Subscribe
Share
Share
Embed
D32 is a premium business growth network where business leaders and experts in Perth and across Australia form meaningful relationships so they can leverage the time, contacts and activities of a vast network. D32 supports the little guys (and gals) and the 7-8-figure businesses. We’re a community that has each others’ backs. This podcast is about all things business, entrepreneurship and connectiom.
D32_Part3_Paul Claessen
[00:00:00] Welcome back to the District 32 podcast, and we are in the middle of a series part three of four at the moment. And we have an. Perth from Perth. Paul Klassen. I call, I pronounced it Clayson last time. I do apologize. It's common, mate. Yeah I would imagine from Paul Klassen Consulting and the first two podcasts that we did, absolutely fantastic.
You, you blow my mind away with how you just simplify. The complexity of small business and how you just put simple steps in place that people need to follow. So I've talked about people, we've talked about performance, and this week what we're talking about is strategy. So I'm keen on this because one of my favorite things is actually strategy.
I think a lot of people go about things. They have no strategy, they have no plan, they have no way of doing it. They just want to do this thing. But I think without strategy, [00:01:00] I don't think anything can really work. It's really important to define strategy because strategy is probably the most overused and probably the most misused word in the business lexicon.
And people say things like, I've got a strategy for this meeting, and that's technically impossible. A strategy is something that first of all, lives on a time horizon of about three to five years. If it's anything that you're thinking about under three to five years, it's not a strategy. It's either a plan, a tactic, or just a thing you're doing.
Okay, good. So strategy, firstly three to five year time horizon. Secondly, it's easy to think about strategy. Where do you play? In other words, what markets do you serve? How do you win? Now, winning is how do you achieve the goals you set out for your business? That is strategy. That is the essence of strategy.
Where do you play? How do you win? Now. Like I hear things like, oh, I've got a strategy for this meeting, or I've got a sales strategy and that makes the cogs in my brain spin up and fly out the side of my [00:02:00] head because I just think it strategies across the organization, it's a three to five year time horizon.
It's what markets am I playing in? How do I win and I break? How do I win down to, how do I provide a service that is both unique? Valuable. In other words, how do I solve a problem for that market in a unique and valuable, not valuable to me, valuable to those people way that is the essence of strategy.
So how do you go about putting a strategy together for a business? Where do you start? What are the steps you follow? There are three. Core elements of a strategy, how do you win? First of all is what is the service model you are taking? To those clients. Now, the bulk of people running businesses in Australia are running professional services or industrial services businesses.
I think it's something like 85% of businesses. So 85% of the people listening to this are running either a professional service or industrial service business. There's some domestic services or other things. There's a bit of retail [00:03:00] out there, there's a bit of manufacturing, but it's vastly professional or industrial services.
So how do you win? You create a service model that is unique. Solving a problem in a valuable way for a client. That's it. And how do you know it's valuable? The money that you charge and the return they get is less. So in other words, what you charge is less than the return they get, or the return they get is greater than what you charge.
That's valuable. So that's element one. Like how do you create a service model for your business? What do you take? What do you serve your clients with? The second part of that is. So how do you set your price for you to be able to achieve your stated end game for your business? Like you didn't start a business just to start a business.
You started a business to achieve an outcome. Now, some people might say that's freedom. Some people might say that's a big boat. Some people might say that's a car. Some people might say it's holidays every year. It doesn't matter. No one's got a right to [00:04:00] judge you. Some people might just wanna give all the money away to some charity that's a perfectly fine thing to do as well.
Inside your business, it's very important that you maximize profit because if you maximize profit, you're providing a better service. You can hire better staff, you can have better resources, you've got more resilience in your business. You can do all those sorts of quality focused things versus scarcity focused things.
So part one is build a service model that's unique and valuable. Part two is price that appropriately, and part three is generate sufficient leads from that service model. They're the three elements of get people to inquire into your business as to how you can help them. That they are the three elements of strategy.
It's interesting how, looking at the first two things you talked about, which is people and performance, and you haven't talked about selling anything or getting money from anybody until stage [00:05:00] three. I. Of what's going on. So you're obviously building this model, this system, the people, everything in place before you actually start going out there.
Is that an intentional thing that you've done? A hundred percent. A hundred percent. Go and put the fastest or most powerful engine in a car with bald tires. Tell me how that thing's gonna go. Not that good. Not that good. No. And it's not the safest thing to drive. Yeah, so I look at things like strategy and sales as the engine.
I look at people and performance as the tires. You gotta get the tires, right? You gotta get grip on the road in order to drive fast, because I think a lot of people do it in reverse. Almost all people do it in reverse. Yeah. So was me. I'd say se 75% of the initial inquiries I have with my coaching services, people are trying to sell their way out of trouble.
And I look at that and I think, oh, I don't know if that's the problem that you're solving. And if you think about [00:06:00] it, I'll go and find five clients tomorrow and my staff, my, my team is just not up to the job. Either they're the wrong people or they're being managed or led poorly. They're not gonna serve those clients very well because they're not serving those clients very well.
You have to do lots of rework so your business doesn't make money. And then your only strategy in that context, because you're not gonna get a lot of positive referrals, is to price, to continue to use price as your lever to win business. And then like it's just a very rapid race to the bottom. Of course, yeah, absolutely.
It's deliberate. Because I, I guess as well as that, when you've got the other things in place, everything is solid. You've got the quality, you've got the service. You don't, as you said, I think it was last week, you said about people focused on customer service when they probably don't really need to, but 'cause if you've got these foundations in place, that's probably gonna take care of itself.
Correct. A lot of the other external issues or issues that come on later, already taken care of because you've built the foundation to [00:07:00] carry everything. Yes, that's exactly right. And I think about the two at the top of my Pathfinder people and performance. I think about them, just the basic building blocks and if you can have great people and you know how your business is gonna perform, you'll end up with a pretty good business, to be honest.
Yeah. If you wanna put a bit of rocket fuel on it, build a strategy, learn how to sell it really well, And you'll grow the thing rapidly. Yeah. No, that's fantastic. Absolutely love it. Is there anything else you wanted to add to that strategy side? I think. When the time is right in your business. In other words, when you've got people in performance, right?
And look, to be honest, Kingsley, sometimes you just can't afford to wait for that. Business isn't just this lovely linear path that you follow all the time. I wish it was, and then I guess there'd be no work for people like me, but yeah, that right? If it was linear. It would be easy, I would say recruit really well and manage them.
Then this, and go around the clock. It doesn't work like that. But if you're going to, if you're gonna really dig in on building a strategy, first of all, it's a [00:08:00] three to five year thing. It's not a, it's not a 12 month thing. So be very cautious of that and find your market, which is. Is this market big enough?
Am I gonna be able to you're never gonna get more than 5% of a market as a small business. So don't go chasing a market of three people. Because you just, there won't be enough to actually hit your numbers. So is the market big enough? Is the problem real enough? And if I sold it substantially enough to the extent that people are prepared to pay me a premium?
And that's all you need to think about but it's a very deep thought. Yeah. Yeah, definitely. That's awesome. Paul, thank you again for just my, these, this series is absolutely brilliant and is, it's almost like going to uni and studying what you need to do and you've taken all the fluff away and just given the essentials for people to follow through.
That's what I try and do. Yeah. Yeah. Which is absolutely brilliant. And again, thank you for joining us on the district 32 podcast. We have one more podcast in this series with Paul, [00:09:00] which I'm excited to to get into. And that one's called Growth. Every one of us that's got a business that's excited about the growth aspect, but without the other bits, it ain't gonna happen properly or it won't be sustainable.
I'm sure that's part of what's gonna come out. I just thought, I'm assuming anyway, so I'll find out next time. Paul, thank you for joining us today again. Thanks King.