Category Archives: Starting a business

Tough times hit hard: 5 things that may help.

Brexit, economic downturn, lack of funding, new regulations and changing personal circumstances  are all events that can rock the foundation of your startup business. Making it through hard times requires a steel determination and some serious grit. However, these days I think we need more than just fighting spirit. Here are some thoughts on what else to do when tough times hit.

Cut Carefully

I really don’t like this cutting, because I think one should always be frugal with money. In addition, for small and growing business, cost-cutting needs to be implemented with the precision of a surgeon’s scalpel. Cut too deep and your business will never recover. Cut too shallow and cash flow problems could force you to the back of the unemployment line. Exercise care and judgment in determining what and where to cut and by how much. And keep monitoring the impact.

Use Low-Budget Marketing

When recessions and other difficult times hit, the marketing function of a business is the first to get cut. With less advertising and marketing, the funnel of incoming prospects is reduced creating even more revenue decreases and setting up a vicious cycle.

The key to salvage any business in hard times is NOT to reduce your marketing activities but to REPLACE them with  Low-budget marketing ( include tactics such as PR, networking, public speaking, online marketing and more.) If you’re already doing that, then figure out how you can do more, through new channels.

Invest your way out?

Are there others feeling the pinch? Can you buy yourself some growth, with efficiencies to be made through scaling operations?

Customer. Customer. Customer.

In good times, business comes easy. Your sales pitch or marketing message may be less effective but will still get results. Surviving hard times requires going back full circle to the fundamentals: Keep it simple, and give your customers what they want and need. Make sure EVERY customer is happy, because you certainly can’t afford a single unhappy one.

Forwards!!

It’s easy to fall into the trap of replaying the situation that got you here today. If you had a failed partnership, replaying your mistakes is a mistake. Research published in the Journal of Personality and Social Psychology by Lyubomirsky, Sousa, et al reveals analysis occurring during talking or writing is beneficial in difficult times while replaying negative events is detrimental.

There is a great book called “What got your here won’t get you there”, and that phrase is a great reminder of the need to pause, take stock, realign and move forward.
Go win. If it was EASY, ANYBODY could’ve done it already.

Gut Says YES, Brain Says NO….!??

If you’re like me, you often find yourself with two options, both appealing for your young startup: one risky, the other is safer.

The risky option promise big growth, great opportunities and fast revenue. Even though you know it’s more than you can take on, you leap. Your heart is shouting a clear Yes, telling you how great it will be and how proud it will make you. Shouting No (almost) as loudly is your sensible and cautious head, which instructs you to slow down and think about it some more.

People around you (especially as you start up) will likely tell you to “listen to your heart,” and “believe in yourself”.  Oprah Winfrey (link is external), too, suggests you follow your emotional inclinations rather than those logic would suggest. But is that really good advice? Think back on the times when you did follow your heart. How did it work out?

Don’t trust your own memory!

Unfortunately, we tend to be bad statisticians when it comes to reviewing our own prior experiences. Research on reminiscence shows that we tend to remember the distinctive events in our lives, particularly those that were pleasant. For most people, even traumatic memories tend to fade with time (hello childbirth!). As a result, we’re almost programmed to go with our heart because we favour and remember the occasions when it provided correct guidance.

Go rational or go home

Your rational decision-making processes probably have a pretty good track record. You just wont remember as much of it: when you followed logic, it just wasn’t as memorable. It’s also possible that when reason prevailed, it told you not to do something; therefore, you have less to remember.

But guess what? All that being said: following your instinct sounds so much more fun.

Decision made. (As I was typing this I was debating with myself if I should follow the logical approach, or follow my heart about who to hire for our next team member. I’ve just clarified for myself that I should trust my gut. )

 

6 things that don’t work well for pre-entrepreneurs in corporates…

I know there are a couple of people who might be frowning as they read this post, and for that I am truly sorry. It isn’t personal.

I am often asked if it was scary to take the leap to become a business owner, and I am always slightly surprised by that questions. It wasn’t scary at all. To me it is a very natural state, as I grew up in an entrepreneurial family, where problem solving was paramount to everyday life. When I think back now, corporate life was the scariest out of the two!

Corporate Misfit?

Perhaps that is why I never really felt like I fit in into corporate life — when your fundamental aim is to solve the bigger problem, the following 6 thing don’t work well at all:

  1. silos
  2. red tape
  3. multi lateral politics
  4. Staying in your lane
  5. “It’s just a job” attitude
  6. Personal positioning

Several of the above points is of course things that a lot of great leaders in the corporate world is trying to counteract. They understand fully how it holds people back, stifles innovation and slow down growth. (So those of you who are now frowning: remember, it isn’t personal!)

Is “just do it” the only solution?

Is there a scenario where we can continue to encourage more entrepreneurship in the corporate world? Or is it simply not possible, and the budding entrepreneurs out there should just take the leap and get going, because their profile will never be truly appreciated in the corporate environment anyway?

 

How Your Leadership Affect Your Company’s Culture

Every organization has a culture. For some it is intentional and for some, it just is what it is.
When I think of culture, I think of how the world sees my organization. I also think of how the people inside the enterprise treat their work and the people they engage. A formal definition of culture is this: Organizational culture is the guiding operating system by which people interact and get things done.

I have always been very aware of culture. I am sensitive to the unspoken word, and how people feel has always been very important to me.  Despite this, I have in the past found myself employed in companies I didn’t fit into at all. I didn’t like the people that much and I certainly didn’t have fun. With my own companies, I decided that I didn’t want that to happen again.

For me, culture comes from these 4 things:
1. Strong leadership
It takes work to define the culture elements and a continuous process to keep the company operating by them.
Leaders are responsible for defining the elements of culture and the work to ensure that the company is leading by the principles that shape the organization.
2. Mission
The mission is the point of the organization. Every organization has a purpose. The reason “why the organization exists.” Leaders define how to take that purpose and make it bigger. It is about the impact on the community and the world. It can never be just to make money. Mission guides the future you are creating and how you intend to contribute to it.
As an example, London Medical Education Academy’s Mission is to “Make doctors better surgeons without harming patients during training by using cadaveric tissue samples for surgical skills labs.”
3. Vision
The day-to-day experience is the vision of the company. Vision paints a picture of what the organization looks like over a set time frame. JUNE MEDICAL uses a 2-year vision as part of our culture to frame the experience for each employee.
Vision tells the story of how the organization will look as it is in service to the mission.
4. Values
The values are guiding principles of the organization. Values become the tool by which each employee does their work and interacts with the people that come in contact with the company. It tells us WHO we are and HOW we are.

For my companies the values become the guiding principles.
Values become a central part of the company’s unspoken conversations. The key point is to make sure you are using values that really matter to the company, mission and vision of the organization.

One word of warning though….: Don’t put values on the wall, unless your values are visible in your work each and every day.

Unless you are authentic in your leadership, no Mission/Vision or Value statement in the world can help you build a truly winning team.

7 considerations for aborting mission

When you’re working on a project, it is sometimes easy to get emotionally attached. From time to time, that means that decisions are taken differently during than they would have been before the start of the project.

Usually when I ask people about their exit strategy, they think I mean how they will sell their company and retire. Not at all: I am talking about how to know when to abandon the plan.

Let me give you an example.

Marianne had been working with her Dance school for years, and she had made it a second home for her three girls who had spent pretty much every day after school in the studio. As a leak in the building made her financial situation strained, the smart move would have been to cut it lose, and to relocate to a different venue.

But, because her day to day business and personal life was entangled with emotional ties, she endured 5 really difficult years in the same location, before she finally gave up, having lost most her savings. Had she been making the same decision if this was identified as a risk and had a mitigation plan before she started? Probably not.

An exit strategy should contain the following considerations (…as a start. There will be more that are specific to your business):

Ask yourself this:

  1. TIME: How long am I willing to go before I say this isn’t working? 1 year? 3 years?
  2. MONEY: What is the maximum financial figure I can commit to putting into the business, and when do I cut my losses?
  3. OWNERSHIP: What are the areas of the business that I would be willing to give up to take in financial support (if any) if I needed to? What’s the maximum shares I am willing to sell?
  4. ILLNESS: What do I do if I or someone who depends on me get really ill? What is my contingency plan?
  5. RISKS: What are the top 10 risks in my company and current set up, and how do I mitigate that?
  6. TRADE OFFS: At what point do I decide the risks are not worth the (potential) rewards?
  7. COMMITMENTS: Are there commitments that I am not prepared to sign? Long term contracts, legal obligations, other?

The above is tremendously useful things to consider and have a plan for. Discuss them with your business partner if you have one – more often than not we have very different views on things like this, and it is good to be VERY specific. And make a plan for what happens if you disagree. Write it down. It may all change, but at least you have a starting point when things get rocky.

Also discuss this with your family. Your partner may not have the same expectations as you, and after all, he or she is one of your most important stakeholders as you embark on a new venture.

Good luck. You have taken a whole list of unknowns and turned them into something tangible. Of course there can be surprises you haven’t planned for, but you have narrowed that down tremendously.

And hopefully you will never have to use any of this!

Part 2 of my mentoring questions: Selling stuff

I know how easy it is for entrepreneurs to be obsessing over sales — especially before you have any, and especially if you don’t know how to sell. And many entrepreneurs don’t. They are enthusiastic experts in their field, but rarely do they have the benefit of having gone through a career in sales and marketing (I consider myself VERY lucky that way, and that’s why I have decided to Pay Forward what I’ve learned.). 

 (Missed the first 5 questions? Click here)

The Anti Crow Rule

I asked my Twitter followers a while back if Marketing or Sales was harder to get right, and the majority said Marketing. I believe the two are closely linked, and if you get your marketing right, your sales will come. I strongly encourage having a clear image of who your customer is, and to segment your market. MAKE CHOICES and stick to them. I call it the Anti Crow Rule: stay away from the shiny objects! It is VERY easy to get distracted, and as an enthusiastic entrepreneur we are flattered and grateful when someone wants our stuff. Don’t get me wrong, do sell….just stick to your overarching plan. 

 

Bank people DO make good friends

If you don’t have finance experience, I strongly encourage you to collaborate with someone who can build you a solid budget, including cashflow projections. Not only will it save you eons of time, it will also ensure you won’t find yourself in a situation that you have a profitable business but no money o pay people or buy stock with. In addition, it will also make any bank conversations you will have a lot more productive. (I never borrowed any money to start my companies, but I do recognise that it is very common to have to do that. And even if you don’t need a cash inflow at the start, having your bank team well informed is a plus should you ever need their help and/or advice. 

 

I am done for tonight, but I do want to talk Exit strategy (because you need not just one but several, and I don’t mean just different versions of you selling your company to the highest bidder and taking off to Aruba) and what/when/how to abandon your plan. 

 

Sign up to get a little note when I post the next time. 

(No spam, no selling of your data, no me selling to you. I #neversell and am just Paying It Forward. Why? Because I can.) 

The 5 First Questions I Ask When I Start Mentoring An Entrepreneur

When I talk to people who are just about to start their own company, they usually have one thing in common: they are experts at what they do. While that is a GREAT thing to get you to where you can deliver a FANTASTIC PRODUCT OR SERVICE, it usually is NOT what you need to get started.  

Why? Because you should NOT BE SELLING ANYTHING yet!

Let’s start in the other end, shall we? Here are the questions I usually ask.  

  1. Don’t tell me what you’re going to do first as you try to sell stuff. Tell what problem you will have solved 10 years from now? (Someone said “To make aviation have zero environmental impact”. Another one said “All clothes will be made to measure”; Excellent!)
  2. What do you need to have accomplished in 5 years to make that happen? (As you can tell, timings here are arbitrary — that depends on who I am talking to. Point is, it starts from the future and goes back to today.)
  3. How will you bridge the income gap until you are into your core business? And how will you make sure you don’t get stuck in that “bridge business” as people start knowing you?
  4. What is the vision in your head (and we all have one — once you start talking about it you realise you know more about your future business and plans than you thought!)? Do you have employees? How many? Where is your office? Will you employ people or work through contractors? 
  5. And then, my favourite question of all: Describe your customer to me. Is it a person or an organisation? (If you say organisation, I say Dig Deeper. It is ALWAYS a person. Always.) Who is she/he? What does she do? What does she like? What is her motivation? Is she a cat or a dog person? Does she do team or individual workouts? Heels or sneakers? You get the point. DESCRIBE your customer, and THEN start thinking about how to package and sell your product, what marketing channels to use, if social media is relevant (and which one?!). 

RELATED: 7 words I don’t allow in Customer communication

That’s it for tonight. More on this, plus the selling part and some thoughts on bank solutions next week.

Sign up so you can see when I post it?