Mike Michalowicz's Blog, page 41

Establishing Sales – The Foundation of Your Business

As entrepreneurs and business owners we have big dreams. Dreams of serving others, dreams of wealth, dreams of making big impacts, and leaving big legacies. But how do we make those dreams a reality – and keep it that way? It starts with sales.

That’s the cold hard truth. Your dreams and gumption alone are not enough to propel your business. It’s our job to ensure that our business is built healthily from the foundation up – and that foundation starts with sales.

The establishment of predictable sales is the base level from which all else in your business stems. Just like food, water and oxygen for humans, your businesses require sales to live.

In the last months you have heard me talking about Fix This Next, explaining The Business Hierarchy of Needs (The BHN) – a simple system to pinpoint what your company needs from you now, and what it doesn’t. If you remember, the base level of this model is sales, followed by profit, order, impact and legacy. Let’s take a look at our big base level a bit more. It is after all, what everything else in your business is balancing on.

How do you establish sales and pave the way to all of the other levels? Well I am going to give you a sneak peek into Fix This Next and share a little more about how The Business Hierarchy of Needs works. It’s more than a diagram. It’s a compass to help you diagnose your business, fix what needs fixing, and navigate to the next level. Within The BNH, I created the vital needs to address within each level.

Level 1 – Lifestyle Congruence

Do you know what your company’s sales performance needs to be in order to support your personal comfort?

How much monthly income do you (the business owner) need to maintain a basic, but comfortable lifestyle?
How much revenue must the company generate to support your lifestyle?
If you reduced expenses (including staff), what is the minimum monthly expense that the company can incur and still achieve the sales needed for Lifestyle Congruence. 
What percentage of annual sales make up your required target take-home income?

Level II – Prospect Attraction

Do you attract enough quality prospects to support your needed sales? 4 Have you identified the ideal prospect avatar? 

What percentage of your prospects are consistent with the avatar?
Are there enough prospects to support the sales needed? 
What are your significant prospect sources (website, referrals, direct mailings, social media, etc.)? 
What volume of traffic do you bring to your source? 4 How many applications or inquiries do you get from your prospects weekly?

Level III – Client Conversion

Do you convert enough of the right prospects into clients to support your needed sales?

Have you identified the ideal client avatar? 
What percentage of prospects become clients?
What percentage of clients are ideal? 
What percentage of clients buy repeatedly?

Level IV – Delivering on Commitments

Do you fully deliver on your commitments to your clients?

How consistently (on a percentage basis) does your company deliver its offering within specifications (time, quality, etc.) 
How often does your offering get returned or customers ask for a partial/full refund?
How often do customers cancel their offer? 
How often is your service or product delivered later than the client expects?

Level V – Collecting on Commitments

Do your clients fully deliver on their commitments to you? 

Do your clients pay on time and in full? 
How often are projects delayed because you are waiting for clients to send you information/ images/copy/etc? 
What percentage of your clients (intentionally or not) cause delay to the project or compromise the quality of the experience?

Ask yourself these questions and take the time to answer them carefully and honestly, so you can correctly diagnose and fix any issues hindering you from maintaining a strong sales base. Keep The Business Hierarchy of Needs near your work space to remind yourself to always make sure your base level is met first. Establish your sales using The Business Hierarchy of Needs.  You got this!

For more tips like this go to Mikemotorbike.com or Mikemichalowicz.com and click on Get the Tools for tons of tried and true resources for business help and how to run a truly profitable business. Let’s rock entrepreneurship!

Follow Mike on Instagram!

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The Business Hierarchy of Needs



The entrepreneurial journey is an exceptionally peculiar one. We start our businesses with a clear vision of personal and financial freedom. Yet, that goal of freedom – the primary reason we have our own business – is never realized. We are constantly on the verge of making it, but few of us ever do. We are stuck. Simply surviving. Which begs the question “Why?” Which then begs the next question, “Who do we fix it?”

In researching the answers I have witnessed a singular pervasive problem: The biggest challenge business owners face is knowing what their biggest challenge is. Let me say that again, for the people in the back.

The biggest challenge business owners face is knowing what their biggest challenge is.

If you find yourself trapped between stagnating sales, staff turnover and unhappy customers, what do you fix first? The response of everything is the norm. But it doesn’t work, since at any given time only one issue can be the most important. Only one thing can be top priority. And if we don’t know what it is, we may be fixing the wrong thing at the wrong time. Or, more insidious, fixing the right thing at the wrong time. We need to pinpoint the right thing to work on at the right time, and the way to do that is by mastering the Business Hierarchy of Needs.

To proactively correct something in your business, you need solid systems in place. Fix This Next was written for this purpose. I created a powerful diagnostic tool in Fix This Next called The Business Hierarchy of Needs so you have a visual of where you are in your business, what to fix first and how to reach your business goals.

So what is The Business Hierarchy of Needs? It’s a model of your business needs, based on the same fundamentals as Mazlow’s Hierarchy of Needs. Within Mazolw’s Hierarchy, you see the base is physiological, then there is safety, followed by belonging and love, esteem, and finally, self actualization. Fundamentally speaking, The Business Hierarchy of Needs follows this model by replacing our human needs with those of our business.

Let’s check it out:

Sales (the base level) 

Always make sure your base level is met first. When it comes to humans, we need food and water. When it comes to our businesses, we first need cash flow and sales in order to move up the hierarchy of needs. 


Profit

This is the creation of sustainability. Many businesses have a profit problem but are focused on sales. It’s more important to bake profit into every transaction you have. You cannot sell your way into profit. You need a system to bring profitability around.


Order

This is the level of organizational efficiency. The idea is as your business grows it becomes less and less dependent on you and it becomes organized. Achieving organizational efficiency will extract the owner from the business so it has no dependency on you, and can run on automatic.


Impact

Impact is the creation of transformation. This is where you realize your business is not about transactions but transformation. You are not selling a commodity, but a service that impacts lives and a community. What is the feeling you are leaving for the client, how are you transforming their lives and decommoditizing yourself.


Legacy

Legacy is the creation of permanence. It is where the business is designed to live on into perpetuity without you. When you create a legacy, you realize you are not the owner of the business, but the steward. To achieve the legacy level the owner must care more about the corporate legacy vs his personal legacy. This should be the objective of your business.

The Business Hierarchy of Needs is the compass that will move your business toward the vision you originally had. By applying The Business Hierarchy of Needs, you will assess your business to see what requires repair. You will use the evaluation tools I have created to help you navigate and understand exactly where you are in your business and what needs to be addressed in order to propel you forward.

When something is broken in our business our first instinct is to sell more, when chances are we really need a better profit or efficiency system in place. You may think you want to have an impact and have a legacy, but you don’t have the efficiency to support it. By using The Business Hierarchy of Needs, you’ll revert to the base level needs, and then make sure they are met before you elevate to higher levels.

It’s also important to point out that the The Business Hierarchy of Needs model has a get to give component. Often we are told you have to give to get, but here, the model shows the first three stages are about getting. You need to get sales into your organization, you need to get more profit and you need to get more efficiency. You need to get that organization. With that strong foundation in place you can then elevate to being transformational through impact and achieve perpetual life – a legacy for your business. Now that is about giving, because only through legacy can you contribute.

Remember, your business is fluid, living, breathing thing. You will find yourself at different levels within this hierarchy of needs at different times. That’s to be expected, especially as your business evolves. To run a profitable business you know there will be times you ping pong around this model of needs. But, the closer you stick to it, and build that solid foundation, the stronger your business will be.

If you are an entrepreneur, you likely started your business with a burning desire to make an impact and change the world. I know I did. The thing is, you can’t make an impact without the means. With The Business Hierarchy of Needs in Fix This Next, you can move forward in a constructive way so you can make that impact and leave your legacy.

For more tips like this go to Mikemotorbike.com or Mikemichalowicz.com and click on Get the Tools for tons of tried and true resources for business help and how to run a truly profitable business. Let’s rock entrepreneurship!

Follow Mike on Instagram!

 

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What’s Your Song?

Here I am backstage at Thrivers 2020 and about to give a keynote speech. In these minutes before I walk out on stage in front of hundreds of people, I could be checking my phone, chatting with someone, checking my vest…

But I don’t.

The best thing I can do before presenting to an audience is to focus on what I am about to do. It’s a ritual at this point.

The ritual? Focus on being of service in these moments.

For me, the song Times Like These, by The Foo Fighters, grounds me and helps get me into that focused mindset I want. It’s times like these that I want to deliver the best service I can, and truly help those around me.

When you are facing a pivotal moment, how do you amp yourself up so you can be laser focused and deliver the best of you?

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Make it Easy – and Improve Your Business

No, I am not showing you a photo of this guy’s (my son, of you must know) legs. See that blue line? That may be the one of the most simple ways I’ve ever seen to boost customer satisfaction.

My son and I went to our local Wegman’s to pick up our groceries. If you know Wegman’s, it’s not exactly a small store. There are a ton of aisles – and a ton of distractions!

The folks at Wegman’s know this, so they painted this blue line on the floor for customers to follow upon arrival to pick up their orders.

Come on, how simple is that?

Now, I know we don’t all own grocery stores here. But what can you do to make your client’s experience the most simple, and worry free experience?

Make it easy. That’s what your customers need.

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Positive Reinforcement for More Profits

It sounds simple, but positive reinforcement can result in big profits for your business.

I realized this as my daughter and I were driving into town and were about to fly by this speed sign. When you are over the speed limit, the sign frowns at you. When you are within the speed limit, the sign smiles. I think you know which one I was going for. For me, it was a small reminder about a big way to drive profitability in our businesses.

As an entrepreneur you know that there isn’t a one size fits all formula to having the most profitable business. But, one thing I have seen over and over is that positive reinforcement works when it comes to increasing profits.

Sounds a bit elementary, right? Perhaps, but let’s face it – human nature determines most of our behaviors and many behaviors are based on how we feel. When a desired behavior is rewarded, the behavior is encouraged to be repeated.

Eureka! (I know, thanks Dr. Michalowicz. You’re welcome.)

Entrepreneurs – you are leaders. As leaders it’s your job to intentionally acknowledge and motivate your employees and customers alike in order to drive profits.

Since I’m not talking about a chore chart and a cup of marbles as a reward here, let’s look at how using positive reinforcement creates profit.

Positive reinforcement with employees

Fulfilled employees are productive employees. (Sorry team, I promise I am not manipulating you – I really do like you.) Practicing positive reinforcement with your employees motivates them and therefore boosts productivity. The end. Maybe I didn’t always practice this, but as the years went on and my businesses grew I saw first hand how positive reinforcement is so impactful. On average we spend ⅓ of our lives at work, and we want that time to be meaningful. A solid leader will make an employee feel their time is well spent.
Work/life balance and monetary incentives are always good ways to practice positive reinforcement, sure, but remember daily morale goes beyond the dollar. Any time I see something accomplished that I like, I let my team know. Psych 101 folks – if you tell someone you like something they did, they’ll likely do it again. Well that was easy. I tell them straight out what I think. I am on the road quite a bit so if I don’t see them in person I let them know through a thoughtful message or email. It doesn’t take a ton of time to offer this support, and the gain equals more than the give. The result? My team is loyal, dedicated, creative and capable. They are empowered to drive profitability – and they do.

Positive reinforcement with customers

It’s not groundbreaking by any means when I remind you that positive reinforcement is a huge incentive for customers. To have a truly profitable business, however, you need to know specifically what type of incentives your customer base is drawn to. What motivates your customers to engage with your business over all the others? I’ve said it before, to know this, you must get to truly know your customers.
Once you know what your customers truly want you can concentrate on types of positive reinforcement to offer.  Customers often like rewards programs with added benefits for repeat services, discounts, or even notes of appreciation and thanks for their patronage. And always, always provide top notch customer support. It may sound basic, but it’s a great start and if you personalize these incentives they will mean more.

Tell me – how do you use positive reinforcement in your business and what are some of the new incentives you can add? Do it and watch your business become more profitable!

If you want more tips like this go to Mikemotorbike.com or Mikemichalowicz.com and click on Get the Tools for tons of tried and true resources for business help and how to run a truly profitable business. Let’s rock entrepreneurship!

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3 Tips to Achieve Business Goals in 2020

It’s the end of another year – actually the end of a decade. Let that sink in!

The end of  the year often leaves us taking stock in both our personal and business lives. We set resolutions, sometimes we stick to them, and there are times we don’t.

During my 4 week vacation (because I Clockwork my business, thank you!) I took some time out to make a list of what my vision and goals are for 2020. Creating this list makes me more cognizant of where I need to focus my energy.

It is so important to remember that time is a fluid thing. Often I achieve goals throughout the year, but that doesn’t mean I rest on my laurels – I then create new goals because it’s important to keep going.

It’s the same for goals perhaps I haven’t hit yet. They don’t disappear because I haven’t achieved them by a certain time. Instead, they roll over to the next year. Unless the goal sucked. Then, you know, I have to let that go…

You may have some goals for your business, big or small. But how are you going to reach them? Here are just a few things I do to stay on track so at the end of the year I’m not hanging my head in defeat.

Inspiration

Where do you find inspiration? For me, I find inspiration all around. From travel, to mastermind groups, to community, to fellow entrepreneurs, to the emails I receive from readers of my books, inspiration is everywhere. Sometimes I see a problem that needs fixing and it inspires me to write a whole new book! (Insert shameless plug for my new book Fix This Next being released in April! Whoohoo!) Inspiration helps me stay motivated to keep working on my goals as well as develop new ideas for new books, training and keynote speeches.

Implementation

You have your inspiration. Now what? What are some of the steps you take to execute those goals you are inspired to achieve?

Weekly tracking – My team and I have a weekly meeting. If am traveling I do my best to dial in. Our meetings are quick, and to the point – we’re not into wasting time. We have an icebreaker as a little bonding time and then get to business. We discuss our goals and update on our progress. We are all on the same page and man, are we one well oiled machine, baby!
Daily list – Weekly meetings are great but how do you make magic happen daily? I (as well as my team) take a few minutes at the start of the day to prioritize our time and see how we can best implement ways to reach that weekly goal.
Delegation – In my book, Clockwork, I talk about “clockworking” your business and I walk that walk. I have built a dedicated team to ensure I have time to create and execute every business and personal goal I can think of.

Give back

Wait what? I’m busy over here, running a business and crushing goals! Yes! Get it! At the same time, giving back teaches new lessons and opens up avenues for continued growth. Yes, you can give back monetarily. I and my team also give our time. When we connect with our community, we see what their needs are and how your business can best serve them. (And, let’s face it, #marketing).
Aside from working within a larger community, I have also been a mentor. When I do this, I assess where a mentee needs to grow. Not only can I help them with what I know, I get to see where I can grow as well. The rewards from giving are endless and can be used in your business at every turn.

Above all, I keep that list of goals I created in the start of the year handy. To see it every day keeps my focus where it needs to be.

If you haven’t already, allow yourself some time to visualize your goals and document them. It will give you the clarity you need to begin reaching those dreams of yours!

Friends and colleagues, I wish you all the success and happiness in 2020!

– Mike

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Anticipating Customer Needs

What is the best way to create a loyal customer base, and therefore a more profitable business?

Anticipate customer needs.

Anticipating needs is the best way to let your customer know that their success is your priority. When you deliver something customers need without asking, it creates a sense of ease. It lets them know you have their best interests in mind. A proverbial “I have your back”.

The most effective way to anticipate the needs of your customers is to know them well. How else will you know what their expectations are? You have to create a relationship with them to identify what their demands are – and fulfill them before they even know what they wanted.

Sneaky. Or as I like to call it, strategic. Thoughtful even.

So how do we go about this? Here are just a few examples:

Establish a relationship

In most of my books I have a call to action. I ask readers to email me to make their commitment to improving their businesses. Developing this dialogue with readers is an act of accountability on both of our parts. Moreover, it is a big leap of faith for some and I am honored they trust me. They tell me why they are committed and I let them know I am here and interested in helping them succeed. Many divulge private details of their finances and personal lives. My responses are tailored to each email and I sometimes send a video in response to them as well. My hope is that they feel less alone in their struggles as business owners and motivated to make necessary changes they need for a successful business.

Exceed expectations

The responses from readers when they receive emails or video from me has been overwhelmingly positive. It seems that most assume their emails will go into a black hole never to be answered. Not only are they answered, but I include a ton of resources that basically equal free coaching. There is a FAQ, links to my Entrepreneurship Elevated podcast, links to find a Profit First Professional, to become a Profit First Professional, links to Clockwork resources, Pumpkin Plan resources….you get my drift. And while it could be interpreted as marketing, anyone who knows me knows I am out to help empower others and help their businesses become more profitable. These resources answer a multitude of questions and inspire business owners, giving traction where they need it to move forward toward their goals. I often get emails from readers who are pleasantly surprised – they are getting answers to questions before they even knew they had them. See? Anticipating needs!

Ask for feedback

I often request reviews of my books. Because I want to hear how great they are? No. I ask for reviews because I want that honest feedback. How the heck else will I know what to write next? How will I know what problems need solving and business solutions entrepreneurs are seeking if I don’t ask? Getting reviews enables me to focus on these key areas where business owners are trying to improve.

Do you anticipate the needs of your customers? Let me know what some of your strategies are. And if you’re not, what are you waiting for? A stronger customer relationship is waiting for you!

If you want more tips like this go to Mikemotorbike.com or Mikemichalowicz.com and click on Get the Tools for tons of tried and true resources for business help and how to run a truly profitable business. Let’s rock entrepreneurship!

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Giving Part III

I told you one of the organizations I love to donate to. Now it’s your turn!

Drop me a line in the comment section. Do you have any fresh ideas about how we can serve our communities through giving? Is there a cause or entity (outside of your business of course) that you are passionate about? Is there anything you take time to volunteer with or give to?

I wonder if we could collaborate together as a community to give as well. Communities serving communities. I like how that sounds, don’t you?

Let’s remember to look out for each other and those in need in communities around us – and that giving is simply the best gift of all.

Be well my friends!

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Season of Giving Part III

I told you one of the organizations I love to donate to. Now it’s your turn!

Drop me a line in the comment section. Do you have any fresh ideas about how we can serve our communities through giving? Is there a cause or entity (outside of your business of course) that you are passionate about? Is there anything you take time to volunteer with or give to?

I wonder if we could collaborate together as a community to give as well. Communities serving communities. I like how that sounds, don’t you?

Let’s remember to look out for each other and those in need in communities around us – and that giving is simply the best gift of all.

Be well my friends!

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Giving Part II

In my last post I discussed a gift I received. I was grateful, humbled, and I will always appreciate it.

That gesture was a reminder of how much I enjoy the act of giving as well. It doesn’t have to be monetary – it can be giving time to your community, a kindness, even mentoring.

What are some of the organizations you give to? One that I love is Kiva. Kiva is a wonderful non profit which lends funds to low income entrepreneurs and students through crowdfunding. Knowing I can play a small part in someone getting their start is so rewarding.

The greatest gift of giving? The way it makes us feel.

Think about some ways you can give back to your community. Not just this month, but all year round. See how inspired you remain through this generous act.

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