How to make your business a profit machine

Small business owners need to continually assess and innovate their strategic direction to keep making a profit.

But that constant challenge can create costly lessons. Work Wise spoke to three successful small business owners, Greg Chapman, Stacey Price and Kathy McKenzie, about how they assess and improve their business’ health. 

In part one of the series, Greg offers insights about how to build a ‘profit machine’ for your business to provide growth.

Building profit for your small business

Greg refers to the process of making and maintaining a healthy business as “building a profit machine”. To build a ‘profit machine’, he has defined five pillars to which a business owner should pay attention:

• The business plan 
• Marketing 
• Management systems 
• People 
• Self discipline  

Through his book, The Five Pillars of Guaranteed Business Success, he outlines how to assess and strengthen each pillar to create a healthy business. 

As part of the marketing pillar, Greg advises small business owners be acutely aware of their “sales pipeline”.


Small business team meeting

Establishing a sales pipeline for your business

He defines a sales pipeline as the number of steps a customer takes to purchase a product or service, from enquiry to close of sale.

When business owners are able to map out their sales pipeline, they can assess:

• Whether their process addresses all customer needs; 
• How long a customer stays at one stage of the process;
• Whether there is a pattern of if and when customers drop out of a sale; 
• Whether there is a bottleneck of customers at one stage of the process. 

Greg recalls that during the early stages of his business, his sales pipeline was “not sufficiently structured” to best service customers.

“I took some time out and restructured the whole sales pipeline and formalised it.

“It wasn’t an instant cure, but it gave me a basis for seeing where things were and weren’t working so I could target where people were stuck, where I was losing people.”

That experience has given him the expertise to advise his mentees about how to best structure sales pipelines for their businesses.

Once small business owners have well-defined processes in place, their businesses should be able to run without them.

And that’s a great indicator of a healthy business, Greg says. A saleable asset, in fact.

Read Stacey Price’s thoughts on what small business owners should know about their finances

Officeworks
 

SHARE

MORE ARTICLES

Five opportunities to find a business idea

Five opportunities to find a business idea

On the road to entrepreneurship, finding the right idea is the hardest part.

Three tips on making the right business investment decisions

Three tips on making the right business investment decisions

Follow our resident small business advisor’s three top tips.