3 Principles to Catapult Your Business Success
In my days working as CFO at Boa Construction, I was part of a lot of cool stuff. Like I shared with you in the last My Journey blog, we developed a killer differentiator that our competition couldn’t hold a candle to. (click here if you missed that post)
Now, this tool wasn’t the only good thing the company had going for it. We also had a great group of people that worked very hard, and an owner who was passionate about growth.
In addition to Boa, there was something equally impressive happening within our sister company, Architectural Millwork of St. Louis (we called it AMSL), a manufacturer of custom millwork, cabinets and casework.
Started in 1988, AMSL had grown to about $1mm in revenue by the time I joined in 2003. In the next couple years, we moved from a 15,000 square foot facility to a 42,000 square foot plant, and catapulted revenues to $4 million annually by 2008.
The same 3 principles that catapulted AMSL to such quick success (after many years of stagnant or slow growth) are keys to any business that wants to grow.
- You have to systematize. You have to move from “flying by the seat of your pants” to a process and system-oriented organization.
- A mindset for continuous improvement will take you a LONG way. As you’re building your systems, you can never think “Great, now we’re done.” There’s always room for improvement.
- Growing companies must have reporting that gives them the ability to predict the future. Sales dashboards and KPI’s (key performance indicators) are a great place to start.
1. Business Success Depends on Systematization
One reason “why” AMSL had so much success was that we changed from a “job shop” to a more process-oriented operation. We started targeting big commercial projects that had lots of multiples, which created big efficiencies.
We went from almost 100% custom residential projects to about 75% big commercial.
There are very few businesses that can grow to this level without developing strong systems across the board.
2. Continuous Improvement is Necessary to Maintain Business Success
At about the same time, we also started implementing lean processes throughout the company.
When most people hear “lean” they think about production lines. We not only applied lean manufacturing and six sigma methodologies to the plant floor, but to the sales department as well.
Using Pareto analysis and some other fairly simple tools, we were able to really zero in on our best product segments and customers. Not just intuitively, but with real data!
The answers always surprise you when you use real numbers.
3. Reporting Will Give You the Ability to Measure Your Business Success
You need good reports in place to get those ‘real numbers’. We took all of the data, and built forward-looking sales dashboards.
Let me explain, because this one is CRITICAL TO EVERY BUSINESS.
I say “forward-looking”, because these sales dashboards helped us predict the future. The actual numbers on the report were historical, but they were leading indicators. By tracking sales activity throughout the funnel, we could predict the future.
It worked extremely well. We knew when we had a shortfall coming, and could adjust our planning and tactics accordingly. Very few small businesses have these kinds of tools and reporting mechanisms in place. Those that do are typically beating the pants off their competitors.Few companies use historical #data to predict the future. Could be a competitive advantage! Click To Tweet
We use very similar dashboards in my business today. And I know it’s played a significant role in our success.
Here’s a little secret though…
…Even a lot of big companies are still trying to get this stuff figured out!
So if you’re not where you want to be yet, don’t beat yourself up.
As long as you’re moving forward in one of these 3 areas, you should feel good about your effort and feel somewhat content, because truly you are in the minority.
Would you add anything to my list of 3 principles to business success? Let me know in the comments below!