Your Silent Partner
BUSINESS GROWING PAIN SPECIALISTS
Dear Doc
I have three kids under 15 and I rarely see them in the week as they are in bed when I leave and when I get home. Then when I do get home, I am often distracted and thinking about work.
It takes up so much space in my brain having to be across marketing, sales, finances, staff and clients.
But what will happen? Are we not giving our children enough time? Will we have teenagers with social problems? How does everyone else cope?
Answer:
“Do not brood over your past mistakes and failures, as this will only fill your mind with grief, regret and depression. Do not repeat them in the future”. Swami Sivananda Indian Yoga master
It is easy to be inundated by day-to-day demands and lose sight of your important objectives. To be able to make choices, you will need to have clear, short-term and long-term goals. Spend some time at the beginning of each week or month, evaluating and revising these goals. What do you want to accomplish this year? This month? This week? Successful time management involves making decisions based on an understanding of your goals, which may include time with your family.
Most time-management programs stress the importance of prioritising your objectives. Make a ‘to do’ list and classify everything on it. In light of your goals and other commitments, consciously decide whether each item is a ‘must do’, a ‘should do’, or simply ‘not that important’.
Learn to Say ‘No!’ This is by far the most important single thing that you can do. You will be asked to do many worthwhile things by colleagues and friends. You cannot possibly do them all. Know your limitations.
You will have to say no and you will have to say it often. The key is selectivity. Evaluate each request in terms of your goals. Ask yourself, is this task going to have a significant impact on reaching my goals? Is it worth doing? Do I have the time to do it well? Am I going to enjoy doing it? If you cannot answer yes to all these questions, you probably should not be doing it.
If you include time with your family in your list of important goals, then you will have to say no to activities that would prevent you spending time with your children. Remember one very important fact; it will not be long before they no longer have time to spend with you!
Dear Doc
My business has remained at the $300,000 mark for the last three years, whilst similar businesses have grown or closed.
Staying at this turnover is OK, but profit margins will diminish and I am frightened that if I do not grow, I will soon fail.
I keep trying to get through the $1 million barrier, only to be rebuffed.
If I want to build a bigger business, what do I do?
Answer:
“Research in the field of ‘cultural due diligence’ has shown that whether it is a legal firm, an international business or small growing business, it is quite clear that the culture of the firm is a consequence of attitudes coming from the ‘spiritual’ leader of that organisation.” David Harding
The fifth Law of success is this: “What you say is what you will do”. So long as you say to yourself that you cannot get passed the $300,000 barrier that will be the case.
I have been taking people passed their glass ceilings for over twenty years and the secret in essence is to do the following.
Naturally you have to consider costs that will occur as a result of your growth and the capacity of your current and future workforce. However, these three points are where it all begins, if you really want to make it happen.
The same is the case for a business growing from $3,000,000 to $10,000,000. Identifying what has to be done and planning the actions, then working closely with a qualified Executive coach will make a significant difference to your success.
Dear Doc
As my business grows, I know that I can’t do everything, but do I only employ helpers, or should I start to look for people that can make their own decisions?
To delegate or not to delegate is the quandary I face. It can be risky if I get it wrong, so how do I handle it?
Answer:
“Once you recognise that the primary purpose of your business is to serve your life and not vice versa, you can then go to work on your business rather than in it.” Michael E. Gerber
You are quite right. I know a number of organisations who delegated themselves out of a job and then out of their business, so you must take care.
With proper planning and training, you can minimise the risk involved.
First of all you have to get over the following feelings:
Delegation does not mean giving someone a task to perform, it means giving them a result to achieve, for as a manager you should be in overall control of the situation. Remember that the positive tasks you delegate are not your positive tasks, so if you interfere, you will not have time to devote to your own priorities. You won’t lose control if you delegate properly and without delegation you will pretty soon get bogged down.
Yes, you will have to accept mistakes, but you can also enjoy the extra activities that are being carried out under your control. The chances are, that these achievements will be many if you are organised and delegate effectively.
So what you need to do is:
Delegation is about passing across part of your job. You are giving your subordinates the authority to decide, without asking you and giving them responsibility while you retain overall accountability of carrying the can!
All you need to do is set up an agreed system or regular meetings to monitor the progress of the task once it has been delegated. Indeed, as the person becomes more confident and more competent, the checks and meetings can reduce. Just remember:
Dear Doc
My manufacturing business on the outskirts of Brisbane is growing very quickly. I have now begun to give customers 30 days credit and they are generally paying on time. However, as I am getting more and more order, I am having trouble with my cashflow.
The products are well received and customer relations ar developing, but I am finding it hard to pay my suppliers on time and some are threatening to stop supplying me until I reduce the debt.
I have been told by some friends in business to look at debtor finance and by others to stay clear as it is the road to deeper debt.
Please explain how debtor finance works, the benefits and disadvantages of factoring.
Answer:
“Winners can tell you where they are going, what they plan to do along the way, and who will be sharing the adventure with them.” Denis Watley
Factoring has been around for over 40 years and has developed and changed as the needs of businesses have changed over that time. Unfortunately, some people remember that originally it was an expensive way of borrowing that was used almost exclusively by companies in cashflow crises and so had many casualties.
There are two main business situations that benefit from this service. The first is labour hire firms who must pay wages each week but have to wait 40 to 60 days to be paid. The margins are good and therefore it is acceptable to pay between 1 to 4 per cent of each invoice and this is usually added into the cost to the customer anyway.
The second time that debtor finance is useful is in a case like yours, where you are growing at a great rate and whilst you are profitable, you owe more than is in the bank. It is important that you can see quick cahflow is simply to speed up payments and are not just to pay old debts.
Once your sales become stable, you can then reduce your use of the lending company until your cashflow enables you to work with your own cash in bank.
You must however be wary of which company you consider to use and I shall give you a number of tips and questions to ask (which are to help you start, but are not the only ones to consider) before you sign anything!
These tips and questions are not the only ones to get the best service, but you can see the benefits are great if you are growing and need cash injections relating to the sales. However, you must really be careful to choose the best service for your business.
I have found that not all banks or accountants really understand how factoring works. In the accounts the money that comes in is a liability (not an asset) and is treated like a loan, this is reduced when the customer pays for their goods and the money goes to the finance company. So choose a consultant that has worked with a number of factoring services and can help you through the choosing phase and then the paperwork to get start
Dear Doc
My business has thirty two people, either in the office, in the workshop, on site or delivering goods.
My General Manager is always busy but never seems to get anything done. All around is chaotic activity and people are getting frustrated. I know that he is knowledgeable and gives the information to people, but it is always at the last moment. Orders are prepared late, raw materials are never ordered on time and our deliveries are behind schedule, so my nerves are getting to breaking point. How can I get the GM to be more organised, or do I have to get a new GM?
Answer:
“You are more likely to overcome challenges, if you have learned in advance what is expected and how to respond. That is why training at all levels is critical to the success of any organisation.” Allen Sheppard
You are expecting the GM to know what to do. Did the job description have a documented succession plan and business structure so he knew what he had to do, or was he supposed to make it up as he went along?
Ask your GM if he knows why he is there. If he answers that it is “to assist the organisation to achieve its objectives”, then you are half way there. All you need to do then is document those objectives and how to achieve them and you should be able to start getting your enterprise back on track.
Can he sit down with you and put in writing what his actual job is supposed to be? Your GM has to learn to plan and you must explain this to him. I would imagine that the reason he doesn’t plan, is that he doesn’t know what to plan. He has to learn that doing a task is not the same as doing a job.
Perhaps if you and your GM both work on the plans together, you can work cooperatively towards your objective of a focused culture within the organisation all working for the same end.
In fact, have you documented everyone’s job activity and description? At the end of the day, it comes back to you as the boss. If you cannot document what people are supposed to do, how can you expect them to second guess you?
Being organised will help to achieve those objectives and having a plan is the first step on the way to that achievement.
Dear Doc
I have been in the financial services industry for many years and have always been able to earn a decent living. However, whilst my clients get a good return on their investments and are satisfied with my service, for some reason I always struggle to get new clients.
How do some advisors have queues of clients banging on their doors, even though they are not getting the good returns that I achieve? What am I doing wrong and what should I do to change the situation?
Answer:
“Your customers don’t care how much you know. They want to know how much you care.” Matt Clarkson MD Megahits Media
I have been asked this question many times over the years by people in your profession, by people working in the ‘wellness’ industry and consultants in general. They can see that I and other consultants like me seem to have clients that not only stay with them but are loath to leave and are their biggest source of new work.
The main problem it seems to me, is that many ‘professional’ people try to offer the best service that they believe their clients are looking for, without fully understanding what their client really want.
We know that our clients are usually intelligent people who can afford our services and we want them to feel that we are also intelligent people who can help and benefit them, through using our knowledge and experience. The problem with that attitude is that by using our service, they are admitting their lack of knowledge and experience and that is a negative feeling.
It is our job, not to make ourselves look or feel clever, smart or intelligent, but to make our clients feel that way for finding and using us. We have to find the hot buttons that got them to us in the first place and let them know that we will help them get to where they want to go, in a manner in which they understand and feel part of. They must rightly feel that they were really smart to find us and ‘together’ we can reach the goal that we have learned is the real reason they are ’with’ us.
With this attitude, your clients are more likely to share their good fortune of finding you, a consultant that they believe cares, with all their friends, relatives and business associates.
Dear Doc
I have recently come to South East Queensland and am setting up a service company. I want to grow my business as quickly as possible and yet I do not know that many people.
How do I get to meet people from whom I can get work or have leads referred to me?
Answer:
“To some, a referral is merely a name. However, a referral is actually much more than this! A referral is the authorization to use the influence attached to the referrer.” Barry Graham Monro
Over 90% of all business enterprises in Australia are small to medium in size. Many rely on passing trade or advertising to get work.
However, many have found that for them, the real power of business growth lies in word of mouth advertising. This powerful means of trade can originate from either satisfied clients, or from other business entities who have their own customer base and business contacts.
Business referral clubs have been around for many years and can be a good and quick way to develop your business. In South East Queensland, are a number of organisations that offer business operators an opportunity to refer business leads to each other.
Businesses in a club ‘branch’ work as a mutual support group to share their client database. Usually each ‘branch’ will only have one firm from each business sector and so all available referrals for that product or service will go to one person.
Below are just five or the many groups that I found easily on the web and whom you can contact. This is not a definitive number and you can find more, but it is a start for you to begin your search.
Business Network International – www.bni.com.au
Sales People With a Purpose – www.swapaustralia.com.au
Women Network in Australia – www.womensnetwork.com.au
Networking Brisbane – www.networkingbrisbane.com
Bx Networking – www.bxnetworking.com
These groups all focus on helping their fellow members, but it is up to the participants to ensure other members understand the clients they are looking for and build relationships within the group.
Branch members have to work as a sales-team for each other to find referrals and think of their group as well as themselves. It is for this reason that some branches are more fruitful in work generation than others.
You may find it useful try a few groups or branches, before you settle for one that you find suits your personality and your business.
Finally, some of these groups not only find work for your enterprise, but also find friendship with likeminded positive entrepreneurs. Good luck and remember to enjoy the ride.
Dear Doc
For the last twelve years, we have been building our business successfully through manufacturing interior units for developers. The quality of our kitchens, walk-ins, offices and dining rooms is one of the best in Queensland and as you can see from the figures, we are growing steadily and profitably.
When we began in 1995, the salesman sold sufficient units for our cutting machine to handle. Now we have grown to four types of cutting machines and a team of six sales people. For some reason, although we have tried to keep the same proportion of sales per machine, the workshop is not as busy as it used to be and we cannot understand why this is the case.
Our production system focuses on keeping the cutting machines working at full capacity. Salespeople can see that we need 40 hours work per machine. When the sales team think they have sold sufficient hours, they ease up. Yet, for some reason, whilst we have plenty of work to produce, the work is spread over a long period, so we are never busy enough. Why is that?
Answer:
“The problems that exist in the world today cannot be solved by the level of thinking that created them.” Albert Einstein (1879 – 1955)
It may be seen from the information I have received from you, that you have a strong cash flow base with which to develop your continuing growth. You are clearly using the same thinking that was used on the commencement of the firm, with your sales to production plan.
The underlying problem of so many firms is that the way they organised the business when they first started, is no longer relevant in today’s environment. This is why successful organisations are under-performing, in financial or productivity difficulties today.
In nearly every case, the root cause is not that the wrong things are being done, or even that they are being done badly. The reason is the outmoded assumptions on which the organisation was built and is still being run.
These assumptions are about the way that the organisation views the market and identifies the production capacity. They are the principles that the company uses to value its strengths and weaknesses and its ability to evaluate its strategic vision. It is these very ideas, which were perfect when the business started, that no longer work.
In your case, I think that a Key Performance Indicator program should be prepared for the sales team and they should no longer be focused on production capacity, but on sales requirements.
Communication between the departments will continue, but the sales force of a developing enterprise should be directed through the business plan, not through their understanding of what is required by other departments.
Dear Doc
For the last twelve years, we have been building our business successfully through manufacturing interior units for developers. The quality of our kitchens, walk-ins, offices and dining rooms is one of the best in Queensland and as you can see from the figures, we are growing steadily and profitably.
When we began in 1995, the salesman sold sufficient units for our cutting machine to handle. Now we have grown to four types of cutting machines and a team of six sales people. For some reason, although we have tried to keep the same proportion of sales per machine, the workshop is not as busy as it used to be and we cannot understand why this is the case.
Our production system focuses on keeping the cutting machines working at full capacity. Salespeople can see that we need 40 hours work per machine. When the sales team think they have sold sufficient hours, they ease up. Yet, for some reason, whilst we have plenty of work to produce, the work is spread over a long period, so we are never busy enough. Why is that?
Answer:
“The problems that exist in the world today cannot be solved by the level of thinking that created them.” Albert Einstein (1879 – 1955)
It may be seen from the information I have received from you, that you have a strong cash flow base with which to develop your continuing growth. You are clearly using the same thinking that was used on the commencement of the firm, with your sales to production plan.
The underlying problem of so many firms is that the way they organised the business when they first started, is no longer relevant in today’s environment. This is why successful organisations are under-performing, in financial or productivity difficulties today.
In nearly every case, the root cause is not that the wrong things are being done, or even that they are being done badly. The reason is the outmoded assumptions on which the organisation was built and is still being run.
These assumptions are about the way that the organisation views the market and identifies the production capacity. They are the principles that the company uses to value its strengths and weaknesses and its ability to evaluate its strategic vision. It is these very ideas, which were perfect when the business started, that no longer work.
In your case, I think that a Key Performance Indicator program should be prepared for the sales team and they should no longer be focused on production capacity, but on sales requirements.
Communication between the departments will continue, but the sales force of a developing enterprise should be directed through the business plan, not through their understanding of what is required by other departments.
Dear Doc
As our firm has grown, so the culture has changed. When we were small and vulnerable everyone used to accept that the costs had to be kept to a minimum. Since getting to the next stage of stable profitability, costs are starting to get out of hand, and my staff doesn’t seem to care.
Why have they changed, and what can I do about it?
Answer:
“Research in the field of ‘cultural due diligence’ has shown that whether it is a legal firm, an international business or small growing business, it is quite clear that the culture of the firm is a consequence of attitudes coming from the ‘spiritual’ leader of that organisation.” David Harding
This is where the saying that ‘you have to work ON your business’ comes to mind. The fact is that as a business develops and grows, so the job of the CEO changes. You are no longer the technician, but have become the manager or the manager of managers. What you have been doing is delegating without training your managers. The result is that they are doing what they thought you did. They are not doing what you thought they were supposed to do.
This is the time that you must get back to the ‘coal face’ and clearly show and explain to people what they are supposed to do. You have to explain the importance of careful expenditure and the consequences of cost blow-outs.
When things get out of hand, it is the leader that is at fault and the leader that must rectify the situation if the business is to get back on track.
Put systems in place so that everyone knows what they can or cannot do and should or should not do. It is up to you as the leader to set the parameters and guidelines. You worked them out for yourself when you started the business, but you must put them in writing for the next level of people to do the work as the enterprise grows.
Presumably your employees are competent and capable, but it is not fair to give them a position of authority and responsibility without giving them some training. As your business is growing, you need your staff be less reliant on you. Work with your staff, or get a consultant to prepare a written quality manual and put a management ‘succession plan’ in place.
Dear Doc
I have a great wholesale business that is growing faster than I can handle!!!! I am just feeling nervous as I have some experience, but do not know if I have sufficient experience to handle a larger concern. I need help! Is a business coach the answer? If so where do I find one?
Answer:
“The reason most people never reach their goals is that they don’t define them, or ever seriously consider them as believable or achievable. Winners can tell you where they are going, what they plan to do along the way, and who will be sharing the adventure with them.” Denis Watley
You are quite right to be concerned, as one person cannot be expected to do everything in a growing business. If you are excited by the potential of your growth, then you also need to stand back and give yourself short, medium and long term goals. Once you have them and know how to take the road to achieving those goals, then you can enjoy the journey and smell the roses as you progress.
A growing business has many tasks to carry out, buying and selling your produce, managing a warehouse, doing all the administration and bookkeeping. As your business grows, you need to focus on the four most important management skills, those of planning, leading, organising and controlling your business.
If as you suggest you are running the business alone, then you have a number of options. One is to outsource some of the jobs, such as the bookkeeping and delivery of the goods. Next you can employ help to carry out sales, organise product for invoicing and prepare goods for collection. Then concentrate on what you are best at such as purchasing. By having other people come to do some of the work for you, it is possible to oversee what is happening and take back control of your firm.
I believe that if you really want to grow your business and have a decent quality of life as well, then you should not try to do it all yourself. It could help if you had a competent mentor to work with you, to plan and implement your growth strategy.
Find someone who has an arms-length view of your business (not a partner or equity holder), who can dispassionately discuss all the activities being carried out. The right person can help you grow your business with a strong foundation and keep your cash flow manageable.
Be aware that not all consultants are able to help you, so be wary that the consultant you choose understands where you are and where you want to go. Do not let them give you extra and unnecessary work in the guise of a learning experience, nor should you accept the one-size-fits-all type of advice.
There are three main places to find competent consultants. First speak to other business owners who use a mentor themselves. Second contact your local Department of Employment, Economic Development and Innovation, which offers advice, grants and a mentoring service with volunteer consultants. Third contact the Institute of Business Consultants who vet people before they are allowed to join their ranks.
Dear Doc
I have recently taken over a garage in SE Queensland from the previous management and have the latest equipment to ensure that I am able to give a good service to car owners. I have always wanted my own business as I felt that I could give a superior quality of service and not overcharge owners.
From the figures I have sent you, it can be seen that I have been in business now for nine months. However, even now I find that customers are reluctant to give me their vehicles, even though they can see that I am doing a good, no great, job on their vehicle.
When people bring their car in for a service, I check and let them know what is needed to make the vehicle perfectly roadworthy at a reasonable price. My competitors do a simple service at a higher cost and then try to add all the extras at a high charge. Why don’t the owners see what is happening? Must I compromise my ethics to stay in business?
Answer:
“Only the client will pay our costs and provide our profits. So we have to conduct all business planning from the client’s point of view.” Ian Carlzon (Former CEO of Swedish airline SAS)
This advice is relevant for all service providers, whether a garage mechanic, fitness club, wellness centre, physiotherapist, a pool shop or computer service.
When potential clients bring their car in for service, that is what they want and what they should be offered.
To be a successful service provider, it is important to build a trusting relationship with clients and have them perceive that you care about them as well as their car. Whilst competitors may know how to trick one-off customers, your aim should be to build a rapport with all clients who come to you and have those clients return on a regular basis. You are not a doctor healing a sick patient, but a long-term carer looking after both the owner and their car.
Once they have received the initial service, you can explain to the owner other things that are required, in a way that they see you are thinking about the long-term care of their car and show understanding of the costs involved.
I suggest that you look after your clients and they will not only bring you a regular income but will find other clients for you.
Remember, whether the ‘product’ is a car, pool, computer, or human body, it still remains a fact that it is easier to retain long term clients than to find new ones