How to Introduce Change Into Your Business

April 26, 2013  •  Leave a Comment

Let's assume that you have a business that is doing SOMETHING (you're making a little cash). It may not be at an optimum level just yet, but maybe it's paying a few bills for you. Maybe not.

You want to change, but what income you are getting from your job (speaking now to self-employed business owners), is something you've started to rely on. Or it's not. Maybe you have another job that pulls most of the weight. That's all good, whatever the circumstances this is likely pertinent to you. 

The big question is how to introduce a change.

Most people are afraid of change, many people are afraid of it so much that they live and die in the places they were born, or they fear new jobs, or switching jobs. They fear a better relationship because the path to least resistance is where they are at. Change is not something humankind seems to be too keen on.

We want to change things to perhaps increase our standard of living. Maybe we want a nicer house, car or clothes. That could be a reason to change something. Maybe we want to donate to more good causes. That would be a very valid reason to consider "change".

So how would you introduce change into a company that is potentially doing "alright"?

Years ago when I first started a painting company with a friend at the time we laid out the statistics of the company. One of those statistics was our gross income. This was the money we took in each week from our jobs. From there we divvied it up and allocated toward P&M, toward gear maintenance, our own pay, our set aside for legal, our set aside for other stuff. I don't remember everything but that equation is different for every company anyway.

So we had these statistics. One key statistic is gross income, another one was "estimates given vs estimated accepted". Gross income is probably key for any business. A sub-statistic of that might be "How many people did you talk to about your service this week?" In the case of our painting business, it was, how many people called us and how many bids did we do that week, how many were accepted and what income was made.

So you get these statistics going, you measure them week to week (or whatever works for you), day to day, month to month, that depends more on the statistic I think than anything else. Anyway, how do you introduce change into the equation?

You simply incorporate the change that affects the statistic and you change NOTHING else. You then watch what happens. You carry on business as usual incorporating that new change. You watch your statistics (you can map these out in Quickbooks or other software). Anyway, you look for the changes that made the statistics rise or fall. Simple. You remove the changes that depressed the statistic, you reinforce the ones that aided it.

So let's say you are putting out a particular flyer that usually nets you X response and that = X income in any given week (or month). Okay, so what if you surveyed and found the buttons current to say perhaps a higher end clientele? You then market to them. Maybe your income rises. If it doesn't the buttons are wrong, or the guy talking to the potential buyer is messing it up, or there's a flaw somewhere along the production line; the product isn't up to par, the QC is off, the follow-up is missing, the ... you get it. That's all part of knowing your business. The crux of this is, you introduce ONE change at once and watch the reaction. And that is easily done by viewing the statistical information.

So okay, you've begun marketing to a higher end clientele, your income increased, so you stop the promotion to the lower end clientele. Watch the statistics for a few weeks or month or two. If they don't begin to drop you did it right. If they do, pick back up what you were doing that was successful. Get that back in because you've got to keep the income coming in despite the other "experimental changes" you are producing on the side.

Through a series of tweaks like this you can bring your income and production into greater ranges. There are of course factors you've got to be aware of and that's probably business acumen, familiarity for your industry, timing, etc. That's where if you try these things and "nothing seems to work", that you find a business mentor and get a little help. A "consultant" if you will.

Remember, apply little changes, tweaks and watch the statistics over the course of a short while to see what their general trend is. If they are improving, stick with the change. If not, reverse it. Don't stop the successful things until you've hit that new stable. For example:

X service = $50

Y service = $75

Z service = $150

ZZ service = $300

You've had "X" service forever but it's only really there because you were pricing toward the middle, which was $75. $50, you feel doesn't represent your service or product now, even at the low end, so having it there begins to intrude on your higher price. You just added ZZ service at $300. You market to a higher end clientele who begin to buy the Z service more frequently and occasionally the ZZ service. You finally annouce that the X service is going away for whatever reasons are legit; maybe your service capacity is better, the product is better, it's the least purchased item, whatever.

Now suddenly, you're priced toward the middle of $150 instead of $75, that's double average potentially (so long as your product/service matches the market and the demand for it).

I won't beat the horse here. But sound off if you need some help or have a question on this. =)

 

 


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