By Hadrian Pereira
Financial hygiene drives your business, whether it’s determining the pricing of a job, paying employees, meeting obligations to suppliers, or distributing a return to shareholders. It’s all driven by financials, so understanding them is crucial.
In any business, there are three levers: business, clients, and people. This framework helps us understand how pushing or pulling certain activities, tasks, or projects can either grow or harm the business if mismanaged.
Business Lever
From the business perspective, we focus on the ethos of the business:
- Operations.
- Defined or yet-to-be-defined processes.
- Legal policies.
- Cash flow, which is very important.
- HR policies.
- Technology.
- Risk management and controls.
These components are essential for analysing and growing the business. Without them, the business falls apart as they form the framework of your business.
Client Lever
Clients are the reason we exist. They include referral channels:
- Who’s your next client?
- Do you have good advocates who would promote your business?
- When you get referrals, are they doing the selling for you?
Effective referral channels reduce the need for extensive business development efforts. Client engagement is another crucial part of your client lever. Understanding the client’s journey from start to finish, beginning with the first “hello”, is key. Empathy and understanding their story are vital.
Client engagement should focus on the value of the relationship rather than transactional interactions. This is why the term consulting often feels inadequate in private business—it is very transactional. Client experience goes beyond business to understanding your people as well.
The biggest aspect of any business is understanding new service offerings. Identify client or customer challenges in your industry. Are your current services still aligned with those challenges?
Technology has significantly changed how we engage with clients and their stakeholders:
- Are we adapting to that?
- Are our services and solutions still relevant today?
Services can quickly become obsolete, so we must continually assess them. However, we should avoid being distracted by every “shinning new thing”. If it doesn’t meet client needs or align with their buying appetite, it won’t be successful.
People Lever
The most valuable asset in our business is our people. While the business framework and clients provide revenue, without understanding and valuing our people, we don’t have a business.
If you’re a sole operator, you are the people, but consider how thinly you spread yourself in delivering to your clients.
Understand what skillset you have and create a skills matrix around the skillset in your team. Create a strong culture behind it. That strong culture doesn’t mean you take them for lunch once a quarter or pat them on the back and say, well done. It’s actually understanding what their purpose is as a part of your team. Understand each team member’s purpose and continuously train and develop them to enhance their skills and personal growth.
Everyone strives to be the best version of themselves, so support their health and wellbeing, whether through Pilates sessions or a day off to recharge. This is all part of understanding your people.
Right at the top of the list is leadership. Whilst you are building your employee value proposition, it’s about demonstrating great leadership. There are qualities around being a good leader and a bad leader.
There’s a lot of thought leadership out there, but being a great leader is being able to empower your staff to take that next level and engage with you as a leader, to deliver to clients.
In a way, there’s always been this concept of making you redundant. I think it’s not making you redundant. I think it’s elevating your staff to perform on your team to the best they can.
The Next Powerful Tool
These are the three key components of the first powerful tool relevant to any business, private or large. Understanding these elements helps you build a strong strategic plan.
Next, we’ll discuss the second powerful tool: creating and executing a plan. Watch for my next blog on this tool, or contact me for the full 10 Powerful Tools presentation.
