3 Key Points in this Episode:
- Staying lean in business means having everything you need and nothing you don’t.
- Remember what got you where you are and avoid the danger zone of growth that leads to bloat.
- Keep things simple, be a relentless agent of systemization and empower your employees to help you develop the systems.
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Episode 116: Everyone wants to sell more, grow their business, and scale. We often think that the only way to scale is to expand our business with more products, more services, and more locations.
The reality is most small businesses do not have the resources to scale their business. The solution is often simple but overlooked and, in this episode, I will provide you with the strategies to stay lean and sell big.
Staying lean in business means having everything you need and nothing you don’t.
Keeping your business lean is a never-ending process, not something to achieve once and expect to continue. Lean might seem like the opposite of growth and expansion, but the reality is that the two can work quite well together.
“Don’t Forget What Got You Where You Are”
The very first job I had straight out of school was at a manufacturing company that remanufactured pneumatic controls for the logging, mining and commercial vehicle industry.
The business was growing, and the owner was enjoying the fruits of his labor. As with most businesses it had taken years to get to the stage that they were at when I joined the company.
They had just landed a large contract with Chicago Rawhide and we were busy and expanding. Everything was going great with record sales and profits. It is a time that I fondly look back on, we worked hard but we had fun and the owner would shut the plant down early on Friday. We would all clean up our work stations and he would bring out beer and sometimes pizza and we would hang out for hours telling stories and just enjoying ourselves.
At this crucial moment when everything seemed like it was always going to be great and we would just keep growing and expanding three things happened.
- On March 11, 2000, The Dot Com Bust caused the Nasdaq to come crashing down.
- On September 11, 2001, the Twin Towers fell in the worst terrorist attack in US history.
- Our wonderful boss met some unscrupulous business people and was talked into diverting large amounts of his resources into the development of a product that had never been made before, was untested and was totally unrelated to what we did.
The three things combined to make a perfect storm and by the end of 2001, my boss was forced to sell his original company to save his house and prevent himself from declaring personal bankruptcy.
Overnight we had a 50% reduction in staff and a new owner who was not from our industry and made a series of blunders that further weakened the company.
In 2007, this owner was forced to sell, and I quit when my bid to buy the company failed.
There was nothing that could be done about the Dot Com Bust or 9/11. But the lesson I learned from watching this whole thing unfold over the nearly 10-years I worked at this company was this:
“Don’t Forget What Got You Where You Are!”
Had the original owner kept investing in the business and the industry that got him to where he was, would I still be working there today? Probably. Instead, the third owner did a controlled shutdown in 2015 and the company closed its doors forever.
One of my mentors unceremoniously said of the original owner, “he had a goose that laid golden eggs and he chopped the gooses head off.”
Staying lean isn’t just about just-in-time inventory and lean manufacturing principles. It is about your mindset as well. Don’t allow yourself to get sidetracked and start chasing shiny objects because before you know it you could be out of business.
Remember the acronym F.O.C.U.S. which stands for Follow One Course Until Success.
The Danger Zone
When you need to grow it can be tempting to want to expand your offering. You start to think about how expensive it is to acquire new customers and you reason that if you could sell more products or services to your existing customers it would give you the growth you need with minimal resources and investment in infrastructure, inventory, people, and training.
It is sound reasoning and a legitimate strategy, but the danger is when expanding beyond core services, growth can easily become bloat. It can take the form of unnecessary meetings and slower processes, as multiple layers of management try to report up and send requests down inefficient — and perhaps unnecessary — command chains.
I fell into this danger zone when I started to expand my contracting business. Before we knew it, we were offering 8 services and we weren’t all that good at 4 of them. So, we had to backtrack and settle on the 4 services we could excel at and provide our customers with the best experience. This caused us to lose momentum and we burned through resources we couldn’t afford to lose.
After the break, I am going to tell you the strategies I recommend that will allow you to keep your business lean and empower your team to sell big.
This episode is sponsored by:
This episode is sponsored in part by the Build a Better Business Blog.
Go to jamieirvine.ca/blog today for in-depth articles that will help you build a better business.
How to Stay Lean and Sell Big
We are back from our break, now before the break, I promised I was going to tell you the strategies I recommend that will allow you to keep your business lean and empower your team to sell big.
You can get lean while expanding beyond your core products or services.
However, it requires that you stay focused, stay out of the danger zone and that you make a commitment to maintain maximum efficiency.
Here is the best way to stay lean and empower your team to sell big:
“Keep it simple because simple is hard enough.”
This is one of my favorite quotes from Owen Clark. I recently was working on a three-page template for a project I am working on. I realized that I could condense it into one-page. This template was the basis for a system I am creating.
Once I institute the system, which option is more likely to be followed by my staff? The one-page simplified edition is the clear winner.
“Be a relentless agent of systemization.”
I learned this from Michael E. Gerber in his companion course that went along with his last book, Beyond the E-Myth. I think that this is an absolute prerequisite to success in both staying lean and selling big.
Nothing is sacred. Every system should be analyzed to see if it’s the most efficient option. Poor-performing systems need to be replaced or eliminated.
“Flip the pyramid structure of your organization upside down.”
It’s hard to become lean from the top down in the traditional pyramid structure. Improving efficiency and testing systems starts at the frontline. Allow outward-facing staff members’ ideas to flow directly to the leadership group. Since everything flows downhill much easier having a strong leadership foundation is the key to making this happen organically.
“Empower employees who care.”
When employees care they don’t need you to micromanage them. If you empower them to help test and modify systems, you will be surprised at the results.
Employees That Care Mini-Series was mentioned.
I remember one time my most junior employee discovered by accident that a cleaning process we had never considered was far more efficient. Since he felt comfortable coming to me, we had a chance to test it and once we verified the results, we instituted this process immediately. The net result was that we saved thousands of dollars and increased our profitability. Had he not felt comfortable coming to me and just did what he was told it would have cost us dearly.
I read an article about this whole subject recently on BusinessCollective.com and I really like the way they concluded the article:
“Maintaining a lean, expanding organization is a balancing act that requires constant attention. You must grow, but only as much as is necessary, while not diverting too much attention from your core services. If you focus and commit, you will be rewarded with an efficient business with new strengths, diversified offerings, less risk, and a healthy bottom line.”
Now you might be thinking that so far all we have covered is how to stay lean. You might be thinking, “I wanted to learn how to sell big.”
That really is the other half of the equation. Once you have a lean, systemized, and efficient business you can make significant growth a reality.
I want you to do an exercise with me.
If you’re driving or at the gym right now don’t worry, I have created a worksheet for you. Since you’ll need to be able to write this all down go to jamieirvine.ca/116 for the free worksheet. Download it at jamieirvine.ca/116.
Okay, let’s go through the exercise.
First, I want you to clearly articulate who your ideal customer is.
Second, I want you to state exactly what your ideal customer gets when they do business with you.
Third, I want you to brainstorm 20 ways you can communicate that message to your ideal customer. Keep changing the words and creating new variations of the same basic message.
When you get to number 20, I want you to stop and clear your mind for 60-seconds.
Now look over the different options until you read the one that sings.
Now you need to include that message in your sales system and pair it with all the work you’ve down to keep your business lean, systemized, and efficient.
I promise you that the work will pay off and before you know it your business will be a lean big selling machine.
This brings episode 116 to a conclusion.
On Tuesday, I am going to introduce you to Ron Carucci. Ron and I will discuss how new leaders often fail in the first 18-months of taking a leadership role and we dive into how to avoid that failure.
Talk to you on Tuesday.
This podcast sponsored by:
If you are hiring a new employee, I highly recommend that you use the Screen2Fit recruitment platform by Pro.File.
I use FreeeUp to find high-quality freelancers to help me run my business and you should as well.
Every business needs a website and I have used Gerrit and Trackstar Web Design since 2012 and so should you.
I use Process Street to create systems in my business and I highly recommend that you use Process Street as well.
Thank you for listening and I look forward to talking with you soon.