Monthly Archives: June 2010

Traits of the Rich & Free #5 – Plan your success

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Point 5 in my Traits of the Rich & Free is “Have a plan”. Very successful people follow a plan, its as simple as that. You have a vision for your ultimate ideal outcome, you articulate the vision for yourself, the people you need to convince and for the universe to get a handle on it too. You turn that vision into some very clear goals – long term and short term. And then you put a plan in place to make sure you achieve those goals. Like any destination, once you know where you are going, you need a map to get there (unless you have been there many times before, then you can rely on memory and instinct). I interviewed Rod Drury of Xero recently, he is on his fifth business and still following a clear plan to a well defined destination. Xero listed on the stock exchange right at the beginning and is taking the world by storm with its innovation and spot on timing – meeting a need in the market with precision and style. Rod talked about how his experience with his previous businesses earned him the respect and credibility he needed to raise capital this way. His journey is well defined and he is a very confident and experienced driver. He can afford to drive a little faster – but still he doesn’t try to get there without a plan.

In my experience, the trick to good planning is to start at the end goal and work backwards. At liber8yourbusiness we spend a session on “Planning Backwards” – a skill that every business owner can benefit from.

In essence the 10 steps to Backward Planning are:

1. View your business as a project with a beginning, a middle and an end.
2. Set your vision for your business clearly out there (what is your business going to look like when its reached its ultimate success)
3. Set your long term goal or goals – clearly defining what you want to see happen in your business for its owners (you and any other shareholders).
4. Work backwards to establish the key milestones that need to happen between now and then to ensure that goal can be achieved
5. Put your milestones in chronological order along a timeline to determine which has to happen before the others
6. Put some timeframes around each milestone – how long do you think realistically it will take to establish this (eg. one of my milestones for my advertising agency was to secure the first major piece of business billing in excess of $2 million. I guessed it would take 2-3 years to get there… I was about right).
7. When you have your end goal in place, with key milestones in order and timeframes on them, you can then put a date on the end goal by adding up all the timeframes on the milestones.
8. Then you review the end date and review your milestones accordingly, to see if you want to try to achieve any faster.
9. Once happy with the chart of events, end goal, milestones and timeframes, you can bring it right back to the beginning and begin to build an action plan for the first milestone. For my ad agency it was to win our first contracted, regular piece of business with one of the major companies in town. I wanted to do that within the first 18 months because I knew that once was we had regular work from an A list client, we would have the credibility to get another. We won the contract to provide all of the newsletters for the TAB (New Zealand’s Betting Agency) within our first 12 months. They were only newsletters… but it was enough to get us started on the road to regular income and credible client testimonials.
10. Follow your plan to the first milestone, allowing flexibility and keeping the door open for opportunities along the way. When you get to milestone one… CELEBRATE and then prepare the action plan for milestone 2.

Hope that’s useful. Feel free to ask me questions if you need more clarity.

The missing link

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I picked up a booklet published by New Zealand Trade & Enterprise the other day. It was called ‘Planning for Success, Helping you develop your own business plan’. There is loads of great information in there and definitely a useful resource for small business owners to help focus thinking when it comes to business planning. Great that the government recognises the importance of small business to our economy and applies resource to improve this sector.

In the preface of this publication it states that more than 90% of businesses employ less than 20 staff, and that small businesses are the very backbone of the New Zealand economy. Indeed we are a most entrepreneurial nation, which is awesome. By contrast, as a nation we are also among the worst in the developed world when it comes to personal debt and planning for retirement. As our population ages, how prepared are we for a growing group of older people with no means for financially supporting themselves?

It occurs to me that there is a connection here and a very real solution for the economy by making a link between the amount of small business owners in our country and the potential future personal wealth these business owners could be creating for themselves.

Who talks about a business as being the wealth creation tool for its owner? What business planning documents ever propose that a business owner plan to exit from their business with their future income provided for? What about building an exit strategy for the owners as the primary busines goal in every business plan?

The more I look into business planning resources, the less I find on the subject of owner exit strategies. Which makes my purpose and vision for liber8yourbusiness even more meaningful to me. To help business owners build a business that pays them back for all their hard work and feeds them wealth long after they have walked away. I’ll keep working on it…

Traits of the Rich & Free #4. Clear Goals

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Goals are incredibly powerful things. The minute you write a goal down you steer your thinking towards the achievement of that goal. In life goals are empowering. In business goals are essential. The achievement of your goals is how you measure your progress. Your goals form the structure of your business plan – they are your targets, they define your purpose and your destination. If you are ever going to create a business that is not dependent on you, you must set goals that will lead you towards this end result.

I learned some basic goal setting tricks years ago, and one in particular I still use whenever I set goals for myself personally or my business. It’s an oldie (you’ve probably seen it before) but its a goodie (it works!). It’s the SMART technique which states that goals should be:

Specific – write down exactly the outcome you want in specific terms not vague terms
Measurable – you must be able to define what it looks like when its achieved (ie. “I want to be happy” is not measurable)
Aspirational – it should be something that motivates you and brings you a positive outcome
Realistic – you must believe in your ability to make it happen. “I want walk on the moon” may not be an achievable goal for you. But for someone at NASA it might be.
Time bound – put a specific date on the goal (not ‘in 3 years time’ but day/month/year)

The one thing I’d add to that is that your goals must be written down. In your head they are concepts and wishlists, on paper or on your computer they are defined objectives. For business planning I believe you need to have long term and short term goals. Long term goals, say 5 years out, which will be broad in nature. Goals for this financial year will be very specific in nature – the general rule of thumb being the shorter the timeframe the more specifically defined the goal.

It’s not rocket science of course but its amazing how many businesses I come across that are so focused in their business that they haven’t made time to focus their direction with clear goals. It’s one of the first things I look at when I work with a business to help an owner create an exit strategy… your goals define your ultimate success. How clear are yours?

Practitioner or entrepreneur?

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My osteopath is a miracle worker. This morning I could hardly sit up straight over my long black and newspaper. By 2pm I was pain free. As I lay on the table feeling Martin’s healing hands do their work, we talked about business. He is the first to admit that if the definition of a business is something that will ultimately pay you when you no longer work in it, then he agrees he doesn’t really have one. He has a job, not a business. We’ve talked about this concept before and he really gets it. He is a practitioner. He is trained in his profession and has built a self employed career through his talents. He deserves his loyal base of clients because he is very good. He also deserves to have his business pay him back for all the hard work he’s put into it over the years. But unless he does something drastically different with his business model, it won’t. The question we talked about today is how can a practitioner create a business that he can walk away from. As his client base relies on him for the experience they expect, it seems impossible.

In reality it is not impossible. But it does require a mind shift. The first step is for the practitioner to want to build a business rather than a “job”. This will mean re-thinking how the business model works. To stop thinking like a practitioner and start thinking like an entrepreneur. The long term vision must be to sell the business, or have it continue working even when you are there. To create something that grows and inspires, and doesn’t rely on your own daily input to thrive.

The question the practioner has to ask themselves is this, “in what ways can my practice earn money without me doing the hands on work?”

It’s a great challenge. Love to hear your thoughts.

Traits of the Rich & Free #3… Belief

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Here’s a principle of life…You will not succeed unless you believe you will. It’s true of any person who achieves the highest success in their chosen field – be it business, sports, the arts, music, whatever – the people reach the top are the ones who believed in themselves enough to put their neck on the line. I love hearing the story of Sylvestor Stallone, the struggling actor who wrote a screenplay called Rocky and then took it all around Los Angeles looking for a production house to buy it. No one would. He had to sell his dog to pay his rent. Then one film company offered him something like US$250,000 for the rights to the movie. However, they didn’t want him to play the lead role, which was one of his criteria for the sale of the script. Imagine that, you are so poor that you have to sell you own dog and then someone offers you a quarter of a million dollars for a script you have written. How many of us would take that offer? So what if you don’t play the lead role. It’s still a lot of money. But not Sly. He said no. He would only sell the rights to his screenplay if he could play Rocky. He held out. And the rest is history. Of course eventually someone saw the potential of him and his script and bought the whole package, including royalties on ticket sales of the movies and the rights to all sequels. The moral of the story is clear. He believed in himself and his belief allowed him to go from potentially a one hit/one script wonder to one of the leading stars in Hollywood. His dog? He bought it back of course, no doubt for considerably more than he paid for it.

And so my number 3 trait of the Rich & Free is ‘belief’. To successfully build a business that you can ultimately retire on, you are going to have to believe in yourself. You have to put a big hairy goal out there (more on that in the next trait) and then believe that you can really achieve it. You have to back your own ability to pull it off, even when the going gets tough. There is not a successful business person you could name that has not been through doubts, has not had tough times, encountered stress and had their commitment challenged. It’s your ability to allow your belief in yourself, your business, your product and your talent to overcome the doubts that will ultimately define how successful you will be in business.

Bill Gates demonstrates the meaning of financial freedom

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It gave me great joy to read about Bill Gates today, giving an exclusive interview to James Quinn of The Telegraph about his committment to giving to the developing world. Mr Gates is the second richest man in the world with a fortune of US$53 billion. Having spent 30 years of his life building Microsoft, which has to be one of the most significant, most contributing companies of all time, he now spends most of his time giving back to the world. As if he hasn’t already contributed enough with his genius and talent as a visionary and business leader, he is now ‘on a one man mission to remind the countries of the developed world about their respective commitments to reach the United Nations’ target of spending 0.7 per cent of gross domestic product on overseas development by 2013′. Here is one man who is using his wealth the the financial freedom he has created for best purpose.

My point is this… when you have become the world’s second richest person through your success in business you are in a very powerful position. You have the wealth, the time and the freedom to make a significant difference to our world. I strongly believe that if one of your driving reasons for wanting to be financially free is to give back, to make a difference and leave a mark on this planet that is uniquely yours, then your chances of achieving that financial freedom will be magnified beyond what most business owners ever achieve. This supports Point 10 in my Traits of the Rich & Free list – Give Back – the world’s most successful business people are driven by a desire to add value to the world around them.

Traits of the Rich & Free #2. Passion

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As I talk to very successful business people, their traits continue to share a common thread. I listed the 10 traits they seem to share in a previous blog and promised to cover each one in turn. I’ve talked about ‘vision’ already. Now for Trait Number 2: Passion. The world’s most successful business people unsurprisingly are not people who typically struggle to get out of bed in the morning. They are people who find each day driving them towards achievement and feel their hearts fired by the vision they’ve mapped out for themselves. I’m sure that comes as no surprise to you. To be the top of field in any game, you have to be passionate. Of course we all know that.

But there is a twist to the concept of passion in business. I talk to all sorts of business people, at every stage in their development. I am honoured to spend time conversing with some of the most successful, those who have proven themselves and reached the very top of the business success ladder and I also talk to others who have yet to start out. Sometimes I will get an email from someone who has heard me talk and is at the very beginning of the business ladder, still wondering how to get on the ladder. A common comment these pre-entrepreneurs make to me is this, “I want to be in business for myself but I don’t know what my business should be. I’m just not passionate enough about anything to make a business out of it”.

And here’s what I say in return. It must be wonderful to have a business doing something you are passionate about. I know that some lucky people do this, they take a personal passion, something they love doing more than anything and they create a business around that. And some even go on to become multi-millionaire business tycoons doing the one thing they would be doing even if they didn’t get paid. But I struggle to think of many examples of such people (please feel free to write some examples in your comment to this blog post).

In reality, you don’t have to be passionate about what your business sells, you just have to believe its the best. It’s an important distinction to grasp. My late father retired when he was 50 years old, having made his fortune from his business selling photocopiers. He started that business in London in the seventies, a great time to be in the photocopier business. He never had to work again from the day he sold it. He did exceptionally well in business. But I can tell you now, he was never passionate about photocopiers. He was passionate about creating a business that would enable him to provide a life for his children without hardship (he grew up in a working class family in the East End of London during World War II, with an abusive father and siblings who left home to escape the hardship). He was passionate about his vision for success for himself and his family, and about growing a business from nothing to an thriving empire he would eventually sell and retire from.

By the time I started my advertising agency, I was no longer passionate about TV Commercials or magazine adverts. But I was passionate about creating the best advertising agency in town, winning Agency of the year and building an agency so successful a multi-national would come knocking at my door. One of my current businesses, Pet Angels, the world’s first online matching system for pet owners and pet carers, is another example. I love animals and I am passionate about animal welfare. But I am not necessarily passionate about walking a dog in the freezing rain or hand feeding carrots to an aggressive guinea pig (one of our Angels recently had to clean a rabbit’s personal areas with a cotton bud… she was not that passionate about it!). I am passionate about providing the best (and most highly systemised) pet care experience in the world and creating a business that fulfills all of its objectives whilst allowing me time to pursue other passions in life… such as time with my children and my mentoring.

So yes passion is a must in business. Passion for life, passion for success, passion for the game of business and building something really cool, watching it grow and achieving its goals… this is the sort of passion you need to succeed. You have to believe in your product or service, and be committed to its uniqueness in the market. But you don’t have to make your passion your business (I love golf but the golfing world will breathe a sigh of relief to know I’m not going to try to make a business out of this passion!).

In short, your business must be your passion. But your passion does not need to be your business.

Husbands in business – a new syndrome?

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Just presented to Her Business Network Meeting in Napier, Hawkes Bay. What an impressive group of business women. The very fact that these business owners give up their Wednesday evening to spend time learning and sharing ideas with other business owners tells me that they have the attitude it takes to create financial freedom from their business. It was a very fulfilling evening, I enjoyed presenting to this group very much. But I must confess to being completely at a loss for advice for two women who came up to me to ‘pick my brains’ after my talk. Their question was this: “What do you do when you are in business with your husband and he, as the more dominant partner, not only doesn’t see things the same way but refuses to explore the ideas you put in front of him?” I was stumped because I’ve never had to deal with this issue. In my first business I had no partner, and in my current business my business partner and I follow our plan of action with equal clarity and commitment. When it comes to the big picture and purpose of our business – we’ve had the same goal from day one, and clearly have the same end result in mind. So what do you do when your business partner is also your life partner and won’t listen to you? I still don’t know what to advise these business women. Appreciate any ideas…