In any business, no matter what the industry, there are always common and very beneficial skills to learn.
Learning these skills turns stress and doubt into confidence and higher profit margins in business. That’s been seen in my own 22 years of business mentoring that when these skills started to be seen as first of all beneficial, and then essential.
These skills, when combined, can be so beneficial; allowing your time to be freed up so much that working can even become optional.
The 3 essential skills of management are:
- Measuring
- People
- Systems
McDonalds mastered all 3 over decades and it’s the specific aspects of all these that need to be considered and applied in a practical way.
Measuring in a business is about 3 functions all businesses need to fulfill – winning sales, carrying out the service from the sale and being paid for the sale.
How well all 3 of these functions are fulfilled determines whether the business is growing smoothly, profitably and worry free - or stress producing and lurching from crisis to crisis.
“Stress is caused more by ignorance than anything else.”
Measuring sales involves, at a minimum, tracking how many new leads were generated in a month, how many turned into paying clients and the conversion rate from leads to sales, plus the value of sales in income. Tracking lead sources for leads and sales is essential too.
When it comes to measuring the service work, the technical employee wages need to be considered a Cost of Sale to see the gross profit and the gross margin on every job.
Service work jobs are best collated by job “type” to identify the range of gross margins for each type. This becomes very beneficial, and often is shocking when all jobs for a month are combined to review the gross margin by service type.
The next area to measure is cash banked and the average number of debtor days each month.
By measuring the new sales income, the value of service work carried out (WIP included) and cash banked, a measure of whether the business is “balanced” by being under-staffed or over-staffed, can be seen.
By measuring all 3 functions of a business every week and month reveals early business trends requiring decisions that reduce potential stress significantly.
If you want to seriously help your own service business clients to be less stressed or be better managers, introduce this measuring principle and help them to measure all 3 functions of their business.
Beneficial People Skills
There are some beneficial people skills that make a significant difference to productivity levels and net profit in a business.
Three of the most beneficial skills for business owners, identified over decades of consideration have been found to be;
- Attitude identification
- Aptitude identification
- Leadership Skills
Attitude greatly determines teach-ability, integrity and the reliability of employees – all beneficial to identify before hiring anyone.
The attitude of a person can be identified quite accurately in minutes during interview questions and is a very valuable skills to have. Think of attitude as a ‘willingness to engage you in a positive way’. That’s a good, practical definition that is looked for with interview questions.
Aptitude is about putting ‘a round peg in a round hole’ and it’s also a skill that can be learned, to know which people match what roles best in your business so their natural skills improve their results.
An excellent tool for aptitudes is DISC Profiling. I recommend this be used for shortlisting candidates – after the two best attitude people have been identified.
A report can be purchased for employees but it’s important to learn it yourself, not just buy them as a report doesn’t teach you about how to identify a person’s profile. There are business mentors who can help you with a practical education on DISC Profiles and attitude identification.
Leadership is another essential skill and important for every business owner to learn when they have one employee or more.
Systems Skills
The skill with systems is understanding how people like to be taught and learn. An example is to provide systems in video form, instead of written form.
All procedures for your business will be three times more beneficial and effective at training employees very fast if provided in video format.
Text is “old school” and super slow with on-boarding new employees.
Recording your computer screen with a microphone creates a video very quickly. You can make a full 10 minute video, from start to finish in about 15 minutes, with some practice. Best of all, you don’t have to be the one making the videos, you can have another employee making them.
Putting it All Together into a Management Structure
Each of the above 3 skills of business increase profits, but the real power comes from combining all 3 into a structure, together.
The ideal way to do so is to hold a weekly team meeting, with all employees. The aim of the meeting is to have every person talk, in turn, uninterrupted (to avoid debates and long discussions). Each person simply talks about how they can do their job better.
Talking about the business’ performance each week by referring to all figures mentioned above will be incredibly valuable and highly recommended. It can and has literally transformed hundreds of businesses.
Tim Stokes
Author Bio: Tim Stokes is a 36 year experienced business owner and builder of 7 in service industries. In 1997 he began mentoring business owners in all aspects of business growth and lifestyle success with results published in national magazines. He’s no accountant, but he brings a fresh, very practical, intelligent point of view to growing businesses that his principal clients enjoy. He’s authored 12 books and The Academy of Business Mastery business management course with its systems and management tools. He’s respected for his contribution to clients of accounting firms who see the results. Tim believes the most important figure in businesses is the net profit percentage and specializes in increasing it with a full suite of time-proven strategies. Visit Tim's website to learn more about him.