“Starting a business is easy. Creating something of value is harder”

TVNZ Interview

TVNZ Interview

If you have a few minutes, take a look at this interview with me on TVNZ Good Morning show earlier this week. To be honest I was quite thrown by the questions asked. I had expected it to be a jolly chat about my book, with a view to inspiring some talented mums at home to consider the opportunities, just like I had. I wasn’t expecting the first question:

 “Why do you think anyone can start a business?”

Wow, that made me think. Watch as I look up into my brain for the answer.

And then it came to me, starting isn’t the hard part. Anyone can start a business. But not everyone has the vision and the fortitude to make it work.

In the interview, I end up back on my own soapbox, showing how passionate I really am about the need to approach business with a long-term view in mind.

The good news is that I got to explain my mantra – ‘start at the end and work backwards’. Think about where you are taking the business and what you want out of it financially, as well as what you want to do right here and now. Plan your business properly – start with a good idea and a clear market for it – and be clear what the end game is.

I’m not sure I inspired those stay at homes to launch into business tomorrow, but I did get to say my piece. The reason I do what I do – helping small business owners become big business owners by planning their way to financial freedom.

I hope things are going well for you in your business right now. I’d love to help you plan your end game and plot the course to get there.

Acceler8me 2014 kicks off July 3rd – for business owners serious about growth. You can find out more about it here – just use the enquiry form supplied to have a chat about it.

Hope to see you soon!

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Have you created a business or a life-long job?

 ‘ball and chainSuccessful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential.’ John Maxwell

One of the first questions I ask when I present to business groups is: ‘Why are you here? Why are you in business? Why on earth have you left the security of a job with regular pay to start your own business, with all the uncertainty this holds?’

I always get similar answers.

Mostly, people say they don’t want to work for someone else. They don’t want someone else’s culture.They don’t want to be told how the way it should be done. They want to be in control. They want flexible hours and to spend time with their children. They want to be able to go on holiday when they want. They don’t want someone telling them how many weeks’ holiday they can have a year. They want to do something they really love. These are all honourable reasons for starting a business.

But, ironically, many business owner-operators end up with the complete opposite. They find themselves with little control. They discover their clients have the control and will often demand they work longer hours than they ever did when working for someone else. Most small business owners pay themselves less than they would be paid working for another company.

Crazy, I know, but it’s true. You go into business for freedom and control and end up working longer hours and earning less. Sound familiar?

Many business owner-operators don’t take holidays. They start their business believing they will be in charge of their own holidays, but they find they don’t go on holiday at all. I met a woman who owned a chain of motels with her husband. They hadn’t been on holiday for five years. When I asked her why she got into the motel business in the first place, she told me it was for the lifestyle. Go figure!

If you pay yourself too little, work long hours, and don’t take decent holidays, you can feel resentful. Worse, you can fall sick and be unable to carry on. A high percentage of businesses fail (and by fail I mean they stop; the owner gives up) within five years of start-up. Disillusionment gets the better of them. They go into business to set themselves free and find themselves with a virtual chain around their ankle. Not surprisingly, they decide they don’t want to do it anymore. But that’s not going to be you, is it? Most people who fail to achieve financial freedom through their business do not have the right mindset. Let’s just take a look at a true story for a moment to illustrate my point:

The story of Julie and Fliss

I was having coffee with an old friend one day. Julie is an amazing lady who had started her first business and built it over 20 years until it was bought by a huge multinational group. She became wealthy and continues to build her wealth through angel investing and mentoring start-up businesses. She has a wonderful life. We discussed how special it was to be able to spend quality time with our kids after school each day and how we enjoyed helping other people learn to build a quality life through business. We got to talking about a woman we both knew. I’ll call her Fliss, for the purposes of this story. Fliss opened a business at the same time as Julie. She is a dress designer and opened up a little retail store in the town where she lived.

Twenty years later she still had that small shop and she was still making the dresses. Fliss was no better off financially and she still had to keep designing and making the dresses to sell in her shop. Of course, there’s nothing wrong with that as a life choice and as far as I know, Fliss is content in her life. I don’t want to appear scornful of someone doing something they love. If you’ve got a talent for design and you’re happy with a small retail shop in a small town, there’s nothing wrong with that – as long as you are aware that this is where you are at.

But what worries me with the owner-operator mindset is that Fliss, like so many other owner-operators, will wake up one day and won’t want to do it anymore. As much as she loves designing dresses, something will happen that changes her ability to live off its income, for health reasons or, more likely, because she’s lost the passion for it. The danger of not having a plan to sell is that she can end up with a business worth nothing to anyone else, meaning she’s stuck with it. What will she do for income when her desire or ability to make dresses is no longer there?

The freedom mindset

Let’s look at situations of these two friends. Why did Julie go one route and Fliss go another? The key difference was the mindset.

One knew she wanted a business she could sell and create a lifestyle where she never had to worry about money again. The other wanted to make pretty clothes. They both made their choice; probably without even realising they had done so. Fliss chose to employ herself in a job she enjoyed. She did not choose to build a business.

We make choices every day. The most important choice is one you may not have given much thought to – until now. Are you choosing to build a business that will pay you back or are you choosing to work for a living?

My book Liber8 your Business explores this question at length and gives you a practical 8 step process to follow if you decide that financial freedom in the future is something worth working for.

From the desk of Liber8me.  Business mentors and publisher of Liber8 your Business: The revolutionary business planning technique that will set every small business owner free.

Some frightening statistics about small business…

lemonade standI’m about to share some frightening statistics taken from 2013 census :
  • Out of 469,118 businesses, 439,920 had less than 10 employees
  • That’s 94%! 
  • 74% of these are deemed uninterested in or unsuitable for expansion
  • 55% self employed people are age 40 – 59
  • Average wage small business owners pay themselves is $40,000
  • What does this picture say to you?  To me is says we have an economy largely made up of small business owners, who are not paying themselves enough and have no plan for growth.  Many of these will hit retirement in the next 10 years, having worked hard in their business their entire life, and will not be able to sell it (no one will buy a business which is unsuitable for expansion).  This is a bleak picture for the business owner and for the economy.  I think it’s time things changed.
  • The two statistics I’d like to see change first are the % of business owners deemed uninterested or unsuitable for expansion, and the average small business owner wage being $40k.  Both can be changed with education and inspiration.  Firstly, there needs to be a movement to change attitudes.  From a small business being more like a low paying job, to a belief that your business is an asset – there to feed you long term wealth.  With some careful planning, a lot of drive and some expert guidance – many businesses can be re-engineered to enable growth.  But it does take a willing owner.  There needs to be a mind shift.
  • Secondly, there needs to be inspirational education and a support network that gives business owners practical steps to follow once they decide they are willing to go for it.My book Liber8 your Business, together with it’s companion workbook, have been designed more as an at home small business course than a book.  The goal is to change attitudes and provide tools to enable change.  I’d now like to see facilitated study groups all over the country, to help take the lessons out of the pages in and into practice in small businesses everywhere.
  • If you’d like to be part of this movement in any way, as a participant, as a facilitator or supporter contact me laura@liber8me.com

Have you created a business or a job? 5 tips for turning your small business into a big asset

looking for a jobMy mantra for small business owners is simple:  Don’t create a job, build yourself an asset.  When you own a business you have the opportunity right there in your hands to build something that can create financial security for you in the future.  You are going to work hard anyway, why waste this valuable time just paying yourself to do a job when you could be setting yourself up forever?

If you are serious (as I believe you should be) about building a saleable business, here are 5 success factors you can be thinking about right now:

1.  Set your end goal. Decide how much you want to sell it for and by when, and work backwards. In my book Liber8 your Business, I show a simple formula for working out your potential end value, with a link to the online calculator.

2. Name your buyer. It’s important to have a good idea who might want to buy your business in your early planning. Imagine spending ten years building a business you intend to sell only to realize you have created something nobody wants to buy. If you build a business with a buyer in mind, you have a much better chance of building something they really want.

A potential buyer could be a larger player in your industry looking to grow through acquisition. This growth might be regional – they want a presence in your city or town and it’s easier to buy you than start from scratch. It might be strategic – you have a smart product or service they could add to their existing infrastructure to create additional revenue streams. An example of this might be a large accounting firm buying a small book-keeping firm to add value to their client base. Your service or product could become a ‘nuisance’ to a competitor (read more on a strategy called ‘kicking sand in the gorilla’s face’ in my book, Liber8 your Business) and they buy your company to prevent it competing or to regain lost revenues. It could be a management buy-out, when senior employees raise the funds to buy you out. It could be a competitor of a similar size wanting to grow and willing to invest to gain rapid growth through acquisition. I’ve sold businesses to two types of buyer. A multinational bought my advertising agency and a local competitor bought my pet care company. My father’s photocopier business sold to his senior management team. A good friend has built three recruitment agencies. The first sold to one of the original partners, who bought out the other partners. The second sold to a multinational looking for regional representation in her city. The third is in its early days of growth and I’ll watch with interest who buys it (I have no doubt it will sell because I know the founders expect this and will build with this in mind). Another type of buyer could be a private equity group or even an individual who sees great potential in what you’ve built.

So who might want to buy your business? What are you building that could add huge value to someone’s offering? Now is the time to start thinking about these things.

3. Remove the dependence on you. To make your business attractive to your future buyer, it cannot be dependent on you. That’s a key message I want you to learn from this article:

No one will outright buy a business that’s dependent on its owner.

If the buyer takes you out of the picture and no business remains, they will either insist you stay in the business or they will walk away. So whatever your strategy is, whatever your end goal, whatever your vision for the future … it needs to not have you in it. I did that at my agency by making sure the clients loved the business but weren’t dependent on me. In the last few years, I hired two senior guys and put them in charge of our biggest clients, so my buyer could see the clients were not reliant on me.

4. Start building a team as soon as you can. I couldn’t afford to bring in those big guns until later in my business growth. I started by hiring people I could afford, with a couple of youngsters straight from college. I trained them to do things exactly the way I wanted. I call it ‘training your clones’ – teaching people to follow your example and do things your way. I kept building my team that way until we could afford to hire more senior people. And then we had to make sure we had a really strong culture to manage senior people.

5. Secure future earnings. Getting all our key clients on fixed-term contracts was another critical strategy that worked. They all had two or three year contracts so when the buyer looked at my business they saw a high level of spend committed for the next three years. This was an important lesson I learned from my businessman father. Remember I told you about his photocopier business and how he sold it and retired soon after his fiftieth birthday? One of the best secrets to success he shared with me was, ‘you’ve got to have a back end.’ To explain, he gave the example of his own business. While the sale or lease of each copier was worth a lot of money (especially in the 1970s when these huge machines were a relatively new addition to business productivity) the real value came from the additional contract that went with each machine. This locked the customer into buying all their ink, toner and paper for the life of the machine, as well as regular paid servicing – which meant that, for every machine sold, my father had income guaranteed for the next 10 years, enabling him to predict with complete accuracy his future income. You can see why this made by father’s business attractive for a buyer. They could see a guaranteed return on their investment. It made sense to me when I started my own business, and I hope it does to you too. It will get you a higher price when you come to sell!

   A business with committed future revenue that is not dependent on its owner to deliver that revenue is a business worth investing in.

You’ll find these 5 factors, and a whole lot of other ideas, tips, stories and exercises about creating freedom from business in my book – Liber8 your Business: The revolutionary business planning technique that will set every small business owner free.

What’s the best weapon for world domination in business? A brilliantly simple tip…

DictaphoneCylinderGuest story with Mike Brunel

How did we take a small Wellington based radio sales consultancy business and turn it into a global success story servicing 400 worldwide markets and selling to 320,000 people?  It all started with a Dictaphone. In the early days we worked out that we could show radio media companies how to move advertisers from a small two week campaign into a 52 week commitment.  I watched my business partner in action and realised that he always did the same thing.  He said the same words, made the same offers and got the same results.  I spent a week watching him, recording him and taking notes.  I created a sales system around what we did, with manuals clearly outlining every single word and action taken.  We then packaged up the system and began selling it to other media companies… all around the world.  In effect we turned a commodity into a system.  Now my business partners and I live in Wellington, our CEO is in Atlanta and we have offices in four different countries… all doing things exactly the way we would.

And so my tip for business owners who want to decrease reliance on you and create a leveraged business is to take time to document exactly what you do.  Use the microphone app on your iphone/android and record yourself as you go about your day… every single little thing that you do and say. Then get it transcribed and turn it into a manual… paper or computer based, whatever works for you.  It may seem laborious – and it is – but this is ultimately what will set you free.  Turn what you do well into a system.  Then train others to use it.

Mike Brunel is co-owner of NRS Media, currently working with over 400 major television, radio, and newspaper companies in the United Kingdom, Ireland, Europe, the United States, South America, Canada, South Africa, the African continent, Australia, and Asia, NRS Media has offices in London, Atlanta, Toronto, and Sydney and employs over 175 staff. Mike is available for sales training and consultations, email mike.brunel@talkingmediasales.com

 

From the desk of Liber8me.  Small business mentors and publisher of Liber8 your Business:  The revolutionary business planning technique that will set every small business owner free

What’s the number one thing to consider if you ever want to sell your business?

soldIf you are serious about selling your business one day, it’s important to have a good idea who might want to buy it. Imagine spending 10 years building a business you intend to sell only to realise you have created something nobody wants to buy. If you build a business with a buyer in mind, you have a much better chance of building something they really want.

A potential buyer could be a larger player in your industry looking to grow through acquisition. This growth might be regional – they want a presence in your city or town and it’s easier to buy you than start from scratch. It might be strategic – you have a smart product or service they could add to their existing infrastructure – for example, a large accounting firm buying a small book-keeping firm to add value to their client base. Your service or product could become a ‘nuisance’ to a competitor and they buy your company to prevent it competing or to regain lost revenues. It could be a management buy-out, when senior employees raise the funds to buy you out. It could be a competitor of a similar size wanting to grow and willing to invest to gain rapid growth through acquisition. Another type of buyer could be a private equity group or even an individual who sees great potential in what you’ve built.

I’ve sold businesses to two types of buyer. A multinational bought my advertising agency and a local competitor bought my pet care company. My father’s photocopier business sold to his senior management team.

So who might want to buy your business? What are you building that could add huge value to someone’s offering? Now is the time to start thinking about these things.

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From the desk of Liber8me.  Business mentors and publisher of Liber8 your Business:  The revolutionary planning technique that will set every business owner free

There are only two reasons to be in business. Do you know what they are?

world arrowAccording to Dun & Bradstreet* reports, “Businesses with fewer than 20 employees have a 37% chance of surviving four years and only a 9% chance of surviving 10 years.” 

I believe that the primary cause of these staggering statistics is that too many people go into business for the wrong reasons.

For me, there are only two reasons why you would start a business: firstly to make money and secondly to make a difference.

Making Money

Business is a financial game.  People who are very good at business understand that business is all about delivering returns to the shareholders.  As the Director and CEO of your own business you have a fiduciary duty to yourself as a shareholder to build a business that delivers maximum returns to you.  To look at it any other way is letting emotions get ahead of business.

Making a difference

And yet a business that cares only about money is a business without a soul. Your business is also there to fulfil a purpose, to add value and make a difference to the lives it touches, whether those people are customers, employees or beneficiaries of the higher purpose your business serves.

There is a fun irony to this concept if you can really grasp it.  If your business is truly focused on making a real difference to as many people as possible, you will attract more people to you.  The more people you attract, the more successful you become and the more people you make a difference to.  It’s a wonderful win/win concept.

Combine the concepts of making money and making a difference and you will build a business that will not only make you rich, but make you feel like a million dollars too!

Are you in business for the right reasons?

I hope so!

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*Dun & Bradstreet is a public company that licenses information on businesses and corporations for use in credit decisions, business-to-business marketing and supply chain management. D & B maintains information on more than 205 million companies worldwide. 

From the desk of Liber8me.  Small business mentors and publisher of Liber8 your Business: The revolutionary planning technique that will set every small business owner free

The 9 big DON’TS if you want to successfully grow your business

no entryEveryone is always telling you what you should do to be successful in business.  I thought for a change, I’d tell you (based on my own bitter/sweet experiences) some of the things you really shouldn’t do.  Here are my top nine DON’TS when it comes to being successful in business:

1. DON’T start or continue a business with no idea of why what you offer is needed and wanted.  Find your niche, be sure people want what you have and have a plan for how you will grow this business into the future.

2. DON’T believe you are the only one who can do what you do as well as you do. No matter what you do, no matter how specialized it is… there will be others out there who can be trained to do it just as well as you… if not better.  Get your ego out of the way.  Or you will become your business’s biggest liability when it comes to growth.

3. DON’T be afraid to hire people.  You cannot do it alone.  No one will ever buy a business that is dependent on its owner.  You must build a team around you.  This is, however, one of the most challenging aspects of business and most small business owner often make a complete mess of it to start with.  Which leads us to DON’T number 4…

4. DON’T do your own HR.  Most business owners are better leaders than they are managers.  You can probably inspire people to want to work for you with your vision, your passion and great ideas.  But an employee will never share the same level of passion as you, no matter how good they are at their job.  Get an expert (HR consultant) to get the right tools and processes in place to motivate your team and manage their performance effectively.

5.  DON’T try to grow too fast.  You need people – but you need to know you can afford them first.  Make sure there is enough forward cash flow in the business first – don’t hire them hoping the business will miraculously appear out of nowhere to pay for them.

6. DON’T ever believe that doing the work is more important than selling the work.  Learn to do the IN/OUT dance – make the out there selling part of your job as important as the in there doing.  You must have a sales pipeline in place at all times, always thinking about where your income is coming from next.

7. DON’T try to run a business without a budget.  Business is a financial game, and you must lead with the numbers.  Project your sales, set your expenses – have a plan to achieve these and then make the plan happen.  Lead with the numbers.  Create strategies to achieve financial targets and take action.

8. DON’T try to do it on your own.  Business can be a very lonely game.  Especially in the early days when you are doing everything.  Even if you have a business partner or management team, it’s too easy to be introspective and talk yourselves into believing what you are doing is right.  Get an external perspective on your business right from the start – a mentor, advisor, Board, Advisory Board… someone who will challenge your strategies and hold you accountable to your goals.

9.  DON’T let the bastards grind you down!  There is an extremely high probability that at some stage during the life cycle of your business you will want to quit.  You will hate your clients, hate your staff, hate your suppliers and maybe even hate yourself for putting up with all their crap.  You will have days like these.  I call them duvet days.  Go home, pull the blankets over your head and hide.  But come out fighting again the next day, because as I saw on a billboard once:  “I’m not saying it will be easy, I’m saying it will be worth it”.

Hope you liked this blog post.  Now DON’T be shy… share your comments below, let’s get talking about the DO’s and DON’Ts of business success!

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Brought to you by Liber8me.  Business Mentors and publisher of Liber8 your Business:  The revolutionary business planning technique that will set every business owner free.

How to motivate your team… take the check list challenge

motivation-newIn my latest book, The Liber8 Disciplines, I’m working with HR consultant Antonia Haythornthwaite on the key strategies to build a high performance team.  Antonia advises that you find out what key factors motivate a particular individual and then use these to encourage the best performance from this person.   Knowing what motivates an individual and then building this into their goals and challenges can make a stunning difference to a person’s performance. In the book, Antonia provides a check list you can give employees to find out what drives them.  I’m going to share it with you in this blog.

Take a look at the check list below.  Your challenge is to book a time over the next few months with each of your team members to begin an informal evaluation process.  Create a form for them using the following checklist. Get them to complete this check list and begin to work out the high performance formula for each individual.

MOTIVATION CHECKLIST – WHAT’S IMPORTANT TO YOU?

Tick the five factors that are most important to you at work:

¨  Pleasant physical work environment

¨  Sense of achievement, pride in a job well done

¨  Being treated fairly compared to others

¨  Job security

¨  Knowing that I’m doing what I’m best at

¨  Variety of work

¨  Challenging work

¨  Safe working conditions

¨  Promotion opportunities

¨  Freedom to do the job as I want

¨  Collaborating with others

¨  Project work

¨  Being well paid

¨  A good relationship with my manager

¨  Study and training opportunities

¨  Spending time socially with the people I work with

¨  Flexible working arrangements

¨  Regular feedback on performance

¨  Clear systems and processes to follow

¨  Goals to work towards

¨  Recognition of a job well done

¨  Perks

¨  Communication about the direction of the organisation

¨  Knowing how I can do better

¨  New, untried experiences

Once you know what motivates someone and build these things into their work day – their happiness and desire to perform increase dramatically.  Give it a try – and let me know how you get on.

Happy team building

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From the desk of Liber8me: Business mentors and publisher of Liber8 your Business:  The revolutionary business planning technique that will set every business owner free

How do you build a saleable business? Here’s a tip you can start thinking about right now…

money tree productHere’s an excerpt from my book Liber8 your Business… a very useful tip when it comes to planning a business that will attract a buyer in the future:

A successful angel investor friend explained to me the concept of exit strategy like this: To achieve a successful exit, it helps to view your business as a product. A good business person empathises with their customer and understands their reasons for buying your product. You know what need your product fulfils in the market and who will want to buy it. You use your expertise and experience to create the best possible product to meet this need. You build a relationship with potential customers with a view to making sales.

 Now, step back and look at your business as a product. Why would someone want to buy your business in the future? Which companies could take your business and create more value with it? What needs do they have that your business could fulfil? How could you build your business to make it easy for them to acquire and integrate it with theirs? This is your market and selling proposition. And just as it takes time to build a customer base for your product, it takes time to build a relationship with your potential buyer. So start now.

For more useful strategies for building a saleable business check out Liber8 your Business: The revolutionary business planning technique that will set every small business free.  Available on Amazon  now.

From the desk of Liber8me.  Small business mentors and publisher of Liber8 your Business.