Using technology to solve business problems
Published on 15 March 2019
Technology is becoming more and more a part of our lives, especially in the lives of business owners. As new technology is invented, it changes the way we can run a business. In a recent Hub Live Elize Hattin sat down with SmartHub Member Steve Grant to learn more about the ways that technology can help businesses.
Steve Grant is a business coach working as iHelp Business Coaching here in Rockhampton, with the philosophy of helping people to succeed in business and solving business problems, hence reducing the stress in business owner’s lives.
Small Business Challenges
When it comes to helping small business owners, a common theme Steve finds is that the people who reach out to him often don’t have enough time to work on the business, rather than for the business. “There needs to be time for working on the business because you’ve got to plan, and you’ve got to look at financial reports. Are you heading in the right direction? Are you making money? Is your marketing plan working? That is all that working on your business is, understanding and implementing some measurements within your business so that you know if you’re heading in the right direction,” He said.
Steve sees himself as a person who solves problems for small business owners, and part of that is finding out what the goals of the business are in order to move that business to where they want it to be. With the issue of time management being a major factor in slowing business growth, he recommends finding tools to work efficiently and effectively. For himself, this involves using Outlook’s calendar function as his to-do list. “You can set up your tasks in order of priority, either high, medium or low. I do all the priorities of a day, and then I’ll move tasks I haven’t finished yet. For example, today’s medium priority becomes tomorrow’s high priority, and every time you add a new task you have to decide what priority that is. When you start in the morning you might want to start with the highest priority, but it might make you feel better and more prepared for the day to get something easy and low priority done first before getting into a harder, higher priority task.”
Another major issue Steve comes across is a lack of cashflow, where there just isn’t enough money coming into the business. “There are a lot of ways you can manage your revenue, but there’s only four ways you can increase the money you’re making in your business,” he said. The four ways are:
- Increasing your price.
For example, if you have a business revenue of a million dollars, but you want an extra $50,000,000 a year, you could increase your prices by 5%. This is a very simple, instantaneous solution to making more revenue.
- Increasing average spend per customer
By using techniques such as cross-selling and upselling, you can increase your business revenue. McDonald’s is a prime example of this, as they upsell Quarter Pounders into Big Macs and cross-sell burgers with fries and a drink in a meal deal. It can be just as simple as offering something else with your customers purchase, as easy as asking, “Would you like fries with that?”
- Increase the number of transactions per customer.
If your business has regular customers that come in once every fortnight, increasing how often they come in can be a great way to increase revenue. Having a sale each week can help by exciting customers and making them want to come in and see what’s on sale. “A local coffee shop used to have a $2 Tuesday,” Steve explained. “So, on $2 Tuesday, you’d get more people coming in who normally wouldn’t. You might not be making as much money per coffee in this scenario, but now you’ve got someone new coming into your shop instead of someone else’s. You can then use this opportunity to cross-sell and upsell. Ask them if they want a muffin, or if they want a bigger coffee. You make an offer that’s irresistible to get them coming back.”
- Increase the number of customers
This is where marketing, sales and service come into play. Every single touch point where the customer interacts with your business has to send the message the customer wants to hear. An important part of sales is building a picture for the client of the desired state they want to be in with your product or service. Steve gave an example about a man he spoke to who sold heavy equipment. “He told me about this dozer, that it had a lot of cool features, but it gets bogged in unusual and difficult places. So, all of a sudden, his client has a picture of a dozer stuck in a stream or something which brings out a negative connotation in perspective sales. By talking about all the things this dozer can do and how quickly it can clear land, you’ve got a picture in your mind of his area being cleared by this dozer instead of imagining it getting stuck.”
Strategy in Business
Knowing how to create more revenue in your business is important, but strategy is key to building wealth. You may have a vague idea of a goal, but you don’t know exactly what that goal is, let alone how to get there. According to Steve, you can go straight towards it or just detour and never get there. “Strategy is all about knowing where you want to get to and building a picture of where that is in your future. You’d be looking out five, ten years into the future, which is why it’s important to be flexible and adaptable when you talk about the strategy for any aspect of your business. Things change so quickly, especially technology. Manual tasks that take you longer now might become more efficient and effective, increasing your profits,” He said.
The first part of the strategic approach is knowing where to go. “If we had a picture of Gladstone but we wanted to get to Rockhampton, we wouldn’t be able to find it. A lot of businesses aren’t targeting the right areas, and you’ll know if you’re one of them because there’ll be a lack of cash. You need to market directly to your client base, or you won’t get a good end result. The number one thing in effective marketing is knowing who your customer is and talking directly to them.”
Another part of strategizing is analysing your suppliers and seeing if there’s a way to save money while maintaining quality. “Your job is to try and save five percent on those costs by finding the best quality product and the suppliers who are giving the best price.”
Similarly to analysing your suppliers, you also should be analysing your operating expenses. “I did this for a client recently. Together we went through everything from a gross profit, profit margins and net profit point of view and we looked to see if there were any trends we could pick up or any smoothing out we could do. We found that the operating expenses were within a reasonable range, which was great because then what you can do is adjust your revenue and your cost of goods to get the best profit that you need to cover your operating expenses.
Also if you know your operating expenses, you can use that as your break-even point because you know you’re going to have to make enough revenue to create a profit and pay your operating expenses, plus tax.”
It’s important to have a vision, a mission, goals and values for your business to know where exactly you’re going, and to keep yourself on track. Steve’s one-word vision is “Success”. “It’s all I want to be. My mission is the same as my tag, it’s helping people succeed. If I can help people succeed, then I get a good reputation and I get more clients. My value is integrity.”
The Eight Hats of Business
The Eight Hats is a business philosophy Steve uses to describe all the aspects of business that people should be in control of on a regular basis. They should know what’s going on in these sections on a day-by-day or even minute-by-minute basis. These hats are strategy, marketing and sales, service, information technology, human resources, finance and administration.
As discussed above, strategy is knowing where your business is and where it needs to go. It’s about analysing how your business is currently performing, what can be done better and how to achieve the goals you’ve set while sticking to your mission.
Marketing is about generating enquiring inquiries. As soon as the client makes contact, the sales process starts. This hat is about getting people to inquire and turning them into clients.
Service is a key part in turning first-time clients into lifetime clients. By having great service, people will keep coming back for the excellent experience you give them. It’s about keeping them as a client and making sure they don’t turn to your competitors.
Information technology can take your business to the next level very, very quickly. Using software such as Customer Relationship Management system (CRM) to help manage and automate processes can make running your business easier and less time-consuming. “A client of mine went onto Tradify as their CRM. He uses the tax invoice through his CRM system, and after a sale the CRM sends out a message that says, “Hope you enjoyed the experience!” It’s all automatic and he doesn’t do a thing. It’s also integrated with Xero’s accounting software, so Xero talks to the CRM. When a payment comes into the bank, it goes in the CRM and it’s an expenditure. What information technology is really about is looking at all the eight hats and trying to integrate them from a technological perspective as best you possibly can,” Steve said. “Try to find a CRM that’s industry specific. Ask other people in your industry what CRM they use. If they’re really happy to refer the name of that product onto other people, it means it’s good. It’s just like how your customers will refer your services to others if you do a sensational job.”
Human resources is about the most important attribute of any business, the people. Everyone in the business from owners and managers right down to the cleaners is a person and “the trick of business is getting the right people on board and you start that with recruitment,” said Steve. “You need to know what you want, have a specific job description and let your candidates know exactly what their duties are through an employee handbook. The job description is the most critical document in HR when it comes to getting people on board. If you get the job description right, at least you know what you want. There needs to be complete understanding between you and your candidate about what the responsibilities are between both parties.”
Finance is a measurement of all the financial decisions you’ve made in your business. If you’ve bought your insurance or your car or you’re paying a lease off, it’s all operating expenses. It’s a measurement of your cost of goods of what you’ve actually spent. Revenue is a result of anything you’ve done in marketing, sales and service. If you’re lacking revenue, it shows you haven’t done enough in marketing, sales and services. “Spend time on those three things, create customer lifetime value in service and you’ll have more money coming through the door. My advice would be to go to your accountant on a quarterly basis, not a yearly basis, and run through any major purchases with them rather than your business coach,” Steve said.
The last business hat is administration. The role of administration is the management of business operations and decision making, as well as the efficient organisation of people and resources to direct activities toward common goals and objectives. “It’s not just filing, it’s a major role. It’s about managing a lot of the other aspects of the business, that resources are in the right area and managing the system of your business.”
Steve’s advice for all those in small business land is to watch out for these eight hats: strategy, marketing, sales, service, human resources, information technology, finance and administration. “What you can do is take these eight hats and make them headings, put all the things we talked about that you need to do in those areas and break down their responsibilities. You can then assign the appropriate people to these responsibilities and make your business a success.”
Networking with the SmartHub
Steve has been part of the SmartHub for eighteen months now and finds it to be a valuable resource to his business. “It’s the relationships and being able to see people that make it great. Before when I was working at home, I wouldn’t see a soul other than my clients. I get to talk to people now and have lunch with them sometimes and bounce ideas off them. The SmartHub’s been absolutely sensational in the respect of being able to make networks and communicate so you don’t feel so alone. It’s just been a sensational success for me and as well with the networks I’ve been able to build. It’s very much a community, and I’d absolutely encourage others to become SmartHub members, even if only for the amazing networking opportunities.”
If you’d like to join Steve in becoming a member of the SmartHub, just get in touch with the SmartHub via Facebook, email them via firstname.lastname@example.org or search for SmartHub on Google. You can even just head over to Customs House at 208 Quay St and take a tour. Membership is affordable, and includes free Wi-Fi, free printing, desk space, a nice kitchen and lunch room and amazing people to work with.