Doubling your revenue and doubling your profits: a bold but achievable challenge

Lessons from Guria

Part two, October 2019 – by Isaac Jeffries

TDi has partnered with PNG Women’s Business Resource Centre to run the Guria Growth Accelerator as part of the PNG-Australia partnership. We are working with twelve top notch entrepreneurs in Port Moresby, Papua New Guinea.

This week has been full of tough questions, soul searching, tears and laughter.
The theme of the week has been “Doubling your revenue and doubling your profits” – a bold challenge, but one that’s achievable.
Here are some of the interesting themes and lessons that came up in the accelerator…

The Work vs Twenty Seconds Of Courage

Not all of your task list is the same.
We can broadly split it into two categories:
1. The work – the tasks that you know how to do, which can be ticked off like a shopping list.

2. Moments where you need twenty seconds of great courage –the nervous moments where you try something new, take a risk, choose yourself and attempt something that might not work.

The difference is huge; in a spare 20 minutes you can do a little piece of “the work”, but we rarely jump at the chance to use our courage.
The courageous moments make up less than 0.1% of your time, and yet they’re the ones that unlock all of the great opportunities.
Vice versa, it’s easy to stay busy doing “the work”, as a means of avoiding the moments that require 20 seconds of courage.
It’s worth finding a support person who can nudge you towards these moments of bravery.
It also turns out that after those twenty seconds, you realise that there wasn’t that much to be scared of in the first place.

Identifying Bottlenecks In Your Business

When we evaluate options for growth, it’s important that we match our customer base with our capacity.
Excess capacity is a waste, and insufficient capacity leads to stress and unhappy customers.
We want to consider the entire production line, from the channels where we acquire customers, to the products and services we deliver, to the follow-up and administration at the back end.
If just one part of the process is constrained by a bottleneck, then the entire business suffers.
The bottleneck might be in your customer base, your key staff members, your equipment and inventory, or most likely you.
By identifying the real issue, we can take steps to remove the constraint, and growth will happen naturally.
A lot of entrepreneurs assume this will require investment, but more often than not the solution comes from increased efficiency, smarter systems and better staff training.

When Does It Need To Be You?

While we want to ensure that the founder isn’t responsible for all of the day-to-day tasks, there are some areas that require their expertise. One entrepreneur mapped out her system, and identified six areas that were dependent on her.
We asked her “If you could only keep three, which three would they be?”
She chose staff management, quality control, and follow-up calls with customers.
This is an incredible selection, because the business benefits from her eye for detail and her “skin in the game”.
The founder is the person who best understands the systems and processes that lead to satisfied customers, so we want to keep her in an oversight/quality control role until she can train a few team members in the craft.

The Island Of Guilt

There’s an interesting feeling in the room whenever you come back into an accelerator program; some people haven’t done what they said they would do.
You don’t want to overlook the issue, nor do you want to throw them into a resentful headspace.
Instead we call it what it is; you’re on The Island of Guilt, an uncomfortable place, and are need a way of getting back to the mainland.
Our suggestion is to name what you’re going to do in the next week, then do it.
Please don’t miss twice in a row.

100% Of Your Workload

A great trick for highlighting the over-dependence on the founder, ask them to allocate how much time they spend on each part of their business.
You’ll get 50% on Task A, 40% on Task B, 20% on Task C, 30% on Task D, and 20% of Task E.
This tallies up to 160%, so the founder will quickly try to “scale those down”.
The reality is that their first guess is probably accurate; they’re working 1.6 jobs.
This might be OK for now, but it has to start decreasing.
Any new project has to be paired with the handover of a current responsibility to a team member, or the decision to stop an old project altogether.

Training + Trusting

Your ability to scale your business is dependent on training your team, then trusting your team.
Even if your customers numbers surge, your capacity will be limited until you become a great trainer.
This means teaching what you know, then stepping back and trusting that your team will do their job.
Several of our group mentioned how hard this is for them, they can train new staff but can’t quite seem to relinquish responsibility for the day-to-day tasks.
What looks like “helping” soon becomes a bottleneck, and establishes a culture that will push away good staff.

Lights In A Blackout

During the week, Port Moresby was hit by extended blackouts.
The cohort saw this as a golden opportunity for one entrepreneur who sells solar lights – since the city was now full of prospective customers.
When people have an urgent pain point (e.g. no electricity for a night), they become prime candidates for the solutions we sell, and their price sensitivity decreases.
The question is, do you have a way of rapidly marketing to an audience who has recently seen the need for your products and services?
I was in Rome one day, and saw a street vendor pull out a box of umbrellas the second it started to rain.
As my Dad pointed out; “Now that’s an entrepreneur”.

Finding Great Customer vs Creating Great Customers

We tend to value our top customers, sometimes to the point where we are dependent on their loyalty.
The question for each industry is, are good customers found or made?
Do you have to go fishing in the right pond?
Or do you have to educate and influence your audience into becoming great customers?
If you run sewing classes and sell sewing supplies, is it easier to target enthusiasts, or take amateurs and set them up for a newfound love of sewing?
If you’re a graphic designer, do you target sophisticated customers, or do you teach people how to get the most out of your services. 

Finding Great Staff vs Creating Great Staff

The same question applies for your team members – are they found or made?
Can you turn lead into gold?
Can you turn a seed into a productive plant?
Or do you have to buy them ready-made?
Again this depends on your industry and your patience, but it’s worth looking at your top talents an auditing how they came to join your team.
Can you afford to hire great people, or will you have to create them?
And in both cases, where do you go to look for more?

Smoothing Out Demand Cycles

Most industries have a natural variance in their busyness – peak season and quiet times.
If you’re going to grow the company, will you accidentally magnify this problem?
The solution is to ask “How might we smooth out the demand cycle?”, which leads to two further questions:
1. How might we outsource our excess work to trusted partners?
2. How might we prompt customers during slow periods?
It varies by industry, but it helps to create a strategy before you need a strategy, since these often take a while to establish.

The Importance Of A Great Brief

If you’re going to bring on new partners, contractors or team members, you’re going to need to learn how to write a great brief.
As anyone who works in a creative field will tell you, if you don’t set a common vision for how you will work together and decide who will do what, it is almost impossible to create a great result.
A brief outlines the aims of the project, how it will be achieved, who is responsible for each task and when each component is due.
I personally recommend using examples of what you expect, which gives others a reference point for what the finished product will look like.
At work we call this “Paint Done”, where we paint a proverbial picture of the completed project.
There are plenty examples online for different fields, and it can save you countless hours in meetings and duplicated efforts.

What Does The Customer Think They’re Buying?

An offhand comment turned into an impromptu market survey, as one person mentioned their idea for a roadside assistance service for PNG.
She gave a high level description of the idea, then we immediately went to the group for their feedback. It was a resounding “Yes!” from most people, and a tentative yes from others. What was interesting though was their rationale – some told stories about breaking down at night in dangerous areas and calling their relatives for assistance, others spoke about their friends who had run into harm when a road accident occurred, and some mentioned that they would buy memberships for other women in their family.

The fascinating theme here was that nobody was worried about their car.

Every story was about the driver needing to get themselves out of the area, with no real thought for the vehicle.
They saw this service as a personal security on call (who just so happened to know how to fix cars).
That means you can sell to two large markets – people with cars, and people who don’t have cars but who go out at night.

Good, Better, Best

We had a guest speaker, the CEO of Brian Bell (a beloved PNG department store).
He mentioned the brand’s philosophy, which he described as “Good, Better, Best”.
For every customer need, they would stock a product that was good and cheap, a product that was better and a little costlier, and a product that was premium in both quality and price.
This may be a good strategy for many businesses – can you implement these tiers to capture a broader range of customers with varying budgets?

Free Agency

As I’ve previously mentioned, there are huge parallels between the worlds of professional sports and startup recruitment.
Talent has options, good people seek out great cultures, and a business never has real control over the movements of its top performers.
Some entrepreneurs see this as a huge risk, e.g. “If I train them, they might leave…”.
The obvious retort is the old “what if you don’t train them and they stay?”, but the other question is; why can’t you become a destination for other top talent?
Yes you’ll have good people leave every now and then, but how might you attract other high performers to join your team?
This takes a deliberate effort, but it’s worth becoming an “employer of choice”.

Leadership Is Not Fixed

We talked about the ramifications of having staff members leave the business in response to the founder and their leadership.
This is often a scarring experience for all involved, but especially for founders who are looking to expand again – will the same thing happen again?
I love the self-awareness behind this question, but self-awareness can quickly turn into unhealthy insecurities.
Your leadership is not a fixed object, it is something that can evolve and improve over time…with deliberate effort.
As they say, it’s only a loss if you don’t learn from it – otherwise it’s a lesson.

A Good Plan vs My Plan

Your advisors can make suggestions and propose new goals, but there’s a difference between “A good plan” and “MY plan”.
That difference is buy-in, a commitment to put skin in the game and the decision to embrace these goals as your own.
That’s why we focus on asking great question instead of providing our own answers, so that every founder commits to their own plan.
I won’t hold you to my expectations and timelines, but I’ll certainly hold you to yours.

 

Isaac Jeffries is a Senior Consultant for TDi, helping social entrepreneurs to grow their business and become financially sustainable. This article was originally posted on his personal blog which you can find here. 

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