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How to multiply your profits
Let's assume you are a small-business owner looking for that edge
or the fine-tuning that can make the difference in your business,
but don't have the financial muscle to hire big management
consultants.
Help is at hand from Action International, the world's largest
business coaching company with revenues of over $1 billion and
operations in 17 countries. The company is all set to debut in
India and is in the final stages of clinching an alliance with the
Reliance-controlled NIS Sparta.
"Estimates show one in three new businesses fail in their first
year of operation, two out of four by the end of the second year,
and three out of four by the fifth. Action's business motto is
providing advice to these businesses at a low cost. And small
companies -- 4,100 of them across the globe -- have found our
expertise immensely useful," says Rahul Kapuria, consultant for
Action in India.
The company, which started in Australia in 1993, works in a
franchisee model and has more than 550 franchisees in countries
all over the world.
So what's the Action model for business success? The core issue,
according to Kapuria, is to ensure that a business-owner builds a
profitable commercial enterprise that works without them.
The company believes systems should run a business, not the owner,
and there are truly only five ways to transform your business into
a profit powerhouse. By simply breaking down your sales and
marketing efforts into these five areas and understanding how each
affects the other, you're halfway there and, most definitely, way
ahead of 90 per cent of businesses out there.
Action Business Coaches have at least 344 different ways, (about
50 to 60 for each of the five areas) to help you multiply your
profits. The first thing Action does is to access the business by
working with the business owners to determine where they are,
where they would like to be, and then helping them implement
systems and strategies based on what they find that would be the
most appropriate for that particular business's needs (increase
profitability, systems, employee training, controls and so on).
Action will assess the business in the five key profit generating
areas: lead generation, conversion rate, average dollar sale,
average number of transactions, and profit margins. Those areas
are highlighted in the following equations:
Lead Generation x Conversion Rate = # Customers
#Customers x Average Sale x Avg. # Transactions = Revenues
Revenues x Profit Margins = Profits
So basically, Action is looking at the equation for profitability
for any business, in any market, in any industry sector.
Throughout all of these sectors of business, the equation for
profitability stays the same.
Once it is established where the business is, Action is able to go
back and look through its systems and determine which of those
would be the most appropriate to implement in increasing the
profitability of that particular business type.
Action uses the information gathered on the business to put
together a detailed alignment report that will serve as the
roadmap to success for the next 12 months of Business Coaching.
Once it is established that the business can be profitable, the
company moves on to the secondary goal, which takes place during
the Coaching process.
That goal is to teach the business owner the difference between
working on their business and working in their business. Small
business owners can spend 60 hours or more every week just trying
to keep their business alive.
Most often, what Action finds, is that they are working on the
wrong aspects and end up spinning in a relentless circle until the
business finally folds in on top of them.
The company's goal is to help them in working on growing their
business instead of concentrating on the technical issues, which
are usually counterproductive to growth.
Throughout the process of coaching, Action will spend about an
hour each week with the business owner (depending on their needs)
helping them stay focused on their goals, testing and measuring
results, assisting them with potential obstacles for growth,
systems implementation and so on. The company holds its clients
accountable for reaching the goals that is set together, and work
diligently to help them achieve results.
Kapuria says owners of small- to medium-sized businesses find it
hard enough keeping pace with all the changes and innovations
going on in today's modern world to find the time to devote to
sales, marketing, systems, planning and team management and then
to run their business after that.
That is where the Business Coaching comes in. Unlike a lot of
other franchisee training programmes, Action's initial 10-day
training programme at Las Vegas for the business coaches is only
the beginning of his journey into a continual learning curve.
Shyamal Majumdar |
