The One Thing That Matters Most in Business Management

small-business-fun

Are you having fun yet?

Fun in business management matters rubber duck

Nobody teaches you about Fun in business at an MBA

Ask any business owner, accountant, management consultant, business coach or other business guru what matters most in business, and you’re likely to be told about the importance of profit, cash, sales, customer retention, staff, leadership, or maybe you’ll be regaled with the importance of quality, systems, innovation or maybe planning and strategic thinking (not a complete list nor necessarily in the right order).

Obviously, those are all important. Without sales, there is no business. If you don’t generate enough cash, your business will fall over in no time as well but there is one factor that’s much more important than all of those. I refer to that factor as Fun in Business.

Fun in Business management is not one of the success factors we learn about in MBA schools, but I can assure you it matters more than anything else. (Read here on Inc.com about the traditional success factors in business)

You see, if you focus on profit as the greatest success factor of your business. It means you’ll never be able to achieve anything beyond profit, and that’s like saying that the greatest measure of success of human beings is how much food we get to eat. Obviously we need to eat food, but we do so in order to achieve what we want to achieve in life. It’s the same with Business and money as well as any of the other success factors mentioned above. We need to make profit and we need to make sales and we need to make our customers happy, but those things are not an end in themselves. Our business needs to do these things, so that it gets to achieve what it wants to achieve in this world.

Think differently about business

It’s time we started to think differently about business than we traditionally have and learn to accept that there is something greater for us to achieve than make sales, improve our systems and generate cash.

A really interesting place to start, I believe, is to focus on the concept of Fun in Business and management. You see when business is Fun, it means everything is working. When business itself is Fun it means that:

  • You are making money and generating cash flow
  • You’re making sales
  • You’re getting better all the time
  • You know where you’re going
  • Your staff are highly engaged
  • Your customers love you
  • You’re proud of the stuff your business produces
  • You creating the kind of balance in your life that is important to you.

Focusing on Fun in Business as the Key Performance Indicator (KPI) of the health of your business and understanding that all the other KPI’s we are used to measuring and thinking about are merely drivers to the main KPI of Fun in Business, will change your business and your life.

“Sounds lovely and all warm and fuzzy, but in the here and now, as the owner of a business I have all these responsibilities and if I don’t focus on money, every day, people are going to start losing their jobs and that’s the end of everything. I need to look at a couple of numbers in the morning and see whether we are achieving our targets and I can’t even begin to measure Fun!”

That’s an objection I am often given. You can’t measure “soft” concepts like Fun in business anymore than you can measure Love or Kindness or Frustration in business or anywhere in life, can you?

But it turns out you can measure Fun in Business in a useful manner, quite easily actually.

Measuring Happiness

In the same way you can measure happiness for example. Imagine I asked you to think of a scale from 0 to 10. 10 on the scale means that you are the happiest you’ve ever been in your life and 0 means the opposite, you are totally depressed; I have no doubt that if I asked you that question right at this moment, you’d have no trouble giving me a number, like 7.3 for example. now if I asked you that same question again tomorrow, you’d probably give me a different number, say 8.1 for example and that would tell us that you are feeling a little happier than you did today when I asked the question for the first time. This way of measurement is referred to as relative scaling. The technique is well established in various forms of psychology.

We can apply the same system of measurement to measuring Fun in business in our business and you can even choose to involve your team with this measurement system as well. I have helped many clients implement such a measurement system in their business and the impact of doing so consistently has been nothing short of amazing.

Obviously, just knowing how much Fun in Business we had last week is not going to change anything on it’s own. The old saying is: “You can’t manage what you don’t measure”. The point of measuring something is that we want to manage (and improve) that operation or section of the business. This principle goes for managing (and therefore measuring) Fun as it is for managing and measuring any other KPI in business, such as how many widgets we produce in an hour.

Fun in Business Management system

Measuring Fun in Business with the scaling question I described is therefore merely the first step in the Fun in Business management system. The next steps are all about the follow up questions.

After establishing what the relative Fun in Business number was for last week, we have to ask what would make next week a better week, how can we ensure we move the Fun in Business number from 5.7 to 6.1 this coming week for example? What do we have to do to make that happen?

The conversation that follows is where the rubber hits the road. It may be for example that you decide that one of the things that causes the Fun number to be lower than you’d like it to be, is that every second phone call into the office is from a supplier who wants to be paid. The reason those phone calls are uncomfortable is that you are always ‘robbing Peter to pay PAul’ because you yourself have an excessively large Aged Debtors list, in other words people haven’t been paying you on time. You are owed too much money in other words and what you need to do this coming week is to dedicate a full hour on Monday to debt collecting. If you reduce your aged debtors from $70,000 to $35,000 in the next couple of weeks, you can pay all your suppliers and suddenly you don’t have to feel so uncomfortable answering the phone every time it rings.

Or maybe you and your team decide that the business would be more fun to work at if people could work to a more flexible time schedule. Start earlier, finish earlier. Work on Saturday instead of Monday and maybe it is conceivable that you can reorganise life to suit such flexibility. There are any number of issues that can and will come up when you start having these kind of focused discussions in your business

That’s called ‘managing by the numbers’ and that’s why Fun is all that matters in business.

The process of asking: “What is one thing we can do next week, that will mean that we move one increment up our ‘Fun in Business Scale’ will flush out the most important small steps to take to move the business forward and start to make business fun again like it was when you first started it… I promise you!

More reading and resources about Fun in Business management:

Book-3_3D-250w-137 Free book: The Ten Truths for Making Business Fun

You can download my book, The Ten Truths for Making Business Fun, for free, on this page https://www.newperspectives.com.au/business-fun-ebook/

Slow and Steady Wins the Race: Podcast Interview

Business Journeys

Stories of change and development in business

 

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Episode 1: Heath Felton, Global Grapevine

Heath was my client during 2014 and 2015. I ask him to describe how the development of his business is like a journey.

Heath’s company is Global Grapevine in Sydney and the import amazing wines from Southern Italy, selected regions in France and Spain.. Most of the best restaurants in Sydney have Global Grapevine wines on their list http://www.globalgrapevine.com.au/

 

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.

 

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.

Masterminds Observations… More Meetings

verne harnish

verne harnish Business Masterminds Observations

 

Predictability

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

Another thought about the Rhythm of business and how to make business as predictable as possible from Verne Harnish’ book: “Mastering The Rockefeller Habits”.

Link to Amazon: http://amzn.com/0978774949

Verne says to have more meetings, not less.

Verne believes quarterly strategy meetings with your staff are not enough. You need to have a monthly, weekly and even daily schedule of meetings to ensure that the strategies and deliverables from the less frequent planning meetings are actually carried out.

I know that many management gurus would baulk at that statement, because the amount of money and time wasted in business in meetings is staggering.

But Verne is right. Strategies and plans without regular, formal and structured follow up meetings, never lead to the outcomes you’d hoped.

Do learn how to make your meetings super-efficient though (For example, I know of a company where all meetings are held standing up, so that the meetings don’t take a minute longer than absolutely necessary).

Enough And The Business Growth Myth

Or why it’s time to send Richard Branson back to his island

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

I’ve had an insight in the last 6 months and I have to make an admission:

BSOne of the pillars and accepted principles of my profession of business coaching, is wrong.

  •  Nonsense
  • Twadlle
  • Complete Rubbish

The principle I refer to is this:

“If your business doesn’t grow, it dies”

Every business coach, guru, mentor, consultant, author, academic and MBA student will tell you that this is a foundation principle of business, capitalism and society at large.

choirI admit that until not too long ago, I repeated the same refrain and was an enthusiastic member of the choir. (More about business growth here as well)

Today, I deeply apologise to everyone I have repeated this refrain to in the past 10 years; because I now realise that the principle sounds good, but is wrong… very wrong.

I am reminded of the quote by American Journalist H.L. Mencken :

For every complex human problem, there is a plausible

solution that is simple, neat, and wrong.

I don’t know who first stated that business must grow and (and by extension, that more growth is better than less growth) and I don’t know in what context, but it’s crap.

And what’s more, it’s dangerous crap and has caused all kinds of damage to business owners, their families, their friends and society.

The idea that business must grow or else it will fail doesn’t exist in isolation from a number of other ideas on which we base the management of our society. The idea is closely related to our celebrity worship culture, the western world’s depression epidemic and other mental health issues, anorexia nervosa in young women and the basic belief in our society that nothing is ever enough.

Never enough

fistBecause in 2013, we are never:

  • Thin enough
  • Rich enough
  • Good enough parents
  • Educated enough
  • Successful enough
  • Beautiful enough
  • Clever enough

And we are definitely never good enough as business owners

The measure of success for business owners is whether or not we sell our business for $100Mil or more.

Or more specifically, the role models and shining light examples we are told we must aspire to as business owners are people such as Richard Branson, Steve Jobs, or Larry Page, people who started a business and ended up billionaires. And don’t get me wrong I think they are amazing people, no doubt about it, but I know many other people who I find just as amazing  and just as inspiring and they will never be billionaires, and probably not even multi-millionaires (just owning a house in a major city in Australia already qualifies you as a millionaire).

Let me explain how I have come to the conclusion that business doesn’t actually need to grow.

My favourite client

plumberI have a client who is a plumber and he has three vans on the road and employs 3 people. He might end up employing one or two more people and have one or two more vans on the road in the next few years, but that’s probably where he will stop growing. He may continue to operate his plumbing business for the next 20-30 years and then, possibly, one of his kids might take it over, or maybe one of his employees might.

But in any case, someone will probably run the same business more or less in the same form and the same size for the bulk of this century and beyond.

His business isn’t dying, far from it.

His business is providing him and his family and his employees and their families a comfortable, meaningful, rewarding life. A life that allows him to feel proud of himself, a life that allows him to look after the people he cares about and do the stuff he wants to do.

The little voice on our shoulders

whisperNow I haven’t talked about this with my client, specifically, but I can guarantee you that there is a small part of him at least, the little voice in his ear, the famous critic on his shoulder (mine is called Ted by the way… what’s yours?) that will be whispering: “You suck as a business owner”; “Obviously you aren’t fit to polish a true entrepreneurs boots, because a proper business owner would by now have built the business up to at least 20 vans and he would have set a big enormous goal to be dominating Sydney and Australia in a few years, with offices everywhere and managers and executives … ready for a lucrative take-over by LendLease or some other conglomerate like that”… “You suck”.

What does your little voice whisper to you in the quiet moments?

We are told that we have to have an abundance mindset and that there are unlimited growth opportunities and unlimited money for all of us. All we have to do is think right and have the right attitude. As long as we have the right entrepreneurial mindset, we can all do as the title of one of Richard Branson’s books suggests: “Screw It, Let’s Do It” and we too shall have an island in the Bahamas.

Allow me to be blunt:

 

You will not have an island in the Bahamas, and nor will I…

island

And you know something? That is perfectly OK (they don’t even have 4G reception on islands in the Bahamas anyway, so who needs it?

 

Daring Greatly

Famous researcher, professor at the university of Houston and author Brene Brown says in her book:  “Daring Greatly, How the Courage to Be Vulnerable Transforms the Way We Live, Love, Parent, and Lead”, that the opposite of Scarcity is not Abundance. Brene Brown makes the point that scarcity and abundance are two sides of the same coin. The opposite of Scarcity is Enough.

And it is.

My client the plumber will get one or two more vans, which will allow him to do a certain kind of work and employ a full time admin assistant and allow him to spend two days a week no longer “on the tools” and then it will probably be “Enough”, for him.

That doesn’t mean everyone goes to sleep… of course not… there are all sorts of things that can be improved and run smoother in his business, there are efficiencies to be gained and his people can get better and develop… the challenges don’t stop, life doesn’t stop, but business growth can stop.

The Abundance Fantasy

When we are told to let go of our scarcity believes and the abundance mindset, we are told a fantasy. The pressure to embrace the Abundance mindset, sets us up to feel bad about ourselves, it sets us up for up for failure and shame.

R bransonThere is only room for one Richard Branson and one Donald Trump (thank God) on this earth and 99.99999999999% of the people on this earth are not going to become billionaires.

Neither you nor I will sell our business for $100mil; this article may end up being read by 10,000 people. It is possible that there might be 1 or 2 people in that group who will sell their business for such an enormous amount of money but the rest of us, all 9,998 of us will simply arrive at the end of our lives and have to find another way to measure how well we’ve done with the 70 years we were given.

The entrepreneurial myth

The entrepreneurial myth, the business growth myth has done us all a lot of damage. We walk around feeling inadequate, guilty and ashamed, because deep down we know that we are not going to be the next Celebrity Entrepreneur.  Venture Capitalists are not going to stake us with a few million dollars, only to cash out a few years later. And so we walk around feeling ashamed.

Stop it…

sticky

Enough is a great place to be.

 

As Brene Brown says in her first TED talk:

…You are enough…

 

Cheers,

Roland Hanekroot

BTW, if you do plan to sell your business for $100mil… Good for you, more power to you… You’re enough too!

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… follow this link

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

4 Steps to Real Fun in Your Business

4 Steps to create REAL FUN in your business

roland

How to create maximum Fun in your business
In part 1 of this series of articles I wrote about how 3 letters, FUN, are the most important thing to focus on in your business.
So in part 2, I am going to tell you how to go about creating more fun in your business…

As much fun as you can have with your clothes on.

There are 4 major steps to creating more fun in your business.

Step 1: Purpose, Passion, Profit

The first step is called “The Hedgehog Principle” as defined by Jim Collins, author “Good to Great” and other classic business books.Jim Collins writes in “Good to Great”, that a sustainable, long term profitable business must be about having absolute clarity about three questions:

  1. What can we be the best in the world at?
  2. What are we absolutely passionate about?
  3. How can we create a profitable business model around that

hedgehogIn nearly 10 years of coaching small business owners I have come to see that it absolutely starts with those three questions. And most importantly… none of those three are optional; you must answer 3 out of 3…

Step 2: People

Business is about people. Many businesses proudly state that their staff are their most important assets yet they rarely walk the talk, because it is a feel-good statement only… and besides the reality is actually much more stark:

People ARE your business, and your business only gets to make profit at the discretion of your people.You will only make profit in your business if your people let youSo your people must be completely on board with those three questions above, Purpose, Passion and Business Model. And that means they have to be communicated with and involved in the answering of those three questions.

Step 3 Goal setting

aliceThe Chesire Cat in Alice in Wonderland said it best: “If you don’t know where you are going, my dear, any road will do.”

So the next step is Goal setting: What are our long term, medium and short term Goals of the business? And again you must get high level involvement from your people.

The most powerful business Goal setting process I know is:

  • Start with a big long term vision, 10 to 25 years out (often referred to as a Big Hairy Audacious Goal, the BHAG)
  • Next create a 3 to 5 yr target that is a big step on the way to achievement of the BHAG
  • Then create a Goal for the current year. The current year goal is the first step on the way to the Target and the BHAG
  • Finally break the 1 yr goal up into monthly milestones

Again, goal setting in a business can have an incredible impact on the business as whole, but only if all the people in the business are engaged in the development of the Goals

Step 4: Measurement

The last step is measurement and keeping track of what goes on, on a daily, weekly, monthly and annual basis… Measurement is what I’ll talk about in the next newsletter

Those 4 steps are what it takes to start to create REAL FUN in your business.

How does that sound? Feasible or is the little voice on your shoulder having a field day?

Ok… As I said, In the next newsletter (May) I will go into a bit more depth on the topic of measurement and then in the June newsletter I will show you how all of it comes together to creating REAL FUN and how we can even become really clear and exact about exactly how much fun we are actually creating, so that we can ask ourselves: “Are we having Fun yet?”

Have a go yourself…

conceptIn the mean time … I’d love you to start thinking about those first 3 steps I talk about in this article:

  • How many of the steps have you taken some action on already
  • Which of those can you take a small step with tomorrow or next week…just a small step
  • Maybe have an informal chat with some of the key people in your business about the hedgehog principle?

You might be surprised how even a few conversations on these topics might start to introduce a little bit more fun in your business.

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

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

 

John was a Plumber

A 1001 Business Bedtime stories… John was a plumber…

Here follows another one of the “1001 Business Bedtime Stories” … Every story comes straight from the New Perspectives Small Business Bootcamp, stories of business and courage . You might recognise some of them from your own experience.

Once upon a time… a long long time ago in a country not unlike Australia… John was a plumber…

John the Plumber was incredibly busy… 60-70 hr per week, week in week out… but he made barely enough money to make ends meet…

John was a great plumber but John hated numbers… I’ll just do what I am best at and let the bookkeeper look after the numbers” was his mantra.

The Bootcamp

While working in The Bootcamp it became clear to John that he had to learn to overcome his fear of numbers and take control back of his business…

and…

John did overcome his fears…

and it did take a lot of courage…

but now a year later John and his wife are making enough money to start a Family.

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

Find out more about the Small Business Bootcamp here

Or follow this link to New Perspectives Business Coaching