Be an Ethical Entrepreneur, Marketer, and Business Builder

Have you setup your business to achieve critical mass?

This blog is going to tie a whole bunch of other blogs together so try to keep up. 😉

As I mentioned in my explanation of why I buy, build, and sell businesses, its important to find a business that you can grow very rapidly. Another way of stating that is to find a business that’s about ready to reach critical mass. According to wikipedia, critical mass is The amount of a tendency needed to keep it going on its own momentum. In other words, you get your business setup with such a strong foundation that now it’ll take off and stop growing linearly and start growing exponentially! With that strong foundation, your profits will grow exponentially as well (and probably faster than your revenue).

So here are the components needed for any business to reach critical mass.

  1. You focus on improving the business through the 6 Stages of business evolution
  2. You have the 3 Leaders every business needs
  3. You have Systems, Processes, Procedures and Scripts in place for everything
  4. You have a program in place to maximize Back-end Sales and to generate Referrals from every sale

This may be the most simplistic way to view a business running on all cylinders, however all of these points are needed to achieve that massive growth. Keep in mind, most businesses do not have more than 1 point of critical mass. They can only have a massive growth period once in their existence which is why it’s so important to know a business that’s about at that point. More importantly you need to know how to take it past that threshold so you can then sell it and cash in on that amazing growth.

Ok so let’s look at each point in a little more detail:

1. The 6 Stages of Business Evolution

In his book, The Business Coach, Brad Sugars steps you through these 6 stages. At his Entrepreneur’s Masters Class he goes into even more detail. I haven’t written a blog about it in detail yet so here’s a quick overview of those stages.

  1. Mastery – Mastering Money (cashflow), Time, Delivery, and Reporting (most businesses are stuck here)
  2. Niche – You no longer can be compared to competitors because you have something unique
  3. Leverage – You’re leveraging (doing ever more with ever less) all aspects of you business
  4. Team – You know how to recruit and get the right people in the right spots
  5. Synergy – Everyone and thing is working together
  6. Results – Just a natural by-product of everything else

2. You have the 3 Leaders every business needs:

A leader leads people and a manager manages resources so it’s important that they’re leaders. Those leaders are the following:

  1. Service and Operations Leader
  2. Sales and Marketing Leader
  3. Finance and Administration Leader

3. You have the Systems, Processes, Procedures, and Scripts in place for everything.

Those systems include your software and computer systems as well as the systems needed to effectively deliver your product. The processes and procedures are the methodologies that you use to put those all into place. They of course all need to be documented to deliver consistency and to get someone trained and up to speed as quickly as possible. Scripts are the methods in which you effectively communicate with your customers, vendors, and maybe even each other. They should all be based on strong NLP principals.

In my office last week we just hired a new Office Administrator for Sales and Marketing and the person training her has given her a whole packet of the procedures, processes, and scripts we’ve developed over the past 5 months. It’s amazing how quickly those things can get someone trained and productive. It also helps you quickly determine if they’re up to the task or if you made a bad hire.

4. You have a program in place to maximize Back-end Sales and to generate Referrals from every sale

I tied Back-end sales and Referrals together because they’re basically the same thing. If I can drive down my cost per lead for marketing by getting referrals from every sale or by increasing the times a customer comes back to buy from me, I’m way ahead of the game. Building that loyal customer base is critical and an essential piece to acheiving critical mass. The way to do that we’ll have to address in a later blog.

So now you have a basic understanding of all of the pieces necessary to acheive critical mass, however don’t forget that this also gives you the perfect formula for determining what businesses have not yet acheived this. In other words, these are the businesses you want to buy! The businesses that just get by or manage consistent single-digit growth. If you’re like Warren Buffet you look for the businesses that have a strong position in the market but have been undervalued or beaten up by speculation in the market. Warren Buffet’s strategy, however is long-term. We however like to think short-term and repeat that short-term buy, build, and sell again and again. Warren Buffet himself said that he could generate 50% or better annual returns if he didn’t have so much money. In other words if he could just invest in small to medium businesses that are about to reach critical mass he’d be an even richer richest man in the world. Makes sense to me. Does it make sense to you?

To your success, Bryan

The 5 simple steps to writing the perfect phone script…

This could be a script for anything. Sales, service, scheduling, answering questions, etc. etc. etc. Keep in mind that just about every script is doing some sort of selling and so we’ll use some basic sales and marketing techniques to effectively write.

Before we review how to write a script, let’s summarize why every business needs scripts for any question or process that occurs on a regular basis.

  1. It’s the only way to ensure consistent, quality responses to all of your customers every time.
  2. It’s the best way to quickly train a new teammate and bring him up to speed on your business.
  3. It’s the only way to be sure that you’re maximizing the chances of a sale, appointment, happy customer etc. with every interaction.
  4. It’s a great way to replicate all of the best, most powerful knowledge in the business and share it with the whole team and even with your other businesses.
  5. It’s required if you ever want to step away from your business because you’ve set it up to run by itself

There are probably a lot more reasons for scripts, however you get the idea. Scripts are a key to successfully growing your business.

So to create a script you need to follow the 4 Basic Rules of Marketing:

  1. Create a need or problem
  2. Provide a solution
  3. Convince them that you’re company is the best one to handle that solution
  4. Entice them into taking action right now

So let’s keep those in mind while we focus on the 5 steps to creating a great script:

  1. Determine your goal or desired outcome from the conversation
  2. List all the benefits the customer/prospect will receive by saying “yes” to your script
  3. Organize the script according to the “4 Basic Rules of Marketing”
  4. Paint a picture and/or sensationalize
  5. Translate into your own words and dialect

Let’s look at an example that we recently tackled at my business. We have a recurring service that we provide for our customers where we change the filters once per year in their drinking water system so that it functions optimally. Originally that script went something like this:

“Good morning, this is Sally from The Water Company. I’m just calling to let you know that your annual filter change is due. The filters should have been changed <date>. We’d really appreciate it if you can call us back at <phone number>.”

So let’s work through our process:

  1. Determine your goal. – Perform a filter change for our customer on or about 12 months after the last one.
  2. List the benefits. Great quality water, lower long-term cost by protecting the much more expensive membrane, the filters are designed to last 12 months to ensure the best water.
  3. Organize the script according to the marketing rules. –
    1. Problem – They haven’t changed filters yet and their water quality is deteriorating
    2. Solution – A low-cost, convenient, in-home filter change.
    3. Why us? – Well since they’re already using our equipment it’s not like they’re going to call a competitor however they may think it’s better if they do it themselves. Our initial script will assume they’re either going to not do a filter change or they are.
    4. Why should I call back to schedule now? – Because we’ll be in your area and you’re already on the schedule.
  4. Paint a picture – Filters take out impurities and over time they lose their effectiveness to do so therefore delivering lower quality water.
  5. Translate – This is done overall by the script-writer but individually by each person using the script

When we put that all together into a full script this was the result:

“Good morning, this is Sally from The Water Company. The filters in your drinking water system are designed to last 12 months and its been 14 months since your last filter change. As you probably know, every day those filters are taking the impurities out of your water so each day beyond 12 months more and more impurities are able to pass through. You are on the schedule for next week when we’ll be in your area so simply call 555.1234 to confirm and we’ll take care of everything for you. We appreciate you being a part of the Water Company team. Have a fantastic day!”

Since we haven’t reviewed NLP (Neuro-Linguistic Programming) in this blog yet, I’ll just briefly point out some things that NLP would have us correct. First, notice in the revised script how “you” and “your” are used more frequently to put more emphasis and focus on the customer.
Secondly, that last sentence jumped out at me – “We’d really appreciate it if…” What message is that sending to the customer? To me that says “you, the customer, are doing us a service by changing your filters” when in reality its a great benefit to them. Again the proper thing to do is to turn the focus to the customer and how it’s a great benefit to them. Notice how we changed that in the revised script – “You are on the schedule next week when we’ll be in your area…” What does that say. Well it assumes that of course they want a filter change and it also gives them a reason to respond almost immediately. If they don’t we might not be in their area for a while or we might show up when they don’t want us to. Either way, it’s much more likely to illicit a response.

As for the problem and benefits, we decided to pick out the points that the filters are only designed to last 12 months and that regular filter changes require good quality water. We put more specific numbers of 12 months and “14 months”, or whatever the time has been since their last change, instead of just spitting out a date. By listing a date they have to do the math and most people either won’t or it just won’t sound as urgent based on the quick math that they do in their heads.

We tried to paint a picture with our words by talking about “impurities being taken out” and “impurities passing thru”. That’s something anyone can easily visualize and we’re hoping most will automatically picture that with their minds’ eye.

Keep in mind, a script is just a starting point. It needs to flow smoothly when its being used so that it doesn’t sound like you’re reading it. In other words, you need to rearrange, add, remove, change transitional words to make it sound like you’re just talking to the customer. Everyone in your business may have a slightly different “script” because of that, so just make sure they know not to change or alter the key points.

Lastly, as with every change in your business, you need to Test and Measure the results of the new script and again Test and Measure when you improve it next time.

A secondary benefit that I derived from working on this script is that it allowed me to spend some time teaching a team member more about NLP, scripting, marketing, and business in general. Obviously it would have been a lot quicker for me to just write it myself – however if I did that, then I’m just guaranteeing myself that I’ll have to write every script forever.

To your success, Bryan