The Clifton Review 

The Clifton Review is a tri-weekly column that examines the question of the Clifton project along with the evolution of the war between two billionaires. We covered the start of this war with articles describing the battle over easement rights, the mysterious burning of a home, the blocks to rebuilding, and countless questionable court filings.

While the 2018 series salutes fashion mogul Peter Nygård’s Golden Jubilee detailing his rags to riches story, his incredible business success over these past fifty years and an inside look at how he did it, The Clifton Review will also continue to address current affairs as they relate to the good of The Bahamas.

Strategy Applied

By P.J. Malone

As tedious as it might be to have to delve so deeply into analyzing your organization’s operations to achieve business success, it can pay off in spades, especially when faced with new business competition. 

Let me start by apologizing for the mistake in my previous article with the calculations used for the example provided. Here’s the correction: If your business makes about $240,000 annually, 20% of that would be $48,000, which means needing to make $4,000 more a month to achieve your goal of increasing the business income by 20% for the upcoming fiscal year.

We are using the strategy of ‘offering more add-on items to product sales’ to be able to achieve the business goal. We previously applied this strategy to the example of a coffee shop. So in our previous discussion, replace the $2,000 with $4,000 and ask the same question of ‘how many add-on items do we need to sell to make $4,000 more each month?’

We talked before about the structures, systems and processes required to implement your strategy and achieve your goal, and we presented an example of a new structure requirement. Now, let’s discuss examples of looking at processes that may be required to achieve your goal.

One of the things fashion mogul Peter Nygard has demonstrated that he is really good at is implementing any required processes for achieving his business goals, which is likely due to his detailed oriented bent to everything he does. How does he do this?

One process involves Nygard communicating his vision and goals to his associates twice a year, but he doesn’t stop there. He has systems in place within his organization that involves an annual review of his structure, systems and processes. 

His review evaluates how well their organizational structures, systems and processes worked to help them achieve their previous goals, as well as what changes are needed to ensure they can support their new goals. This is done on a micro level with each of his major departments.

In applying the question of what processes are needed to implement strategy, let’s use the same strategy example of ‘selling more add-on items’ and use it with the example of a small accounting business that may offer bookkeeping services to other organizations.

If your accounting business performs services like bank reconciliations and accounts receivables/payables, what add-on items can you offer? Well, one example is that you can offer custom reports in addition to the general reports you may normally produce for your clients. 

What if you add more customization of the report for an additional small fee? You can offer a report on the breakdown of the accounts payables into detailed types of payables, or a breakdown of accounts receivables with not just types but time periods for money that’s overdue. 

If custom reports are already included in your bookkeeping services, then how about offering an add-on service item of reviewing a client’s accounts receivables set up in their business for a small fee? Some businesses could probably use help with ensuring that their accounts receivables’ system is efficient and effective. 

And remember, add-on items should involve lower additional costs; otherwise, it will be considered a major cost item, which may depress add-on sales.

You would then need to review your own company processes to see if anything needs to be changed or enhanced to be able to implement the strategy of offering these add-on services.

For example, if you are offering a custom report as an add-on service, create a new questionnaire as a part of your bookkeeping process to determine what new categories in a custom report might be helpful to each client; then decide what custom report could and would be offered to each client. If you tailored your offer to your clients’ needs, you are likely to be more successful with add-on sales.

For offering the add-on service of an accounts receivables review within your client’s company, what new processes will you need? Maybe you need to create a template for reviewing the various components of the client’s accounts receivables set up. What about creating a checklist of the ideal elements needed for a proper accounts receivables set up to ensure that you suggest exactly what’s needed without missing out anything?

We’ll continue with practical applications of the strategy of selling more add-on items monthly.