3 Tips to Bulletproof Your Business
Change — and challenge — is inevitable. Here’s how to prepare for where we go from here.
If you haven’t realized it yet, I have a message for you: Things will never be the same. Small business owners, executives, and managers are left with the question, “Where do we go from here?” In the last year, things that have become a staple of businesses now include masks, Lysol, a magic 8 ball (I mean, you need to get some direction from somewhere), and an ever-evolving plan.
The question now from the green industry as a whole is, “How do we better protect ourselves, our businesses, and our industry?” As we continue to learn lessons from the pandemic, there are three things that many in the green industry have done to bulletproof their businesses for the future.
- Focus on stability, before growth. I know that growth is fun and exciting, but before you focus your time and energy on growth, take a hard look at your business and ask, “Is my business stable?” As we are working with dealerships, we call this being in balance. By this, I mean that every department is producing substantial and consistent profit. That’s right, every department. Before you move to growth in your business, first do the hard work of stability. Growth without stability is like a game of Jenga just waiting to collapse on you.
- Set up recurring revenue sources inside of your business. Let’s take a note from software and technology companies and set up recurring revenue sources in your business. Do you know why everything is broken down into a monthly investment? Because it works. Some of the most effective ways we have seen this in the dealer space is putting together a parts-on-demand program, where customers have parts on hand and are billed on a monthly basis for the parts they are using. We also see that breaking down annual services for equipment into monthly payments is something many customers like. On the landscaping side, think about breaking down the investment of lawncare into monthly investments. Regardless of what you sell, this sets you up to lock your customers into your service while allowing consistent revenue all year long.
- Take your profit first. Another focus inside of your business should be your own profitability. Start today, taking a percentage (above a salary, and yes you should be taking a salary) out of your business that is profit you expect your business to pay you for the risk you are taking. You need to take this percentage out before anything else and expect your business to run on the remaining.
Let me give you an example. Let’s say your business brings in $10,000 a month. I want you to pick a percentage that is profit, let’s say 3%, and take that off the top. You would then have $9,700. You would then take your salary, let’s say $1,500 and that would leave you with $8,200 to run the business on for the month. If that’s not enough, we either need to decrease expenses or increase revenue. When you start setting your profit aside, you become your own line of credit and next time some unexpected thing happens and impacts your business, you are in a place of action because you have the resources needed The green industry as a whole is weary, but it’s also stronger than it was before. In the midst of the unknown, innovation is born, and that innovation has pushed us in many ways to be the best version of ourselves as an industry.
In the midst of uncertainty, push yourself to do the hard work of stability in your business, so that you and your company can sustain the growth that is to come.
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