5 Step Waste Reduction Process
Profit is the lifeblood of any organisation. Without profit and cashflow you won’t be able to guarantee your long term survival. Profit generates the capital that you need to grow your business. Without it you cannot reinvest for the future.
Waste removal in any organisation is the easiest opportunity to increase profits. Studies have found that waste in a company can be as much as 30% of the operating costs. This leaves a lot of room for improvement in all businesses.
To eliminate waste it is therefore important to fully understand exactly what waste is and where it can be found. We need to identify the most prominent areas where waste occurs in organizations and what tools and processes are available to help us with this task. Taking a strategic approach to managing waste reduction can bring a range of key benefits to your business
We a spend a lot of time working on our own business – but do we take the time to look at what our competitors are doing? Why do we need a Competitor Analysis? Your competitors are your best friends. They test the market for you. They leave gaps in the market for you. They make mistakes that advantage you. By first analysing and then monitoring your competitors you can significantly improve your own business – even if it is just by learning from their mistakes.
Most of your customers will have dealt with your competitors. They will know who is the most expensive in the market, who has the better quality and the better service. They base their purchase decisions on this information. You also need to know this information as it is the cues that they respond to.
A formal competitor analysis will allow you to discover any gaps in the competitive advantage of your rivals and to develop specific plans to overcome them.
CUSTOMER LIFETIME VALUE
Estimating Customer Lifetime Value will help you make decisions about how to allocate your marketing and business development resources. How? It will provide you with an estimate of the value to your business of each customer over the expected lifetime of your business relationship. You can then make informed decisions about what resources you should invest in and then building that relationship. It will also help you answer questions like where should you apply your marketing focus and how much should you spend on existing customers versus new ones. When you know what each customer is worth then marketing is an investment in the future of your business, not an expense.
Market segmentation is simply a tool that helps you to understand your market and the needs of your customers. Once you understand this better you can refine your product or service, positioning and marketing. A key to growing your business is to review the market regularly. You can segment the market by Product, Geography or Customer. This then lets you answer questions like:
*Is your segment size enough to make a profit?
* Is it seasonal or cyclical?
* Is this long term or a quick profit?
* Is it shrinking or growing?
Do you really think about the ways that you can increase demand for your product or services? Do you work on ways that can help customers come to you? A lot of success in the modern business environment is generated by creating demand and creating triggers for customers. This can be critical to the sales process and driving growth.
We estimate that only about 10% of your customers are in the “buying” stage. Good business should be looking beyond this part of the customer buying cycle and putting energy into the potential customers that are still in the “satisfaction” stage. Understanding the customer buying cycle helps us to do this and generate sales demand. This is where we can generate real revenue growth and hit those sales targets that will make your business a success.
Defining the vision for your business will make your future as clear and as powerful as it should be. Your vision should give you a clear understanding of where you are heading so that when we consider the “now” you know what is important and what is not. Clearly defining your vision allows you to prioritise the principles aligned to the achievement of your business objectives. Once you have this you can then set achievable targets and timeframes.
In setting your vision we consider – what we do, what are we good at, who are our customers – now and in the future, what do they value and how will we measure our success. Once we understand all of this the plan for the future growth of the business becomes easier to develop.
Why do we want to grow – because a business that is not growing and changing stagnates. Growth gives us the returns that help to meet personal goals and ensure that your business is sustainable. It allows you to improve what you are doing and the product or service that you are delivering.
There are four main ways that you can grow a business and they include market penetration, market expansion, product expansion and diversification.
Double check that you have thought of all the options. Can you think of any existing products that you can grow within your existing market? This is what we term market penetration. Have you got any existing products that we can sell into new markets? We call this market expansion. Have you any new products that we can sell into your existing markets? We call this product expansion. Have you got any new products that you could develop in your new markets? We call this diversification.
Most times when it comes to pricing we are either guessing or copying what others in the market place are doing. This means that we may not be maximising profits and could be leaving lots of revenue on the table – either by not charging enough or by charging too much.
Deliberate pricing strategies can help you maximise the return from your business. How often do you feel that you need to be the lowest price to win the sale? Evidence shows that price is not always what a customer cares about. However you need a strategy to be sure.
You also need to consider a strategy for raising your prices – at what level can you raise your prices without customers objecting. If you get this strategy right, you can raise prices without them even knowing that you are doing it, let alone objecting.
GROWING YOUR BUSINESS SEMINAR
RSM Bird Cameron is committed to helping you grow your business. Talk to us today and we can start helping you achieve the results you want. Our free seminar on 12 June 2013 is a great place to start learning what you need to know to improve your business. You will benefit from our years of experience helping business. We will also be applying the tools developed by the accountants network Mindshop – some to the best secrets to business.
To attend the free RSM Bird Cameron Growing Your Business seminar email your details to [email protected] and we will send you further details.
YOU’RE INVITED TO OUR FREE… (02) 6217 0300 rsmi.com.au GROWING YOUR BUSINESS SEMINAR
Striving for increased growth is an objective for most businesses however the path is not always a smooth one. Understanding what products, services, people, industries and market segments will provide you the desired growth and then what strategies are required to ensure you achieve your goals is critical. This workshop is designed to enable attendees to develop growth strategies for their organisations and then build in safeguards to ensure continued success.
- Identify your key market
- 5 steps in reducing waste
- How to influence customers
- 4 ways to grow a business
- Customer lifetime value
The workshop culminates in the use of the one page plan to document your goals.
When Wednesday 12 June 2013
Where The Eye, Regatta Point Business Centre
Time 5.30 – 6.30pm Refreshments will be served after the presentation.
RSVP required [email protected]
(02) 6217 0300 rsmi.com.au