Welcome to Stage 17 of this year’s Tour de Profit! Today marks the one-third point of the race. Only 35 stages left in this year’s Tour. Well done! These are critical to moving your business from price only-based competition to benefits-based competition. You have created a Niche for your business.
In Stage 17, we will take advantage of your Niche and focus on the engine that powers growth in your business – your Business Chassis. It makes no sense to focus on growth if you have not clearly defined how you are differentiated from your competition. Many companies chose to focus only on growth and they may get it, but not the right kind of growth. It is critically important that you find your Niche first so that your growth can be PROFITABLE GROWTH.
So just what is the Business Chassis? It is not unlike the chassis of any car. Every car has a chassis – the framework on which the car is built. In fact, many cars are built on the same or similar chassis. An example is the Ford Taurus and the Jaguar XJE. Both are built on the same chassis – yet one is built as a modest, utility car that is reasonably priced and the other is built as a well-appointed luxury car that is very expensive. How can that be? Both an average car and a high-performance car are built on the same chassis? Yes!
The same is true for an average business and a high-performance business. Both are built on the same chassis. Some chose to build a high-performance machine with their chassis while others don’t really understand the power that lies in their chassis and as a result, they build a modest, so-so machine on it. The first step in building a high-performance business machine on your chassis is to understand the components of your chassis.
Here’s Your Profit Tip of the Day
You must know what your Business Chassis is and how the components work together. Once you understand this and focus on this, you will recognize the power that lies inside.
The Business Chassis is made up of five component parts. We all engage in these five activities, but many just don’t recognize that they are linked and work together to provide the power to grow your business. Below are the five components of the Business Chassis:
● Generating Leads – Your ability to generate new leads is critical to our business success. The more and better leads you generate, the more exposure you get and the more chances you have of selling your products or services.
● Conversion Rate – Some lead conversion processes are very robust and well-defined, others are haphazard and inconsistently performed. These conversion processes are typically known as your sales process. How well you do at converting your leads into customers is the second critical component of your Business Chassis.
● Number of Transactions – All businesses can calculate the frequency of purchase for an average customer. In the case of a coffee shop, the frequency of purchase may be daily while for a dentist the frequency of purchase maybe twice per year. The difference does not matter as much as the ability to know what your frequency of purchase is today and the strategies you use to increase that frequency on a regular basis.
● Average $ Sale –You can take the average of all purchased and calculate your average purchase price, or as I call it, your average $ sale. Again, this number may vary widely depending upon the type of business, but what matters most is that you know what it is today and that you have a plan to increase it on a regular basis.
● Profit Margin – Some may be better than others. Some may even be negative margins. But when you roll all your products and services together, you can calculate your average profit margin for your business. Once again, this will vary depending upon the business and industry, but what matters most is that you know what yours is today and that you have a plan to improve it on a regular basis.
Having the actual data for your business is important. Without it, you will never know what is working and what is not. Most business owners work with a blindfold on – they do not have the data on these five critical components of their business! It is like driving a car with your eyes closed – not a smart move!.
If you’re looking for more success and freedom from your business, join my FREE, private Facebook Group called The Peloton. It’s where business owners like you are learning, sharing and working together to get better every day! Here’s the link: https://www.facebook.com/groups/jointhepeloton/
Come on – join us! And remember, whatever you do, RIDE HARD!