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Useful tools, tips and strategies to help your business learn, develop and expand.

5 Growth Strategies The Most Successful London Businesses Use

Of the 4.8 million private sector businesses in England, 1 million of them have their head offices located in London. (Department of National Statistics 2016) Since 2010, the number of businesses in London has increased by 41% and it has the highest number of businesses per adult (1,464 per 10,000 adults). There can be no doubt that London is the UK’s most vibrant business hub, with new products, services and markets emerging on a daily basis. It is also home to a pool of bright young professionals, which businesses can tap into to create diverse, talented workforces.

However, what that also means is that competition is rife in London – and so achieving growth here is no walk in the park. While London’s huge population spells opportunity, there is also greater necessity to cut through the noise in order to be heard.

Coaching businesses in London for the last 9 years, specifically with the purpose of growing and expanding those businesses, means we have a bit of insight into this. Here are five strategies that we have found to work most successfully for businesses in London who have their eyes on greater gains.

1. Increase profit margins

Conducting a price review is often one of the simplest ways for businesses to improve their profits, and one of the first things we consider with new clients.

In London, services and products are instantly more valuable than they would be elsewhere in the UK because the demand for them is so high. This city automatically lends prestige to your work simply by virtue of continuing to practice here.

You would be amazed at how many businesses in London could easily increase their margins, without having a negative impact on their number of customers or clients. It enables the growth of profits while also demanding that the business continues to provide exceptional value to their customers.

2. Implement a recruitment strategy

Businesses in London have the luxury of being picky when it comes to hiring new staff, and this is something you should take advantage of – especially if you are hiring your number 2, but even if you are just hiring your next executive.

There are professionals in London (and beyond) that have the exact skills your company needs to achieve growth, and you can find them without pulling your hair out as long as you use a recruitment strategy suited to this city.

We put together the 4-hour recruitment process for our clients because it works so well in this city. It shows you how to scoop wide first, and then sift out for that perfect candidate. It has worked time and again and placed some really fantastic people into ideal jobs both in The London Coaching Group and with our clients.

3. Focus on conversion rate

When operating in a city like London, with such a massive population of potential consumers, it can be tempting to invest majority of efforts into lead generation.

However, what you should more understand is that with a city that has a large population, lead generation is the easy part. Focusing on improving it will give you only marginal overall growth.

What is usually more difficult in this city, full of sceptics that have plenty of choice, is conversion. How are you communicating with new leads and building trust? How are you showing them that your solution is the solution they should buy?

When you compare the effort required against the ultimate gain, you’ll find that for most London businesses, conversion strategy improvement outstrips lead generation.

4. Get creative with your referral process

We all know that word of mouth is one of the most effective ways to build loyalty among consumers – we trust recommendations our friends make and value the opinions of online influencers.

While word of mouth is typically not very easy to control, there are strategies that you can employ to encourage referrals. London is an incredibly social city, and businesses should make the most of that.

Simple promotions like ‘recommend us to a friend and you will both receive a free item’ or ‘bring your friend along for free’ are great ways to tell your consumers that you value their loyalty and that you want to uphold a two-way relationship with them. These examples are especially valuable in a city like London where people are eager to socialise through offering friends new opportunities and offers that they have discovered.

5. Bring in an outside perspective

There is so much going on in London that it is easy to get caught up in the excitement, forgetting to step back and look at the bigger picture. You might miss an opportunity simply because you have been focusing so intently on what is directly around you.

Hiring a business coach in London (or a mentor or business management consultant – whatever arrangement works for you) is becoming more and more valuable for not only getting a fresh perspective but also a trained and expert eye on your company. This enables you to combine your intricate knowledge of the business with an expert’s wider view of the market and the kinds of systems that can be leveraged on for greater growth.

In the end, London is currently the top city of opportunity. There is enough abundance here to go around. These are just 5 of the strategies that London-based businesses can use to leverage the ample opportunities available and achieve significant growth in this sprawling metropolis.

Considering a business coach in London?

London Business Coaching Strategy SessionGrowth in London can be difficult, for sure. And just like playing football can be tough, the best players succeed by having a coach watch their plays.

If you think your business could be achieving more, book a free review of your business and find out for yourself if business coaching could benefit your business.

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3 Key Figures For Your Mid-Year Review

If there’s three things you should be doing in the middle of the year, it’s reflecting, reviewing and remapping your next steps.

In this video, I give you pointers on key numbers in your business that you should know and track closely. In fact these numbers, are always included in the dashboard that I review regularly with my business coaching clients.

These are not only important for measuring your level of success, but they are also critical for helping you align your compass to point towards even greater growth for the rest of the year.

Prefer to read rather than watch and listen? No problem – here’s everything I said in the video as text:

Hi this is Shweta from The London Coaching Group, this is that time of the year when doing this one thing can help you actually have the corrective measure in your business or build on the momentum that you already have.

And that one thing that I am talking about is reflection, reflecting on your business performance through the number lengths.

Now three simple things – three simple things that you can do to analyse your numbers and to see what needs to be done. And I would specifically focus on income statement, also called P and L – Profit of Loss.

So the first thing you need to look at is look at the actuals of the first six months compared to your budget. And the first thing to focus on is the overheads – see what is the deviation, because that’s easy to correct or easy to identify the areas of focus.

The second thing that you need to straight away look at is your GM – Gross Margin. How are your margins looking? They should be looking better, compared to your budgets or pretty much on track.

And the final thing that you’d want to look at is the sales. You understand, and you obviously want the upside on sales to make sure you are doing well. Let me just peel another layer of sales – when you’re analysing your sales, look at two other things. Break it down into your existing customers, or clients/sales. Because you want to make sure there is good amount of retention, and ideally more build-up on that that they are doing more business with you as far as your existing clients are concerned.

So that’s an important distinction to make, rather than lumping the whole sales in one thing. And the second level of analysis you need to do is new business sales. How many new clients did you acquire? What has been the average pound value? It should be healthy. And once you look at these three fundamentals to start off and then peeling the layers of sales further, to make sure you have some very clear input for moving forward – it will help you have more confidence, that your first half of the year has gone well and you’re in control of the next half of the year.

But make sure you do something about it before another year just passes by and you’re left wondering saying, “Where did those twelve months just go?” Because I’m sure you would want to end this year with a high note, and with a good feeling.

Need guidance for an effective business review?

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7 Ways to Increase the Value of Your Business

how-to-increase-value-of-business-jeweller Countless entrepreneurs and business owners’ dreams are to create a successful venture, sell it, and retire. However, selling a successful business is not something you should jump into when the first offer comes through. Just like any sale, selling your business is all about getting as much out of the sale as possible. During this process, your business will be scrutinised in every way possible by a number of valuers, banks, and lending institutions. Ensuring that you get the highest return from the sale is about making sure your business is worth as much as possible. So how do you increase the value of a business? Here we give you some tips that may help.

1) Reduce Customer Concentration

Business coaches will always tell you that in order to increase the value of a business, you need to ensure that no single customer exceeds 15 percent of your cashflow. When you rely on a low number of customers, the risks associated with your business increase. Therefore, constantly strive to spread your cashflow concentration thinner, and hedge your bets on more than just one or two main clients. If you are really unable to do so, at least make sure you protect your revenue by creating layers through signing contracts and officialising agreements you have in place with your customers.

2) SKU Rationalisation

Having an uncontrollable and unprofitable range of SKUs (Stock-Keeping Units) is a sure way to lowering your business’ overall profit margins. I f you want to increase the value of your business, you need to lower you SKU count. You should reduce your high volume, low margin stock and consolidate your most profitable products. By concentrating your efforts on a controllable number of goods, you will make your business more in-demand with potential buyers.

3) Review Marketing Activities

Before selling your business, review all of your marketing and advertising activities to ensure that you are getting the highest ROI on these investments and you are not making any glaring mistakes. If you do not have the processes in place to measure such activities, this is the best time to develop them. When you have a clear picture of how your marketing is performing, consolidate your marketing investments, review, and optimise. By ensuring that you get the best bang for your buck – with a clearly identified niche, target person, and social media strategy – you will be easing the uncertainty of potential buyers as your message and targeting will be honed to the right people. If aligning your marketing is your major problem at the moment, you may want to join the MarketingCLUB to get some direct advice on improving your strategies.

4) Reduce Your Costs

We live in a world post-financial crisis, which means investors are generally wary of where they spend their money. One of the first things they will look at when valuing a business, is its cost structure. You need review all of your fixed and variable costs to ensure that your margins are as healthy as they can be. You should empower your managers and employees to explore and highlight where the company might be over-spending. After conducting your reviews, enforce discipline in expenditure by outlining how much and on what each department should be spending moving forward. Create accountability within your workforce to ensure that no one loses sight of this critical aspect of your business’ profitability.

5) Efficiency Through Processes

As the business owner, buyers often see that the company’s most prized asset is you. Without you at the helm of the organisation, uncertainty could potentially spread through the business. However, we have always said that a truly successful business is a profitable one that can run without you. If you want someone to feel safe in buying your business from you, you must ensure that your business has seamless and efficient processes in place so that you team can operate the business without your constant presence. Take the time to review and develop your current processes, create new ones, and most importantly, document them. Leverage is a critical concept we teach in business coaching to successfully run a business. By ingraining these systems into your business structure, you give potential buyers no reason to doubt the company’s capabilities without you.

6) Employees Can Make Or Break Any Company

High employee turnover is one of the biggest worries that new owners have when buying a business. Without experienced employees, the stability of the company will be called into question, as years of know-how and specific skillsets will have just walked out the door. To build your company’s value, you should have a high quality workforce that is loyal not just to you but to the company as well. Besides ensuring that you hire the right type of people in the first place (you can download our very effective recruitment process here), you need to give them a reason to stay. Incentivise your employees with long-term rewards attached to the company’s success, such as equity ownership, or bonus plans tied to profits. Always know who your key employees are, and if you are looking to sell, ensure that you have clear transition foundations laid out so they will not blindly leave with you.

7) Tidy Up The Business

First impressions, even when buying a business, truly do matter. The first thing which potential buyers will notice will not be your business model or your processes, but your business’ physical structure. Prior to any sale, make sure that your office, factory, warehouse, machinery, etc. are looking their very best. Just like any open house, make your business look spotless, and you will be starting off on the right foot. This may seem like simple and superficial element. However, we are fully aware of how people make decisions based on emotion, not logic, and similarly, a buyer’s decision is heavily affected by impression, no matter how impressive the systems. These are just a handful of tips for increasing the value of a business, especially if you intend to sell. Remember, as an entrepreneur, you have given a large chunk of your life to developing something great, make sure that when you let someone else take the wheel, you give your creation every chance it has to remain great. That is what buyers are looking for. 

Find out the value of your business

If you are planning on selling your business, it is a good idea to get an independent assessment of the valuation of your business. As business coaches in London, we offer highly accurate 23-page report on the value of your business.  
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Cash vs. Accrual: A Question You Should Ask Your Accountant

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When you talk to your accountant or bookkeeper, do you actually understand what they are telling you? Or are you just assuming they are doing the right thing? An understanding of how money works in business is, of course, a critical part of running a successful enterprise.

While you do not need to have same kind of depth of knowledge that an accountant or a financial analyst might have, you need to ensure you have an awareness of some basic financial concepts. You need to understand what your accountant or bookkeeper is talking about so that you can make sure you are asking them better, more useful questions. If you don’t know what you don’t know, then how can you know what to ask?

You do not need to be able to draw up your accounts, but you do need to be able to understand them. Once you can appreciate how the money flows through your business, you can begin to see which decisions make more sense for your business. A mistake we often see a lot of business owners commit is to look at their bank account statement or their ‘cash based accounts’ as their management reports.

This is a good way to ensure that your business stays alive – but a very bad way to grow and develop your business. The place to start when it comes to finances in the game of business is that there are two ways that numbers can be captured in your business. Those two ways are cash-based and accrual-based.

Cash-Based Accounting

In the simplest business model you have sales bringing you income, expenses that are costing you money, and the profit, which is the difference between the two. Sales – Expenses = Profit. (We can keep it simple for this and do not need to worry, at this stage, about things like gross profit or net profit.) If you are using cash-based accounting, you only take the income from the expenses once the money has actually changed hands.

In other words, only once you actually get the cash or the money is actually transferred to you, do you consider that sale in your accounts. Equally, only once you have actually paid out the salary to your employees or paid out an invoice, do you account that expense. That is cash-based accounting in a nutshell: based on the actual cash you have. It is what a lot of business owners use when they are first starting out – to keep track of the cash going in and out of the business.

Accrual-Based Accounting

What accrual means is that it is “due”. So while you may not have received the cash just yet, it is due to eventually come and you can still account for it. In this way, you can then make plans for the sale or contract that you have currently just completed. The customer or client may only have to pay you after 30 days or 15 days (and you should have a good system for chasing up your debtors), so the cash is not yet in your account, but the sale has been confirmed, so is being taken into account.

With this form of accounting, you can then have the sale sitting alongside, say, an expense like the rent that will be going out at the end of the month. So you know that that money for the rent has to go out, but you also know that you will be receiving money from a sale by then. You can therefore see the resulting profit and get a better picture of long-term profitability.

Should you be using Cash-Based or Accrual-Based Accounting?

Through business coaching in London we have obviously seen a full range of businesses’ accounts. Every time we see cash-based accounting being done, here’s our advice – change your accountant first and then move to accrual-based accounting. There is a very good reason why accrual based accounting was invented in the first place – to separate out a P&L from a cash flow statement and ensure that the accounts capture the ongoing nature of the business rather than its cash movements.

If you are a very small business and keep your accounts on a sheet of paper or an excel sheet, or you are using partial accrual-based accounting, then cash-based accounting might make sense. However, for any growing or slightly larger business, you really should be doing this accrual-based so that you are producing the most useful numbers for your business. Now, armed with an understanding of all of this, go to your accountant or your bookkeeper and find out – are you doing cash-based or accrual-based accounting?

Next, ask what about VAT – are you on cash VAT or accrual VAT? Why have you chosen that? What happens to your cash flow if you move from one VAT method to another? These are one of those “better” questions to ask.

This combined with your marketing knowledge, your understanding of sales, and augmented with knowledge of other important concepts such as markup and margin, you can start making smarter decisions and more calculated risks that will accelerate your business growth.

business coaching servicesWant to experience more direct business coaching?

As a leader of business, you need to get a good overview of a range of concepts – and there isn’t always time to sift through the reams of information on the web.

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Why is it so Difficult to Give Businesses Free Money?

business management consultant When ambitious, capable businesses improve and grow, the economy booms and the entire country benefits. The government wants to help with this so much that it is willing to give out free money – literally. Last time we checked the long list of government schemes to help businesses, there were 597! So why is it that not only are most businesses not aware of these free initiatives (a recent survey revealed that 81% of businesses in London had seldom or never sought support from gov.uk), the uptake itself has not been as high as expected?

In my view, there is a combination of reasons that have led to this anomaly.…

Realistically, the government is reluctant to give away free money to just anyone for fear of fraudsters taking advantage. To protect against this, a layer of bureaucracy has developed whereby middlemen stepped in to do the appropriate checks on the businesses and hand out the money on behalf of the government (keeping their cut, of course).

Unfortunately, but perhaps not unexpectedly, the public sector preoccupation with form-filling and box ticking seems to have permeated most of these private sector partners (the middlemen) involved, leaving business coaches and direct support providers in charge of spreading the word. 

At the receiving end, are businesses that are focused on growth – which are the ones that the government would like to support. These are businesses that typically do not have time to waste jumping through bureaucratic hoops. They would rather spend that time and effort building their business.

A lot of the businesses that are naturally drawn to the governmental business support and end up participating in these programs are those who were focused on help rather than on hard work – clearly not the ideal profile the government would like to help.

Undoubtedly, most of those who have taken on support have reported being quite happy with the level of support and the results they have achieved and have reported increased levels of profitability.

However, the potential benefits that these programs could deliver is not truly being achieved and both parties – the government and businesses – continue to grow even warier at the relevance of the support. The government typically responds by cuts to business support (as most Councils have been seeing over the last few years), restructuring previous programmes (Business Growth Service) and more experimentation.

Equally, businesses have grown sceptical of the combination of time-wasting bureaucrats and business support agents who they feel are continually trying to sell them something.

This vicious cycle effectively results in the ‘free money’ that was on offer often remaining in government coffers and never reaching the intended recipients.

In the end, the top down approach of handing out money to businesses to help them grow needs to be replaced with a bottom up approach driven by businesses and their owners recognising the value of external support to their business. There needs to be a more dedicated and sustained effort at education around what businesses don’t even know that they don’t know.

Government programs now are designed to not only help with accessing finance, but also to fill skill gaps in management teams, assist with exporting plans, encourage and develop new ideas for businesses, provide expertise and help streamlining manufacturing processes, and help provide access to a wide network of peers.

If a business seeks out a business coach/ support professional they trust, this naturally cuts the suspicion of the middleman. It also means that the government is not simply tossing money about, but is indeed investing in skills and strategies for business – a far more effective way of boosting growth.

The focus therefore needs to shift to a process of education around benefits rather than a play on some extra money available. There is now sufficient evidence across the world that business coaching and other forms of business support result in increased productivity and profitability while delivering a return on investment.

However, the proportion of people seeking external help (from any source) still remains extremely low. The proportion of businesses failing remains as high as ever (60% businesses failed in London in their first 2 years). Even among those that survived, whether they could do better with external support remains the question.

If you would like to see if you are eligible to participate in the Business Growth Service, click here to find out.  

business management consultantNeed someone to watch your game? 

While you are out there, taking your shots, who is watching your plays? Is there any room for improvement in the way you run your business? Is there a new level for you to play at? 

Register for our webinar where you can learn more tools and strategies, and find out if Shweta, the top business coach in London, is a right fit for you.


Markup vs Margin – And the Winner is…

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The language of business is one of numbers, and it is a language that every business owner should understand. When you know the numbers in your business, you can make smart, calculated decisions to move things in the right direction. A critical distinction that we find many business owners are confused about in our business coaching sessions, especially when they are considering discounting their products (which we do NOT recommend), is the difference between margin and markup.

Getting these two terms mixed up – or thinking they are the same thing – can result in some pretty big losses. Here I will explain exactly what each of these terms mean, and how many business owners mistakenly use them.

How to Calculate Markup

Imagine you manage a product-based business and, for simplicity, we are talking about setting the price of the products. If the cost of the goods from the supplier is £100, and I want a markup (not a margin!) of 60%, what is the price I will be selling it at? The answer is £160. Markup is applied to the costs of goods. The equation for how to calculate your markedup price is as follows: Marked Up Price = Cost of Goods * (1 + Markup%) So for the above example: Marked Up Price = £100 * (1 + 60%) = £160

How to Calculate Margin

Now let us imagine that in order to make a good profit, you want a 60% margin on the products you are selling. If that’s the case, what should the price be? The equation for calculating gross margin is: Gross Margin% = (Sales – Cost of Goods) / Sales In this equation, “Sales” refers to the amount of money the item brings in – so this is the price of the item (what we are looking for). While “Cost  of Goods” is the costs required to produce the item – so our £100 from above. Re-arranging that equation you end up with: Sales (i.e. Price) = Cost of Goods / (1 – Gross Margin%) Which means: Price = 100 / (1 – 60%) = £250 As you can see, a 60% margin yields a very different price point compared to a 60% markup.

How Markup and Margin Usually Get Confused

Once business owners have gotten their avatar identified, their inbound marketing pulling in leads and their sales team asking all the right questions – it comes time to consider what margins are required for the business and how to increase those margins.

The main problem we find with business owners is that they think, “Ok, I need to achieve a 60% margin. So let me markup my prices by 60%.” However, you can see above that this does not achieve what you need to achieve. In fact, in this example, if you marked up the price by 60%, the price is only £160. That means that the Gross Profit = 100-60 = £60. That then means that the Gross Margin = 60/160 = 0.375 – which is a margin of 37.5% not the 60% that you need to make a good profit.

You can imagine the kind of impact this would have on the business if you were meant to be achieving a 60% margin and were only achieving 37.5%! This is just one example of the kind of numbers that business owners need to understand – and one that could make a very big difference. Learning this language of numbers is not nearly as complicated as most business owners think: when it is explained clearly, it can become very simple and yet result in massive impact for you and your business.

If you regularly mark up your prices, I’d love to hear your experience on how you decide the percentage to use. Do put in your comments below or drop me an email.  

business mentor LondonWant to learn more about the language of Leaders? The language of Leaders is a critical language for all business owners. Sometimes, it helps to have someone walk you through it. We run a completely webinar where you can learn this language and other strategies for business growth. Click here to register.

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