People Magazine recently profiled 63 people who have lost amazing amounts of weight and transformed their lives. One of them, Mike Bauler from Madison, Wisconsin, weighed a staggering 450 lbs before losing 225 of them in 18 months.
When Mike’s father-in-law had a massive heart attack eight years ago, the 28-year-old father drew a line in the sand and decided to make some changes. He focused on what we’re always told to do– diet and exercise–only this time it worked! Now, at age 35, he has competed in several Ironman-style events and credits extreme accountability for helping him maintain his new life.
So what in the world does weight loss have to do with your business and profits?
Glad you asked! Some of the same principles that helped a very large man lose the equivalent of another full-grown man can help you add more profits to your business. What did Mike do to succeed? He focused on the basics and didn’t attempt to go it alone.
It took Mike 18 months to get to his goal, but a few simple basics listed below—done in tandem with a great accountability structure—can help you see improvements in as little as 30 days.
1. Reduce friction – Mike began simplifying his life and saw results. The more difficult (read: “frustrating”) it is for your customer to do business with you, the less likely they are to do so. Pretend to be your typical customer, and walk yourself through your sales process. Look for “friction points” where their experience feels awkward or redundant. These are the friction points that need to be resolved.
For example, can customers get to your online shopping cart in 1 click instead of 2? Do you have your phone number or a large “Buy Now!” button in the top-right corner of your website so they don’t have to scroll for it?
2. Raise prices – Mike decided that the low bar he had set for his health was actually hurting him. When he started asking more of himself, he started getting seeing improvements. Too often we engage in a race to the bottom when it comes to pricing. We figure, “They’ll buy from me if I’m just a little ‘cheaper’ than the other guy.”
“Cheap” connotes bad quality. Ironically there is often a higher perceived value that accompanies a higher price tag. (The old you-get-what-you-pay-for mentality.) Don’t go crazy and triple what you’re charging, but a reasonable increase of a few percent that makes sense for your industry could help you see instant results. Sure, you might lose a few bargain hunters. But the odds are you’ll more than make up for them in the long run.
3. Sell larger amounts – If you sell physical items, consider selling more of them at a time. If time is what you’re selling, sell a bigger block of it. These moves hardly cost you anything, and new customers will likely not be put off by it at all. They’ll figure this is just the way doing business with you works. For Mike this meant investing in longer workouts.
4. Bundle – Can you put multiple types of products or services together to sell as a package and then productize the packaged offering? Pick a main item that is a high seller, and add smaller/weaker sellers to it that will compliment it. You get to charge more, and the customer gets exposed to parts of your product line they might not have otherwise bothered with. Name the packaged service (i.e., “productize” it), and you make it simpler for customers to purchase because they can ask for it by name.
5. Eliminate waste/get efficient – Mike had to get rid of a lot of junk food in his life to get where he is today. And he had to get smart about how he ate and exercised. What are you doing (or spending) that is eating up precious time and resources? Even a little more wiggle room in your margins can be a big deal! But you have to understand those margins first to know where you can do some trimming, so plan to get in the weeds a bit. It’ll be worth it, though.
Not every waste point is financial, but even time has financial implications. Look at how can you streamline your processes to avoid unnecessary steps. Can you do daily 10 minute stand-up meetings with your team instead of that Monday afternoon marathon staff meeting? (Which is especially ineffective when your team has all just had Mexican for lunch, btw.)
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6. Focus on best selling product/service – Mike focused on two basic things (diet and exercise) and didn’t waste time chasing a lot of wild fads. He stuck to what he knew he could do best. You know who the star pony in your stable is. That thing you’re a rock star at doing or selling. Make sure you are promoting it strategically so you have a consistent revenue stream from it. Even if it means putting some other shiny side projects on hold, focusing on your strengths is a proven vehicle to raise profits.
7. Be more valuable – Customers love to be served in surprising ways, and they will reward that kind of thing with certificates of appreciation (read: “dollars”). What can you add that costs you little, but helps them a lot? Servers in many restaurants have found that delivering an un-asked-for mint for each guest along with the check results in consistently bigger tips. (What would happen if they brought two for each guest?) It takes some creativity and paying attention to the little clues your customer drops along the way, but adding true value is rarely expensive or difficult.
8. Tap into your team for ideas – For Mike, his success has depended largely on leaning on the people around him for support and accountability. When it comes to your business, don’t be a one-person show. (Even if you are a one-person show!) Get the people in your orbit involved in discovering ways to streamline your processes, promote your products, brainstorm new ideas, and serve your customers better. And reward their efforts with some fun treats to make the whole thing more of a “game” than just more “work.”
Everyone is in sales. And everyone or your team can bring something to the table. Not only will they help you find ways to maximize profits, you’ll build a better company culture along the way…which will most certainly make your business more profitable!
If you need some folks to stand beside you or help you implement some of these ideas, our entire team at Patrick Accounting is here for you. Helping business owners just like you maximize profits is what we do all day everyday! Give us a call at 901.755.5858 or stop by and learn more about our services!