You Only Die Twice (Or Does Your Small Business?)!

INTRODUCTION:

Many years ago, the secret to making money and having a good business was to have fancy marketing and a great sales team. Basically you could have an average product or service and still do quite well.

World renowned business guru Brian Tracy argues that this was the old way but in today's fast changing world, the best way to have a great business is to actually have a great product or service or die a natural death. Now this may seem (sarcastically) a very 'profound statement' but what he's saying is that average products and services will lead to discounting and price wars as the new age makes it easier for customers to do research and get better deals.

Great products or services usually lead to repeat business and unless you have repeat business you will generally die. Business valuers consistently look for this when performing a small business valuation with higher than normal multiples.

How then do you know if you have a great product or service?

Figure 1: You need to have a great product or service these days or things could get ugly just like Jaws.

1. Sales Are Increasing

Sales may increase for a number of reasons but when you sit down with your small business accountants Sydney and Dubbo to do an analysis, do you know from your business growth equation how much is actually due to:

• existing customers;
• new customers;
• new products or services;
• price rises;
• average transaction spend per customer;
• increase number of transactions per year per customer.

A business that is growing in sales due to existing to any of the above other than price rises, this will tend to imply that most likely you are moving towards a great product or service.

If your sales are stagnant or decreasing, chances are you are slipping back to the pack, losing to the competition or reducing your prices.

Have you done an analysis?

2. Your Customers are Referring And Coming Back

If your customers keep coming back and telling others about their experiences with your company, then you must be doing something right and/or different to your competition. Remember, points of difference will make it much easier to generate more sales and more profits. Sit down with your small business accountant Sydney and Dubbo when working out your business strategy and list these traits down.

3. You Are Continually focused On Creating "Great"

Are you consistently trying to focus on being 'great' or are you just churning out the same thing year after year?

People who are forever focused on improving what they do for their customers will ultimately win but you need to be disciplined.

Figure 2: Are you Alexander The Great or Alexander The Average?

4. YOU Consistently Score 9 Out Of 10

Ask your customers regularly what you would score out of 10. If it's less than 9 ask them what you would need to do to get there.

What systems do you have to survey your customers and when was the last time you asked them for feedback? Positive feedback will go a long way to helping you survive the "digital interview".

CONCLUSION:

If someone says that you need a great product or service to do well in business, don't dismiss this as being the obvious. Review your business and work out if the signs indicate that you already have these and if you don't you need to do something about it, or you could just be looking for Miss Moneypenny to bail you out!