In my view, branding is one is the most misunderstood and least valued weapons an entrepreneur has on the road to success.
To be blunt, I think one if the biggest differences between really successful entrepreneurs and small business thinkers is their commitment to having a powerful brand. If customers love your brand and your teams deliver on your brand promise, they don’t need to love you… and when customers love your business more than they love you… you’ve really nailed it!
Key number 6. Build a brand that stands for something
Your brand is not just a logo and a bunch of colours – despite what many graphic designers will tell you. It’s not what goes on your business card. It’s everything your company stands for. It’s driven by the difference your business is making in the world and by your company vision. It influences how you stand out from your competitors, how your staff behave, how you approach your marketing and every other business strategy.
The best companies in the world have strong brands. Great CEOs understand what a brand is all about. As the CEO of your own business I encourage you to study branding… look at successful companies you admire, see if you can work out their strategy by studying their brand.
If you are going to invest in anything right now, I’d say invest in your brand. Talk to a good brand strategist and ask them to assess your brand. And if they tell you that you need to do some work on it…. be willing to spend the money. Look at it as an investment in your future, not as an expense.
Exercise: study branding
If you really do want to build a valuable business and be a wealthy entrepreneur rather than an owner operator, then you need to understand the power of your brand. If you do already, great. If not, it’s time to educate yourself. Look at brands you love and see if you can work out their business strategy from their brand. Compare your brand to a brand you believe to be really valuable. How does it stack up? Google articles on branding, see if you can really understand why a whole industry exists just to help people with their branding. Why is it so important? Here are a couple of articles I found on the subject as a starter for 10:
As always, feel free to email me with questions, ideas, thoughts for discussion at email@example.com
PS. Early bird pricing for 2016 Acceler8or Programme ends soon. This is a 12 month journey to accelerated growth you’ll never forget, please email me at firstname.lastname@example.org for more information. If you are serious about growth or creating financial freedom from your business sooner rather than later, you will want to be involved. Only 5 places left.
One of the biggest obstacles to increasing business value is the dependency of that business on its owner. And an even bigger danger is the unwillingness of a business owner to let go.
Something I often hear people say is that their business is their baby. But it’s not.
Your business is not your baby. Which leads me to key number 8 in my bigger, better blog series:
Key number 8. Remove dependency on you
I’ll say it again – your business is not your baby. I remember watching this powerful interview of a lady in America who had a bakery. It was doing very well in the town it was in, she was very proud of it and very emotionally attached to it but she needed help to grow, so she brought in two partners. She trusted them and sold third shares to each. Then they ganged up against her and fired her. She was marched from her own bakery at gun point (as you do in America). After the pain of losing her baby she decided that she wouldn’t get angry she would get even. So she started a new bakery business, but this time she decided she wouldn’t get emotionally attached to it. She approached it as a strategic exercise and within a few years had a chain of bakeries across America… whilst her old bakery with its two partners stayed small. I remember her saying that by not seeing it as her baby she could focus on what was really important and grow a business that wasn’t dependent on her.
And back to my earlier blog about exit and creating a valuable asset… a business depending on its owner has no value and no one will buy it. So you have to have removal of dependency on you as a key objective for your business over time.
But how do you do it?
In the early years of business growth, it is to be expected that the business will be dependent on the owner. To go into business and not expect to give it your all in the early years could be somewhat naive. So the goal is to lessen this dependency over time.
There really are only 4 ways to decrease dependency on the owner of a business.
1. Technology – in today’s world, it’s never been easier to find ways to use technology to help scale a business without necessarily using more of your time. In my pet care business, our sophisticated matching and booking system took care of the administrative side of the business for us. Our pet carers and clients met online, they got in touch with each other, they arranged the care they needed together and when the job was completed, the pet carer logged back into the system to close the job online, enabling them to go into the payroll system. Head office was responsible for recruitment, training and marketing. We built a team of 150 pet carers nationwide with a headquarters consisting of just 3 people working part time from home.
2. Products – it’s possible to build value into your business in ways that grow the revenue without growing the need for you to service your customers. This is true particularly in service businesses, where the value is derived from the exchange of expertise for money. Turning the expertise into products that can ideally create recurring revenue can be a way to both increase value and decrease dependency. For example, I have a client who creates internal process systems for his clients. He is creating software that will enable clients to map all their systems and host in one place for easy access. Clients will pay his company to set up the systems then pay a monthly license fee to access the platform that hosts their systems map. Staff can log in and access any information they need at any stage of a process, without having to ask anyone.
3. Systems – what’s clever about the product being created above is that my client recognizes the need for good processes and systems within any organization. If staff know what to do and how to do it at any time, things run smoothly without needing the owner to tell them what to do all the time. Growing a business requires consistency of delivery to your growing customer base. Everyone needs to know what to do and how to do it – the way you want it done – time and time again. The only way to ensure this happens is to document what you want done and how you want it done… then ensure everyone involved knows about it. There is a chapter on creating systems in my book “Liber8 your Business.”
4. Team – a business cannot grow without people. And you will never be free or create true value in your business without a team. People will set you free. You need to create the systems and the culture you want to invite people into, then find the best people you can to join you on your journey. This in turn means you have to learn how to be a leader and a manager. In my experience this is one of the hardest things about growing a business… you have to confront your own leadership style, learn to let go, learn to trust and be willing to let people make mistakes with your business. Which brings me right back to ‘your business is not your baby’. If you are too emotionally invested, you will struggle to allow others the opportunity to grow with your business. You will hold the reins too tight and slow down your own progress. Learning to build a high performance team is not easy… but it is totally necessary. The Liber8 Academy has a good pool of experts who can help you with this, if you are willing and able to do what it takes.
Grab that big piece of blank paper again (I have several A3 pads lying around my office and house so I can pour out my thinking at any time). Write in the middle: “Decreasing dependency on me” then put 4 headings: Technology; Products; Systems; Team. Under each heading brainstorm ideas that will free you and your business over time. Write down as many ideas as you can without questioning the practicality of your ideas. When you’ve exhausted your thinking, go back and circle the ideas that have the most merit, and then the ones that you can begin to implement sooner rather than later. Remember, you can’t decrease dependency quickly, it takes time. You need to build it into your long term and short term planning. Financial freedom will come when you have a business that operates smoothly and profitably without you having to be there all the time.
As always feel free to email me with your questions and ideas at email@example.com
When I did a plan to start my own advertising agency I knew right from the start that I was building it to sell it within 10 years. And I knew that the likely buyer would be a multi-national agency group. I even wrote down what I wanted to sell it to them for. I painted a really clear picture of what they would be looking for in a boutique agency and I set about building that business for them. I worked out what I was building and then I put a plan in place. I was taught to do this at a business school I attended…. It made sense to me, so I stuck to my plan and achieved my sale price within 9 years.
Key number 3. Start with the end in mind
The key to my ultimate success with my ad agency was that I planned my exit right from the start. I knew what my end goal was, which enabled me to work out my plan to get there. I had a clear picture in mind, which kept me on track, even when the going got tough.
This is something I encourage all business owners to do. Plan your exit now – will you sell it one day, or will you build it so that it generates income for you even if you are not there? What kind of business do you need to build to enable this? What does it look like? What do you need to build in order to create value?
Many business owners tell me they will never want to sell their business. I say that it really doesn’t matter… because if you build a business that is valuable and saleable, it will be ticking all the right boxes and you will have choice.
If you don’t build a saleable business and something happens to you… you don’t have choice… you work hard for years and years and have nothing to show for it.
Here’s an excerpt from my book “Liber8 your Business” on the topic of having a clear end game:
“A business is a project not a life sentence. By having a clear picture of where you are going, you can create your own map of how to get there. When I started and I was alone in my horrid little one-roomed office, with concrete walls and no natural light, I dreamed of a beautiful office with high ceilings, big windows, wooden floors and a big staircase sweeping up the middle. I saw a team of motivated young people all passionate about creating the best boutique agency in the country. I could see the award trophies lined up and could feel the joy of knowing I’d been successful. I painted a picture of exactly how I wanted my agency to be and worked out what it needed to be doing financially to deliver on this image.”
My book and my programmes teach you how to work out a realistic sale price and how to paint the end picture that will deliver this for you, and I’ll cover more of the critical components towards creating a valuable business in my next 5 keys to a bigger, better business.
Think about this… if your business could be anything you wanted it to be in the future, what would it look like? Don’t let the obstacles you might see in front of you influence your imagination here. What does success look like for you? Think about the financial return as well as the satisfaction you will feel from building something really special. If someone knocked on your door offering to buy your business, what would be a price you would sell for? And how would that influence your life? What sort of business would they be buying and what makes you feel proud? Remember, you don’t have to sell it… but you do want it to be valuable. Imagine the satisfaction of turning down the offer?
The 2016 Elev8or Group is coming soon!
For ambitious business owners who want to create a clear end game for their business, build a plan and be guided and supported to make it happen. Only 10 business owners will be selected to join … are you ready for it? Click here for more information.
‘Successful 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.
I had an interesting debate on Linked In recently after I posted myblog “Some frightening statistics about small business” onto a discussion group. I thought my point was that if more small business owner operators were inspired and equipped to grow a valuable asset rather than settle for a low paying job, our economy would be better off – and a whole bunch of people would retire with enough wealth to lead a life of freedom, instead of having to panic when they get too old to keep doing that job any more.
The debate that raged on Linked In seemed to be between me and a strong school of thought that believes if you don’t have the potential to be the next Rod Drury (CEO of Xero) or Richard Branson then you should not have aspirations to grow. “Leave them alone” the argument went – let the small thinkers stay small and let’s put our energies into the big thinkers who will be the next global dominators. This is where the real gains are to be made.
Sorry I can’t do it. For every small thinker I can help become a bigger thinker, I will feel my work is worthwhile. Between the billion dollar global business and the solo operator plumber there are a myriad of other business types, sizes, aspirations and dreams. My work is to encourage others to see their business as a potentially valuable asset, not just a job. It could be a desire to build a business that generates $60k per annum passive income, or a $100,000 sale. Or $500,000 sale, or $3 million or $10 million. Or $100 million. I don’t put a judgement on the size of someone’s business or the size of their dream. I just want people to be aware that they have choice. To choose the easy road now and not think about building something of value as you go will inevitably lead to a road that’s harder down the track. To choose a harder road now and learn to build something greater than a job for yourself, will increase your chances of a life of freedom down the track.
I just want to give people more choices through education and inspiration. Not every owner operator wants to grow of course. That’s fine, let them work out their retirement their own way, sure. But some do and don’t know how, some lack confidence, some lack knowledge. My mission is to provide the motivation and then the tools to give small business owners a better chance at creating value.
So to all small business people who don’t aim to take on the world, but want to make a difference to their lives, their families and their communities. Rock on. I won’t leave you alone.
My 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.
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 firstname.lastname@example.org
In 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
¨ 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.
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.
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:
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.
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
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’!
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