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Listen to the three steps I always follow when implementing a new idea to increase my profit or cash flow. In this podcast I use an example from the book Find the Hidden Money. Chapter five describes the first step, you should always have a system for collecting the cash from from your customers. This podcast outlines the three steps you must take to be successful in implementing any new idea.
- Set the goal and strategy. Always start by setting a specific and measurable outcome. For this example our goal is to increase cash by $3,000 in 30 days. Our strategy to accomplish this goal is to reduce 60 and 90 day receivables by 50%. Currently, the 60 and 90 days account receivables are $6,000. Notice how the goal and strategy is specific and is easily measured. This keeps you focused and makes it easier to take action.
- Develop the action plan. This step involves setting out who will do what by when. An important part of this step is developing measures that provide timely feedback on the progress. In this example, we will develop an action plan that will help us achieve our goal. For example, John and Wendy will design a conversational script that we will use to call all your accounts receivables that are 60 days or older. The targeted outcome of the phone call is to get the money paid on credit card and therefore we will design our script to achieve this outcome. By getting a credit card payment, you are moving the risk to the bank. We will also prepare in advance for possible objections. By having a script, you don’t have to think up things on the spot or end up saying things you will regret later.
3. Implement the plan. Apart from starting straight away the most important part of this step is to measure. Always measure and adjust only one variable at a time. Too often a business will change more than variable at a time. This makes it very difficult to perfect your system. In our example we may want to measure the number of times we are successful in collecting credit card details. If we decide to adjust the script we will then be able to see if the new script is more effective.