Every business would like to be profitable. In fact, management guru Peter Drucker once stated, “Profit for a company is like oxygen for a person. If you don’t have enough of it, you’re out of the game. But if you think your life is about breathing, you’re really missing something.”
Drucker is suggesting that a great company needs profit, but it’s not just about making a profit. Unfortunately, in the today’s business climate, it is not easy for companies to make a profit. In fact, a business owner that I work with once quipped about his company when someone asked him what he did for a living stating, “I run a great business, but for three years I ran a nonprofit and did not know it.”
Build processes and profitability
The key to profitability lies within the core processes of the business. After having worked with business owners for many years, I discovered profitable enterprises embrace five fundamental processes .
1. Effective sales process
The number one critical process of every business is the sales processes. Many companies create excellent products, but have no idea how to sell. Sales is an essential part of the success of any business. The sales process should include answers to fundamental questions:
Who is our ideal customer?
What are the critical sales steps from introduction to close?
How long does the typical sales cycle take?
What is the usual sales amount?
Question: Can you clearly outline in detail your company’s sale process?
2. Engaged customer experience process
Smart companies focus on profit plus customer experience. Good leaders develop an engaging and inviting customer experience. A great customer experience will bring repeat customers, which is necessary to create a sustainable business. One simple starting point is to identify your Net Promoter Score.
Question: How do you think customers would currently rate your company, products and services?
3. High performance training process
The market is always changing. Smart companies become learning companies. In a 2015 Human Capital Institute survey, 74% of companies noted that creating a learning culture was an upcoming priority. This survey points to the fact that growth-minded business owners understand the need to improve. When your people improve your company improves.
Question: Have you established a model for how employees can improve themselves and their performance?
4. Empowered goal setting process
Goals inspire action and effectiveness. In their book “The Strategy-Focused Organization,” co-authors Robert Kaplan and David Norton note that “only 7% of employees fully understand how they can help achieve company goals.” Additionally, in a presentation at the 2015 BetterWorks Goal Summit, Kris Duggan stated “companies that do goal setting quarterly are 3.5 times more likely to be top performers in their industry.” Great companies set and achieve goals.
Question: Do your employees know how they can help the company reach its goals?
5. Easy and repeatable purchase process
Every company must thoroughly create an effective purchase process. Today’s consumer has many buying options. A quicker and easier path to purchase is essential. This process should also include methods to handle customer complaints and steps to turn customers into brand champions.
Question: How easy is it to buy your products and services?
Successful companies are built with successful processes. The late William Edwards Deming, widely acknowledged as the leading management thinker in the field of quality, once said: “If you can’t describe what you are doing as a process, you don’t know what you’re doing.” Create and perfect these processes to reach profitability.
This article has been edited.
Ken Gosnell is the CEO and Servant Leader of CXP (CEO Experience). He serves leaders by helping them to have great experiences that both transform them and their organizations that enable to go further faster. He has worked with hundreds of CEOs and leadership teams to enhance strategic, operational and people accomplishments. He is an author, coach, and strategic partner with CEOs. Ken is the creator and facilitator of the Christian CEO Linkedin Group and creator of the CEO Experience Impact Assessment. He is married to Shonda, and they have four children.
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