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

Posted on January 7, 2014 by Laura Humphreys

Here’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.

What one thing will make your business more valuable to a future buyer? Build this ‘attractor factor’ for the future into your business plan today

Posted on January 3, 2014 by Laura Humphreys

This is an excerpt from my book Liber8 your Business: The revolutionary business planning technique that will set every small business owner free. It’s such an important point when it comes to building a valuable, saleable business, I thought I’d share it in today’s blog:

How to command a premium price when selling your business:

Your reputation may get you noticed but by a potential buyer but it won’t get you that premium price. Business is business, at the end of the day. And once the buyer has made their approach, their focus will quickly switch from appearance to substance. They will have three words buzzing round their head from the minute they start looking at the inside of your business. Their focus is Return On Investment (ROI).

The sooner you demonstrate your company’s ability to make acceptable future profits, the closer you will come to sealing the deal you want. If you are serious about selling your business, your business plan should have clear goals for ‘locked in’ forward revenues – money committed to the business for a reasonable future period. A buyer will look at your turnover/profits from past years. They will probably find them interesting and give encouraging nods and praise how well you have done. But they really want to know what’s going to happen next. What profits can they expect when they own the business? You need to convince them their investment is as risk free as possible And the best way is to show them the amount of income that is ‘locked in’.

Planning for forward revenues

How do you lock in future income? You need clients who have committed to buy for an agreed period in advance.

Sign them for the future

When I sold my advertising agency, a primary attraction for the buyer was the knowledge my key clients had signed three-year contracts, agreeing to a set amount of spending with the agency for each of those years. The buyer could see the worth of the future business they were buying and not just on projections based on past performance. The contracts significantly lessened the risk of losing those customers and their revenue streams.

Contracts

Most of us don’t want to sign contracts. We much prefer the freedom of taking our business where we want, and when we want. To convince your customers to sign contracts for future business, you’ll need to construct an attractive proposition that offers benefits in return for their commitment. For many businesses an effective way to do this is to create ‘packages’ whereby you offer a customer a pre-determined level of service for a set fee each month. You can also have a tiered approach to packages, so customers can choose from a range of different monthly fees depending on the level of servicing or type of products they want included in their plan. A tiered package plan could look something like this:

Starter	Small	Medium	Large
List features included	List additional features	List additional features	List additional features

From $125 per month	From $245 per month	From $450 per month	From $850 per month

The benefits of signing onto a monthly plan should be made very apparent to customers. Typically you would have a higher hourly rate for those not on plans and over time be able to demonstrate to a client how they are better off with a set fee than running up ad hoc charges.

Memberships

A popular method of locking in projected income is the membership model. It’s a more subtle and often complicated approach to secure forward sales, but it can be done. Gyms have been doing it for years. A common tactic for them is holding annual fees at the level of foundation membership – in other words, as long as you don’t take away your patronage, you avoid price increases. Loyalty cards are a simpler version – think of the cafes that create a sense of membership by giving you a card that entitles you to a free coffee after so many visits. The smart café operators quickly learn the percentage of customers who return to use the cards.

Keeping customers loyal and restricting churn can be time-consuming but if you can show your potential buyer you have repeat customers, and can quantify it, they’ll see extra value in your business.

Remember! A buyer wants future earnings, not past performance.

Avoid one-off sales

A business based on one-off sales is destined for hard work, not only for its daily survival but also when it comes to finding a buyer. In my advertising days, I came across many design companies that worked mostly on a project basis, designing a brand identity for a client and then struggling to get exclusivity on future projects. As an advisor to such companies these days, I always ask them to think of ways to lock clients into contracts – whether it’s for services (such as providing web hosting) or through methods of payment (monthly retainers, for instance).

The traditional retail model accepts that future earnings will be based on past performance and projected growth modelling. Most shop owners still seem happy for a customer to buy an item and walk away. But a buyer will still pay more for guaranteed earnings or, at least, income that is based on more than random chance. Having a decent database of customers, with information on how much they spend and when, is better than telling a prospective buyer you know nothing about where you money comes from. Imaginative retailers come up with clever ways to encourage repeat business. If you’re in retail, put some effort into finding a concept that suits your business and it’ll pay dividends.

LIBER8ING EXERCISE: THINK ABOUT FUTURE EARNINGS

Whatever type of business you have, take a few minutes to think of its future earnings. Do you already have a way of securing future revenue? If not, what could it be? How could you build a base of guaranteed future earnings from your clients to increase the value of your business to a potential buyer? Could you re-design your offering into ‘packages’ so that customers sign up for a monthly fee?

Excerpt from Liber8 your Business: The revolutionary planning technique that will set every business owner free. Purchase the book here www.Amazon.com

Winners have a strong brand. Do you? A lesson on branding from The X Factor USA

Posted on December 29, 2013 by Laura Humphreys

I’ve been trying to explain the importance of branding to people all year and then recently I watched the final of The X Factor USA and I saw the power of brand building in action… in a way I think will help people understand.

The three finalists had each been working hard on their personal brand the entire competition:

Carlito Olivero is a Hispanic competitor from the Bronx who has been an underdog all the way, even ending up in the bottom two twice. Every week he tells America that he’s a fighter. He tells them he’s come from the gutter, and he’s going to work hard and fight his way to the top. This is his brand. This is what he stands for. And we all love a fighter.

Jeff Gutt is a single dad who is inspired by his three year old son. He was depressed and gave up music until his son came along. He needs to win for his son. We’ve all bought into his story. He stands for sacrifice, determination and parenthood. He stands for hope. He’s a father. That’s his brand. We are routing for him to win for his son.

Alex and Sierra are the beautiful young couple who are madly in love. They are the lovers of the competition. They both have wonderful voices and sing into each other’s eyes week on week. They stand for love. That’s their brand. Love. And who doesn’t want to believe in love?

Do you see what I’m saying here? In the X Factor the winner is chosen by the vote of several million viewers. But it’s not just about the singing. The good contestants have not just demonstrated their talent. They have also shown us what they stand for. We have fallen for their story and what the values they represent to us. We have an emotional connection to what they are about not just what they do.

In the real world (because we can’t all be X Factor stars), your brand is what your business stands for, not just your product or service. You have to sell an emotional connection.

In the X Factor final, love won the day. What does your brand stand for that will make you a winner in your world?

Best,

PS You can read more about the power of branding in my book Liber8 your Business. Available on Amazon right now.

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.

Why are customer surveys so important? And how do you do them properly?

Posted on December 17, 2013 by Laura Humphreys

I’ve recommended to three different clients in the past week that they undertake a client and prospect survey to find out what’s really going on with their business. Each of these clients has different challenges but each will be able to make better decisions by asking the people they are trying to reach.

I was in the advertising industry for over 20 years and the most effective work we ever did for clients came out of insights we had gained from understanding their customers and potential customers. When I ran my own agency, we would always start a new campaign by talking to both existing customers and potential customers. We would base our advertising messages on what they told us…. more so than on what the client told us about their business.

Today I am still a huge believer in the power of talking to your customers on a regular basis.

Why and when should you do a customer survey

To learn more about customer purchasing and spending habits, and how they are utilizing competitor products – so you can be sure you are positioning your product and marketing in the most appealing way
To build a more detailed customer profile for future marketing campaigns – who are your hot clients, what do they want and where can you find more of them?
To further define a clear point of difference – what is that you do that your customers love, and why do they choose you over the competition?
To learn what frustrates your customers about your industry and how can you package your offering to provide the best solution to this
To assist with brand development – if you are undergoing branding work, you can build better strategies with customer insights
For new product development – before you spend money building something, make sure it is needed and wanted by matching it against client/prospect needs
To find out why clients are not referring others, even with very good incentives to do so

How do you go about it?

I’ve just published a report called ‘Customer Insights: Developing valuable insights for marketing and product development’, which outlines the steps to take and the types of questions you should ask.

You can download it at www.liber8yourbusiness.com/tools

Research is a really important part of product development and positioning so do check it out, and let me know if you have any questions at laura@liber8me.com

Good luck

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.

Which is more important… delivery or sales? Should you be in doing or out selling? Learn the 5 steps to the ‘The In-Out Dance” here…

Posted on November 7, 2013 by Laura Humphreys

As a small business owner you’ll be familiar with ‘The In-out Dance’ I’m sure. It goes like this. You are busy in the business, delivering your service or product, working hard, working hard. There’s too much to do and you need help. So you hire some people and now you have to spend more time training them and managing them as well as doing all the work you already have on your plate. There’s no time to think about getting out there and selling your wares. Busy in, bum down, doing it, doing it, doing it. You’re working hard, putting in the hours, no time to sleep, worrying about dropping balls and hoping your delivery meets client expectations.

Then suddenly the work dries up.

You’ve got the team, but no income on the horizon. So you have to get OUT there and sell you butt off. Out, out, out, sell, sell, sell. The pressure is on, there are mouths to feed and everyone is relying on you to bring home the bacon. It’s a frightening and stressful time and the buck stops with you. Now you’ve got time to sleep but you can’t because you’re worried about money. So out you go. Pick up the phone, network like crazy, press the flesh and try to keep the desperation out of your voice when you talk to people.

Hopefully your efforts pay off. The orders pour in and back you go to the coalface. Doing it, doing it, doing it. Work, work, work. Late nights, no time to sleep, on and on until…

Suddenly the work dries up.

And out you go again.

You get the picture. It’s ‘The In-out Dance’ and very exhausting it is too. It can be really, really stressful – especially when you have to lay people off because you can’t afford to pay them in the quiet periods.

So what do you do to change this pattern?

You need to learn to dance better. You’ve got the steps all wrong. Instead of in, in, in then out, out, out, the dance needs to be more like in, out, in, out, in, out. A gentle rhythm set to an even beat. You must be out as much as you are in, or at least have a marketing system that allows for constant out focused activity.

Here are 5 pointers to Strictly Come Dancing In-Out Style:

Understand the in/out balance. Business is a balance of sales and delivery – you cannot have one without the other. If you put all your focus on sales but not delivery you will disappoint customers, damage reputation and lose business. If you put all your focus on delivery and not sales, you will run out of business and the best delivery in the world won’t matter. So you must ensure you dedicate time to both no matter how busy you are.
NEVER take your eye off sales. When you are too busy to think about sales, this is the time to think about sales. Ensure sales and marketing activities are in your weekly work in progress and given equal priority. Try not to bump the sales activity off the to do list because you and your team are too busy.
Keep the pipeline full. You should always have a number of hot prospects waiting for conversion, a number of proposals in progress, a number of leads to follow up, a database to make irresistible offers to. This can only happen if you keep the pressure on your sales and marketing at all times.
Have a marketing system. Create a marketing process that happens every week. Make sure you have a hot list of potential clients you are targeting and a regular campaign underway. With a system in place you can get other team members to help with the logistics.
Hire people out of cash flow. Don’t hire new people on the basis of today’s busy period alone. This can lead to disaster down track if the work dries up. Try to use contractors to start with if you can until the workflow is more certain. Ideally you’d be hiring people you know the business can afford, or at least ensure you have money in the bank to cover salaries should there be a quiet period on the horizon.

There is a reason that marketing and sales make up the important pillars to business growth. You can’t grow without them. Life for a small business owner is a constant juggling act in the early years. Your job is to remember to keep both sales and delivery balls firmly in the air. And learn to be a champion ‘in-out dancer’!

Dance on!

From the desk of liber8yourbusiness. Business mentors and publisher of Liber8 your Business: The revolutionary business planning technique that will set every business owner free

Tired of being tired? Here are 3 steps to overcome business fatigue.

Posted on October 7, 2013 by Laura Humphreys

I talk with small business owners every day and there are two words I hear all the time: “busy” and “exhausted”. It’s a common ailment of the business owner operator. I’m sure you know how it feels.

So how can you look after yourself and try to minimize that feeling of overwhelm that sometimes feels like it will consume you? Here are three strategies I’ve found useful…

Schedule ‘time out days’ in advance. Make sure you keep a calendar that shows a month at a glance. Look at your calendar for the next 6 months and see where you can find two whole days that you could take off each month. They don’t have to be consecutive. If you can’t see two days, then juggle things around. Shift appointments onto other days. This is a discipline and a habit. I schedule the first week of every month ‘off’. I have no appointments during this week and I won’t allow any to be scheduled for me. If this means I have some pretty crazy days during the rest of the month, so be it. Once you have these days scheduled let your team, clients and suppliers (or anyone else who might want a piece of you) that you will not be available on these days.
Plan how you will use your time out days. Remember the purpose of these days is to help you with those feelings of overwhelm and exhaustion. However, if you are anything like me then you won’t be able to just lie down for the day. Your brain will be too busy thinking and worrying and going over every little thing that you should be doing. The guilt will get the better of you and you will be on the phone or answering emails before you know it! So rather than take the time ‘off’, take the time ‘out’ and use it to work on your long term planning and strategies. Or to write that blog you’ve been meaning to write. Or to catch up on some important reading that you never have time for. Use the time constructively but with relish and gusto. Enjoy being productive rather than busy. Believe me, it will re-energize you as much as a day at the beach!
Plan your to do’s a week in advance. A business owner’s to do list is a scary thing and more likely to keep you awake at night than any monster under the bed. The overwhelm you often feel comes from a sense of being out of control. This happens when the to do list gets longer than the hours in the day and starts to encroach into your personal space in an unhealthy way (you know what I mean don’t you?). My personal discipline to help combat this involves getting up extra early on a Monday morning (I can’t bring myself to sacrifice my Sunday evening) to map out my to do’s across the week. I use a paper diary (shock horror!) to do this. Once I’ve put my appointments in for the week (taken from my online diary) I then spread my to dos across each day, taking into account what else I have on that day. On days that are quite full I give myself less other items to do and on quiet days I make the to do list longer. Of course I prioritize them by importance and urgency as I go too. If my to do list is looking particularly ominous for the week then I won’t allow any other appointments to be booked in. I make a conscious decision to put my health and well being first at this point. And note: my running and yoga times are already scheduled in the diary for the week and are not to be moved.

It does help to know that you are not alone in the feelings of overwhelm and exhaustion. Many before you have trodden that lonely and sometimes depressing path. Most survive and as your business grows and you build a good team around you, it improves I promise.

In the meantime, try my three steps and let me know how it goes. I’d love to hear of any suggestions you have for managing the busy side of business too. Share them here and I’ll pass them on to other business owners out there.

Be kind to yourself

From the desk of liber8yourbusiness. Business mentors and publisher of Liber8 your Business: The revolutionary business planning technique that will set every business owner free

What is the single most important question every business owner should ask? Find out here…

Posted on September 3, 2013 by Laura Humphreys

Bula from Fiji! I’m enjoying a quick solo break, just to re-charge my batteries (which by the way is something every business owner should do on a regular basis… even if you don’t have time – no wait, especially if you don’t have time).

On my ride from Nadi airport to my hotel I met a lovely Fijian called Junior. We got chatting about business. Junior is about to start a new venture with an Australian business partner. It’s a tour guide business. They plan to have a fleet of vans to take tourists around the island, visiting the sights. When he heard that I was a business mentor and soon to be author, he asked me what I thought of his business idea. So naturally I asked him some questions.

Firstly, how many other tour guides are doing this? The answer was ‘many, many’.

And then, what will make your business different? What will make you special? The answer was a long pause. Followed by a question back to me: ‘what do you mean?’

I re-worded my question for him. Why would someone want to choose your business over all the other choices they have?

And that, my friends, is the single most important question every business owner should ask.

Junior had identified the need. Tourists want to see the island and they need a guide. He recognized it was a crowded market. But had he considered how he’d get people to choose his business over his competition? When pressed to think about it Junior told me he would offer the best service at the most affordable price. This would be his point of difference.

At this stage we pulled up outside my hotel, so I didn’t get to question Junior further. We exchanged business cards and I wished him well. I walked away full of admiration for Junior’s entrepreneurial spirit and courage, as I always am when I meet someone about to embark on a new business venture.

But I do hope he thinks more about the critical question I asked him. In the answer to it can be found the difference between an average business and an exceptional one, which will blow the others out of the water.

Have you asked yourself this question lately? If not, do it now. Grab your team, grab a white board or a big pad of paper and start that all important quest for the singular point of difference that will stand you out from the crowd.

I’ll write more on this soon, it’s that important. In the meantime, if you are up for more challenging questions, download my business health check – it will get you thinking!

And don’t forget my book Liber8 Your Business will be out soon… find out more here.

Bula for now!

From the desk of liber8yourbusiness. Business mentors and publisher of Liber8 your Business. The revolutionary business planning technique that will set every small business owner free.

Why the best business people fail… and how you can be a successful failure too

Posted on July 30, 2013 by Laura Humphreys

You might think failure doesn’t enter the vocabulary of successful people. But willingness to fail is a key criterion for success. Here’s an unavoidable truth about business – you’re going to fail in your business at some stage. You will probably do some really dumb things and at times you may feel like an idiot. You could make bad decisions, decisions that cost you money. You might make poor employment decisions or lousy client decisions. Failure is guaranteed. What’s important is having the ability to pick yourself up and say, ‘That was stupid, I feel like a fool, but what have I learned?’ Successful people learn from their mistakes and carry on.

I love the story about IBM from the 1960s. A manager made a decision that lost the company $10 million. He was summoned to the office of the CEO, Tom Watson. When asked why he’d been called there, the manager said, ‘So you can fire me.’ Watson replied, ‘Fire you? Of course I’m not going to fire you. I’ve just spent $10 million educating you!’

All business people fail at something at some stage. The smart ones learn and use the experience to their advantage next time.

So next time you think you won’t do something important in case you fail… remember Michael Jordan’s famous quote: “I can accept failure, but I can’t accept not trying”. And get out there… do it!

This was an excerpt from Liber8 Your Business – The revolutionary business planning technique that will set every small business owner free. Pre-order your copy here.

Business Mentor Tip #88 – Business is a roller coaster – strap in for the ride of your life!

Posted on June 26, 2013 by Laura Humphreys

There are some fundamental truths about owning a business that apply regardless of what you are selling. One of these is something I’m not sure every business owner realizes when they set out – business is not an easy ride. And like the Superman ride at Movie World, it is not for the faint hearted!

There will be times when you are on such a high your adrenalin is surging faster than Niagara Falls. And other times when the bottom drops out of your world and you will feel sick with worry. Winning a new piece of business, especially if you’ve had to fight for it, will make you sing with delight. Losing a piece of business the next day will make you weep with disappointment.

Sometimes you will love your team so much you want to kiss them all (best that you don’t though). Other times you will be so frustrated you’ll want to kill them (definitely best you don’t). You’ll have ideas that work and bring you money. And ideas that suck and lose you money. You’ll feel your chest burst with pride when you meet targets. And slink around with your tail between your legs when you fail to meet targets.

You will be clear and on purpose one day. And lost in the fog of confusion the next.

Like I said, it’s a roller coaster. As a lovely serial entrepreneur friend said to me recently, “business is not a fairy tale”. It’s real and it’s tough.

So what do you do about it?

Firstly, know that you are not alone. EVERY SINGLE BUSINESS OWNER ON THE PLANET HAS HIGHS AND LOWS!

Secondly, have a strong vision and purpose for why you are in business and where it’s taking you. Strong enough that it will pull you out from under your duvet on the stinkiest of days.

Thirdly, buckle in and enjoy the ride. Celebrate the highs. Scream with delight as you reach the top and feel you could conquer the world. Breathe through the lows. By all means indulge in a brief wallow of self pity when you bottom out, but know that another high is coming. Focus on the big picture, remember why you are here and trust all will be OK. From experience I can tell you, everything always works out OK in the end. Kia Kaha. Stay strong my friend.

Want to hear some of my stories of highs and lows? Get ready to read Liber8 Your Business.

Want to be part of a group of passionate business owners getting ready to strap in for the ride of their life? Ask about the Acceler8me Programme.

From the desk of liber8yourbusiness. Business mentors and author of Liber8 Your Business – The revolutionary business planning technique that will set every small business owner free.

Why do small businesses fail?

Posted on June 16, 2013 by Laura Humphreys

According to a Dun & Bradstreet* study, ‘businesses with fewer than 20 employees have only a 37% chance of surviving four years (of business) and only a 9% chance of surviving 10 years.’ Restaurants have only a 20% chance of surviving two years. Of these failed businesses, 90% closed because the business was not successful, did not provide the level of income desired, or were too much work for their efforts. The failure rate for new businesses was 70% to 80% in the first year and only about half who survived the first year would remain in business the next five years.

I spend much of my life working with and listening to small business owners, and I am now certain the true reason so many businesses fail (cease to exist) before year four is because people go into business for the wrong reason.

When I make presentations to business groups and ask why they chose to start a business, the answers are always the same. I wonder if you identify with one or some of these reasons people give:

I thought I could run a business better than my boss.
I was tired of working for someone else.
I wanted to be in control of my destiny, choose my own hours, and go on holiday whenever I felt like it.
I am good at something or trained in a particular field and have built my business around my skill set.
I had a good idea and believed I could make a business out of it.
I don’t know; it just sort of happened.
I want to help people, I’m not in it for the money (this response is particularly true of health practitioners).

Do any of these answers resonate with you? Have you really given much thought to why you are in business or what you really want out of it? Or have you stumbled into business as a reaction to your own personal circumstances without a true sense of purpose driving you?

It’s important to ask yourself; because your reasons for being in business will determine the way you approach it, which, in turn, will influence the ultimate success you have.

There are only two reasons to go into business for yourself: to make money and to make a difference. My book Liber8 Your Business shows you how you can do both and build the business you really dreamed of. I’m looking forward to sharing it with you soon. In the meantime if you have any questions about your business model feel free to email me laura@liber8yourbusiness.com

Cheers

*Dun & Bradstreet is a public company headquartered in Short Hills, New Jersey, USA 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.

If you want to put your business under the spotlight – Laura’s next Acceler8me Programme, inspiration and support for passionate business owners, kicks off in August. Click here for details