Do you have a plan for taking your company to the next level?
Reaching your next revenue milestone — whether that’s $250,000, $1 million or $50 million — requires aggressive growth and the ability to execute solid strategies.
Paul Giannamore, managing director of The Potomac Company, who advises companies on how to increase their value, offered 10 tips to help you succeed:
1. Set Strategy. Identify critical obstacles to performance and develop a coherent action plan to overcome them. Good strategy helps a company manage itself, so you can focus on growing the business, Giannamore explained.
2.Establish Systems. Systems dictate how things get done. They mitigate chaos, help employees perform intuitively, reduce errors, and control reward activities and behaviors. They also generate valuable feedback that you should use to hone your strategy, said Giannamore.
3.Get Input. Meet daily with employees for five minutes to identify customer and employee problems; meet weekly or monthly to solve them, Giannamore advised. These meetings can become the "pulse" of the business and give you feedback to guide strategy.
4.Prioritize Customer Retention. A first-year customer returns about $5 in annual profit; a seven-year customer delivers $100, said Giannamore. Focus on delivering recurring (not one-time service) and actively track customer retention rates.
5.Track Predictive Indicators. Instead of watching balance sheets and P&L statements, set targets for customer retention rates, employee retention rates and revenue per technician — direct obstacles to performance — and track them weekly, advised Giannamore.
6.Tie Strategy to Performance. Design key performance indicators that tie employee activities to customer or business needs, such as retention, monthly recurring revenue and sales conversions. Create scorecards and update them routinely so employees know how they measure up.
7.Use Incentives. A mix of short- and long-term incentives aimed at individuals, employee groups and the entire company can greatly impact performance. Just craft them carefully so they don’t bring in low-margin accounts at the expense of long-term recurring ones, stated Giannamore.
8.Boost Motivation. Employees are motivated when they understand the company’s goals and what’s in it for them, so regularly explain your plans to grow revenue, their role and potential reward, opportunities for professional development and the career path before them, he said.
9.Ask Why. Metrics like gross revenue growth, profitability and employee retention tells us the ‘what,’ said Giannamore. If you don’t ask WHY, you don’t get to the underlying activities, behaviors, issues or architecture that may need adjustment to improve the business.
10. Expand Your View. Look beyond this industry and attend seminars in other fields to gain sales and marketing ideas and learn other ways to organize a business. Also, form a council of three to five advisors who can serve as coaches and mentors for you and the company.
This article was adapted from a presentation given by Paul Giannamore at PCT’s Million-Dollar Club Virtual Conference, sponsored by Arrow Exterminators.
This article was published in The Higher Standard, a Dow AgroSciences publication brought to you by the PCT Media Group Custom Publishing Division.