How To Increase Small Business Profits |
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By: Paul Simister Posted: 2008-04-27 05:14:04 |
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Many small businesses fail each year, dashing the hopes of the entrepreneur and causing suffering to employees, customers and suppliers. Statistics often quoted include "50% of businesses fail in the first two years and 80% fail within the first five years".These statistics will differ from country to country, from trade to trade and across the economic cycle but what is true is that too many small businesses fail.Most entrepreneurs and owners of small businesses lack a guide or model to business profitability and prosperity that can be used as a planning tool before they start and as a management guide after start-up to produce small business profits.The Entrepreneurial MythIn his great book "The E Myth Revisited" Michael Gerber argued that many small businesses are started when the prospective owner wakes up one day with an "entrepreneurial seizure.""Why am I working for John when I am a better [insert trade or profession] than he is but he's the one who drives home every night in his expensive car to his big house with the profit I make for him. If John can do it so can I. It's time I started my own business."According to Michael Gerber, this is where the trouble begins.The new entrepreneur knows how to do the technical work of the trade or profession but has little clue how to build a business. It is this lack of business building skills which cause so many small businesses to disappoint their owners or even fail.Introducing The Eight Pillars Of Business ProsperityThe Eight Pillars of Business Prosperity model is designed to bridge this knowledge gap and to help entrepreneurs build bigger, better businesses which prosper.The Eight Pillars of Business Prosperity are:-Your key numbers - measuring the performance of your business-Translating your vision into action-Establishing your market position in the competitive environment-Generating your leads-Converting your leads into first time customers-Building your back end with repeat customers-Leading your team to achieve your vision-Systematising your business
When the Eight Pillars model is used with an established business it breaks down into four sections:-Where are you now - Pillar 1-Where you want to be - Pillar 2 and Pillar 3-What you have to do externally - Pillars 4, 5 and 6-What you have to do internally - Pillars 7 and 8 Putting The Eight Pillars Of Business Prosperity To WorkThe Eight Pillars of Business Prosperity provides a comprehensive program for you to improve your business.Take each pillar in turn and-Assess your current performance and prioritise the Pillar which appears to be the biggest constraint to improving your small business profits-Brainstorm ways to improve your selected Pillar and start implementing the easiest ideas-Check your progress and identify if any other Pillar has become a new constraint-Develop solutions to each constraint as it appears and you will continue your journey to increased small business profits. Apply the Eight Pillars of Business Prosperity diligently and you will increase your profits.Paul Simister helps customer focused entrepreneurs to build better businesses using the Eight Pillars of Business Prosperity. Paul is a chartered accountant, has an MBA with distinction and is a certified Guerrilla Marketing Coach. Paul trades as Your Profit Coach and writes a very popular and extensive Business Coaching blog at http://www.paulsimister.com which is packed with free information to help entrepreneurs and owners of small businesses increase profit. |
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