The 5 management truths for building a Fun business

TTTMBF the revolution

The Ten Truths for making business Fun

The Ten Truths for Making Business Fun

And building a business that sustains you for years to come:

This is the third article in a monthly series on Making Business Fun: This article is about the 5 business management Truths

The last article laid out the foundations of a fun business and you can read it here

The articles are based on my book, The Ten Truths for Making Business Fun, published in 2011. All of my books and other resources are available for free here

Building a Fun Business: The five building blocks

And the hard hitting truth about business management

TTTMBF the management truths Would you like to move out of overwhelm and start building a Fun Business that sustains you for years to come? The truth is that once you’ve laid the foundations (using the Hedgehog Principles), it’s all about learning to manage your Fun Business properly.

I won’t lie, you will need to focus on a few fundamentally dull things, small business management in other words, like goal setting, team management,  planning, systems and measuring. However, I have a few shortcuts and strategies up my sleeve that make the process markedly more exciting…

A Fun Business Has Flexible Goals

TTTMBF goal setting Everyone knows that goal setting is a good idea. It engages your team. It improves your decision-making. It helps your business deliver on its promise. What’s more, I don’t believe your business will ever become Fun if you don’t practice goal setting effectively. To manage your business well, to build a great Fun Business, you simply can’t avoid Goal setting.

Still, goal setting is surprisingly difficult to do well. It’s hard to get people onboard. It’s even tougher to keep everyone accountable. Our world is also changing every day, so goals must be continuously adjusted to suit new realities.

SMART is a well-established tool for creating impactful goals:

  • S pecific
  • M easurable
  • A chievable
  • R elevant
  • T imeframed

I like the idea, but I believe that adding three more letters to the acronym makes it exponentially more powerful:

  • S tretch (you can just see yourself reaching for it)
  • I nspiring (for you)
  • P ersonal (about your personal achievements and growth. Read: not about achieving a particular profit level or buying a Porsche because unfortunately, those material things won’t motivate your subconscious brain!).

I always invite my clients to decide on a large, visionary goal for the future (Jim Collins refers to this as the BHAG or “Big Hairy Audacious Goal” in his book, Built to Last) that meets the SMARTSIP criteria and then break it down into a medium-term goal and a goal for the year.

A Fun Business Engages Everyone

TTTMBF helping hand Lots of businesses proclaim that their people are their greatest asset (and to be honest, whenever I read that statement on someone’s website, I run a mile), but most of them generally belie their beliefs with their actions.

Most companies prefer not to think about the fact that a business IS its people, and your business only gets to make money if your people let you. Business Management is about people first and foremost.

If your employees are only interested in their paycheck, you will always struggle to make a dollar and business will feel anything but FUN. On the flip side, if your whole team is enthusiastically pulling in the same direction then your business will move mountains.

So, how can you achieve said nirvana?

  1. Hire the brightest: Find people whose attitude, energy, enthusiasm and resourcefulness matches your culture and team dynamics.
  2. Move beyond money: Listen to people, recognise their achievements and give them the right tools to do a meaningful job well.
  3. Get the team involved: Bring your people into all the processes, planning meetings and rhythms of the business.
  4. Remember that employees are people too: Don’t just dictate – get people involved in developing their own goals.
  5. Play the game of business: Get your people to start thinking like team members who are playing a game that they all enjoy and want to win.

A Fun Business Has a “Living” Business Plan That Drives It Forward

TTTMBF looking into the future, planning Human beings don’t accomplish anything without a plan. In fact, some say it is our ability to plan that sets us apart from other animals. However, most small businesses do not have a formal business plan, and if they do, it generally lives in a dusty bottom drawer.

Having a written plan (AKA one that exists outside of your head) allows other people to engage with it and understand where the business is going. It allows you and others to check progress, brainstorm, make good decisions and maintain focus on the important stuff.

Most business owners know this. I’m sure you do too.

The sticking point comes from a simple misunderstanding. It comes from believing you are expected to develop an externally focused plan in the format we are taught by accountants, consultants and government bodies (read: not designed to be useful for you, the owner) when an internal business plan is what you need.

An internal business plan is a shareable and succinct “living” document. It is created collaboratively and revised frequently. It is designed to support decision-making and internal communication about the direction of the business.

Trust me, once you let go of your idea of what a business plan “should’” look like and just get around a table with a flip chart and a group of your people, you’ll find that business planning is not actually daunting at all, but instead really powerful and Fun.

A Fun Business Has Rhythm and Regularity

TTTMBF rhythm Entrepreneurs are the busiest and most guilt-ridden people on the planet. They work long days, dream about their businesses at night and repeatedly scorn themselves for not living up to some impossible standards laid out by a critical inner voice [HYPERLINK TO BLOG POST 1].

As a result, most business owners operate as crisis managers. This situation has many undesirable consequences: dropped balls, neglected business development, burnout, missed family time, stomach ulcers, or all of the above. An atmosphere of stress and last-minute problem-solving also starts to develop company-wide, leading to low morale and high employee turnover. You get stuck in a loop where you don’t have time to foster predictability, develop systems or train people to handle the crises themselves and because of this, there will always be another crisis.

The way through this dilemma? Building rhythm and regularity into your business.

One of the best first steps you can take is to start a weekly operations meeting where everyone reviews the previous week and plans for the next one (a better one). Want to make it effective? Start and finish on time. Follow an agreed agenda. Ensure everyone is present. Don’t allow distractions. Focus on solutions.

Next, you might decide to look at the systems in the business because systemisation is an important contributor to a sense of calm predictability. This could be as simple as creating a script and a standard form/checklist for inbound office calls.

Remember, people want to feel safe, and safety starts with knowing what the future holds.

A Fun Business Measures the Fun

TTTMBF measuring fun Beyond the most obvious measurements, every business has different priorities. However, there is one key measurement that all business owners should consider starting with: Fun.

Fun is the only success factor that cuts across and influences every aspect of business.

One of the reasons Fun doesn’t usually get measured is that most people believe you can’t because it is intangible. But you can measure intangibles such as Fun. Quite easily and accurately as a matter of fact.

Let’s say you asked your team every Friday afternoon to give an anonymous rating on your Fun in Business scale from 0 to 10, with 10 being the most fun you’ve ever had in business and 0 being the opposite. Next you collate and average those numbers and come up with a single “Fun number” for the week in business.

You could then have a staff meeting every Monday morning and share last week’s Fun number, asking the team what you could all do to get the number just a couple of points higher in the coming week.

The first few times you do this, your team will make silly suggestions about doubling their wages and paintball outings because it is all such a novel idea. However, I guarantee that soon enough it will become obvious to everyone exactly what real business Fun is all about and you will start having practical, productive conversations that make exciting things happen.

Your Homework (The Fun Kind)

Here’s a couple of steps you might take in the coming week(s) in respect of each of the management truths:

For Goal setting:
  1. Thinking about the SMARTSIP structure I describe above, pick a date, ideally no more than a year from now and no less than 6 months away ad create a Goal (or set of Goals) for you and your business that inspires you and is both a stretch, yet achievable,specific and  measurable and meaningful to you personally and motivating for your staff
  2. Create a rough draft monthly plan for achievement of your Goal with monthly milestones
For your team:
  1. Get your team involved. Organise a meeting with your team and introduce the Goal and draft plan to them and work with them to firm up the plan
  2. Assign specific tasks from the plan to team members or groups of team members
  3. Agree on monthly meetings with your team to update the plan, and agree on next months actions and responsibilities
For your business plan:
  1. Incorporate your Goal in a longer term plan. Where do you want your business to be in 5 years, what is it going to look like, what is its focus, how big is it, what new developments have taken place.
  2. On your own or with your team (or part of your team) create a SWOT and create actionable targets to address the top 3 items from each of the sections (see more about SWOT here  and also here )
For Rhythm:
  1. Start by blocking out a small amount of time each week for yourself (as little as an hour each week or as much as you can manage), to do nothing but think and plan and develop new ideas. Phone off, can’t be disturbed, go off site to a cafe if you need to make sure you’re not disturbed.
  2. Implement a weekly half hour meeting with your staff to set up the week… Celebrate the wins from last week and plan to have more wins this week. Make sure it’s quick, efficient and doesn’t talk about why certain things went wrong last week, simply acknowledge the things that went wrong and focus on making sure things go right this week instead.
For measuring the Fun:
  1. In your weekly and monthly meetings, start by asking everyone for one small tiny little thing they can do themselves to mak the week ahead more Fun
  2. In your weekly and monthly meetings ask the staff for one thing you can do to make business more fun for everyone in the week ahead
  3. Start recording the fun suggestions and the fun number (more about measuring Fun in business here)

More on this topic:

 

A Taste of My Own Medicine

medicine

Winning the lottery

Or… what to do when you don’t

Are you expecting a tax refund? And if so, what will you do with it?

windfall

The question recently popped into my head while reading about an innovative new working capital loan provider for small business called Kabbage who are expanding into Australia.

It is a nice question to think about.

What would you do if you had an unexpected windfall in your business?

I suppose you could just pull it out and treat yourself, nothing wrong with that.

Stop and think about it for a moment…

Monopoly

monopoly What would you do if you suddenly had an extra $25K to play with in your business… The old monopoly card: “The bank has made an error in your favour, please collect $25,000”

I won’t tell you what to do with the boon… your circumstances are unique to you… But how might a financial injection without any strings attached change your life?

Let me tell you what I’d do:

I’d spend the money on a digital marketing campaign. Maybe 12 months at $1500 per month (and a $7000 for a nice holiday with my wife.)

$1.5K a month would get me a high quality digital lead generation specialist, such as Motive Marketing in Sydney and I’d get them to design and run a marketing campaign in Facebook, Google, Linkedin and wherever else to get people to download my book – The Ten Truths for Making Business Fun.

ROI

You see it’s all about ROI, return on investment.

My theory would be this: If I spend $1500 per month over a year on lead generation, I’d need to have maybe 500 small business owners downloading the book… that would be 6000 in a year and if I get 6000 small business owners to download my book and I start talking to them with my articles, videos, webinars, surveys and all kinds of other free tools and resources… a small proportion of those 6000 people will ultimately become my clients… I would expect that it would not be unreasonable to expect that over time between 10 to 20 people who download my book will become paying clients of mine.

Now that would be an amazing ROI. when you think about it… 15 clients are worth around about an entire year’s revenue for me, so by spending $18,000 I gain a year’s income…sounds like a brilliant investment, doesn’t it.

And I’d get to have a nice holiday as well.

Hang on… lets look at that again

But wait a minute… The question was: What would you do if you had a sudden windfall in your business… what would you do with it… Obviously I just outlined a great investment, but what’s to stop me from making that investment anyway?… why don’t I go and talk to Scott from Motive Marketing and work out a plan anyway… if the investment is that good, I’d be a mug not to make it anyway right?

That’s  why the question came up for me when reading about Kabbage… if it’s a god enough investment, why not go and borrow to money to do it anyway… valid argument I think.

medicine Well, rest assured… Scott and I will be talking in the coming weeks (he doesn’t know it yet, but he’s getting a phone call from me next week.

But what about you?

Are you holding off on making an investment because you haven’t got the money yet?

I hear it a lot when I talk to prospective clients: “Well, I’d love to work with you, when I can afford it” … really… Maybe you could argue that once you can afford me, maybe you don’t need me anymore… the question is: Can you afford not to work with me.

Think about it… in the mean time, I’m calling Scott… time to take my own medicine.

 

Business Is All About The Numbers

numbers

Business is a numbers game

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business.

In this series of articles and associated webinars and workshops, by Roland Hanekroot you will learn the basic concepts and get the knowledge need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.

Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some “First Steps” you can take straight away to put the knowledge into action.

The Numbers

numbersIn the fifth of these articles we’ll look at the numbers and ask:

How do we do business by the numbers and why?

Doing business without numbers is like playing football without a scoreboard. You simply cannot run any kind of business for any length of time without keeping your eye on the numbers.

This is a fact.

You may not like numbers and you may believe you are no good with numbers and you may want to just “get on” with running your business.

Well I have good news and bad news for you:

  1. Bad news: You’ll simply have to get over your dislike and your hurdles.
  2. Good news: Numbers are a lot simpler than you think, you don’t need all that many of them and you won’t have to find them yourself.

Measurement

Numbers are important because they are the result of measurement and measurement is what allows you to manage and develop a business and stop it from going backwards.

For example you have to know (measure) what is in your bank account if you want to stay alive… No argument there I imagine? Well your bank balance is a number.

You may also want to measure the effectiveness of the money you spend on marketing and again the answers will come in the form of numbers.

You may want to know if you have enough stock on hand to supply your customers in the coming week… The answer is a number.

You may want to measure why your bank balance has been going backwards in the last three months… The answer will be in the numbers.

I trust I’ve convinced you that numbers are key and you just have to get your head around them. But which numbers?

Lets have a look at one of my Business Bedtime Stories.

A Business Bedtime Story

(The ‘Business Bedtime Stories’ are real world case histories that illustrate this months topic in some way)

Once upon a time… a long long time ago in a country not unlike Australia… Michael had a carpet cleaning business …

carpet cleaner Michael owned a carpet cleaning business in Sydney and Michael had ten vans on the road with 16 staff. Michael’s life was full of crises, most of the crises involved his staff not delivering the customer service or quality that Michael’s clients expected.

Michael kept thinking:

“If only I had a simple way to measure “Good Work” and “Good Service” that I can apply across the board and use to manage the performance of the guys ?”

Working with me as his business coach Michael learnt that you can create relative measures for intangible things. For example If you were asked to give a score out of ten for how happy you felt at this moment, where “10” was that you felt delirious and “0” meant that you were at risk of self harming, you might say “6”. If I were to ask the same question again tomorrow you might answer “7”. This would lead us to reach a valid conclusion on your state of happiness tomorrow relative to today.

This same principle can be used to measure all sorts of intangible things in life and lends itself really well to measure quality, service and satisfaction levels.

Self-scoring

Michael and I went to work to create a self scoring system, where a staff-member filled in a small form at the end of each job in which he gave himself and the just completed job a series of scores out of 100 on a number of different measures (for example: “Give yourself a score out of 100 for being punctual”)

The forms would be collated in a spreadsheet and the numbers averaged for each staff member and for the business as a whole. Every week on Monday morning Michael received a report from his admin assistant with the average performance numbers across the company for service and quality in the last week. At the same time Michael had his assistant call 10% of all clients every week and ask them to rate the completed jobs in a similar manner and these ratings were listed side by side with the staff member’s own ratings. The staff members would be given access to the customer ratings as well and as required Michael would sit down with individual staff members, compare notes and generally help the staff improve on their ratings and become more accurate in their self-scores.

This scoring system completely changed the way Michael thought about managing his business and he realised that the way to build a great company and great business value was to step back and create management systems, scoreboards and dashboards.

Five years later Michael sold his business for a price much higher than he could ever have hoped to gain when we first met.

And Michael as well as the new owners of Michael’s business will live happily ever after… The End

Lessons from Michael:

So let’s have a look at what we can learn from Michael:

  • First: There are many other numbers that we can focus on besides money in the bank
  • Second: Measuring intangibles like punctuality is actually quite simple.
  • Third: Measuring an aspect of business allows you to improve it.

Deserted island

deserted island Here is what I’d like you to do: Imagine that you are banished to a deserted Island. And for a period of time, say 6 months, the only information you get about your business comes from the weekly mail boat. The mailboat can deliver you only a single piece of paper with maybe 15 numbers on it and the mailboat will wait for 15 minutes to take your instructions back to your business for that week.

What are the 10 to 15 numbers that will tell you how healthy the business is and allow you to make quick management decisions and instructions that you can send back?.

Most businesses will have a couple of common numbers, such as bankbalance and profitability on their mailboat report, but beyond those common numbers every business owner has his or her own priorities that tells him/her what’s going on. For example, in my business I constantly need to know how many inquiries I have had in the past 6 months, because it gives me a really good indication of the number of new clients I’ll get in the next 6 months. In another business a critical indicator might be the average number of days it takes to get paid, because if this number goes up, the business will to run out of cash.

Don’t do it yourself

I mentioned in the ‘Good News’ that you don’t need to be the one who finds the numbers.

finger on the pulseThis is actually a critical point. You as the business owner are primarily responsible for keeping your fingers on the pulse, but I want to encourage you to delegate the production of the numbers to others as much as possible.

There are a whole lot of reasons why you should delegate getting the numbers to others. This article is not the forum to go into the  detail of those reasons, but let me assure you that business owners who truly manage their business by the numbers, get one piece of paper every week, with the critical numbers from their bookkeeper, one from their sales department and one from their production department. It is simply not the job of the business owner to dive into the bookkeeping system themselves to find the numbers; that is not ‘best use of your time’

So start thinking about that deserted island, what do you need to see on that single page mailboat report to enable you to manage the health of your business?

Your First Steps:

As mentioned at the start of this article, here are some resources and actions you can take right away, that will get you started on implementing the principles I discussed:

  1. Go to the resources page http://tiny.cc/numberslpage the following resources will help you start to manage the business by the numbers
  2. A sample dashboard with critical numbers of a past client of mine in the catering industry.
  3. Article about business dashboards by Valerie Khoo in the SMH

About the author and the Masterminds sessions

roland Roland Hanekroot is a business coach who works with Small business owners to help them have more Fun in their businesses and build businesses that sustain them for years to come. Roland is also the author of “The Ten Truths books for Business owners” (more about the books here: http://thetentruths.com.au)

Every month Roland Hanekroot runs a business development workshop as well as a webinar called “The Small Business Masterminds” more information here and to register for the next webinar or workshop, follow this link: http://smallbusinessmasterminds.com.au/ The first time is free.

 

Business Plans That Work

Business plans that work.

A business without a plan achieves everything in it.

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business?

In this series of articles and associated webinars and workshops, you will learn the basic concepts and get the knowledge you need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’, and build a business that sustains you for years to come.

The First Steps Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then to suggest some “First Steps” you can take straight away to put the knowledge into action. The previous articles On Purpose, Financial Management, Marketing and Sales can be found in the archive on the blog.

In the fifth of these articles we’ll look at Planning and ask:
Why do so few business owners have a business plan, or if they do have one, why don’t they look at it more often, and how can we create a plan that does make a difference?

planning I bet you actually have a business plan. You probably created it with the help of your accountant or by following a template you downloaded from a government website somewhere. You filled in the blanks and fiddled with it a bit. It made the bank happy. It looks great and when you finished it, you felt proud to hold it in your hand. But when was the last time you even looked at the thing?

We all know the mantra: If you want to build a successful business, you must have a Business Plan.

I completely agree with that mantra, but does that mean that a business with a “Plan” will by default be successful?

No, obviously not. Most business plans don’t actually have much of an impact on the success of a business, because their format and content is irrelevant for business owners and their staff.

So how do you write a business plan that is relevant for you and your business? A business plan that is your most powerful tool to guide the direction and development of your business?

Business Bedtime Story, Laura

Here is one of my Business Bedtime Stories that illustrates how to think about planning. The Story is about one of my clients, Laura.

fashion Once upon a time… a long long time ago in a country not unlike Australia… Laura had a fashion label…

Laura had a little shop in Sydney and a fashion label and a small dedicated band of followers for her unique brand of office fashion for successful corporate women.
Laura’s business was 4 years old and although it was gratifying to see the same customers come back season after season for her latest lines and to know how happy her customers usually were when they left her shop, Laura felt strongly that there was a great opportunity for her to grow the business and bring her unique designs to a larger audience, but she just didn’t know where to start.

“Should I get involved in social media, or maybe I need to take the plunge and open a shop in the CBD or should I look for a partner in Melbourne or knock on the door of Myer, and how will I finance an expansion, and can I continue to manufacture in Australia, and what if I am not good enough to manage more staff and various localities, and is the market in Perth the same as the market in Sydney, and what if Cue designs simply decides to knock off my designs, and if I grow will I lose the loyalty of my customers” ? etc etc

Paralysis

act-plan-do Laura was stuck in a classic decision paralysis loop.

Working with me, Laura came to realise that the only way to cut through her dilemma’s was to face her lack of confidence in business planning head on write a thorough Business Plan, but in a form that worked for her.

So she did. Laura started by creating a big mind-map in which she wrote down all the dilemmas and questions and then she systematically ordered them, prioritised them and answered them.

The mind-map evolved to a series of small one page documents for different aspects of the business and a time line with projections for different stages of the business development.

A place for all the questions

From there Laura simply started to work progressively through the plan, and every time another question or dilemma came up she went to the plan, and found a place to house the question. This simple process of planning allowed her to be able to focus on the immediate step ahead without being afraid that she would forget something crucial.

Making this step to getting involved in an appropriate level of consistent planning is the one thing that started to shift Laura’s business into a new realm.
Image: Shopping for free on Kurfuerstendamm in Berlin 1.5 Years later, Laura had opened a second shop in Sydney. The planning process helped her understand that her opportunities in the short to medium term were not in the CBD, nor in large scale production off-shore, but in a series of small unique shops in specific inner city suburbs like Balmain and Mosman, followed by similar expansion in Melbourne and other major cities in Australia.

Laura was looking forward to the next 5 years of consistent controlled growth and building a loyal national following of her label.

And Laura lived happily ever after… The End

The lessons

Let’s examine Laura’s lessons.
We’ll start at the beginning. Why do we need a “Business Plan”?

The purpose of creating and having a business plan is threefold:
1)    To spell out exactly where the business is headed and how it will get there.
2)    To have a fixed set of criteria to “test” every decision in the business against.
3)    To know your options and to be able to make swift and accurate decisions when your business circumstances change from the ones you planned for.

If your Business Plan is designed with those three principles in mind, you can be sure it won’t be kept in the bottom of a drawer. It will sit on top of your desk; it will be dog-eared, and smudged; it will have coffee stains, scribbles and doodles all over it. You will look at it every day and so will everyone else who has anything to do with it.

Business Plans that live

There are 6 key criteria that a Business Plan must meet for it to truly add to the success of the business:
1)    It must be a “live” document and be kept “live” by the people directly affected by it, monthly, quarterly, annually.
2)    It must be designed with the people who are directly affected by it in mind.
3)    It must be easy to use and easily accessible for the people directly affected by it.
4)    It must be designed to address the short, medium and long-term goals of the business.
5)    It must reflect the Purpose and Mission of the Business (see last month’s topic article on my blog)
6)    It must be short… on page… ideally.

On the special resources page for this topic (follow this link) are a couple of simple templates that you can download and work your way through to create a business plan that meets these 6 criteria. All of the templates are designed to fit on one page.

None of the templates on the resources page are for business plans designed to go to the bank with. Those plans are external plans. The plans I talk about in this article and the plan that Laura created are internal plans, their function is to help you and your people drive the business to where you want it to go.

Your First Steps:

As usual in this series of articles I want to encourage you to take action. To get started with creating a business plan that is going to help you build a business that sustains you for years to come, the first step is to follow the link to the special resources for this article and download the two templates. There are also a couple of articles about planning from two internationally renowned business gurus you may want to read.

Step 2 is to get started. Put aside an hour to get familiar with either of the templates. Alternatively you might prefer Laura’s approach or you may decide on a different format altogether. It doesn’t matter, as long as you get started.

roland I’d love to hear how you go, email me your first draft or feel free to contact me with any questions.

The Masterminds sessions.

Every month I run a business development workshop as well as a webinar called “The Small Business Masterminds”. In December our topic for the Masterminds sessions is business planning and how to write a plan that works. For more information and to register for the next webinar or workshop, follow this link. First time free, normally $99

(By the way. Feel free to email me if you do want a good external business plan template to apply for an overdraft with.)

The Purpose of Your Business

Have you ever asked yourself:

Why does your business exist

and why would anybody care?

If you enjoy this article click here to get a free copy of one of my “The Ten Truths” books for business owners

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business?

In this series of articles and associated webinars and workshops by Roland Hanekroot you will learn the basic concepts and get the knowledge need to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.

Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of New Perspectives business development programs, to suggest some “First Steps” you can take straight away to put the knowledge into action.

The Purpose Question

In the fourth of these articles we’ll look at Purpose and ask: What is the Purpose of your Business?

conscious-capitalismContrary to what most people think, the Purpose of your business is not to make lots of money.

As John Mackey, author of the book “Conscious Capitalism” (More info here) and founder of “Wholefoods Markets” says: “Thinking that the purpose of business is to make money, is like thinking that human beings are on this earth to eat. Eating allows us to fulfil our purpose in life and it is the same for business. Profit allows Business to make good on its Greater Purpose”

Shame really, because life was so much easier when us business owners could just focus on “maximising shareholder value”, but in the 21st century we have to rethink the Purpose of business.

Allow me to illustrate what I mean with one of my Business Bedtime Stories.

A Business Bedtime Story

(The ‘Business Bedtime Stories’ are real world case histories that illustrate the different aspects of business that the various New Perspectives Business Coaching programs deal with. See it in pictures here)

Once upon a time… a long long time ago in a country not unlike Australia… John owned a cornershop in the inner city of Sydney…

Running a cornershop in the inner city is hard, there are corner shops everywhere and then there are the 7-Elevens and city express stores and even Woolworths and Coles get in on the act from time to time.
The hours are insane, profitability is minimal and the Competition is just crazy.

John often caught himself thinking: “How can I escape this trap of deadly competition with my neighbours, so we can all have a better life?”

Working with me as his business coach, John came to realise that the only way to escape the competition trap was to make the competition irrelevant.
supermarketThe way to make the competition irrelevant is by making yourself truly unique, by creating something that is completely different from everything else out there.

And so he did, John decided to become “The Best Small Supermarket in Sydney”.

The day he made this decision, everything changed. Sydney has great corner-stores, handy convenience stores, big Coles and Woolworths, sexy delis and grocers, but there is only one “Best Small Supermarket in Sydney”.

2 Years later, John opened a second store, a year after that his third and a year later again his fourth. John’s customers love him and love his stores, profits are many times what they were 3 years ago and John is creating something really special in the Inner City of Sydney.

And John and all his satisfied customers lived happily ever after…

The End

Lessons from John:

So let’s have a look at what we can learn from John:
First: Competing on price is not a strategy for sustainable success of your business.
Second: In order to avoid having to compete on price, you need to be clear about the Purpose of your business.
Third: The Purpose of your business has to relate to your customer’s needs.

The Problem with Profit

start-with-whyFocusing on profit as the Purpose of your business, has one major flaw: Your customers have no interest in supporting you to make money. They are quite happy for you to make a profit, but only after you have met their needs first.

There is a beautiful video on Youtube by Simon Sinek (watch the video) another bestselling business author and management guru. In the video Simon states that “People don’t buy What you do, they buy Why you do it”.

In other words, your customers want you to explain to them why your business exists, what it is on this earth for and why they should care.

In working with my clients to find the deeper Purpose of their business, I always ask them those questions first and invariably I get the following three answers:
1.    We do great work
2.    At a great price
3.    And we give great customer service

Undoubtedly true, but first of all your customers expect those three qualities as a bare minimum, a starting point and secondly, your competition makes exactly the same three claims. Have you ever met a business owner who proudly claims to produce and average product at an average price with average customer service?

This is why you must find the deeper Purpose of your business.

Here are some example of deeper business Purposes:
1.   An Architect’s business: Architecture that Inspires
2.   A furniture factory: The Most Beautiful Tables in the World
3.  An Electrical contracting business: You’re in Safe Hands

table If you were in the market for a table, wouldn’t you like to check out the furniture factory at number 2? Of course you would… I know I did.

You might be interested to know that all three of these businesses have been wildly successful and bucked their respective industry trends for years now.

How do you find it?

The process of finding and developing the deeper Purpose of your own business starts with asking yourself the following 7 questions:

1)    What are my 5 most important personal values, as they relate to business?
2)    What core beliefs do I hold about my business and industry?
3)    What do I get really excited about in business; what do I get out of bed for; what am I passionate about?
4)    What do I want my business to be the best in the world at?
5)    Who are my ideal customers?
6)    What do my ideal customers need or want that they are not getting at present?
7)     How can I address all 6 questions above and develop a long term sustainable, profitable business model around that?

I encourage you to involve others in brainstorming these questions with you. Working your way through them will put your business on an entirely different footing, I guarantee it.

This is the topic we will be talking about at the November Masterminds ‘live’ workshop as well as the Masterminds online webinar, both on 14 November. If you would like to attend either the webinar or the workshop, register here

Your First Steps:

As mentioned at the start of this article, here are some resources and actions you can take right away, that will get you started on implementing the principles I discussed.

Go to the resources page to find the following resources that will help you clarify your Purpose and Passion in your business:
1)    The Simon Sinek Video about the “Why” of your business
2)    An article from business guru Jim Collins about the importance of “Vision”
3)    A worksheet and tool I have created to help you step through the 7 questions above.

First Steps to Establishing Your Market


the simple steps cogs First Steps to establishing a market for your business

©by Roland Hanekroot, New Perspectives Coaching 2013

What does it take to make a success of your small business… how can you avoid adding to those frightening statistics about failure rates of small business.

In this series of articles and associated webinars by the authors of “The Simple Steps for Business Program” you will be introduced to the basic concepts and knowledge that will set you up to become a successful ‘Business-Owner’, as opposed to a struggling ‘Business-Doer’.

Format

The format of each episode in the “First Steps” series is to explain the basics of the topic and then in line with the principles of “The Simple Steps for Business” program, to suggest some “First Steps” you can take straight away to put the knowledge into action.

market3 Questions

In the second of these articles we’ll look at Your Market and ask:

What, who and where is my market?

Most of us business owners find ourselves in a market by accident. Not many of us start from scratch in a new market. We’ve either taken an existing business over from a previous owner or we’ve started our business doing something that we happen to be particularly good at and hence we’ve already had a couple of clients and a market from day 1.

Consequently we roll along doing more of what we’ve always done. Our recipe for success is our belief in ourselves and a vague notion that we’ll be able to do it better than the other guys, somehow.

The things that don’t set us apart

This situation is equally applicable to someone with a carpentry business, as it is for a mortgage broker, a café or a fashion store. When asked what sets them apart, most business owners will say 3 things:

we love customers 1)   We give great customer service

2)   For a great product

3)   At a great price.

And I have no doubt that they do, believe that they do, or at least strive to.

There are two problems with these statements though:

1)   The three statements are not special enough, they don’t offer enough value (Customers expect good service, good quality and good price from everyone… as a minimum)

2)   And most importantly, all your competitors say exactly the same thing.

Who is the cheapest?

If you and your competitors make the same promise, the customer will make a decision on price because it is the easy factor to compare on.

In small business, there is nothing worse than being forced to compete on price, because there is always someone who is prepared to do it cheaper. You cannot build a long-term sustainable small business based around being the cheapest.

Find a tight niche

One of the most effective solutions to this problem is to find a tightly defined niche market that is either not serviced at all or is underserviced.

If you can find a niche market for your product or service that has few or no other business operating in, you can set out to own that niche and dominate it. Dominating a niche is a recipe for building a long-term sustainable business, like no other.

3 Niche questions

There are 3 questions you can ask to help you find such a niche:

1)   Who does not currently use my product or service but might?

2)   What are all the factors that we and all our competitors already compete on with each other?

3)   On which factors are none of us competing?

I am going to work through a couple of examples to demonstrate how to go about finding a niche and stepping into it.

The carpet cleaners

Re question 1: ‘Who does not currently use my product or service, but might?

carpet cleaner Assume you own a carpet cleaning business and your town has heaps of carpet cleaners and they all offer more or less the same thing so that 75% of the inquiries you get from prospective new clients revolves around the question: How much do you charge per room? The question drives you mad, because you are only just making ends meet as it is and having to be the cheapest all the time just isn’t viable.

One day you decide something has to change and together with your wife you start to have a look through your database of clients and jobs from the last 3 years. You are not sure exactly what you are looking for yet, but you hope to find a specific category of client or job that is either more profitable than the rest, or more fun to do, or is easier, or all of the above.

After an exhaustive search over many evenings, your wife mentions that she’s come across a few big 21st birthday party cleanups and an idea starts to form.

cleaning the mess 21st birthday parties

You decide to create a special offering and expertise in preparation and cleanup before and after big parties. Especially 18ths and 21sts can be massive messy affairs and a lot of anxiety goes along with them. How about offering a package that includes preparing the carpets for a big party with a protective spray application and then coming back the day after the party to do a thorough clean to make the house smell like new again?

A special package like this is actually not offered by anyone in your city and addresses a great need.

John and Mary’s Party Cleaning is born… a unique product and offering at a price level that you can make good profits on and best of all, prospective customers cannot compare on price.

Your business and your life will never be the same again… I guarantee it.

The Simple Steps for Business … First steps:

As mentioned in the opening paragraphs of this article, here are some “First Steps” actions you can take right away, that will get you started on implementing the topics and principles we discuss:

1)   Read the article Blue Oceans and Empty Swimming Pools”, by Roland Hanekroot. Follow the link to the resources page

2)   In a notebook ask yourself the first of the 3 niche questions above.

Kelvin’s bike shop

bike shop Now lets have a look at the other “niche questions”. This is a story about a different set of circumstances as experienced by Kelvin who owns a bike shop.

This story relates to questions 2 and 3: What factors are you and your competitors already competing on and what factors are you not competing on:

Selling bicycles is not easy because there is a lot of competition from many different sources. There are other bike shops all around the city; there are the ever increasing number of ‘Big Box retailers’ such as Big W and Kmart and then internet is increasingly impacting traditional retail models as well.

Kelvins shop was still doing just ok but the trends were not looking good at all, and pressure on his margins was constant.

Just at this time Kelvin came across a quote from a bikeshop owner in America, Chris Zane: “The only difference between our competitors and ourselves is the service we provide”

The fish pond

fishpond Kelvin realised the obvious truth of this statement. There is effectively no difference between the bikes sold by Kelvin or any of his competitors or the pumps or the bike-shoes. Kelvin and his competitors were all fishing in the same pool trying catch exactly the same fish and the number of fish in that pond was diminishing. The only way forward was to create a new pond and attract enough of the fish away from the old pond to be able to enjoy the fishing again.

So Kelvin set about changing his approach to business completely. First Kelvin looked at all the factors he and his competitors fought over (price, range, convenience, friendly service, speed of delivery, connection with major sporting heroes etc)

Then Kelvin looked at what other factors there were that nobody competed on yet.

The insight that Kelvin had was that the greatest opportunity for his business, lay in creating long term customer loyalty through delivering truly extraordinary service, and absolute peace of mind.

Lifetime free stuff

For example, Kelvin implemented a life time free flat tire repair; Kelvin offered no questions asked replacement guarantees for any bikes and products sold if you were dissatisfied with the product for whatever reason. Kelvin taught his staff that from now on the word NO was out of bounds and no request was to be rejected.

A couple of years later, Kelvin moved his store to a new location with three times as much space.

Kelvin created his own fishing pond and he was able to dominate it, year after year.

The Simple Steps for Business … First steps:

As mentioned in the opening paragraphs of this article, here are some “First Steps” actions you can take right away, that will get you started on implementing the topics and principles we discuss:

1)   In your notebook ask yourself the remaining 2 niche questions above.

2)   Printout the “find your niche” worksheet here, and complete the worksheet. Follow the link to the resources page

3)   Blue Ocean Strategy” by W. Chan Kim and Renee Mauborgne is the Bible on this topic of finding a niche. It is a great read. Follow the link to the resources page

 

See – Feel – Change

Business Masterminds Observations

SEE-FEEL-CHANGE

switchI read a wonderful book by Chip and Dan Heath a little while ago called “Switch”, “How to change things when Change is hard”

The book is full of wonderful anecdotes and really clear explanations of powerful concepts about change.

The authors explain how most people believe that if something needs to be changed, that we need to go through a process of ANALYSE-THINK-CHANGE, build a business case in other words with figures and stats and graphs. Sadly that turns out to be one of the least effective approaches to building a momentum for change… A vastly more effective approach is SEE-FEEL-CHANGE. In other words let people see and feel the problem and the effect of the problem and help them see and feel the change and the effect of the change to get them on board.

So if you’d like people to “get” why something in your business needs to change… demonstrate… speak to their feelings… tell stories

Noble Failures

Business Masterminds Observations

Create Noble Failures

I read ‘It’s not the big that eat the small, it is the fast that eat the slow’ by Jason Jennings and Laurence Haughton years ago (follow this link) and was reminded of that book when reading an article in INC magazine, recently

Have you celebrated a failure today? You should. I was reading about a CEO who instigated a ‘Failure of the Month’ award in his organisation.

Why would he do that?

Failure happens when we try stuff, when we are curious and ask “I wonder what will happen if…” Failure happens when we skate close to the edge, and when we’re not skating close to the edge we fall asleep and then nothing develops at all.

So celebrate your greatest failure this month, because from failure comes innovation.

1001 Business Bedtime Stories… Rebecca Builds a System

The system works! Rebecca gets systemised… Truth 8

Read on to find out how Rebecca learnt that systemisation = less effort + more profit.

Once upon a time… a long, long time ago in a country not unlike Australia… Rebecca ran a consulting business.

She had a team of six consultants and two administrative assistants.

While all her stafff contributed in their own ways, Rebecca was finding there was no consistency across their output. Some jobs would be completed with great results while others were done haphazardly with outcomes all over the place.

Rebecca was spending hours fixing the other consultants’ work and making sure the admin assistants were on track. She was becoming increasingly worried about the quality of the business’s output and concerned her clients might get fed up and leave her.

Rebecca felt she could never relax because she needed to check up on everyone and everything all the time.

She wondered, “How can I make sure everyone in the team is producing consistently good work?”

Rebecca was going nuts.

The Bootcamp

Working in The Bootcamp with me, Rebecca came to understand that she needed an overarching system so that everyone knew what they needed to do.

The biggest lesson Rebecca learnt was that once you put a system in place you don’t have to think about it again (well, not immediately at least!). Good systems free you up to get on with the real work of your business.

In the Bootcamp Rebecca and I talked about the principle of, “Do more of what works and less of what doesn’t.” She started tracking different jobs and looking at what was and what wasn’t working, and found that:

Result 1: Successful jobs always had more time in the briefing stages than jobs that were rushed in.

Result 2: Successful jobs always had a simple document register attached to the filing system for the project.

Result 3: Successful jobs had one person who was responsible for keeping the documents register up-to-date and the filing system organised.

From these findings, Rebecca was able to put in place the following actions:

Action 1: She created a series of minimum benchmarks for the briefing stage of any project, no matter how rushed the client was.

Action 2: She assigned one person as the responsible officer for the filing system and document register for each job.

Action 3: She implemented a monthly ‘systems meeting’ where she would go through each job with the responsible people and check on the briefing stages, the filing systems and the document registers.

The difference in just a few months was remarkable. Peace and calm reigned in Rebecca’s office because everyone knew what they should be doing, how they should be doing it and when they needed to have it done by. Happily Rebecca can now take a day off here and there to focus on her favourite hobby… photography.

Systemisation really does mean less effort and more profit.

Ask yourself… Where will you find the courage to build a remarkable business? 

1001 Business Bedtime Stories… When Courage Leads to Money to Spare

1001 Business Bedtime Stories… Truth 4: Cashflow

Ever wondered why sometimes we don’t succeed, even when we know how to solve a problem? Find out how Vivienne overcame her cashflow problem and now couldn’t be happier.

Once upon a time… a long, long time ago in a country not unlike Australia…

Vivienne owned a consultancy that helpe

Truth 4 – Financial Management

d businesses implement OH&S practices in their workplaces.

She worked hard and had plenty of clients. She knew her market and had priced her services appropriately, but found she was forever struggling to pay the bills at the end of the month. There was nothing wrong with her profitability.

Cashflow was the obvious problem. But knowing this didn’t solve it.

Each week Vivienne thought, “I know my cashflow is hurting the business but it’s hard to makes changes and I don’t know how to do it.”

Vivienne was losing sleep.

The Bootcamp

When Vivienne joined me in The Bootcamp two years ago she made a wish and committed to it. She said:

“I wish to have money left over at the end of each month, and I am going to do whatever it takes to get there.”

So we got underway…

Now it didn’t take a rocket scientist to work out that the first step on the path was to design a consistent debt collection strategy… We worked out a system of weekly actions and follow-ups and, most importantly, Vivienne vowed to stick to it with machine-like consistency.

So she did… and it took a lot of courage.

Vivienne started using the system, week in, week out, no matter how unpleasant some of the phone calls were or how yuck she felt getting debt collectors involved. She had the courage to honour her commitment to herself and to keep going until her cashflow problem was solved.

After six months of this relentless focus, it was clear that Vivienne’s business and her life would never look the same again.

Now… two years later, Vivienne is putting cash aside every month in an investment account and, I might add, she looks 10 years younger.

And Vivienne will live happily ever after… The end.

Ask yourself… Where will you find the courage to make profound things happen in your business?