We all believe what we have to offer is valuable. But is it more than just our time? I recently had a chance to be on a panel of coaches hosted by the ICF (International Coaching Federation) to talk about our own formula and “secret sauce” for creating value in the eyes of our customers and clients. Here’s what I shared with the group:
5 keys to calculating ROI
Match up or Walk away
- For coaches – Build your own filter to determine your Ideal Client and go for an early “no” from them.
- For clients – Find a coach that has experience that matches where you want to be in the next few years.
- I have made 81 introductions in the past year that have resulted in hundreds of thousands of dollars of business for those people. Even when it was introducing a prospect to another coach. What may not be right for you may be perfect for another coach.
- Agree on what you want to improve.
- Example: If it’s profitability, you may want to improve operational efficiencies.
- Get an accurate measurement of current status and what metrics you will use.
- Often times you will have to improve your tracking before you can measure the benefits.
- Agree on a realistic range of time that you would like to see this occur
- Think of about hiring a personal trainer at a gym. Nobody goes home fit after their first session.
- Focus on creating change that will deliver a 10x return on the investment
- If the cost of the engagement is $10,000, then look for a return of $100,000 in improvement.
My process to create an ROI for my clients is to approach every engagement to deliver 10x return on their investment. For example, if they are going to spend $10,000 to create a product or system to grow their business, then we both expect it to create $100,000 return on that investment. More often, these CEO’s are wrestling with million dollar challenges and opportunities.
The conversation may start with money, but what if that CEO is already working 70 hour weeks? What if they haven’t seen their son’s little league games or daughter’s gymnastics meets in the past five years? Will more cash in the bank bring those years back? Not in my experience.“There are two reasons a man gives for the things he does, A good one and The real one” - JP Morgan Click To Tweet
- Money– No one should dictate the limits of how much you can make or how much you can keep.
- Time– Do the work that you love and what creates the most value for those around you. Then you never have to apologize for taking time off for your kids little league games, family vacations and time with friends that raise your game.
- Relationship–As entrepreneurs we all have clients, partners, employees & suppliers. What if you could replace all your headache relationships with A-List people and companies? Upgrade any of these relationships and things instantly get better.
- Purpose– When you can align your best working qualities with Your Unique AbilitiesTM in your business.
A recent example is a Midwestern logistics company and customer. The Freshly Minted CEO had been a rockstar of a salesman and had lead teams to support his large clients with fantastic results over the years. Now he was in charge of the whole operations. In a few short years the company grown to nearly $5M and was on the verge of growing out of control. They also had a few large clients and dozens of tiny clients that created some operational struggles.
The leadership team engaged the Dynasty Catapult process and started seeing the payoff immediately. They narrowed their focus to “what moves the needle” in new clients as well as prioritizing their business strategy options. They exposed and addressed some weaknesses that get walked past or stepped over daily. The new CEO and his team put a “laser sharp focus” on their best opportunities.
In his own words, “It gave us confidence to walk away from bad business and even go so far as to recommend a competitor.” They recently impressed a new client by telling them “you score very well with us” and explained their unique qualifying process. They will do over $7M this year, with eye on $28M in next few years, while putting healthy profits to the bottom line.Click To Tweet
3 Keys to establish ROI
- Determine where you are at right now.
- How will you measure it?
- What metrics will you use?
- How much change are you and your team willing to make
- Process – the way you do things.
- People – moving people around.
- Think about hiring a personal trainer example to get in shape
- It won’t happen over night
- It’s what you do or don’t do when they are not around that will set the routines
- Diet takes all the fun out of eating
- How much change are you and your team willing to make
- 4 Freedoms – Time, Money, Relationship & Purpose
- Grow the business – Double sales
- Grow the profits to get a better sale price
- Buying your freedom – see your kids little league games
- Choose the company you keep – A-List clients, partners that align with your vision and coaches that get you there because they have been there themselves.
I have several clients where the Board of Directors has replaced the CEO and has also given the Freshly Minted CEO marching orders to get the company ready for sale so they can get liquidity in the next 2-3 years. They will spend $20-$50k with me over that time and in the end we expect to add $1-2M of value to the sale price. More than a 10x return if you are keeping score.
Dynasty Leadership, focuses on mid-size entrepreneurial companies in transition. I have built a uniquely effective system, called Dynasty Catapult, designed to allow both retiring and first time CEO’s to maximize their business valuation. These processes and systems have all been built with hands-on testing. Over the past twenty years I have co-founded, grown and lead five previous companies from startup to sale.