8 clichés every entrepreneur should consider

8 clichés every entrepreneur should consider

Feb 5, 2018 | Customers, Management, Small business

Clichés become clichés because they make sense, and are widely used, so they pass into the language. Unfortunately, common usage often makes them appear flippant, a throw-away line that means nothing.

That they take on that label does not make them any less valid, in fact, becoming a cliché is almost like getting an endorsement for wisdom.

Following are 8 that entrepreneurs embarking on an enterprise, whether it is the next Uber,  starting a cleaning business in your local area, taking on a franchise or a multi-level selling ‘opportunity’, that you should consider.

 

Cliché 1. Know where, and who, you are.

Irrespective of the starting point, starting a business is a journey. If you are going to start a business, recognise  that it will consume you if it is to be successful. It is not like being an employee, irrespective of results, at least for a while, you get paid to turn up.

Not so now.

Starting a business takes a heavy toll on not just your financial resources, but your resilience and personal relationships as well. Being prepared for the long hours, stress and uncertainty is a good start, you must know yourself well.

Cliché 2. Know where you want to go.

Many become tangled up in visions, missions, values, business purpose, their Why, and all the other ways that have become ‘popular’. All are valid, all have their place, but I ask my clients a simpler question; What does success look like? When you can answer that question, you have at least enough of an idea to start, but if the answer is purely financial, you need to do some more thinking.

Cliché 3. Have a plan.

There are lots of clichés about plans. Prominent amongst them are: ‘no plan ever survives first contact with the enemy‘, and  ‘failing to plan, is planning to fail‘ and both are right. Point is that unless you have a plan, you have no chance of understanding and managing your progress towards the goal, which tactics worked, and which ones did not. All crucial pieces of information. There are many planning models, each with their own emphasis, and I always recommend that you use several in the thinking part of the planning process as a way to ensure that things do not get missed.

Cliché 4. A journey of a thousand miles begins with a single step.

Planning is the easy part, the hard bit is to take action. Without action, nothing happens, nothing!

Taking the steps, getting outside your comfort zone is why you are going into business for yourself.  Curiosity, an idea, recognition of a need you can fill, a problem you can solve, all are great reasons to go into business. All it takes is the first step, and it is always the hardest.

To add another cliché to the list: ‘hope is not a strategy’

Cliché 5. To succeed, you must have something others want.

Success in business is dependent on being able to deliver superior value to customers, at a cost that delivers you a margin. If you cannot deliver value, almost always the solution to a problem, which can be anything from a more efficient power station, to a better tasting tub of yoghurt, to on time delivery, or something no-one else can do, at a price the customer is happy to pay, you will  not survive.

Tough but simple.

Cliché 6. People have to know you are there.

Even if you do have the next greatest thing, you cannot sell it without  others who may need or benefit from your gizmo knowing about it. Marketing is essential. The process of gaining understanding how you will deliver value to whom, while making a profit on the way is make or break for every business, particularly a new one as generally you cannot afford to make mistakes. Selling skills are as important. Not only do you need to sell to your potential customers, but to the banks, your suppliers, and often even your partner. If you cannot sell, and do not want to learn how, do not go into business for yourself.

Cliché 7. Watch the pennies and the pounds will take care of themselves.

There are two aspects to this cliché. Cash is the lifeblood of every business, and you need to watch your cash the way a mother bear looks after her litter.

The first is to do a regular, I strongly recommend weekly, cash flow forecast. Make it a part of the way things are done in your business. At first it may seem strange, but it pays off, as you will always know your cash position, which will be a huge stress reliever. As a side benefit, trading while insolvent is illegal, and the simplest measure of solvency is can you pay your bills as they fall due.

The second is the behaviours you are setting out to build. Results come from the way things are done, as well as ensuring the right things are done, and if you want your staff to be as frugal with your money as you are, you have to  build, that behaviour deliberately. A weekly cash flow forecast with the appropriate level of staff engagement and contribution is a very good way to start.

Cliché 8. Work on your business, not just in it.

The ability to see your business as others  see it, customers, potential customers, and competitors, is essential to success. To have that external perspective, you must be able to extricate yourself from the day to day pressures of getting stuff done. It leads on to what could have been an addition the list, ‘do what is important, but not necessarily urgent’. Knowing what is important to the long term health and prosperity of the business is more about how others see you than it is about responding to those unimportant but seemingly urgent  things that pop up every day.

So, remember, all that glitters is not gold, but good advice can be.

 

 

Your ‘enemy’ makes you stronger.

Your ‘enemy’ makes you stronger.

Feb 2, 2018 | Marketing, Strategy

Strategy is as much about what you will not do as it is about what you will do, perhaps even more so, as it forces difficult choices.

Equally, the old marketing buzz-word ‘positioning’ which was defined in my university days 45 years ago as ‘how your customers see you’ benefits hugely from the addition of a clear statement of what you are not, what you will  not do, and even calling out the ‘enemy’.

When you define who is your enemy, those who feel the same way as you will find it very hard to do anything but support you, it rallies support to your cause.

This means that you can never create a product for everyone, the more defined you are the better, as you will then have more potential for rallying groups of those who are against what it is you are against.

Where would Mohamed Ali be without Joe Frazier?

Where would Apple be without Microsoft?

Would Neil Armstrong have taken a moon walk in 1969 without the Russians?

Mr. Churchill would have remained a backbencher without Herr  Hitler

Would Coles and Woolworths be the most successful FMCG retailers (as measured by domestic market share) in the world without each other?

In the back streets of Ashfield in Sydney there are two small grocery stores, almost opposite each other, fighting to the death for the last 20 years, and in the process keeping Woolies and Coles at bay, at least in the very local area they service.

Respect your enemy, and learn from them, they make you stronger.

Photo credit MrT HK via Flikr

9 reasons why SME’s should invest in a governing board

9 reasons why SME’s should invest in a governing board

Jan 31, 2018 | Governance, Leadership, Small business

 

Very few of the small and medium sized businesses I interact with have a governing board of any real quality. Many have a ‘board’ required under the various regulatory regimes they must meet, but very few have a board that acts in the manner of a public company, as an independent oversight of strategy, financial and operational performance, culture, and of the senior management effectiveness.

This is something that should be remedied.

The short term costs are in my experience  heavily outweighed by the benefits over the medium to long term.

Some of the benefits I have seen can be summarised as:

  • Introduction of industry knowledge and networks.
  • Introduction of business management expertise and experience from a wide range of backgrounds.
  • Provides time and the catalyst for management to consider wider issues than the normal ‘urgent’ things that dominate the daily routines.
  • Provides diversity of views, values and ideas
  • Keeps management and particularly the CEO focussed on the issues that will impact long term commercial sustainability, as well as the short term financial outcomes.
  • Adds depth to the management functional capability by enabling mentoring and coaching
  • Thought starter and sounding board for management
  • Acts as a catalyst and guidance for longer term capability development of employees, and the manner in which the business captures and leverages those capabilities.
  • Oversight if not development of strategy, and oversight of strategy implementation, feedback and renewal.

 

There is an old saying that most of the smartest people in your industry work somewhere else. Therefore it makes sense to try and tap into that expertise in some way, and a well considered ‘board’ is a great method.

These bodies do not necessarily operate under the rules of  the Corporations Act, where there are enforceable fiduciary responsibilities. They are usually more of an advisory body, often meeting  formally only 4 times a year, but with significant interaction with management on an as needed basis.

 

What governments can learn from small business.

What governments can learn from small business.

Jan 29, 2018 | Governance, Leadership, rant

Apart from the obvious, of doing sufficient due diligence on the important detail, such as knowing your nationality, there are many other lessons to be learnt.

Amongst the key ones is the depth of consideration small business owners need to give to the deployment of their very limited financial and operational resources. In most cases, some level of financial and strategic consideration is applied, and trade-offs are always necessary and usually painful. Governments on the other hand are not similarly constrained, spending is welcome, and rewarded, whereas constraint and tough choices are avoided, and there is no bank to refuse an increase in the overdraft.

Those I work with are encouraged to consider their commitments from three buckets:

  • What is required to keep the business going, which includes operational and necessary capital expenditure.
  • What is required to build the resilience and agility of the current business, enabling it to grow and prosper at the rate, and in the manner necessary to be commercially sustainable.
  • What is required to move the business to the ‘next level,’ whatever that may be in the context of their competitive and strategic environment.

Those that give this sort of framework deep consideration generally come out on top.

By contrast, Governments seem to consider their expenditures only in two buckets.

  • Sustain operations and get elected. In other words, never take anything away, but find creative ways to rebadge it so that it seem you are always giving.
  • Who is entitled to what from the bottomless purse of money to be spent. Joe Hockey when delivering the 2014 budget referred to ‘The end of the age of entitlement’ and look where it got him, and the Abbot government. A bad dose of adversarial short term politics by the opposition, and marketing incompetence by the government ensured that the age of entitlement continues, to this day.

 

Let’s hope that in this new year we see some common sense and vision emanating from Canberra. A big ask, but after a year of utter and complete chaos, irresponsibility, and self-congratulatory bullshit in 2017, I think we all deserve more.

 

Australia Day 2018

Australia Day 2018

Jan 26, 2018 | Change

It is Australia day down under.

A day we celebrate…… what?

The landing at Sydney Cove of the first fleet of convicts and their equally corrupted gaolers?,

The invasion that ended a way of life that had existed for how many thousands of years?

The beginning of the  vibrant successful multi-cultural community that is modern Australia, with all its faults and problems, still the best place on earth?

Depending on your perspective it can be any or all of the three.

The current debate about the meaning of Australia day is probably useful, but let’s focus on some facts rather than allowing it to be another example of our ability to bellow a personal view  at each other and treat it as a fact.

Mark Kenny’s insightful article advocates for May 9, for some very good reasons. It is the date Australia formally became a self-governing federation in 1901, the date the parliament formally shifted from Melbourne to Canberra in 1927, and the date in Bicentennial 1988 that the current parliament house was opened.

Oh joy, some facts and solid argument why the change should  be made, and for the first time I find myself agreeing.

However, perhaps we should also be considering some of the stuff that will make the future of our children a successful one, rather than squabbling about the trappings of position today.

  • How is Australia to compete in the modern world of digital everything without the industries based on original science? History suggests that commercialisation of this sort of research takes 30 years, way beyond the electoral cycle that seems to determine the funding. The choice of professor Michelle Simmons as Australian of the year is a wonderful choice. A scientist at the cutting edge of research into the stuff that will reshape our society, leading a great team, and, a woman in a mans world. That is how we will compete into the future. (thank heavens the Aussie of the year is not a sports star, again)
  • How is our education system going to accommodate the demands of a society radically different from the one that the teachers grew up in? The choice of Eddie Woo, a local maths teacher who has conquered teaching maths on line is inspired and well deserved, and I am sure his students will represent the new generation of contributors to Professor Simmons work.
  • How are our institutions, designed to accommodate the world of the 20th century going to evolve to give us the confidence and ability to continue to be a success in the 21st. Our governments and their politicians, churches, educational processes, and pretty much all others are on the nose, despite them being inhabited by a vast majority who work hard to do the right thing.
  • How are we going to retain the successful human melting pot we have been in the face of the apparently increasing levels of xenophobia domestically and the pressures externally to be more open and accepting of differences?

 

Enough of that, I am going to fire up the barbie and have a coldie, or two. Isn’t that what Australia Day really is, a day to kid ourselves that the future will look very like  the past, and all we have to do is turn up?

Happy Australia day.

 

Image credit : City of Geralton WA RIC1383.jpg