How A Small Change Can Make A Big Difference In Your Business And Your Life

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A small change can make a big difference in your business and your life. I was nine years old when I learned that lesson. As a kid, I used to play with an Erector set. It came in a box full of metal strips in various shapes and sizes, screws, nuts and bolts, rubber belts, and wheels and cogs of all sizes. And while the set came with instructions, I liked making up my own designs, and built 4-foot cranes, Ferris wheels, an assortment of cars and trucks. I even made a helicopter. I will never forget the excitement of flicking the switch and watching these "toys" come to life.

I went on to get a degree at Princeton in Aerospace Engineering, and a business degree from Stanford. Hard to say whether these childhood experiences influence our decision on the paths we take, but the "engineering" background and the business education did land me key positions in several Fortune 500 companies. I worked overseas and here in the States, and got a cultural education as well. Then I became the entrepreneur I was destined to become, and now spend my time helping business owners transform their businesses, working with them to master niche, leverage, team, and synergy to attain sustainable results.

Last week, while working with a client, I flashed on the challenges of putting that first crane together. The client, a chiropractor by trade, came with a binder filled with challenges: files, receipts, meeting notes. I could tell she was meticulous in trying to track things, and business, she shared, was going well. "It's like I have all the instructions," she said, patting the binder, "but right now they could be in Chinese. It's like something is missing, but I can't put my finger on what.

"I'm at a standstill," she said, almost like a confession. "I can't seem to break through this plateau."

The image of the crane popped into my head. I had tried, in my first attempt to build it, to use a smaller gear with a larger one, as I had used the gear I needed for the crane in a Ferris wheel I had built. In my mind, it should have worked, but the gears kept slipping, and I was forced to make a choice. I made a smaller Ferris wheel, releasing the larger gear to use for the crane. Success. A small change had made a big difference.

"Are you robbing Peter to pay Paul?" I asked. The expression sounded a little different to my ears given my name is Peter. I forced the thought away.

"Am I?" she asked, more as a reflective thought than a question. "Maybe I am."

We rolled up our sleeves. Unlike many business owners who had no sustainable systems in place, at least she had a framework to work within. We revisited her Financial Plan and picked apart the "parts", addressing each from a different approach than she had previously thought of. These parts include:

• Marketing: Changing one's focus from cost cutting to income generation

• Sales: Professionally helping people to buy

• Cost of Goods Sold (COGS): Total fixed costs, profit (Average sale divided by Total sales plus Total Delivery = Conversion needed to break even (Total Fixed Costs divided by Net Profit)

• Payroll: A worksheet that tracks employee changes and cost

• Income Statement: Add sales, administrative costs, income, and expenses to determine your net profit, lead conversion rates, cost per lead, etc.

• Balance sheet--charts inventory, receivables, payables, capital expenditures, etc.

• Statement of Cash Flows: Breaks an analysis of balance sheet accounts and income down into categories, including operations, investments, and financial activities, and tracks all cash flow in and out of the business.

We discovered that the COGS of her business needed some adjusting. The irony of the initials of Cost of Goods Sold--COGS--is the same word for gears did not escape me. A business is, after all, a lot of parts that when fit together properly help the business become a commercially profitable enterprise that runs without the business owner being there 24/7. Business is not child's play, but it is interesting that an engineering toy from my childhood taught me some important lessons about building a functioning, successful machine.

My client and I are now working on the 5 ways to boost her profits by at least 61% through increasing her leads, putting plans in place to increase her conversion rate, measuring her Average Dollar Sales, tracking her client's buying patterns, and tracking the gross or net margin her business achieves.

She is smart. She hired a business coach to help put these systems into place. What about you? Do you want to keep struggling, or are you ready to make a small change that will result in a significant boost to your profit? Take action. Help is a click away.

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