Marketing, Finance, Operations and Management are the 4 core functions of EVERY business....
Do you agree?
The New Economy has been challenging to many business across the country. While the past 30 years has allowed numerous companies to flourish, it has also allowed business owners to "get by" in many areas of their businesses. Business costs are rising every day and if you are not growing your business and making it more efficient, at some point you will struggle. You may be making money on paper, but are you really making money? Or...Could you be making more money.
Now that the rapid growth of the past 30 years is over, the weaknesses in businesses are showing up. Most are good at what they do, but few are good at working in all 4 functions simultaneously. Most business owners are either good at operations or good at sales. Few people start businesses because they are good at Accounting (Unless you are an Accountant...), but most business owners dread the details the Accounting requires. It is alright to not be good at all 4 functions, that is very natural. But as a business owner you must insure that all 4 functions are being managed because each of the functions is reliant on the other.
If you don't market continuously, you will run out of work, impacting your Finances and impacting your employees because you don't have any work.
If you don't manage your Finances, you will not be able to get the materials you need or be able to Market your business to get more work.
If you don't efficiently manage your operations, you will not be profitable, impacting your Finances and also impact your marketing, as well as management.
If you don't manage your business, none of the other 3 functions would be relevant.
The 4 Core functions are the same in EVERY business. There may be other departments in your company, but more than likely you can tie each one back to one of the core functions. It doesn't matter if your business is BIG or small, without equal expertise in all 4 functions, you business will be doomed at some point in the future. The realities of our New Economy is showing those weaknesses in thousands of businesses across the country.
Here are some examples of projects that I have completed in each of the 4 core areas of business. They are not prioritized in any way, but as you will note each one relates back to some type of problem the business was having.
Marketing
Developed New Strategy For Family Website
We had a 6 page website that needed to be re-designed to support our efforts in the energy efficiency market. One of the challenges we faced when utilizing the call center concept to market our energy efficiency services is that we had no established way to provide an avenue for potential customers to learn more about our services other than a plain 6 page website. The website had been re-designed in 2006. After discovering that the website would require an additional $3,000 to add additional information, I began to research other options. Through my research, I discovered Inbound Marketing and the Hubspot Software Platform. This gave me the control over my website that I was looking for and also taught me how to create organic traffic to my website utilizing blogging and content development.
Increased all web traffic from 972 visits to 11,827 visits in 12 months
Traffic has increased substantially since I implemented the web strategy. The 3 years prior to September 2010, traffic was virtually non-existent, maybe 50 visits per year. From September 2010 to December 31, 2010, traffic increased to 972 visits. From January 1, 2011 through December 31, 2011, traffic increased from 972 visits to 11,827 visits. Since we implemented the strategy to today, the website has seen 13,973 visits overall.
Increased organic search results by 4,760%
While traffic is important to any successful website, it is not the only metric one must look at. How the traffic got there is just as important. We experimented with Pay Per Click, and Facebook ads which generated some traffic. Craigslist also generated some traffic since we used Craigslist as part of our employee recruiting platform. But the most traffic came from the growth in organic traffic. Organic traffic in September 2010 was 25 vs December 2011 of 1,192, an increase of 4,760% on month to month traffic. Overall, 8,152 visits were generated via organic traffic.
Increased Google indexed pages from 6 to 391 in 14 months
Indexed pages are important as indexed pages are an indication to Google or other search engines of the relevance of your site. In September 2010 we had 6 indexed pages. As of January 19, 2012 we have 391 indexed pages.
Increased ranked keywords from 0 to 376 in 12 months
I didn’t even know what a keyword was until I started working on the Hubspot platform. I quickly learned their value and began building a strategy around certain words. We did not rank for any keywords when we started in Sept 2010. As of January 19, 2012, Hovey Electric ranks for 366 keyword terms 99 and under, 249 terms ranked 10 or under, 89 terms ranked 1. I have utilized a list of 1000 keywords to describe the energy efficiency market and continue to adjust that strategy based on results.
Developed E-Book that has a conversion rate of 23%
In order to attract leads to the website, we created some advanced content. We created a whitepaper on a project that we had completed for energy efficiency and we also created an E-book Titled : Business Owners Guide to Energy Efficiency. This E-book was intended as a Free download. We have seen a conversion rate of 23% on the E-book and 10% on the whitepaper.
Developed 84 blog posts that led to 8,000 visits in 12 months
By utilizing the Hubspot platform, I have built a loyal following of readers and much of our organic traffic has been generated using this platform. I am the primary writer but I also taught one of our Journeyman electricians who works on the energy efficiency projects how to write blog posts as well. He writes out rough content, I re-format the articles for SEO and then publish them under his name. Together over the last year we have written 84 blog posts. Roughly 8,000 visits to our website out of the 13,000 were in direct relation to the 84 blogs.
Developed a new market research template for consultant
I did some work for a consultant that I had hired for projects of my own. He needed to do a market research plan for a client but did not have a very good format. He asked me to re-develop the format and also do the market research that he needed for this client. From the research, I created a new format for performing the research.
Finance
Process mapping led to eliminating multiple steps in Accounting process that eliminated position
Process mapped all core functions related to Finances including Accounts Payable and Accounts Receivable process. By documenting the system we were able to eliminate multiple steps in the process that eliminated the need for one position in the company, reducing overhead.
Operations
Developed a new employee manual tied to individual scorecards that eliminated 5 non-productive employees
Evaluation system was broken and needed to be rebuilt so I started over from scratch. This was a year long process to create a new system to measure the effectiveness of the field employees. My goal was to make it simple. I created a Scorecard based on the same A,B,C, D, E system that we use in the schools, similar to a report card. I created a series of questions that could be scored ranking from 0 to 10 in 2 point increments. Average is a score of 6 which is the minimum we would expect from an employee based on production amounts implemented within our estimating software system. The employee has 2 separate scorecards, one for how they contribute to the company as a whole (tied to the Employee Manual) and on the skill level of the individual person. The results of these 2 scorecards is added together and averaged to come up with a percentage. If the employee scores below 60%(below average) they do not qualify for a raise that year. They have the opportunity to increase their wages by 3-5%, and they are given a raise based on their scorecards that are collected throughout the year.
Management
Increased Gross Profit from 20% to 50+%
Started a 3 years process to create a common system utilized to manage the electrical contracting projects in the field. The theory behind this training was to engage the field personnel to focus on the cost of goods sold section of the income statement rather than teach them the entire financial statement. If they understood the items they were responsible for such as the labor cost and material cost, then they could have significant impact on the profitability of the company. We met every 2 weeks over a period of 3 years with a group of 5 field leaders. Using their ideas blended with some direction, we created a project management system that has yielded very high gross margins for our industry. The first project we used this on netted a 55% gross margin as compared to a typical 20-25% and an industry average of 25-30%. The amazing part is the fact that this project was $1,100,000. The extra 20% added $200,000 to our net margin. This has been proven recently where we have someone who came back into the company who chose not to implement the established systems. His profit margins on the past 4 jobs have been a gross margin of 6%. With another field leader who implements this system fully, he has netted a consistent 42% gross margins on his last 7 projects including a 67% gross margin on a $355,000 project.
Created Energy Efficiency Profit Center that netted $220,000 in 90 days
Create a new profit center around energy efficiency for family electrical contracting business. This included researching the market, determining demographics for target market, creating sales process, created call center concept to market the service, developed calculation process and proposal format. We focused on being consultants rather than contractors to gain a better position when developing relationships. 90 day campaign focused on 3000 business list netted 130 leads, 9.1%, 44 requested face to face appointments or 6%. Of the 44 requests, 24 appointments were scheduled. 21 proposals were generated, 88% for a total of $800,000 in new business proposals. $220,000 in revenue generated from that 90 day campaign.
Developed a new market 600 miles from Midland, MI generated $6,000,000 in sales in 2011
In October of 2010, we opened a new location of our business in Guthrie, KY. This is very close to a new $1Billion dollar manufacturing facility that we are currently working on. I prepared the initial strategy and market research to present to the executive board. We found the area to be growing very rapidly and has over 150 major manufacturing operations in the area.
Saved $125,000 by creating an online job recruiting platform
The Hubspot platform gives the website owners a lot of tools to be creative with their websites. When HEI opened the new facility in Guthrie, KY, we needed to recruit a lot of new electricians very fast. In the past, we would have hired a recruiting company to sort through resume’s and identify potential employees. This had a cost of around $2500 per employee. We needed 50 employees, so that would have been a cost of $125,000. Instead, I decided to try a new concept. I created web pages for each of the job descriptions that we were looking for. I then created a call to action at the bottom of the job description. The call to action then went to a landing page that acted as a prequalifier because there were many mandatory items that they had to agree to in order to even apply. On this landing page was a custom form that I developed in order to speed up the process. I did not want a bunch of resume’s that were in different formats. By using the form, it put all the information in the same order so it was easy to review. This was my filter. If they answered yes to those questions, I had them fill out basic information and had them tell us a little about them. I got 2-3 word responses to complete resume’s posted. This turned out to be the most important category because it showed that the person could actually communicate. They would submit the form and the form would be immediately emailed to all the important people. We would receive them immediately. I drove traffic to the site by placing a simple Craigslist ad that pointed to the job description which is where they began the process. We pushed all the applicants through that process. In the end we hired 55 electricians in a 2 month period using this process. This process saved the company well over $125,000 in recruiting costs. By monitoring the metrics from our landing page, we were able to see that the page was viewed over 700 times, but only 23% of those submitting the form. This was an indication to us that roughly 75% of those that looked at the page did not meet the minimum qualifications. By not having to sort through that 75%, we were able to save a lot of time and hire people rather quickly.
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