Our last post featured the first half of an interview I conducted with Deanna Davies about her interest in growth and profitability and her passion for helping businesses achieve this for themselves.
This month’s post features the conclusion to our discussion, in which we get an in-depth look at Deanna’s career trajectory and how she became a growth and profitability specialist for small and medium-size businesses.
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LR: Can you tell me a little bit about the course of your career and how you came to specialize in helping businesses struggling with growth and profitability?
DD: I grew up around my family’s small agricultural business and was involved in production and sales from an early age. And after high school, I got a B.Comm from Queen’s University.
In the early 80s, the Queen’s Commerce program believed in developing well-rounded business people, which was something that appealed to me.
After graduation, I pursued my CA, which is now called CPA—Chartered Professional Accountant—where my interests were focused on small-to-medium sized businesses, not on big audits or taxes.
Business owners will talk about their business issues if you ask, and I have always been curious about the challenges that businesses face. Over 20 years ago, I become involved with an international group of accountants which aligned with my philosophy that no business owner wants an accountant; they want someone to help them build a better business.
I began to proactively move from analyzing past results to influencing the future profitability and growth for a select group of clients.
LR: In previous discussions, you’ve told me that you believe it’s wise for small and medium-sized businesses to get outside, professional help to create a strategy for growth and profitability. Why is that? What are the risks of going it alone and trying it yourself?
DD: Getting outside help from a growth and profitability specialist makes sense. Business owners know how to do the technical work of the business, but they don’t often have training in management or finance. They just don’t understand how valuable these skills are if they want to achieve profitability and growth.
As a result, business owners make mistakes and lose focus with the day-to-day fires that happen in the business. They get caught up in working. Think of us as a coach that helps businesses train to improve their profitability and growth.
LR: When times are tough and we’re struggling, it’s a very human desire to want to get out of that state as soon as possible. Are you able to estimate how long it will take to recover, get back in the black, and start seeing some growth and profitability?
DD: How long it takes for a business to recover is a hard question to answer. It’s like asking how long it will it take until I am fit and healthy. It always depends on the starting point.
I have found that success largely depends on the willingness of the business owner to commit to:
a) making an investment in their business—not only in our services but other areas—for example, new software, equipment, people training, et cetera
b) making changes in the way they do things, and
c) making time to work with us. We are not magicians. We can’t do it to them but we can partner with them to achieve their goals.
You have heard the definition of insanity—doing the same thing over and over again and expect different results. I believe that quote is from Albert Einstein.
Let me tell you about one client that we work with. In the first year of working with us, the business went from a loss to profitability of approximately ten percent of sales. Cashflow improved such that they were only using half their line of credit.
LR: Are all businesses capable of growth and profitability? Our work-hard-and-get-ahead culture certainly says yes. But isn’t it natural for some businesses to close down? Surely not every business can succeed or there wouldn’t be enough profit to go around, right?
DD: For a business to be successful, it must have a product or service that satisfies a need for its customers. Over time, customers’ needs change. For example, you no longer see video rental stores. There’s just no use for them anymore; we have new ways of watching movies now.
For a business to be successful, it must be able to provide products or services at a price point where the customer values it, there is sufficient demand for it, and at a price where the business can make a profit.
Businesses that are willing to adapt and change are much more likely to be successful, and the ones willing to change are the businesses we can help.
LR: That’s great. I can see why the owner who insists on working in the business could be a real barrier to making necessary changes.
We’re just about out of time, but I have one more question for you:
What’s the single best thing a business can do to start moving towards growth and profitability?
DD: Being willing to recognize that they need help and hire a growth and profitability adviser to work with them to help them get there faster.
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Now that we’ve come to the end of this two-part interview, let’s review some of its key takeaways.
First, moving towards growth and profitability is likely to require a good deal of change. This may be an uncomfortable process, but it will help you shed old habits that are actually preventing you from developing your business.
Related to this first point is that owners need to be working on their businesses rather than in: if the owner spends all her time doing day-to-day tasks, there will be no time left to figure out how to expand the business through tactics like clarifying your ideal customer, identifying their additional needs, and then offering ways to satisfy them (i.e. capitalizing on the principles of growth and profitability).
However, none of this can occur until the business has a clear vision. That is, the direction they collectively want to move in: it won’t work if staff members are pursuing different ends.
Finally, the fastest and most reliable way to move your business towards growth and profitability is to get professional help. These outside experts can help you objectively assess your business, what needs to change, and then can coach you along as you make those difficult first steps.