• by kaibizzen
  • Jul 21, 2020
  • Blog

You’ve likely heard of the K.I.S.S. Principle. 

A reminder to “Keep It Simple”. 

Yet, in business, how closely are you following this principle? 

Having been a business coach and business mentor for over 17 years now, it’s my experience most business owners have heard of the K.I.S.S Principle, but very few actually understand how to apply it to their business.

So, in this blog I will share with you examples from two of our clients from this last week that have reinforced my belief that success in business really is simple.   

How Mary* and Tom* Achieved a 68.7% increase in Gross Profit 

At this time of year, my clients and I are reviewing their financial ‘scores’ in order to plan for the coming financial year. 

6 months ago, with Mary* and Tom* we determined the most important financial number to focus on was their Gross Profit.  Why?  Because they were losing most of their money in the cost of producing their product.  

Upon reviewing Mary* and Tom’s* 2020 financial year numbers we have determined their business achieved a 68.7% increase in gross profit from Quarter 1 (July to September 2019) to Quarter 4 (April to June 2020).  

How did they achieve this impressive turn around?  

In January 2020 (so only 6 months ago), we worked with Mary* and Tom* to ensure their 100% focus was on two and ONLY TWO areas of their business:

  • Focus Area 1: Ensuring their quotes were being produced at their targeted gross profit margin (for example 55%)
  • Focus Area 2: Ensuring their production was being managed so well that the cost of their materials and labour to manufacture and install was achieved at the quoted price OR BETTER, ie 55% or more.

Over the last 6 months, Mary* and Tom*, along with their team, have been 100% focused on ONLY these two areas of their business.  

Mary and Tom are smart, because they know and fully understand that their gross profit is only a result.  

They know the gross profit margin at the end of every month or quarter tells them what action they have or have not been taking in that period and what they need to continue with or do differently in the next period.  

Mary* and Tom* know for their business the gross profit is a result of 3 things – quoting, manufacture and install – including all materials and labour.

Their quoting and manufacturing/installation management team and team members have been working on improving processes and tracking.  On a weekly and monthly basis Mary* and Tom* have been analysing everything that is happening, and from that analysis, changing things and improving things little by little.  

What’s the result of just six months of focused effort? 

  • Quoted prices are being done more accurately in line with their target 
  • The work is being done quicker, with less rework.  
  • Finishing the year with a 68.7% improvement in Gross Profit!

This result also means everyone’s needs are getting met – the clients’, the team’s and as a consequence Mary*’s and Tom*’s too.  

Well done Mary* and Tom* for achieving a Gross Profit improvement of 68.7%!

How Focus Reenergized Fred*’s Business

Over the last week I’ve worked intensively with Fred* because he was becoming increasingly disillusioned with his business.  In fact, in recent times he’s seriously thought about giving it away.

In finalizing Fred’s 21FY plan, we have worked to give him one – yes ONLY ONE – focus this financial year.  

  • Focus Area 1: To increase the number of times his clients use their service.  

Our reverse-engineering planning process enabled us to see Fred currently has enough clients.  

So, if he puts 100% of his energy and focus on getting those clients (who’ve already bought from him once) to buy from him more often, he will achieve the business targeted income very simply.  

Fred came out of yesterday’s meeting much more energized, because now he knows exactly what he has to do.  

Go get them Fred!

A Side-note On Growing Your Business

In 17 years as a business mentor, I’ve found there are many “Freds” out there.  

Many business owners believe the best way to grow their business is to go and get more customers.  

My question to those owners is this…

“How much money are you leaving on table from each and every one of your current clients?”

In more than 17 years, I’ve never had anyone tell me they’re leaving zero dollars on the table.

Why would you put your energy into going and getting new clients, when you could be improving your relationship with and adding more value to the people who already know your business, know what you do and like you?  

Research consistently shows that acquiring new customers costs businesses 7 times more than monetizing your current clients.

Does “Keeping It Simple” Make Business “Easy”?

Business really is simple.  

It’s us who make it complex.  

We make it complex by not having clear focus, running all over the place and not achieving.  

We make it complex by reacting to everything that’s happening in our business, rather than working out why things are happening the way they are and figuring out the best response.

Now, was it easy for Mary* and Tom* to improve their Gross Profit so significantly? 

No, it wasn’t. 

Both of them had to learn how to be better leaders for their team and how to hold people accountable. 

There was a lot of being ‘uncomfortable’. They had to move employees on who were no longer a fit for their roles. They had to have hard conversations with their leadership team about accountability and achieving targets.

They had to stay consistent when they encountered push-back from their team.

None of that was ‘easy’. 

But when you’ve got experienced coaches like Rob and me in your corner, it’s certainly easier than going it alone.

How Will You Apply The K.I.S.S. Principle? 

What are your business targets for the 2021FY? 

What are the critical 1, 2 or maybe 3 KPIs in your business which are going to have the greatest impact on you achieving your 2021FY targets?  

What are the one or two critical numbers (like the cost of doing business (Cost of Sales), Repeat business or Average $ Sale) you need to stay focused on and take action on in order to achieve your goals?

Once you know your critical areas of focus, what actions do you and your team need to take to achieve those set targets?

If you’re not clear, or you’d like a fresh pair of eyes to go over what you are doing, reach out

Rob and I are here to help. We’re here to support you achieving the business and life you deserve for you and your family.

02 Oct

Panel Discussion

Tuesday, 6:30pm Quest Cannon Hill

What does it take to actually remove yourself from the day-to-day grind of business? Learn from our panel of Business Owners who've Been There, Done That.



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