Big business success – A few years ago Japanese car giant Toyota boosted its profits by £980 million. A fantastic sum, but something far more incredible is that they put their success down to applying two little words to their whole business strategy. Money Hitman has discovered the secret behind their success and it only takes five minutes to learn. Can your business afford not to do it?
Your Secret Two-Word Formula
The experience of Toyota made a huge impact on Money Hitman associate Joe Merry. He discovered Toyota put their new found success down to applying Best Value, and he was keen to adopt it in his own company. Joe discovered these two little words had as much power in a small business as in a huge corporation. Joe has increased turnover at his curtain and blind making business by 29.9%!
Joe explained I ruthlessly challenged the reason-for-being of every fabric I offered. If it wasn’t making money, I dropped it from the range. I compared every product with its nearest competitor, making sure it cost no more but was better quality.’
Using Best Value (BV) as a standard helps identify ways for you to deliver the optimum product or service to your customers and how you can do it for the best price. With this insight you can enter the market confidently and secure the best profits for your business. BV shows success not just in financial terms but also in your all-round performance and helps identify improvements.
Using BV reveals:
• What you do well… and areas you need to improve.
• The methods you need to adopt to improve your service.
• What your customers really want…. and what they don’t – then concentrate on delivering this to them and retain their interest in your business.
• Wasting time on unproductive activities dramatically slows down development, but it’s not always easy to identify ways to work to time. BV helps spot and eliminate any time-wasting elements.
• BV offers long-term benefits, identifying how to develop your business to its most productive and profitable level… long into the future!
Putting Best Value Into Action
To benefit from BV, carry out a Best Value Review (BVR). Do this now and then repeat it every six months. A thorough BVR will reveal how your business performs over the months – and give you space to identify the exciting new ways it can be improved in all areas.
A BVR involves four key stages – the ‘four C’s’ of Challenge, Compare, Consult and Compete. At each stage you’ll discover powerful information that is going to give valuable insights into your business. Spend time on each part of the process and take careful note of your findings.
Stage One: Challenge
Never take your business for granted. Question your purpose and development at every single stage. By being made continually aware of what you do, and why you do it, you’ll be clearer about the decisions you make.
You’ll find out:
• the purpose of your product or service
• how much your customers really want what you offer
• how your products or services contribute to your business
• methods to produce products or offer services in more effective and efficient ways
Stage Two: Compare
Compare your business with others in your field. This provides a complete picture of your performance and identifies how to achieve excellence.
• who else produces or sells your products or service
• how they produce or sell and the prices they charge
• who has the very best product or service – if not you, compare yourself with the best
• what steps can you take to match or exceed the best standard of product or service in the market
Stage Three: Consultation
Know what customers think of your business, not just how much they spend. This is critical to your long-term success. Always consult them about your current performance and future plans – the decisions you take now, should lead to what they want to buy tomorrow. Remember the more accurately you collect and use this information, the more powerful it will be.
• who your regular customers are
• what is their opinion (via personal interviews, and mailed questionnaires)
• and identify what they do/do not want to buy, how much they are prepared to pay. Make sure your questions are clear so that you receive the information you are looking for.
• how to use this information to improve your product or service (Example: Add a new product, new services, or change the price.)
Stage Four: Compete for success
Any business can improve by encouraging competitiveness, not just with other businesses but within the business itself. Consider:
• how you can encourage your suppliers to be more competitive – to receive best value in return. Ask them to tender for your business or get a quotation before ordering.
• how you can encourage more of a competitive edge to your business. Give individuals responsibility for a project – or for budgets. Use outside contractors/freelancers wherever this offers best value and encourage them to be as competitive as possible.
Joe consulted his customers, asking them what they felt about the products they bought and increased competition amongst suppliers by getting at least three different quotes before placing every order. Best Value for Joe’s business meant he was giving Best Value to his customers!
BV doesn’t completely replace your profit, loss and financial information. But by challenging, comparing, consulting and competing you’ll discover key information and open up opportunities that money-profit figures alone just cannot give!