Staff engagement and the Germans in Brazil

winning kid

How to build a team that fires?

staff engagement germans champions I have spent the last few weeks getting very excited about World Cup soccer, and whether or not you like soccer or you get more excited about other footbal games with pointy balls… one thing is clear some teams sparkle (Germany for example) and some teams don’t (who can forget the crying distressed faces of the Brazillian supporters at the end of the semi finals?)

Thinking about staff and employees I often flash on what a friend of mine who is a nurse used to say (half-jokingly): “I could run such a great hospital if it wasn’t for all those ruddy patients.”

But the business owner’s lament is a different one: I know I could run such a great business if it wasn’t for those pesky staff

Michael Gerber, in his famous book: The E-Myth told us 25 years ago to give up trying to manage people, and focus on systems instead.

Gen Y

And in his time, Michael Gerber hadn’t even met a Gen-X employee yet, let alone Gen-Y! Ask your Gen-Y staff member to do something simple like smile at a customer and make them feel welcome when they walk into the shop and they look at you as if you just asked them to kiss a cockroach.

We all know that employing people is tough and it can be the toughest challenge any business owner faces when trying to develop and grow his or her business. And yet, it is also where the greatest opportunity lies for your business, because the essence of just about any business model ever invented is about charging a margin on labour, employees of some form in other words. And that statement holds true equally for either product or service business and even fully digital businesses will find it hard to be successful without employees of some sort.

So how do you engage those pesky staff members, so that you get the best out of them, and you don’t go grey prematurely?

I believe it all starts with this Golden Rule:

Hire for attitude and train for skill.

When you recruit for new employees I urge you to keep this Rule in the forefront of your mind – Always look for attitude first.

dee hockThe founder of Visa International, Dee Hock shared this about hiring staff: “Hire first on the basis of Integrity; second on the basis of motivation; third, capacity; fourth understanding; fifth, knowledge and last and least, experience.”

Integrity and motivation are what makes a great team member. Most other skills can be taught.

Prepare Prepare Prepare

So how do you hire for attitude?

  1. 1)   Prepare, prepare, prepare… Put together a simple series of questions that give you the opportunity to get a clear insight into this person, what they’re really like.
  2. 2)   Organise trial days.
  3. 3)   Experiment with role plays,
  4. 4)   Involve your manager in the hiring process
  5. 5)   Check references.

This is what happens when you don’t check references:

beauty salonA client of mine, Wendy, runs an upmarket beauty salon in the Eastern Suburbs of Sydney.  6 months ago she fired one of her staff for unfailing laziness.   Recently, Wendy received a phone call from the owner of another beauty salon in Sydney who had employed the previously ‘fired’ employee for some months, on the strength of the fact that she had worked for Wendy before. She rang Wendy, confused and disappointed, because of the bad attitude and performance of her new employee.

A simple reference check, before hiring a new employee can save you a whole heap of aggravation.

Second step

The second step in engaging your people is a little less obvious.

You see, your staff aren’t actually all that different to you, they are actually normal people, just like you, honest they are, trust me.

And people like to be engaged, they like to enjoy life, they like to collaborate with other people and they like to win.

It’s the reason so many of us play team sports. In my experience of working with many small business owners, the most effective approach to engage a bunch of employees in small business is to think of business as if it is a game of rugby.

Fun and winning

winning The reason we join a soccer team is to have fun and enjoy ourselves and the object of the game is to win.

I encourage all of my clients to start to think of their business as a soccer team (But maybe not the Brazilian world cup team at the moment!!) and their staff as fellow team members, with yourself as the captain and coach of the team.

As the captain you understand that your staff joined your team for exactly the same reasons you created it, to have fun and enjoy themselves and to win the game (That is as long as you hire for attitude). Furthermore you must help them understand how the whole team depends on each other.

As the coach you know that you must take the time to teach your team members the rules of the game, you have to train them to become more effective in their roles, and you have to show them how their actions have a direct impact on the outcome of the game.

Finally the team members need to feel they have a ‘stake in the outcome’; they have to feel that winning is good for them as individuals as much as it is for the team as a whole.

Don’t get me wrong, implementing what I just described isn’t easy, and no doubt there will be plenty of times when you will want to pull your hair out (there’s a good reason I don’t have any hair left). But by making it your prime responsibility as the business owner to become a great coach and captain of your team, you will be well on your way to building a Fun business that sustains you for years to come … I promise you.

For more information about to how to step out of overwhelm, get unstuck and start having Fun in Business again, click here

Becoming a Sales Machine

sales flexibility

Taking sales seriously will change your life.

Are you spending lots of time doing estimates, quoting jobs, writing proposals,  and not winning the work?

Stress It is just so frustrating isn’t it? It gets you down sometimes… What is your strike rate? 20%? 30%? 50%?

How would you like to win twice as many proposals than you currently are without doing more quotes?

Easy… you say… just drop all my prices by 15% and I’ll win everything, but I’ll be losing money hand over fist…

WRONG

Price comes last

Here are the top 9 success factors for winning quotes and proposals:

  1. The client likes you.
  2. The client trusts you.
  3. The client ‘gets’ what you are passionate about and how that relates to them.
  4. The client has experienced your professionalism.
  5. The client understands what your offer is.
  6. The client knows that other people like you (if others like you, you must be good).
  7. The client understands the benefit they are personally going to get from using you.
  8. The client can picture how good they are going to feel when you’ve completed the work.
  9. Your price is right given all of the previous factors.

Have another look at that list and notice that price is at the bottom. Don’t allow yourself to fall in the trap of thinking that you lose sales because of price… If you lose a sale because of price, you simply haven’t done a good enough job of addressing the other factors. Trust me!

The 3 success factors of Sales…

That leads us to the three basic principles of sales that you must get your head around to become more effective at it:

Firstly, in order to sell your service, you have to, sell yourself before you sell your ‘stuff’.

Secondly, selling is a skill, you can learn about it, you can train in it and you can get better at it.

Finally, sales is a function of business just like operations, marketing and distribution. It requires resources and systemisation to work well.

Point number 1 doesn’t need much explanation; clients must buy into you before they buy into your product. If people don’t like you and don’t trust you they will not buy from you. Enough said I think.

So, let me share a little case history with you about a client of mine called George that illustrates points 2 and 3

George learns about sales as a system

carpenter-builderA few years ago I met George, who is a builder in Sydney with a small team of carpenters and labourers on the payroll. George’s wife Lisa runs the office.

George mainly builds in the $500K to $2Mil range, large renovations and some upmarket new homes.

When I met him, one of the biggest issues George faced is how much time is wasted on preparing tenders for architects. His strike rate was about 20% and each tender was taking him around given 20 and 40 hours of his time, Therefore, George spent some 20 – 30 hours every week of the year to win about 6 to 8 projects.

George felt he was stuck and he was frustrated, because he felt he was missing out on the best years of his young kids’ life.

Coming from my own experience as a builder, I explained to him that the most effective way to get un-stuck was to improve his strike rate. If we could improve his strike rate from 20% to around 1 in 3, the impact on his business and his life would be enormous.

A target is set

So George set himself a two-year target to get his conversion rate to 35%. The first commitment he made was to become just as professional about Sales as he was about every other facet of his business.

We started by carefully designing and implementing a sales system that would run like a machine to manage inquiries, leads prospects and quotes.

George and Lisa invested in a high quality CRM system. Soon they were keeping track of prospects and leads at different stages in their sales cycle. Inquiries through email, phone, website, word of mouth and referrals were all entered, tagged, categorized and appropriately followed up in the system by Lisa.

George also wrote a series of scripts for answering telephone inquiries and follow up calls. And finally George enrolled himself in a 6 month sales training program.

A year later George’s strike rate reached 28%. Then he got the rate down to 36% the year after.  Just as importantly though, now that George is so much more professional in his sales approach, he doesn’t feel the need to negotiate on his prices anymore and his margins have gone up significantly.

George and Lisa are a lot happier these days and so are their kids.

The lessons

The three lessons from George and Lisa are:

Firstly: The only way to do sales well is to take it just as seriously as all the other aspects of your business

Secondly: One of the most effective approaches to making more money, finding more time and having more fun in your business is to improve your sales conversion rate.

Thirdly: To do sales well, think systems and think training.

What do you think? Is it time for you to make a commitment to become professional at sales?

My One-Month Transform Your Sales Program is a short, sharp, fun and intensive 4 week program designed to tackle your sales, in one month, and implement a series of effective and simple strategies that will start to transform your business. It starts with an obligation-free half hour Discovery Session via Skype!

Transform your sales in one month! Book in a FREE Discovery Session with me via Skype.

goal setting and planning

Financial Management

profit

Why cash is more important than profit

register for webinar

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 you 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 small simple “First Steps” you can take straight away to put the knowledge into action.

Financial Management

profitIn the fourth of these articles we’ll look at the Financial Management and ask:

What do you need to know and how do you need to apply that knowledge to put your business on a solid financial footing?

3 Principles

There are 3 principles you need to understand to manage the finances of a business well:

1)    Why do we need to make profit?

2)    Profit and cash are not the same thing at all and they don’t even have a direct relationship between each other.

3)    Cash is what you must worry about all the time… not profit

Why Profit?

Let’s address the principle about Profit first. The first thing to understand about profit is that it is not the purpose of business. Profit is a vital component of business, but it isn’t the reason the business exists. The Purpose of your business must be something much more important and something your customers actually care about. (More about this idea in my article about Purpose and Vision click here)

Why Profit?

Let’s address the principle about Profit first. The first thing to understand about profit is that it is not the purpose of business. Profit is a vital component of business, but it isn’t the reason the business exists. The Purpose of your business must be something much more important and something your customers actually care about. (More about this idea in my article about Purpose and Vision click here)

The 3 Functions of Profit

Profit has 3 functions:

1)    To pay investors and stake holders in a business a return on their investment.

2)    To provide the business with funds to invest in itself to grow or develop the business.

3)    As the thing by which we measure how well we are doing in running the business.

The first function is straight forward, if someone invests $100 or an hour’s work into a venture, that person wants to see a return for that investment. That return can only be payed out of the profits of the business.

The second function is also straight forward, in that, if you want to buy a new machine or tool or vehicle for your business you need to have the money to pay for that. Profit is what provides that money. (You can borrow for that purchase of course, but then the purchase is effectively made out of future profits)

The third function is about this: How do we know if our business is going well or not so well? The simplest method to answer that question is to keep track of the financial numbers and profit is one of the most important of those.

Profit and Cash

The second principle about profit and cash is what brings a lot of small businesses unstuck. A large proportion of the businesses that make up the horrendous statistics on failures in small business do so because of a lack of understanding of this principle.

Profit is a simple sum (on paper) of sales minus costs. So if you sell stuff in a week for a $100 and it costs you $50 in raw materials that week and $25 in office costs, it means that you have made $25 profit that week.

river Cash (your bank balance) bears little relation to those numbers in most cases. The $100 of stuff you have sold might not be paid for that week or even that month. You also might have had to pay for the raw materials some time previously and your office costs (staff and rent etc) may have to be paid every Friday. So that at the end of the week your bank account will actually be significantly in the red even though you’ve made a profit.

Cash Flow

So cash needs to be calculated in a different and slightly more complicated manner than the simple profit and loss equation.

When thinking about cash it is useful to think in terms of flow… money flowing in and out of your account, like a river flowing into the sea. If it rains upstream in Queensland for example, it may take a month for the Darling River to start swelling downstream in South Australia. So when talking about cash we usually talk about cash flow…. Money flowing in and money flowing out. If more money flows into your bank account in a given period than flows out in that period, your bank account swells and vice versa.

Cash is the main thing

cat And that brings us to the third principle that you need to understand about financial management of the business.

I said that the thing to worry about in your business is Cash and not Profit. For most people this is a counterintuitive statement.

The truth of this principle is actually much more straight-forward than you might think, because:

Only cash can be used to pay for stuff

Theoretically, your business may never make a profit and yet survive, as long as you continue to have enough cash to pay the bills, your staff, your raw materials, the rent etc. Obviously without making a profit, the business will ultimately run out of cash, but that can take years in some circumstances. So as a business owner who is committed to put his business on a solid financial footing, Cash-flow must always be your first concern.

This is the topic we will be talking about at the March Small Business Masterminds ‘live’ workshop as well as the Masterminds online webinar, both on 13 March. If you would like to attend either the webinar or the workshop, go to http://smallbusinessmasterminds.com.au 

Take the first steps:

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

  1. Download the Article by Roland Hanekroot: “Cash-flow, the Basics”: follow this link
  2. Have a look at a great blog post on the Times of London about the importance of profit in business: Follow this link
  3. 5 ways to improve your cashflow in INC magazine: Follow this link
  4. If you are not already doing so, start by paying yourself a regular “wage”. A weekly or monthly amount you can live on as a minimum, and record this wage in your books as an expense to the business. You may decide to invest this money back into the business if you don’t need it to live on, but by paying yourself such a wage you will gain a more accurate insight into the profitability of the business and you will start to see how much money you are actually investing into the business and therefore should get a “return” on in the future.
  5. Start a proper bookkeeping program (Xero, MYOB, Quickbooks, Saasu, Freshbooks) and ensure it gets kept up to date at least monthly.
  6. Ask your accountant or bookkeeper for a simple cashflow spreadsheet and either start to use it yourself monthly or ask your bookkeeper to do so for you, you’ll be surprised how easy it is to start to get a handle on the cash flowing in and out of your bank account.

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.

 

Celebrate Your Victories in Business

Business Mastermind Observations

big book of small business Celebrate your victories

Amazon link

http://amzn.com/B00ANYJ1W6

I recently read another book by Australia’ s favourite small business guru Andrew Griffiths: “The Big Book of Small Business” and it is a doozy.

It’s a fantastic book to dip in and out of and pick up all kinds of wisdoms, tips and insights to help you improve your business.

One of the really lovely passages that stood out for me is called: ”Remember to celebrate your victories” and Andrew goes on to tell that he has a big whiteboard hanging in his office that he records his victories and achievements on throughout the year.

I really love that, because we don’t spend anywhere near enough time celebrating our achievements. Worse, we tend to forget about our achievements moments after we’ve achieved them, because as responsible business owners we know we have to drive ourselves to do better all the time and stopping to smell the roses is for normal people, right?

Wrong… Andrew has the right idea… stop and acknowledge the good stuff you have done and are doing all the time, nothing like a pat on the back every now and then.

Cheers,

Roland Hanekroot

Call me if you’d like to explore how I can help you have more FUN in your business.

Or come to the next Small Business Masterminds workshop… click here