Let’s keep business simple

  • by kaibizzen
  • May 16, 2022
  • Blog

You’ve likely heard of the K.I.S.S. principle as a reminder to “Keep it Simple”.

How closely do you follow this principle in business?

Here at Kaibizzen, we have been business coaches and business mentors for over 18 years and have noticed that while most business owners have heard of this principle, very few actually know how to apply it to their business.

In this blog, we will share with you examples from two of our clients that have reinforced my belief that success in business can be simple.

How Mary and Tom Achieved a 68.7 Per Cent Increase in Gross Profit

At this time of year, we are often working with our clients to review their financial ‘scores’ in order to plan for the coming financial year. 

Six months ago with Mary and Tom, we identified that the most important financial number to focus on was their gross profit.  Why?  Their operating expenses were fairly consistent and where they were losing money was in the cost of producing their product.   

Upon reviewing Mary and Tom’s financial year numbers, we determined their business achieved a 68.7 per cent increase in gross profit from Quarter 1 (July to September) to Quarter 4 (April to June the following year).

How did they achieve this impressive turn around?  

In January, we worked with Mary and Tom to ensure their focus was on two areas of their business:

Focus Area 1: Ensuring their quoting was being quoted at their targeted gross profit margin (for example, 55 per cent)

Focus Area 2: Ensuring their manufacturing and installation was being managed so well that the cost of their materials and labor to manufacture and install was achieved at the quoted price, or better.

In the span of six months, Mary and Tom, along with their team, have been 100 per cent 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 three things – quoting, manufacturing and installation – including all materials and labor.

Their quoting and manufacturing/installation management team 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 per cent 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.  

How Focus Reenergized Fred’s Business

Over the last week, we 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 finalising Fred’s financial year plan, we have worked to give him one focus for the entire financial year.  

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

Our reverse engineering planning process enabled us to see Fred currently has enough clients.  So, if he puts 100 per cent of his energy and focus on getting those clients who have already bought from him once to buy from him more often, he will achieve the business targeted income very simply.  

Fred came out of his meeting with Kaibizzen feeling 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 18 years of being a business mentor and business coach, I’ve found there are many ‘Fred’s’ 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 the table from each and every one of your current clients?

In more than 18 years, Rob and I have never had anyone tell us 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 current relationships 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 seven times more than monetising your current clients.

Does Keeping it Simple Make Business ‘Easy’?

Business really can be simple, it’s just us who make it complex. We make it complex by 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 business coaches like Rob and I 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 next financial year?

What are the critical one, two or even three KPIs in your business which are going to have the greatest impact on you achieving your targets?  

What are the one or two critical numbers you need to stay focused 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 on where to start, or you’d like a fresh pair of eyes to go over what you are doing, Kaibizzen can help. Our renowned PPP Method business coaching program equips our clients with the best business and personal growth strategies, specific to your situation so you achieve your goals.

Get in contact with Rob and I today by filling out our contact form or calling us on 0408 337 288.

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.