Article FLOURISH AND PROSPER!

© 2007 Michael Priv. All Rights Reserved.

FLOURISH AND PROSPER!

Any business could flourish and prosper at any time, in any economic climate. There are no exceptions. The only reason for businesses failure is ignorance or misapplication of certain simple laws. In other words, all business wounds are self-inflicted and failures are internally-generated. These crucial laws are based strictly on common sense and observation but vast majority of people do not have this data. Company such as McDonalds, Coca Cola, Microsoft, Executive Software and many others do have the data and they are using this technology constantly.

The basic laws in running any business are:

1. Use only statistics (stats) to evaluate any aspect of the business.

2. Apply proper condition formulas to the stats.

3. Use stats analysis, data analysis and situation analysis to isolate the bottom-line WHY for any drop in stats.

4. Write short and doable step-by-step programs to handle the WHY and then do the steps until the program is fully completed and stats fully revert.

This article goes mainly into the first two points above because they are absolutely vital in business: Stats and Condition Formulas.

STATISTICS

A statistic is something plotted against something, usually production of something against time. For example, Weekly Gross Income stat is a graph of all the money gotten in this week. It can be compared with last week or last month or last year and conclusion can be drawn, handlings worked out, etc. Contacts/Sales is a stat measuring the daily, weekly, monthly number of contacts with prospective customers and the actual sales. There was 1000 contacts this week and 25 sales and 900 contacts last week that resulted in 35 sales. Such a stat would alert management to the existence of some situation and help them investigate. The end product of such an investigation would be the TERMINATED HANDLING of the situation of high contacts and low sales. “Terminated” means it is handled so it no longer exists at all for now and as much as possible for the future, a total reversion of stats, no more problem at all.

Anything can be statisized, everything in business should be. By comparing graphs of various statistics with each other manager can find that some graphs look very much alike and establish some cause-effect relation between various data. Or he can find some other vital data. For example, with the increasing number of contacts and decreasing sales graphs at hand, the Manager discovered that the increase in contacts was time coincident with increase in the number of telemarketers. That same increase in the number of telemarketers coincides with the drop in actual sales. He investigates and finds out that two experienced telemarketers quit and four new telemarketers were hired. The investigation revealed that (A) the pay system was inadequate which resulted in two good telemarketers quitting and (B) none of the new telemarketers have been trained or drilled to do their job. The handling was based on revising the pay system (increasing sales bonus) and setting up a weekly training class as well as daily 10 minutes of drilling for all telemarketers. On the surface there could be hundreds of reasons, including laziness of the telemarketers, long breaks or the global economy. Actually it was just bad pay and no training. That is called finding a WHY. When you fully handle the WHY, your situation is TOTALLY handled and stats revert. That means the stats are going up, they reached their previous level and keep on going up. If you handle your WHY but the stats didn’t revert, you found a wrong WHY. There is a correct WHY there somewhere, it still needs to be found. Statistics, not hunches or emotions, are crucial for finding the right WHY.

One more thing about a WHY. Here is the law: “WHY” ALWAYS OPENS A DOOR TO A HANDLING. That means that “bad global economic conditions” or “Chinese are running us out of business” or “bad weather” or “it was God’s will” – all such reasons are not real WHYs, they do not open a door to any handling. WHY always opens a door to a handling. Otherwise you have a wrong WHY, i.e. wrong underlying reason for your problem or maybe even a wrong problem! You may be VERY far off the mark on your evaluation if your WHY did not open the door to a handling.

CONDITION FORMULAS

Any activity is always in some condition. That is obvious. It would seem there are billions of possible conditions and every business is so different from any other and all businesses have their own unique circumstances so no classification is possible. Actually, if you consider only hard stats and nothing else, you come up with only a few possible conditions by stats:

Stats are at zero or extremely low Non-Existence

Stat graph went down sharply or keeps

sliding for a long time Danger

Stat graph is level or went slightly down Emergency

Stat goes up little by little Normal Operation

Stat went up sharply Affluence

CONDITION GRAPHS

DANGER

NON-EXISTENCE

EMERGENCY

EMERGENCY

AFFLUENCE

NORMAL

CONDITION FORMULAS

There is a set of steps for each of these conditions which, if followed, will take the business up the conditions into the next condition higher, i.e. it will improve the stats. For example, the stats dropped way down, the condition is Danger. Do the steps of Danger, you will end up in Emergency. Do the steps of the Emergency condition and the stats will start inching up higher than you started from which is the Normal condition, apply the formula for Normal and the stats will shut way up. It is worthwhile to do that if you remember that stats in business directly or indirectly represent only one thing: YOUR MONEY.

Here is an example: the GI (Gross Income) stat dropped slightly this week from 12,000 to 11,000. That is the condition of Emergency. You immediately start applying the Emergency formula:

· Promote

· Change your operating basis

· Prepare to delver

· Economize

· Stiffen discipline

First of all you work out some immediate promotional actions as well as longer term promotion.. You may want to call or write to your old customers, send chocolates or flowers to some of them, put up a big 25% SALE sign, get your web site operational, reduce prices, advertise a gimmick such as NOW OPEN FOR BREAKFAST or FREE T-SHIRT WITH EVERY ORDER or whatever. You may also want to work out a longer term advertisement campaign, set up and sponsor a contest, put up a show, write articles, pay whatever is necessary to Google for much increased exposure on Internet, distribute some flyers, etc.

When you have the promotional actions well in hand, it is time for you to change your operating basis. Obviously, if your operating basis or some aspect of it brought about the condition of Emergency, you better change it or your stats will keep crashing down on you. So what was your operating basis when the stats went down? Aha! You took a habit of ridiculing some of your employees in front of the group. Or you started opening late and closing early. Or you knocked out daily your call-in actions as ineffective. Change it.

Then prepare to deliver. What are you selling? Do you have it in stock? What else do you need to actually deliver? Who else do you need? Whar equipment do you need? You are promoting, you have to make sure you can deliver.

Then you economize. It would seem if the GI is down, you need to economize right away. Not so. You need to promote right away, change your operating basis right away, prepare to deliver right away and only then you can start economizing. If you start economizing right away, you will cut off the resources you need to bring the stats up.

Then you stiffen discipline. That includes your own discipline and work ethics as well as that of your employees. Push through any employees disciplinary actions you were thinking about, start coming in on time yourself, don’t forget to shave, lay off the beer and stop womanizing for now, get more sleep – whatever it is, just stiffen discipline.

The stats will start reverting somewhere half way through the formula but you complete the formula and then go straight into doing the Normal condition formula. The first step of Normal is DON’T CHANGE ANYTHING. Stats are going up, so why change anything? So keep the actions you have been doing in. Just keep doing your routine. Go to the next step. And so on up the conditions.

There is a lot more to this but this is the road to prosperity. Any business can and should flourish and prosper.

The basic laws in running any business are:

1. Use only statistics (stats) to evaluate any aspect of the business.

2. Apply proper condition formulas to the stats.

3. Use stats analysis, data analysis and situation analysis to isolate the bottom-line WHY for any drop in stats.

4. Write short and doable step-by-step programs to handle the WHY and then do the steps until the program is fully completed and stats fully revert.

Michael Priv

Advanced Business Consulting

510-316-3346