Thursday, 10 January 2008

Successful Business Bucks the Trend

Earlier this week I had a review meeting with a client that I started working with just 12 months ago. The small independent business operates in the home improvement retail sector.

The business owner had hit the classic growth plateau, the business had been running 5 years was doing OK, but the owner was running around like mad and missing time with his family. He wanted to grow the business further but was unable to see how this could happen.

After carrying out a free diagnostic I identified that the business could grow with the right growth and development strategy but that he also needed to work on the business and not in the business. Also the business needed to work smarter not harder.

I worked with the owner to put together the clear vision, strategy and tactics to grow the business and rethink how the business operated. This was then translated into a robust business plan containing SMART objectives and accurate financial forecasts so that we could accurately measure costs and sales. The forecasts also allowed us to track the impact of strategy and tactics.

We also repositioned the business to concentrate on the higher net wealth clients and to turn away the lower value business to the big chains that were in the usual aggressive price war. The secret was to avoid competing on price and spending lots of time producing design layouts for business that would not be closed or if won would be on lower margins.

We projected a reasonable growth of 20% and to retain a good gross profit margin.

So how did this approach pan out?

We just examined his final end of year results he achieved 68% growth and exceeded the targeted good gross profit margin by 1%. The changes we made has meant that he is now able to take an extra day a week off, plus several breaks. He is relaxed, happy and is now looking at planned expansion funded out of profit. He now gets a very large proportion of business from recommendations and is spending a lot less on advertising.

The business is expected to hit the five year growth target that we set at least 1 year earlier.

Meanwhile his competitors both the small independents like him and the large national chains are all struggling even harder and fighting over low profit business.

To quote a character from the TV programme 'The A Team,' " I love it when a plan comes together," (and so do my clients)!

Alan Briggs

Dynamic Business Strategies Ltd
Tel: 07917 446068


1 comment:

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