PROFIT RADIO - "A Network of Entrepreneurs for Entrepreneurs"
Here we are at the beginning of 2021 and hoping to put 2020 behind us. Unless you were one of the lucky owners who had the right offer at the right time, the majority of entrepreneurs took a big hit last year. It is forecasted that business revenues for 2020 is 1/3 of 2019! How many owners do you know that are already out of business?
This series of shows are not about good news. We are very pessimistic about the immediate future - the next 6 months. That emotion is based on the arbitrary nature of global lockdowns. In fact we address that in our Thursday show: "Beating The Lockdown ...While You Still Have A Future".
This season we will share 4 decades of experience on the 3 Types of Businesses, based on performance, and what you can do about it. Today's show is about refusing to let forces outside of your company put you out of business.
LISTEN > ENGAGE > APPLY
Let's start this at the beginning. When we were doing our initial research in the early 2000's on fast and sustainable growth from cash flow, we developed a model for evaluating businesses. It was based on on it's performance relative to it's capability. In other words what were they doing with what they had.
Once the model was complete we built a consulting practice around it and the first phase was to validate our research. Part of that process was to review research on the same topic from other credible organizations. That is when we started a relationship with the Kauffman Foundation. One project they had just finished for a group of local governments was on the types of successful small businesses to attract with grants, tax abatements, etc. These were small, fast growing companies that would provide a solid tax base and jobs.
The study called those companies HIF's (High Impact Firms) and how critical to a healthy economy they were because of creating 95% of new jobs. The further challenge of attracting them was they represented only 5% of all small businesses. We took that research and compared it to our Library of Best Practices for Fast Growth Companies, creating the 5.15.80 Performance Model. The top 5% dominate their markets and their core concern is SUSTAINING success – to a Break Out through a major reinvention.
The middle 15% represent firms doing OK but unsure about how to take the company to the next level. Their core concern is how to Break Through.
The remaining 80% represents businesses that are struggling to compete in the current environment, they are one or two moves away from disaster. Their focus is how to Reset the business and fight another day. Their core concern is how to consistently achieve BREAKEVEN.
Our concern in this series is the 80% and the focus now is how to move into the 15%.
Key Issues - Owner Perspective:
What You Need to Know
The UnderPerforming Many, The 80%The 80% makes up most small businesses today. They are barely hanging on and need to rethink where they are and what they are doing. They need to focus on (1) achieving operational efficiency to become the lowest-cost producer (this is not about price) in their markets, (2) enhance their offer by improving the existing product line to make it distinctive and take the pressure off price, and (3) professionalize management to blend frugality with developing people. The most stark element of our research for the 80% was to attack cost and capacity first instead of pursuing revenue.
Most of the companies we studied went under with a sales - not cost first approach.
RESET to Break Even: 3 Critical Elements
What You Need to Do
We are your single, one stop source for business success, period, end of story.
Make sure you leave some thoughts in the comment section below. I am interested in continuing the conversation.
new choice for BUSINESS SEARCH
All IBGR Shows Notes are available for download