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Growing Your Business

8 Key Business Skills You Absolutely Need

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Success in business hinges on a range of key business skills. Without them your progress in the face of ever increasing competition will be held back and your frustration will increase. It is true to say that if you compared two businesses in the same market doing the same thing, the difference in performance will be down to the differences in the leadership, and the differences in the leadership will be primarily governed by the skills and knowledge of the leaders. So the sooner one gains these skills the quicker you will be successful.

Having worked with hundreds of business owners over the years, these are the most important skills someone in business should have.

What are Key Business Skills?

Business is a multi-faceted undertaking that combines a range of activities and concepts. The central product or service being delivered is obviously something that has to be done well but that is only a small factor in determining overall success. Wrapped around that central product or service is a range of ancillary activities that are vital to producing the desired business outcomes of profit growth and business value growth. It is not uncommon for people to start businesses where not only is there a lack of key business skills, but no awareness of the key business skills that are required.

Key Business Skills

1 Strategic Thinking

Business is not a short term play. Strategic Thinking is the thought process one engages in to devise long term competitive advantage for a business. The quality of this process is what will ultimately bring profound and lasting benefit to the business.

2 Planning

Arguably, nothing happens without a plan. Planning is the process used to develop the sequence of actions that will ultimately culminate in achieving a goal or objective. A plan will identify and quantify the resources and time required. It helps deal with challenges and problems at an intellectual level, less expensively and more quickly than if these were dealt with in a real world situation

3 Leverage

Leverage is probably the most fundamental business concept there is. In fact, business itself is nothing more than an exercise in Leverage. There are many definitions of Leverage but essentially it relates to being able to take small actions and to get comparatively big results. The most important form of leverage is knowledge. The more knowledge you have, the more power and influence you can wield and the less risk you take.

4 Business Finance

One engages in business in order to generate profit. The way we measure the value of a business is by the amount of profit it makes. Business finance is all the numerical logic behind the determination of profit. Without a grasp of Business Finance it is very difficult to measure progress or gauge performance.

5 Emotional Intelligence

Businesses employ people and have people as their customers. People’s behaviour and actions are significantly affected by their emotions. Emotional Intelligence is ones ability to recognise ones own and others emotions and to use this information to guide thinking and behaviour.

6 Business Software

Software is an important leverage tool. In this day and age, business needs to move quickly and be efficient. There are many categories of business software and a business leader should be aware of all of these; their uses and their benefit.

It almost goes without saying that proficiency with business productivity software is hugely advantageous. Any business owner who does not know how to set up a basic spreadsheet that contains formulae is at a distinct disadvantage.

7 Organisation

Businesses have a degree of complexity that is unavoidable. There are many details, activities and actions that need to harmonise to produce a good result. For this to be the case everything needs to be well organised.

8 Sales and Marketing

The most crucial skill of all is how to generate revenue in your business. This aspect should receive the most attention and be the centre point of most business that have a growth agenda. Once most of the other business actions and arrangements are in place, the issue of revenue generation continues to be an ongoing focus of any business forever and ever.

Is this the complete list of skills you need? Depends who you ask.

What skills do you think are critical?

Business Lessons You Should Not Learn The Hard Way

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Everyone who has done it, knows that success lies at the end of a series of business lessons and learnings; some easy some hard. If one were to analyse these lessons, you would likely find that most business owners will have made many of the same mistakes. Most could have had a much easier time had they instead, sought to learn from the mistakes of others first.

Every business owner will experience their own trials and tribulations. Here are some of the most common:

business lessons

  1. Learn how to delegate effectively early on. As a business develops and progresses, the owner has to keep moving his or her focus and activities up the food-chain of importance and presumably difficulty. One cannot do this effectively unless you are able to get rid of the lower order tasks, to free up your time and head-space. Remember that “success in business is a team sport” and delegation is at the heart of a good team effort.
  2. Focus. There is always a strong temptation to get involved in other things that you believe will make you more money. It’s very hard to be good at selling antique furniture and at the same time do justice to your social media software product. If you keep focussed you will become known as a specialist that people will value. You will be able to charge more. That said, if there is a service or add-on that will make your core product better, provide it.
  3. Get your business model right early. Running your own business is hard work no matter what it is. So make sure that you optimise your business model, otherwise you will be pouring a lot of effort into something that at best may only be mediocre.
  4. Beware of Discounting. In certain situations, discounting is an appropriate mechanism. But unless you fully understand the financial implications, avoid it like the plague. The common notion that one will make up for the lower price by increased volume is true; it’s just how much volume you need that will catch you out. Do the math. You will quickly concur that discounting will seriously affect your businesses profitability.
  5. Your product is probably not as good as you think it is. At the end of the day, it is only your customer’s opinion of your product that really counts. In-house use and testing will never be as tough as having indifferent customers using it in the field and beating it up. So seek customer feedback and act on it. There is nothing worse than product-complaint-deafness. Don’t be like the contestant on Australia’s Got Talent who’s family and friends think is great, but on a real stage, has obvious shortcomings.
  6. Keep a tight reign on receivables. This is especially important if you provide a service, you don’t have much bargaining power when you are only selling time. But it’s key for all businesses. Have a clear and enforceable credit policy that you stick to relentlessly. If you let things slide, not only will your business be cash-starved, but you will end up having to pay more to collect old receivables which will reduce your profits.
  7. Develop products against specific demand. If you think “Wow, I think xx industry could use XX” you could be very disappointed. Once you factor in development, marketing and distribution costs for commercialisation, you could be up for a big investement. On the other hand, if a customer comes to you with a specific request; you build a product for them and then discover that there are many more customers for that product you will be in the pound seats.
  8. Never enter into a partnership without a buy/sell agreement. Irrespective of how well you think you know someone, you just don’t know what is going to happen in their lives. Having such an agreement worked out before problems arise, makes for a clean (and inexpensive) separation when the time comes.
  9. It’s much more expensive to prove you are right than admitting you are wrong. When you have an unhappy customer, apologising, refunding them and moving on is much better than trying to prove you’re right and save the sale. They will burn too much of your time and badmouth you. They are not your ideal client; put them in the D for “Dead” category and move on.
  10. Thoroughly understand leverage. To grow and prosper means to be leveraged. Make sure that every aspect of your business is set up to get the biggest outcome for the least effort, over and over and over again.
  11. Get really good at hiring. All too often employees are hired too readily and without sufficient rigour. Chances are your candidates are better at handling interviews than you are. Before you start recruiting, develop a thorough process that will unequivocally eliminate under performers, and an equally thorough process for monitoring their progress through their probation.
  12. Leave your ego at the door. Neither your customers nor your team members will pander to your ego until you are a big player in the market. As a general rule, being humble and generous trumps egotistical and mean, convincingly. If this applies to you, learn how to manage yourself.
  13. Poor managers make poor employees. Don’t expect employees to do a good job all by themselves. A few will, most won’t. A good manager can make all the difference; turning mediocre employees into good ones. A good manager will have outstanding communication skills and be very clear about building a productive work environment that addresses the businesses vision and customer promise.
  14. Document, document, document. Most of a business’s success will be attributable to the knowledge of its people. When people inevitably leave, they take their knowledge with them, even though it belongs to the business. So make sure that everything you learn and develop in your business is properly documented for the use of those that follow; otherwise you will continually be paying to re-invent the wheel.
  15. People leave because of people, not companies. People’s actions are largely based on how they feel. Everyone, staff and customers alike, like to feel valued. Customers will stop using your product if they are dissatisfied or feel you don’t care; staff will leave. All this, a reflection of management’s understanding of Emotional Intelligence.
  16. Make customer acquisition and retention you key focus. You can have the greatest products, the best customer service, the most efficient operations. Without the requisite number of customers required to make your revenue targets, all of that serves very little purpose. When you have a sufficiency of customers, most other business challenges can be dealt-with with comparative ease. If your top-line is a continual struggle, no matter how good everything else is, your business will struggle and eventually succumb.
  17. Understand how to make the Internet really work for you. We live in a world where customers do their homework before they show up to buy. Your business needs to be part of that story. There are many options and opportunities online that you should be abreast of. Make it your business to understand them in relation to your business.
  18. Cash is more valuable than profits. You can run your business at a loss for a while, even a couple of years, but if you run out of cash it’s all over. Have a safety fund with two to three months operating costs in it, and for safety sake, a line of credit even if you don’t think you need it.
  19. There is no shame in getting help and advice. Many entrepreneurs are out to prove themselves and feel awkward asking for help. In business the stakes can be high, so better to be proved right with help and advice, than wrong without. And even if you are confident you don’t need help, it’s astonishing how much value an emotionally detached outsider can bring – which is why big companies have external directors. You will be amazed at how many of the world’s top business people stay at the top of their game by using coaches and mentors.
  20. Don’t overdo things. Always have the CFO pay for drinks.

Your business lessons are inevitable. You have to learn them to ultimately succeed. It’s just up to how you choose to learn them. Either through your own mistakes, or by studying the mistakes of others.

What’s Stopping You Getting Your Business to the Next Level?

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“I want to take my business to the next level” is a phrase one often hears from people in their own businesses. We talk about “levels” of business, but what do we actually mean?

What is the next level?Taking your business to the next level

From the business owners point of view, this is significant because the “level” implies the degree of personal involvement required, which is a function of the management structure of the business.  The more developed the management structure, the easier the business is to run. As such, the business’s level is somewhat independent of traditional measures such a turnover. Through the typical evolution of a business from micro to small to medium to large etc, the role of the owner changes dramatically. So in order for the business to get to the next level, the owner has to continually redefine and adapt their role to the requirements of the level they would like to get to; a perennial challenge for most.

Level 0: Micro

This level is a one man show with perhaps occasional helpers that require close supervision on a daily basis. Most of the business’s revenue is due to the efforts of the owner. At this level the majority of time is spent doing low order tasks and what the business really needs is for the owner to step up as quickly as possible to doing higher order, higher value tasks. The Level 0 business’s biggest challenge in moving to the next level is appointing capable staff to whom meaningful work can be delegated to. At this level, the owner usually has little money and has to use his time to compensate. As such the owner does not have a lot of control of how time is spent, hindering progress to Level 1.
The most difficult aspect of moving out of Level 0 is to know when and how to appoint the first employees.

Level 1: Small

At this level typically, there would typically be up to 6 or 7 employees working under the owners direct management. Some effort will have gone into structuring and organising the team and the owner’s time is a lot more discretionary. The biggest ongoing challenge is to avoid revenue fluctuations and to stabilise cash flow by working on the sales and marketing such that there is a steady flow of business. The owners skill at hiring staff and making them effective and productive, will be properly tested and be the biggest determining factor for transition into Level 2.

Level 2: Medium

Medium sized businesses are characterised by a management layer between the owner and the team, and the existence of proper systems to ensure the smooth running of the business. The owner’s focus is now on empowering the managers and he or she is now removed from the day to day operations and decisions of the business. This is a major shift for the owner as their personal significance in the business must be subordinated to that of the business itself. It is often a real struggle for the owner to let go of tasks, responsibilities and decision making that he or she has owned since the start of the business. For the business to run effectively at this level, there needs to be a proper management infrastructure in place. Businesses processes have to be well documented and systematised, and appropriate and robust metrics need to be in place. The owners vision for the business has to be well understood and the team needs to be committed to the business’s mission.
The owner spends most of their time doing strategic work such as planning, networking with important prospects, customers and suppliers. The owner now has full discretion on how he or she chooses to spend their time.

What it takes to get to  the next level

If one looks at the distribution of businesses as a function of stage, you will find that the further up the scale one goes, the smaller the number of businesses at that level. What is the reason for this? Well, taking a business from micro all the way to through to medium size (and beyond) takes considerable acumen, fortitude and time. There are many factors that can either aid or hinder this process. For example, recruiting an exceptional individual early-on can have a big impact on the speed of progress. Market conditions can have a big impact, either slowing things down or hopefully helping to speed them along.
During the Micro and Small stages, the business owner has to work hard and needs to have the moral and emotional strength to deal with the multitude of issues they have to face.  In addition, many business owners discover after some time in their own business that they require skills and knowledge they do not have to continue to grow the business. Some rise to this challenge, others don’t and their businesses therefore plateau.
As a function of the available knowledge, capital and capacity, a business will reach an equilibrium point with market forces and stop growing. To get to the next level, i.e. to continue to grow,  it is usually the knowledge and emotional strength components that will provide the impetus for further growth.

Are you a business owner or entrepreneur?

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Occasionally interchanged, business owner and entrepreneur are two different beasts. Two different mindsets. An entrepreneur concerns him/herself with creating the future; synthesising an enterprise from a concept using their smarts, their ability to impress, motivate and sell. The entrepreneurial mindset is about creating, building, innovating and organising,  in the determined hope of overcoming the inherent risks and going on to make a fortune.

 

The business owner’s mindset is focussed on managing and mitigating risk; improving efficiency and minimising mistakes. He is interested in sustainable and measured growth, whilst keeping everything as stable as possible.

 

The popular stories in the news and in books are usually about entrepreneurs who beat the incredible odds and become successful.  Yet the reality is that most successful entrepreneurs go on to be business owners.  You see, whilst there is  a romance and mystique about being an entrepreneur, as a business owner, the pay cheques are bigger and life is a lot less stressful. Not to mention the fact that all of those people that followed the entrepreneur to help build his dream have school fees and mortgages.

 

Make no mistake, there is plenty of opportunity for business owners to innovate and build. So do erstwhile entrepreneurs make the best business owners? What’s your view?

 

Do you have business mastery or are you headed for demise?

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I don’t think anyone would argue that success in business requires a high degree of mastery. Mastery over your environment. Your success will be in no small measure dependent on the dimensions and extent of your mastery.

The Free Online Dictionary defines mastery as “full command or understanding of a subject”. In business, that could encompass a wide range of things that could vary from business to business. Whatever they are, there is a minimum level of knowledge needed to achieve mastery, and there would be knowledge beyond that level too. The minimum level is what would be required to stay in business.

As time goes by, business conditions and the business environment gets more complicated and more sophisticated. This is not a linear progression but exponential. Just consider what has happened over the past 20 years. The advent of the internet has accelerated the pace of change of technology and business at a rate that would boggle the mind of most successful business people 50 years ago. Buckmaster Fuller observed that up till 1900, human knowledge doubled every century. By the end of World War II, it was doubling every 25 years. According to IBM, the build out of the Internet of Things will lead to the doubling of knowledge every 12 hours!

So what would have been considered a state of mastery 25 years ago, would unquestionably be well below what is required to thrive in business today.

Business Mastery

What are the main areas of mastery? These can be divided into two sections: domain mastery and business mastery. Domain mastery refers to all those industry specific topics that one needs to know to successfully operate in a particular field e.g. carpentry if you are a carpenter, Photoshop if you are a graphic designer etc. The education system is really very good at providing adequate domain mastery.

The other key business mastery topics are: Delivery Mastery, Time Mastery, Financial Mastery and Destination Mastery.

Delivery Mastery

Even in this day and age, one comes across glaring examples of the absence of delivery mastery, often when the human factor is involved. Delivery mastery is the ability to deliver on time, on price and on quality, every time. Bigger businesses engineer this into their process as do some smaller businesses. But it is quite common to encounter poor delivery mastery when dealing with small, local businesses. Businesses with these issues will find it increasingly difficult to compete as the world gets smaller. There is no longer safety in the notion that it is too hard for people to patronise more distant businesses. Customers nowadays have limited tolerance for poor delivery and will vote with their mice.

Time Mastery

People and labour are usually the largest expense of a business. So it is incumbent on management to see that they are used carefully and judiciously. This is far less of a problem where there is a fixed labour cost per unit of production than when people are paid for their time. Time mastery is concerned with getting maximum results within the minimum time. It deals with topics such as planning, scheduling, prioritisation, delegation, attitudes and mindset.

Financial Mastery

A business is nothing more than a systematic arrangement for making money. As simple as this sounds, it can become very complex and elaborate with many moving parts operating with various degrees of independence. Making sense of such a system can be difficult. Financial Mastery is the ability to gain clarity from this and to use information gained through appropriate measurements to make better management decisions. Of course it includes your standard financial reports and statements, but goes further to include operational measurements as well.

Destination Mastery

To a great degree the outcomes that a business can obtain largely depend on how the business vision was hatched and developed. Developing a clear picture of the end result and then a plan to get there are what destination mastery is all about. Nowadays, we tend to put a lot of energy into conceptualising and planning, simply because it is easier, quicker and cheaper to do it that way than just forging ahead through trial and error. But it takes effort and know-how, and so, many people in business don’t do it and end up underachieving.

Business Mastery and Growth

Business Mastery and Growth

Business Mastery can be thought of as the measure of our response to the demands of the business environment. Where our mastery exceeds that of the needs of the environment, we will thrive; when it is insufficient, the pressure of the environment will work to diminish our prosperity. The astute business leader will work to keep his level of mastery at a level where his knowledge exceeds the threshold needs, thus affording him an opportunity to build wealth.

Top 10 Game Changing Ideas

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Here are my Top 10 Business Game-Changing Ideas that will fundamentally help you stay on track to achieve your business goals. Follow these, and your results will be “miraculous”!
  1. Schedule at least an hour per week for critical thinking – Think on Paper!
  2. Plan your day the day before it starts.
  3. Only do work worthy of your true “hourly rate”
  4. Before you start working on a solution or system to solve your problems, accurately and precisely identify the problem to be solved
  5. Identify, and consistently measure the five critical drivers of your business.
  6. Find and eliminate the expenses in your business that are not contributing to gaining new customers or keeping the ones you have.
  7. Use the five financial levers to dramatically improve cash flow and profits.
  8. Transform your “high maintenance” team into a “high-performance” team by focusing on the culture.
  9. Run your business so that customers would say: “I would have to be crazy to go somewhere else!”
  10. Develop a strong enough brand (niche) to attract customers and repel the competition.

Remember, a successful business is one where ordinary people produce extraordinary results by doing ordinary things, extraordinarily well.

 

Business Growth in a Nutshell

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Business Growth in a Nutshell

By Evan Rubenstein

Nowadays, businesses in all fields face unprecedented levels of competition. A business without a growth strategy will find itself falling further and further behind simply because of increasing levels of competition. So what does one need to have a business growth strategy?

The three elements required for business growth are:

  1. Clear goals
  2. A properly worked out plan of action (growth plan)
  3. A bulletproof system to ensure the execution of #2 above.

The growth plan is a clear, sustainable path to continued profitability. It will encompass strategies to build:

  • Sales/Turnover
  • Profits
  • Free Cash flow
  • Value

In all businesses, growing profits can be achieved in one of two ways:

  1. Reducing expenses
  2. Increasing Revenues

Reducing expenses is not a long term, sustainable profit building strategy. It is only useful once in a while, to trim fat or to bring runaway expenses back under control.

Increasing revenues is obviously the winning long term strategy. This can only be accomplished through developing a value proposition that addresses the needs of the target market in an evolutionary fashion.

The value proposition will be the sum of:

  • elements of product/service, branding, and customer experience.
  • elements relating to operational effectiveness, customer management, innovation and efficiency
  • elements relating to the team and organisational culture required to achieve all this.

So achieving growth in a business really comes down to a non-trivial, coordinated execution of a comprehensive plan that addresses these elements.

The reality of many businesses is that they:

  • Don’t have a clear set of goals, or the goals are not clearly communicated within the organisation
  • Most often don’t have a clearly articulated and documented growth plan other than what’s in their heads on a given day
  • At worst, lack essential knowledge and skills to orchestrate all of this or are unable to effectively execute their plan
  • Can very easily be distracted or caught up in day to day operational issues that keep them from their strategic path

Most business owners, left to their own devices, are at best sitting on top of unrealisable potential or at worst facing long term demise. The successful ones have grasped this and dealt with it, one way or another by continuously educating themselves and making the focus of their role, these issues.  The role of the business coach, like a personal trainer, is there to guide, assist, support and sometimes enforce the rigour required to make this all happen.

Mastering Business Finance Concepts

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Amongst small business owners, mastering the essential business finance concepts is a perennial issue.  What is in fact relatively straight forward, is perceived to be very complicated and the domain of accounting experts only.

The instrument panel of business is its finances. Ever tried to drive a car without instruments? It’s easy to break the speed limit or run out of fuel. The consequences of not having instruments is such that most of us would not drive our cars without them.  Yet many business owners blunder along without this critical knowledge.

So what are the most important components of an understanding of Business Finance concepts? Here is the list:

  1. Margins and mark-ups – what each terms means; how it fits into the financial puzzle and how discounting affects profits.
  2. Break-even. How this is determined and how to interpret the results such that your activity levels are in line with making profits
  3. The Profit and Loss report; its structure, what it means and how to read it
  4. Profit vs cash-flow and the working capital cycle
  5. The cash-gap and managing cash
  6. The Balance Sheet; its structure what it means and how to read it
  7. The financial operating cycle

These are the basic concepts that anyone in business should be across. This level of knowledge will demystify most of the basic  jargon that frightens the ignorant, and provide a level of empowerment that will lead to greater confidence in dealing with business issues that have a financial underpinning.

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