8

Building for the future

CHECKS 88 TO 90
      Set a business goal

What is it?

I once met a successful eBay seller who was turning over $2 million per year. When I asked him what his plans were for the following year he shrugged and said ‘I don't know'. What does this tell you about this particular business owner? In short, how can you reach a growth goal if you don't even have one? A reasonable aspirational business goal is often the driver behind successful entrepreneurs. A desire to reach your business goal can help you make tough decisions, and encourage you (and your staff) to try harder.

Three reasons to do it

Setting a business goal or target is a fundamental point of difference between a business owner who is aspirational and future focused, and one who is mired in the day to day of operations.

1 With nothing to aim for it's highly unlikely you will be able to optimise your business operations most effectively.
2 Tracking progress to a business goal is one of the fastest ways to highlight business challenges and opportunities.
3 It's also important to celebrate your successes — if you hit a target, it's worth taking time out to enjoy reaching that milestone.

Getting started

Setting an aspirational but realistic business goal relies upon instinct, assumption and knowledge.

Check 88: Create a business goal

Creating your business goal is arguably the most time-consuming part of this section. You will need to have a thorough understanding of your stock levels, sales prices and competition on eBay. Use a research tool such as Terapeak (www.terapeak.com) to help you gauge the total size of your category on eBay. Look at who the biggest seller is and what their turnover is. How many products do they sell, and how long would it take for you to be the same size, then bigger than them? What realistic percentage of the category could your business own?

Getting it done

A business goal sits within a larger business plan (as covered in check 12). Even operated in isolation, however, it can be invaluable in helping your business grow. A successful goal is as much about market and customer intelligence as it is about keeping you focused and realistic.

Check 89: Measure performance to goal

Measuring your performance each week and month is critical to getting the most out of your business goal. A sensible business goal has many indicators, including number of buyers, number of sales, sales ratio, average sales prices and number of competitors. As each of these metrics changes, it should impact your tracking against the original goal you set.

Check 90: Review your business goal

As with most aspects of running a successful business, your goal is rarely static. Set yourself a calendar reminder and revisit your business goal at least once a quarter to see whether you are on track. If you're exceeding expectations, you could reset the target slightly to ensure you optimise your growth potential — underperformance may encourage you to lower the goal so you can keep morale high. The point here is not to be reactive and continually change your goal, but to remain realistic and responsive to business challenges and opportunities. After all, an impossible goal is as useless as no goal at all.

Detailed costs and time for checks 88 to 90

1 to several hours to create a calculated business goal.
Setting business goals is cost free.
About five hours each month to monitor your progress.

Business impact

To gauge potential impact, measure if there's:

an improvement to your turnover expectations
an increase in your profit margins
faster response times to external pressures such as competitors, customers and pricing.

More information

See the Forbes guide to successful goal setting at http://goo.gl/38Ttfq.

CHECKS 91 TO 93
      Plan for review

What is it?

A business is a living, evolving entity. One of the greatest challenges for business owners is to keep reviewing their business's performance even while they are incredibly busy managing day-to-day operations such as fulfilling orders, dealing with suppliers and keeping customers happy. While it's true that these tasks keep the money coming in and bills paid, it cannot be underestimated how crucial regular reviews are. In some instances, it may even be more sensible to pause day-to-day operations rather than continue to operate in a manner that is not as profitable as planned or is not achieving business goals. The important thing to remember is to keep concentrating on the big picture — how is my business performing overall?

Three reasons to do it

Operating a successful business is about having your finger on its pulse — at all times. Losing focus or failing to keep informed is a sure-fire way to lose track of opportunities for, and threats to, growth.

1 Quickly identify changing trends and readjust your business's operations to avoid major issues.
2 Complete administrative tasks such as tax returns, BAS (business activity statements) and supplier negotiations faster.
3 Carve out time for review at the beginning of the year, before you are consumed with the day-to-day running operations of your business.

Getting started

The first step in planning for review is just that — ensuring you have allocated the appropriate amount of time to sit down and review your business.

Check 91: Set a review reminder

Create a calendar reminder for a business review each quarter. This should be a minimum of three hours on a day and in a location where you will be free from interruption. Set yourself clear guidelines, such as no telephone and no appointments. It's sensible also to set yourself a reminder two days before the review so you can avoid scheduling conflicts.

Getting it done

Reviewing your business will take time and require ready access to the relevant information.

Check 92: Review business performance

Have all of your operating rhythms documented and well ordered. The easiest way is to use your computer to save all of the information — you could consider a third-party program such as MYOB (myob.com.au). Information you will need includes:
  • profit and loss spreadsheet
  • customer information (details, comments, orders)
  • eBay information (fees, upcoming changes and so on)
  • eBay reporting (sales reports, traffic reports, invoices and so on)
  • current stock levels
  • supplier details and terms
  • other providers' details and terms.

Check 93: Trending business performance

Reviewing your business is mainly about highlighting data trends — both good and bad. The easiest way to assess the trend is to compare it with the previous three months. What has changed, by how much and why? You can download business review plans from the internet (see more information below).

Detailed costs and time for checks 91 to 93

3 to several hours each quarter to review your business in great detail.
1 to 3 hours each quarter to write an action plan to adjust your operating rhythms.
Several days to implement your review plan.
It costs nothing but time to review your business, but you may wish to consider asking an external party to conduct the review for you. This is likely to be more objective and could be faster, but may cost thousands of dollars.

Business impact

To gauge potential impact, measure if there's:

an increase in your overall sales volume
an increase in your profit margin.

More information

View the Queensland government's business performance guidelines at http://goo.gl/hdOOj8.

CHECKS 94 TO 96
      Network

What is it?

Networking with other eBay sellers and eCommerce business owners is one of the most effective ways of learning and improving your business. Throughout the year there are opportunities for you to meet professional eBay business sellers and ask them about their own journeys and successes. Naturally there will be some aspects of business that are closely guarded secrets (such as suppliers and profit margins), but most eBay sellers are happy to share their advice and learn about your own experiences. Choosing the right event here is critical, because you don't have the luxury of wasting your time at events that give you no clear actions to implement within your business. Most events also include exhibitors whose services are relevant to your business; often investing in a third-party solution can help you boost turnover and improve profits.

Three reasons to do it

Learning from experienced professionals is one of the most effective ways of expanding your skills and improving your business's performance.

1 Networking challenges your own perceptions and encourages you to be more objective in assessing your business and its challenges and opportunities.
2 Networking can lead to additional business opportunities such as expanding your range.
3 Sharing your knowledge can be personally fulfilling and rewarding.

Getting started

There are countless conferences and events that you can attend each year. Inevitably they are a little hit-and-miss, and you need to take some time to find the ones that are likely to provide you with the best business insights and most effective business contacts. Avoid those with hefty registration fees and those that appear to be inundated with businesses trying to pitch their services to you. Look specifically for events with clearly allocated networking time.

Check 94: Research networking events

Spend a few hours on the internet searching for some networking events to attend. These do not have to be in-person events; some may be online events or forums.

Check 95: Register for networking events

Aim for at least three per year. Register for one online forum (consider eBay's forums at http://goo.gl/dvtr7o), one in-person event (consider the annual Internet Conference at www.internetconference.com.au) and another event you find appealing.

Getting it done

Merely registering for and attending an event is not enough, however! You need to plan to get the most out of them.

Check 96: Set event targets

For each event, set yourself a goal to meet a minimum number of people and collect a minimum number of contacts. You could also aim to secure at least one ongoing business mentor from each event. Be prepared to take notes and ensure you collect at least three BIG ideas for your business, then implement each within one month of the event.

Detailed costs and time for checks 94 to 96

In-person events can take from 1 to 3 days, depending on location and agenda.
Ticket prices for the Internet Conference are usually less than $1000.
It is free to use most online forums, including eBay's.

Business impact

To gauge potential impact, measure if there's:

a new idea (or ideas) to help improve your eBay business's turnover or profit margin
an ongoing network of business supporters who are available to answer your questions.

More information

For more information about the Internet Conference visit http://goo.gl/zIzN2q.

CHECKS 97 TO 99
      Improve your knowledge

What is it?

Nearly every business owner I have met has told me there simply isn't enough time in the day to do everything associated with running a business. One of the things that often suffers as a result is the business owner's own knowledge. In this case, knowledge of industry and marketplace trends is one thing, but technological advances, eBay product updates and government regulations are quite another. With the wealth of information available, the important thing is to concentrate on quality, not quantity, of information.

Three reasons to do it

1 Responding to upcoming change before it happens will save you time, resources and stress in the future.
2 Gain a competitive advantage over other business owners who do not allocate time to comprehend trends and changes within your category.
3 Expanded knowledge can lead to new business opportunities and growth.

Getting started

Be firm with yourself and ensure you stick to your plan of trying to expand your knowledge frequently.

Check 97: Set knowledge reminder

Set yourself a calendar reminder to set aside one hour each week. It should be at the same time on the same day so you get into the habit of using this hour to expand your business knowledge. Ensure the hour is free from interruptions.

Getting it done

Keep your knowledge about eBay and your industry current.

Check 98: Learn more about eBay

One area of knowledge to expand is eBay itself. The site is continually being updated and often requires sellers to adjust their business practices. Ensure you read every communication you receive from eBay (you could create a new folder in your inbox and read these during your knowledge hour each week) and always check the News area of the site to look for updates at http://goo.gl/0mMi8I.

Check 99: Learn more about eCommerce

Conduct an internet search to find a blog, newsletter or other website relevant to eBay selling, your industry or eCommerce. Sign up to receive emails automatically and save these to read during your knowledge hour each week. Alternatively, you could subscribe to a magazine or ebooks.

Detailed costs and time for checks 97 to 99

1 hour each week to read the information.
Subscribing to most email services is free; however, magazines and other websites may charge a small monthly subscription fee.

Business impact

To gauge potential impact, measure if there's:

an improvement in the efficiency of your business operations
a decrease in the number of changes to the eBay site that come as a surprise.

More information

Consider the Professional eBay and eCommerce Sellers Alliance blog at http://goo.gl/qK7JpK.

CHECK 100
      Conclusion

You can't make a million dollars in your sleep. Running any business requires careful planning, constant re-evaluation and close monitoring. To be successful on eBay you need to be able to cut through the daily grind and implement those changes or tactics that will provide the biggest cut-through — you need to increase your turnover, drive down your costs and see your profit margin increase. Be careful, however, not to obsess about the margin. I've seen too many sellers lose sleep over 0.5 per cent when what they should have been doing was focusing on the volume of cash profit. After all, selling 10 fifteen-dollar products at a 50 per cent margin nets you $75, whereas selling 1000 five-dollar products at a 10 per cent margin nets you $500.

Today, business owners are expected to be jacks of all trades. You have to find time to plan your business, run your business, satisfy customers and, if you're like me, pack your products and drive them to the post office, and follow up on customer satisfaction. Time is of the essence and one of the most overlooked but critical components of business success is reducing your time investment so your virtual hourly rate is optimised.

Check 100 is your toolbox for streamlining your eBay business. You can troubleshoot or else pick a page at random and apply the lessons to your operations. Some of the checks are fast, free and simple; others may take longer and may force you outside your comfort zone, but that's all part of running a profitable and long-term successful business, whether on eBay or not.

Now that you have completed 99 checks, there's only one thing to do. Go back and check again, because no business can afford to rest on its laurels. The most successful are continually reinventing themselves and challenging their ways of working. One hundred checks a year could be the only thing that lifts you from a mediocre result to one that far exceeds your profit expectation.

Check 100: Now go back and start all over again!

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