A few weeks ago, we spoke with Marty Lewis about How to Prepare a Business Plan. If you've already got a business plan and you're wondering how can you improve your business strategy, this episode with Jason Button from JB Strategic is for you.
• Start with your "Why". "Who" and "What" come next, followed by "How" and "When".
• What should you include in your business strategy? Keep in mind the 4 Ps.
• What should you NOT include in your business strategy? Lack of accountability and unrealistic timeframe.
What is meant by “business strategy”?
What does business strategy mean?
Jason: Let's sort of get into the nuts and bolts of it. If anyone hasn't listened in before, I really encourage anyone to jump in and listen to How To Prepare a Business Plan With Marty Lewis, which is used to start a business and direct operations. That's going to cover your “Who” and “What” within the business.
From the strategic side of things, a strategic plan will look at implementing and managing the strategic direction of your existing organisation or the business that you're in. Think of that as your “How” and “When”.
1. Know Your Why
There's this pretty cool book called Know Your Why about understanding why you're in business. It allows you to understand your “Why”, “What”, and “Who” to further build on your business strategies.
Jason: That's got to be the starting point every single time. You've got to start with the “Why”.
For anyone who owns or operates a business, it's really critical for you, as a business owner or operator, to understand what that “Why” proposition looks like to you. Looking at it from a customer's point of view, what is the “Why” for them? Starting with that is a really good grounding point for you to build out that “Who” and “What” of your business plan and then the “How” and “When” we get there from the strategic proposition.
The other things to take into consideration with your strategic plan is how to tie in things like your vision, mission, objectives and how you are going to achieve everything as well as the “Who” and “What” of the business plan.
2. Know Your Customers’ “Why”
You brought up a good thing there: knowing your customers' “Why” as well as the business' “Why” and objectives. A lot of the time, they don't line up. How do you make sure that from a business owner's perspective, your “Why” is solid but clear to your clients and you're not pulling any emotion into that?
Jason: The exercise that I'll generally go through with people in this position is you've got to turn off all the noise around you. Take the emotion away and then think of why you are in business. What do you want to ultimately achieve within that?
Once you've got that as a framework and then you start to look at it from a customer's point of view with whatever product or service offering that you've got, there has to be some sort of alignment. That's not to say that it's got to be exactly the same, but there's got to be some sort of an element that ties both of those things together for you to have a really strong value proposition, which you can live and breathe in your employees or contractors or whoever is working within your business or organisation.
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From the customer's perspective, they start to understand what your value proposition is and how that ties into whatever the offering is and ticks that box for them.
3. Know Why People Choose You
If you've already been in business for a little bit and maybe you had a napkin-type of a business plan to start off with that you created when you're at the pub with a few mates, and now you've already got some clients, is it polite just to ask them, 'Why do you work with us?' or 'Why don't you work with someone else?' How do you pull in that data?
Jason: Generally, what we'd look at is getting feedback from your existing customer base and suppliers. Go and talk to your employees or contractors. You could go to friends and family just to get that sounding board and start to really shake that up.
If the feedback that you're receiving isn't lining up with your “Why”, there is something amiss at that point. There's got to be some realignment because the “Why” stitches everything together and where you want to head. If you can't get that alignment and what you're projecting out there, there's got to be some time and attention spent on that.
How Much Time to Spend on Improving Your Business Strategy
We read Know Your Why a few years ago, and then last year we revisited it and I looked deeper into why we are in business. It racked my brain, nearly turned me into turmoil. I didn't know what I was doing. I just dived straight into it and ended up coming back full circle on why we're in business. How much time is the right amount of time to be spending on this sort of stuff?
Jason: If you've genuinely got some concerns in your “Why”, I encourage anyone to take the time. When we're all stuck in the grind, Monday to Friday is not the time to do it. You need to get away from things and turn off those outside influences to really drill down on that.
Have some time on that and start to line it up starting with the feedback. There is absolutely no reason why you can't spend time on this during the different phases of your life. You've always got to get that alignment and revisit your “What” on a regular basis.
Revisit Your Why on a Regular Basis
Jason: You've also got to start to spend time looking at your “Why” on a regular basis. I work with clients and we re-evaluate our “Why” on an annual basis and then that starts to shape that strategic plan. We do it on a financial year basis, but that doesn't mean you can't do it on a calendar year basis or whatever suits you, whatever you're comfortable with. What's really important is to always bring that back to your “Why” while you can.
We have a boring book. I've got all my different business plans that I've written in this book, and every year, I review it and see where I'm at. It's also going back through and seeing what the idea and direction and vision of the business was for us in, say, 2007—when we started—and then how that changed in 2010. Who was our target client and who were our suppliers and why were we in business?
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Having a look and going far out, we've changed. I just get this big hit of energy because I've actually done a lot. Sometimes you feel like you’re just on the grind, you're spinning your wheels, and you think I'm not getting ahead as fast as I want to but reflecting and looking at that, you'll find that you've done a lot. Keeping the book is a very huge value-add for us.
What should be included in your business strategy?
With a business strategy, should you be talking about how many staff or is that not important? Is it more important to talk about revenue or is it more important to reflect on the numbers or the emotion? How do you know that you're balancing things properly? What are the three basic business strategies that you should be having in a business plan?
The 4 Ps and Your Why
Jason: Whenever I'm looking at a strategic plan, I look at the 4 Ps: plans, people within the business (i.e. internal stakeholders), process (i.e. how we go about certain things), and the purchaser (i.e. customers). I love to just segregate the 4 Ps into four quadrants there, start with those areas and start to drill down. You might write your “Why”—the value proposition—right in the middle of that.
1. The People
Jason: Start to look at what’s the value of all your People. We start that with a survey to get some feedback and we might do a bit of an audit on the skills and experience. We look at career pathway mapping, the culture within the business, how engaged they are, what sort of capacity we've got. There are so many different things that we can look at with just our People.
2. The Plan
Jason: When I say Plans, we also have to look at the timeframe. When do I want to achieve X, Y and Z? Taking it back to your book, I think it's really cool that you've got a reference point to go back to when you put your strategic hat on. Start to look at your plans at that snapshot in time. Then, look at any outside influence or any change to your “Why” and then update that to ensure that you're on the right track. That's sort of a lot of planning.
3. The Purchaser
Jason: Jumping across to Purchaser, it's looking at your “Why” standpoint from your customer side of things. It's improving the experience and communicating the value proposition. You need to do some thinking on how you communicate that effectively to customers and making sure you've got the right customers.
4. The Process
Jason: In terms of your Process, what are you doing in terms of capturing your training internally so that it can be replicated for new people coming into the business? I can come up to your “What” proposition really quickly and look at all documented actions.
I know you do a lot with business process automation so I'm keen to get your thoughts around that and what process you go through when you talk to a client.
I started the business off as a cowboy with no processes and everything was in my head. That story is pretty familiar to a lot of people. I was running a very profitable business, but it was just myself. I brought one extra person, and then if I shall use the term, he was the Robin to my Batman. He was fantastic, but he sadly had a stroke while we're working 80-hour weeks.
I thought I'd try to do my best to do the work that he was doing as well as the work that I was doing. There are only 168 hours in a week, so I don't have very much time to do the work he was doing and the work that I was doing. I ended up having to instigate the 80-20 rule, and get rid of a whole bunch of clients that we kind of didn't want to work with anyway.
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It sounds terrible, but everyone has them. I now had a profitable business that I was able to manage myself. But the push came when I brought on the first employee after him. That was when I realised I really did have some better processes in place. It took me 6 months to have that person become profitable, so we started putting in fantastic processes internally to start off with and then we noticed a lot of businesses don't really have this sort of stuff.
What is automation?
For us, what we call automation is a mix between software and delegation. It's about understanding the processes yourself that might be in your head, pulling them down onto pen and paper, and then looking at how things work to then make them work better.
If you're doing any level of repetition, we have a look at how long that takes and then we take that and look at how long it would take for us to automate that process. Then we make an assessment: is the squeeze worth the juice?
A good example would be I was learning about electronics when I was 12 years old. I wanted to automate my door—I could press a button on the remote control to open or unlock the door. I worked out how the pneumatics were going to work and thought this is going to be awesome. I showed my brother, who's 13 years older than me and an electronic engineer, and went through the whole thing.
He asked how long it's going to take to make. I said, probably 100 hours. He said, 'How many times could you have stood up out of your chair and just open up the door in 100 hours?' I said, 'That's fair. Many, many, many more times than I'll ever need to do it.' But it was the process to learn how to do it.
Don't automate something that doesn't need to be automated. Don't create a process or have a faceless process if there are people involved.
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Profitability and Efficiency
Jason: I really like that point and the early part resonated with me. This is going to seem a bit funny. Let's pretend that we're at a restaurant. If you watch MasterChef, there was this little trend called deconstructed everything. They deconstructed desserts and other food.
Everyone knows what a pavlova looks like, but then you get a deconstructed pavlova—may still taste nice, but you just haven't had the time to do it so you've done all the elements separately. That can often happen in business when we're talking about process. Just because we are making money, it doesn't mean it's the most efficient way to do it.
I'd like everyone to look at their business and what they're offering once it hits the purchaser or the customer. Am I serving up a whole pavlova dessert in its completion or is it a bit of a deconstructed base where I've got a lot of good little elements and they're still leaving you satisfied, but it's still not quite right?
That's a great way to look at it because a lot of businesses will have all the bits, but they might not be the best chef to put it together either. It's good to be engaging people like yourself to be able to gain visibility.
An Extra Pair of Eyes Helps
I am the worst critic of our own business. In our heads, we always know we shouldn't have done this or we should be doing that. A lot of the time, you can't see the forest for the trees and you need to have someone come in to help deconstruct some of the different processes to find out if there is a better way to do things.
You don't know what you don't know until you know it, you know? That resonates strongly with a lot of stuff that we do with businesses.
For instance, we went in and he said they've been doing something for years. I asked if they have any problems with it locking up and they do, but everyone just jumps out of the file and then they all—10 people—jump back. I asked how often it locks up, and he said, 'Twice a week.' He has to organise 10 people to jump out and then back in twice a week. He calls them up on the phone to make sure everyone jumps out of the file. It's 30 minutes that everyone's jumping out and waiting to use it twice a week; an hour for 10 people. That's ridiculous.
Jason: From an outsider's perspective, it's really difficult in the day-to-day grind to see some of this stuff. When it is pointed out to you as obvious as that, that's your profit margin. You might still be making money, but all that inefficiency could be either replaced by tightening up your training or introducing a technical solution is profit.
It's always good to zoom out of your business and spend some time looking at what your strategies for those areas are. Look at those 4 Ps—the people, the plan, the process and your purchasers—so you can get the most out of your business and yourself. You're a happier individual with it as well.
If you want to contact Jason from JB Strategic, jump across to his LinkedIn profile.
Step Out of Your Business to Work on Your Business
I think stepping out of your business is one of the most intelligent things you can do in your business. We were talking about some of the different house renovations that I'm doing, and I made it very clear that I'm not a builder, but I find that your brain never turns off.
When you're sleeping, your brain is not turned off. You're always thinking about something—a business problem, a personal thing. Whatever happens, you're always thinking about it.
I think swapping skillsets sharpens your sword. It's not just diving into your emails and becoming monotonous and repetitious with what you're doing. Just by changing out to doing something else like a run in the morning, you'll find that thoughts just come to you.
Have a Record of Your Ideas
Almost everyone experiences taking a shower and then the answer they've been looking for comes to them. Or you're asleep and then you write it down. There's actually a funny Jerry Seinfeld episode where he wrote down a funny joke when he was asleep and woke up the next morning didn't know what the hell he wrote.
I've got the Amazon Echo units. I'll think of something great and I'll say it, but I'll say it with such blubbery mess in the middle of the night. In the morning, I'd wonder what the hell I was talking about.
Jason: That's a really good point. If you have some way to capture these ideas, whether it is a notebook, a whiteboard or a Google sheet, and just go back and sort of reference it when you've got time. I'm hopeless when it comes to ideas and idea generation. It often happens when I'm driving all over the countryside in traffic. I use just an audio recorder, and I'll just talk out loud by myself in the car. I can sort of throw all sorts of crazy ideas out there and dedicate a couple of hours a week to working on the business, not working on the business operations.
I use that reference point, pull out that notepad or play that audio file. I go, 'The guy in the car that day made a really good point, and I could probably translate that into the business in some way, shape or form.' That's a little technique that I use, and it might help.
Thank you. That's fantastic because they don't always come at the best of times, but we have to be able to find these ideas usually when we're nearly running out of time.
What should NOT be in your business strategy?
I want to just ask a couple more questions. People ask a lot: what is a good business strategy? I want to ask you, what are the things that you should avoid having in your business strategy? What is a bad business strategy? It helps to know what you shouldn't be spending too much time on or shouldn't be putting into it?
1. No Accountability
Jason: A bad business strategy for me is one that is missing any sort of accountability.
2. Unrealistic Timeframe
Jason: The other thing that springs to mind straightaway is timeframes that are unachievable. You've just got to understand and get a feel. Don't bite more than you can chew and make things too ambitious. Make it so that it is achievable and will push you out of your comfort zone. Let's just make sure that it's something tangible and achievable and we know the steps to get to the final point.
Don't get hung up on the design of your plan, the front cover and the pages, and the look of it. That's where we all sit and procrastinate. Rip the Band-Aid off and then you can come back tomorrow and start to put a bit of a sense to it. It's sometimes the best way to go about that.
I think you hit the nail on the head. Starting is always the hardest. At least, if you just put something on the paper, you can then start refining it and massaging it into something better. What I do is I look at the big audacious goal and then I do the timeline in reverse.
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What is it you're looking to achieve? For instance, you want to earn $10 million in two months. What are the steps that you need to take before that gets to $10 million? If you're at $1 million now, then how are you going to get to $10 million?
Is it times 10 of your client base or are you going to change around the products that you're selling to clients? What is it you're doing to allow that process to come to fruition and then put steps on that? Is it going to be a marketing plan that needs to go towards promoting these new products and everything else? You can make it a more realistic timeframe.
Avoid saying what a lot of people starting off in business say: 'I can make triple of what the boss is paying me because he charges a triple of what he's paying me, so I can do all this and I'm going to be a millionaire and pay my house off in a year for getting all of the mechanics.'
Jason: I couldn't agree with you more on that point. Once we start to get the data down and write the figures down, such as insurances, you start to work out pretty quickly that the proposition with your boss wasn't looking too bad if everything's just about money. When you're earning just over $12 an hour, once you pay yourself, it might not be the best suit for you.
It's really important that you set your goals and then work backwards from that—what it's going to take, what the steps are, and then go back and look at those 4 Ps of how they're going to help you achieve that.
Recommended Book: Good to Great
What would you say is your favourite book or a book that covers business strategy and improving your business strategy?
Jason: My go-to is Good to Great by Jim Collins. I encourage everyone to go and have a look at any of Jim Collins' works, particularly Good to Great and Built to Last. I find them really inspiring. Every time I go back and look at it, I can go with a different context and framework, and I'll get something out of it every time.
It's quite long, but just try and break it down and get a really good understanding of the concept that they're promoting and then take that little bit of time, work it back within your business and then go on to the next one. A lot of great stuff there.
The reason why I love it so much is I'm a data guy. 'The numbers don't lie' is one of my favourite sayings. That book was created out of years and years of research by some of the best companies in America at the time and as far back as World War II and the trends they've got in common to make them great companies.
I actually haven't read it, so I'm going to check that on the side.
What is business freedom to you?
The podcast is called Business Built Freedom. What is business freedom to you or what is freedom and why are you in business?
Jason: Freedom for me is always time. Time to be a better parent later and mentor to people. It affords me the freedom or the space to continue my learnings and absorb different concepts so that I can start to shape that in my own experiences and then share that with others to inspire them. That's why I do what I do.
I'm one of four children, and my father had a small business. He left before we got up and came home in the evening and we didn't get to spend a lot of time together. I appreciate the time, effort and energy that it takes to own and run a business. If I can come in and help a business, give them that bit of freedom back to be a better parent or a better individual while their business is sustainable and growing at the same time, happy days. Everyone wins.
If you want to contact Jason from JB Strategic, jump across to his LinkedIn profile.
If anyone has any questions to put those up for the greater community, go to our Facebook group.
Jason: I'm more willing to share anything and speak out.
That's what it's all about. The world goes round on knowledge, and I think everyone should be sharing as much as possible and not holding their cards too close to their chests. We will grow and become better together.
If you have enjoyed this podcast, jump across to iTunes, leave us some love, give us some feedback. Stay good and stay healthy.
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