Podcast Summary
Business Owner's Challenges: Profitability, Finding a Premises, and Funding: To grow a business, assess current situation, set clear goals, delegate tasks, implement efficient processes, and seek expert advice.
Michael Moyer of Alpha Performance Fabrication faces common challenges many business owners encounter: increasing profitability, finding a premises to buy, and funding the purchase. To address these challenges, Michael aims to hit profitability targets, expand his team, and secure a premises with a commercial real estate property portfolio plan. However, he currently falls short of his profitability goals and spends too much time on manufacturing instead of focusing on marketing and selling. To overcome these hurdles, Michael can consider delegating tasks, implementing efficient processes, and seeking expert advice. For entrepreneurs facing similar challenges, it's essential to assess your current situation, set clear goals, and explore resources and strategies to help your business grow. Additionally, attending events like Business Masterclass can provide valuable insights and tools to accelerate your business's growth.
Entrepreneur Growth Strategies with James Inclair: Attend James' event, buy admin services, or join Entrepreneurs University for growth strategies. Networking important, but online marketing needed.
James Inclair offers various ways for entrepreneurs to grow their businesses. They can attend his event in London, buy admin services, or join his Entrepreneurs University for weekly coaching at an affordable price. Michael, the owner of Alpha Performance Fabrication, shared how he started his business through networking in the automotive industry and still relies on face-to-face interactions to acquire most of his customers. Despite this, he acknowledged the need to improve his online marketing efforts. James encourages entrepreneurs to try his Entrepreneurs University for free and promises growth for their businesses.
Focusing on lead generation while trusting team: To generate more leads and increase profitability, prioritize helping clients solve problems passionately, trust team to handle increased demand, and hire additional staff when necessary.
Generating more qualified leads is crucial for increasing profitability in a business. The speaker emphasizes the importance of being passionate and genuinely caring about helping clients solve their problems to secure deals. However, the challenge lies in making the transition to focusing primarily on lead generation while ensuring the team can handle the increased demand. The speaker expresses concerns about stepping away from the tools and trusting the team, but acknowledges that sales should always come before operations. Once the business has the resources to expand, hiring additional staff can alleviate these concerns. It's important to remember that perfect conditions may never arise, and taking calculated risks is necessary for growth.
Fear of Change and Perfectionism: Fear of change and perfectionism can hinder business growth. It's important to assess risks rationally and take calculated risks to move forward, rather than delaying expansion indefinitely due to fear.
Fear of the unknown and a desire for perfection can hinder progress in business. The speaker expresses a reluctance to expand due to concerns about hiring additional staff, increasing wages, and potentially losing customers. However, it was suggested that these fears might be rooted in a discomfort with change rather than a rational assessment of risks. The speaker acknowledged that setbacks and even going backwards are a natural part of business growth, and that the fear of these potential outcomes might be preventing progress. To move forward, the speaker needs to overcome their fear of change and take calculated risks, rather than delaying expansion indefinitely. The speaker also mentioned that they have learned valuable skills and knowledge over the years, and that these assets could be leveraged to navigate any challenges that may arise. Ultimately, the fear of losing progress or going backwards should not prevent the speaker from taking risks and expanding their business.
Making tough decisions for business success: Evaluate current situation, let go of unprofitable projects, focus on leveraged products or services, and set boundaries to ensure financial success
Business owners need to evaluate their current situation and make tough decisions for the sake of their own financial well-being and the long-term success of their business. In this conversation, it became clear that the business was not profitable, and the owner was taking on too much risk while not benefiting financially. The owner's mindset was hindering them from making necessary changes, such as raising prices or letting go of unprofitable projects. Another important point discussed was the concept of leverage in business. Unleveraged products or services, like custom engineering projects, can take up valuable time and resources without the potential for significant returns. Instead, businesses should focus on leveraged products or services, which can be produced or sold multiple times to maximize profits. Additionally, the conversation touched on the importance of setting boundaries and charging appropriate fees for custom work. The business owner mentioned that they had learned from past mistakes and now targeted specific types of clients to avoid wasting time on unprofitable projects. Overall, the conversation emphasized the importance of making difficult decisions and focusing on leveraged products or services to ensure the financial success of a business.
Focus on repeatable, profitable work: Aim for 70-75% of revenue from repeatable production work, set minimum fee for one-offs, and prioritize long-term clients for profitability.
Focusing on repeatable, profitable work is essential for a successful business. The interviewee emphasized that while one-off projects can be enjoyable and even serve as proof of a company's capabilities, they are typically less profitable than repeat business. They recommended setting a minimum fee for one-off projects to cover research and development costs and considering the long-term profitability of such projects. The core of the business should be focused on repeatable production work, ideally from the same clients each month. The interviewee shared that their business now generates 70-75% of its revenue from repeatable production work. They also cautioned against taking on one-off projects solely for the sake of short-term cash flow, as it may not lead to long-term profitability. Instead, businesses should aim for customers who return multiple times, ensuring a steady stream of revenue and profitability.
Effectively utilizing time for business profitability: Charge appropriately and manage time effectively to increase business profitability. Consider investing in property as a long-term strategy, but ensure profitability and savings first.
Leveraging time is crucial for business profitability, especially for those providing one-off services or products. If you're not charging appropriately or not leveraging your time effectively, you might be holding yourself back. Additionally, investing in property can be a good long-term strategy, but it requires a significant deposit or strong business profits to make it happen. If you're not yet profitable or don't have a large deposit, consider building up your savings and improving your business to reach profitability before making a property investment.
Exploring alternative financing methods: Consider private mortgages or lease options for business funding, build trust with investors, and continuously learn and develop to grow a successful business
When facing funding challenges for a business venture, exploring alternative financing methods like private mortgages or lease options can be effective solutions. These approaches offer flexibility and potential cost savings, especially during periods of favorable market conditions. However, it's crucial to be transparent and honest with potential investors or lessors. Building a strong relationship based on trust and demonstrating competence as a business owner can increase the chances of success. Moreover, transitioning from managing a profitable job to growing a business into an investment requires continuous learning and development. Attend business masterclasses, engage in networking opportunities, and focus on enhancing both hard skills and knowledge. Remember, hard work alone is not enough; the combination of effort and education is the key to achieving your goals.
Importance of setting realistic profit targets and understanding overheads: Aim for higher gross profit margins to achieve desirable net profit percentages, invest in R&D, and be mindful of scaling up not being necessary for all businesses.
While being a good person increases the chances of good things happening, it's essential to ensure that the actions taken are right and not detrimental to the business. Michael, a business owner, emphasized the importance of having realistic profit targets and understanding that overheads can consume a significant portion of gross profits. He advised aiming for higher gross profit margins to achieve desirable net profit percentages. Most businesses operate on net profit margins between 5-10%, and increasing turnover often decreases net profit. Michael also highlighted the importance of investing in R&D and acknowledged that scaling up may not be necessary for everyone. He ended the conversation by expressing gratitude for the opportunity to share insights and encouraging listeners to apply for the podcast if they wish to join the discussion.
