PART III: Implementing Strategic Growth Projects
“Strategic Growth Projects” are the optimal tactics, identified through analyzing systems variances that will produce the best possible results for correcting variances.
For instance, if your Lead Generation goal was to acquire 250 new leads in one month, and you only reached 150, then the variance was 100. So, in order to correct the variance, you should develop a new lead generation strategy or marketing tactic.
Let’s say you set a goal to overhaul 50 diesel engines last month, because you make a higher profit margin on them, and you only performed 30. Your variance on engine overhauls was 20. By analyzing the variance and determining the cause, you will have the knowledge required to implement a “Strategic Growth Project” to correct it. For example; if the variance was caused by a lack of capacity, then you may need to recruit another repair technician. If it was caused by a lack of customers, then you might change your sales strategy.
If you don’t do anything to correct the variances we mentioned, then you won’t reach your ultimate goal of increasing revenue, which, as we indicated in Part II of this blog series, will eventually cause you to go below the “Red Line” and risk going out of business.
Before you embark on starting new projects, perform some market and industry research to answer these questions. You may find some simple solutions in the answers:
1) What will make your customers spend more with your repair shop?
2) Will producing your products and services less expensively increase your profits without lowering your sales?
3) Can you raise the price of your labor or parts without negatively affecting sales or losing customers?
Examples of Marketing “Growth Projects” are:
- Researching to uncover new market opportunities, especially unmet needs
- Developing a more effective and measurable Marketing Plan
- Increasing the marketing tactics or channels to achieve better results
- Changing the marketing messages and measuring the results of the change
- Expert Sales Training to increase the rate of conversion
Examples of Management “Growth Projects” are:
- Updating Policies, Procedures, and Systems
- Developing Scorecarding and Reporting Processes
- Updating Job Descriptions and Organizational Charts
- Priority Time Management
- Increasing Productivity of Employees
- Developing new Training Programs
- Increasing Oversight and follow-through Leadership
- Developing Strategic Plans with Key Performance Indicators
- Developing Position Transition and Career Paths
Examples of Operational “Growth Projects” are:
- Updating Technology to Increase Productivity and Efficiency
- Improving Quality Control Process
- Increasing Production Capacity and Flexibility
- New Product/Service Innovation
- Increasing Customer Satisfaction Levels
- Obtaining Skill Certifications and Continuous Training
- New Product/Service Development to increase Market Potential
- Improving Gross Profit
- Reducing Errors and Re-work Costs
Examples of Finance “Growth Projects” are:
- Cost Analysis
- Expense Reduction Planning
- Cash Flow Planning
- Financial Reporting for Managers
- Pricing Strategies for Profit
- Forecasting Expenses and Cash Flow
- Activity Based Budgeting tied to KPI’s
- Increasing Net Worth Valuation and Cash Reserves
The graph below illustrates how implementing “Strategic Growth Projects” within your main business systems can have a dramatic impact on 3-5 year goals. It demonstrates how the effect is accelerated over time, achieving the highest profit increase in the last year.
The longer you wait to implement “Strategic Growth Projects”, the longer it takes to achieve your goals.
By taking an Entrepreneurial Approach to developing the right combination of systems innovation and “Strategic Growth Projects” – monitored, measured, and improved over time – you can dramatically increase your diesel repair shop performance and create sustainable growth and longevity for your business.
Click here to download our free White Paper, “The Entrepreneurial Approach to Running a Successful Diesel Repair Shop”.