I’m hearing a lot these days about business reinvention. And it certainly seems like a great idea. But I think that a complete business overhaul is not only unjustified much of the time, but can be a risky move.
So instead, I’d like to propose the idea of a business “remodel”, which is more along the lines of a home remodel businessmantalk.com. When you remodel your home, you generally keep the existing structure and foundation. The changes are distinct for sure, but do not involve knocking down your entire home. Rather, the remodel may involve adding an addition, repainting a room, finishing a basement, etc.
Likewise, you can remodel your business in distinct and powerful ways that cause a huge shift in your delivery of services, income stream, target market, or visibility as an expert. But a business remodel needs to be justified, strategic, and executed in such a way that the remodel doesn’t cause too much turmoil in your business. When you remodel a home, for example, it needs to be done in a way that causes the least disruption to your living environment. Yes, you are willing to suffer some inconvenience in the short run knowing you will wind up with a beautiful newly remodeled home. But you wouldn’t plan a remodel that forces you to live in absolute chaos unless you can move out during the construction and find another place to live. Easier said than done!
With your business, you can’t necessarily find a new business “home” while conducting a business remodel because you still need cash flow. Sure, there are exceptions for those business owners that saved a ton of money to fund a remodel, but even in that case, it would mean dropping out of the business for a temporary period, which is not going to leave you top of mind with your target market.
What is your ultimate business plan? Do you want to increase sales, improve profit, grow your business and create wealth? Let me outline how you might go about achieving massive growth in your business – no matter what business you are in.
Twenty five years as a business advisor across most industry groups has shown me that while most owners are fantastic at running their day to day business operations, they never spend enough time working on improving the performance of their business.
Sadly, most business owners I have worked with are just so busy working to keep the wheels turning that they never make the money they deserve. Many struggle to draw commercial wages for their efforts, many never reach their profit potential, and most never sell their business for what it could really be worth.
My question to you is – are you making enough money right now? Do you even know how much profit your business is capable of making? Perhaps even more importantly, do you have a plan of how to grow your business profit and business value into the future?
I think you will be amazed at how easy it is to achieve massive business growth if you simply focus on what is important. In fact, let me cut to the chase and show you how easy it can be – let me show you an example of a business that grew its profit by 75% after making 5% improvements in each of its 5 key profit drivers.
Before implementing a business improvement plan, this manufacturing business had 800 customers purchasing from them 6 times a year and spending on average $500 each time. This gave the business a sales turnover of $2,400,000. With a gross margin of 50%, their gross profit was $1,200,000. After paying $800,000 in overheads, their net profit was $400,000.