4 Step System for Rapidly Training New Hires


 

In my last essay, I discussed the three benefits of using outsourced workers (cost savings, reducing overhead, getting work done while you sleep). And then I gave you tips for finding and selecting the right outsourced provides.

In this essay, I'll lay out my system for rapidly training these new hires (it also works for new in-house and/or full-time hires).

Before you start the training


Before you begin their training, take a few minutes to break down the work to be completed into a list of steps, or even a process map (a simple, visual flow chart of how the process will go). As a manager, your job is to create these processes and coach your team to implement them and report the results back to you.

If something goes wrong, it's either because they did not follow the process correctly as you spelled it out -- or there is something less effective about your process to correct. Listing all the steps and putting them in the right order will also clarify your thoughts and give you a guide or agenda to follow when training them.

The simple system for rapid training

Step #1: Explain


This is where you take the time to describe the work to your virtual assistant or outsourced person. Show them the list of action items or an overview of the process. A written summary coupled with a verbal explanation is usually the most thorough way to do this.

Tell them what the task is called (for easy reference later on), what it accomplishes, why it is
important, who will need to do it and when, and how it is to be done, step by step. The
more details you can give, the better, because they will grow to understand you and
your company goals and will be able to handle more things for you later on without
having to ask a ton of questions.

Also, understanding your business model, your customers, and your purpose will help them make more informed decisions along the way -- subtle differences that can turn good work into greatness.

Step #2: Demonstrate


People learn better by seeing an example of how something is supposed to be done. This will teach them better than the longest explanation. Demonstrations can be done in different ways:

1. In person. Example: Demonstrating how to fold and stuff envelopes.

2. On the phone, via webinar. Via phone or webinar you can tell or show a virtual person how to do something.

3. Via video. if you show someone something via a webinar, record the webinar. That way, the next time you need to train someone, they can simply watch the video rather than requiring your time to train them.

4. Hypotheticals. In this case, you would give a few "if-then" scenarios to your hire and tell them what to do or say depending on what happens.

For example, you might write in an email to your hire, "Call Joe Contractor and ask him if the work is about 2/3rds of the way done. If it is, ask him for a range of days and times for me to meet him to do a walkthrough. If not, ask him when he expects it to be and call him back that day."

Step #3: Practice


After learning how to do a task, the hire must then attempt it on their own under your supervision. It's important that you monitor their work for a while until you are certain that it is being done correctly. Otherwise, neither of you will know if it needs improvement.

Find a way to watch them in action or to see the results of their actions. This might be hard for some of you, but let them fail. It is least distracting and demotivating for you to observe the entire process and save your comments for the end.

The whole point of training is for them to get used to the whole process on their own. NOW is the time for them to make mistakes. Hopefully you budgeted enough time for them to practice things a few times and get it right before crunch time.

The way to monitor them could be watching them in person, listening on the phone, or reviewing a finished product of some sort, like a design or written work.

Step #4: Feedback (Positive and Negative)

This is the part of training where you help them to improve at their job by pointing out things that could be done differently or better. I prefer to use the "Feedback Sandwich" approach, in which you tell them what they could do better in between two compliments so it's not harsh or overly negative.

For example, you could say:

    (Compliment) "Julie, this mail looks really good. You somehow found a way to fold the
    letters in just the right places so that they fit inside an envelope perfectly."

    (Critique) "You know, I read once that the better lined up the stamp is on the front of the envelope, the more people respond. Would you mind making sure they are all put on
    straight from now on?"

    (Compliment) "Thank you so much. That, plus the handwritten address, which looks so
    personalized I'd think it was coming from my mother, makes these mailers perfect."


Once you have given your feedback, the training cycle begins all over again. Your feedback
is their new explanation (Step #1). You may demonstrate it again if you feel you need to (Step #2), and have them practice it again (Step #3), until you decide that the results are good enough.

A Trained Assassin

When you have decided that your hire is capable of performing the task consistently on their own, they are now officially trained. Be sure to congratulate them on learning the task, and thank them for making your life easier.

And lastly, this rapid training system is not just something to use when they are first hired.

If at any time their performance falls behind, or you want to help them take one of their skill sets to the next level, or you think of something new for them to do, just follow these 4 simple steps again.

 

Suggested Resource: If you don't outsource, you can't compete. The math is simple...if your competitors are outsourcing and only pay $X to complete a task, and you pay $3X, $5X or $10X, your competitors will eat your lunch. You simply must outsource to stay competitive. Outsource the right way using Growthink's Outsourcing Formula. Learn more by clicking here.

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The Big Secret to Raising Venture Capital


 

Years ago I served on a funding panel with Tom Clancy. At the time, Tom was a partner at Enterprise Partners Venture Capital in San Diego.

At the time (around 2003), many venture capital firms were licking their wounds. They had funded a ton of companies during the tech bubble phase, and most of them had failed.
 
This led Clancy to make an important decision. He said that going forward, Enterprise Partners would wait at least six months before funding any new company they met.

The rationale was solid. During the six months, he would see what the entrepreneur was able to accomplish. If the entrepreneur accomplished the milestones set forth in their business plan, than they were deemed worthy and would receive funding. If not, they would not.

So what is the entrepreneur to do during the six months in order to get the investor to write them a check?

Obviously they need to achieve milestones... But what else?

Before I give you an answer, I want you to know how crucially important this is, not only in raising capital, but in securing key partnership and gaining key customers.

Let me give you an example of an entrepreneur who successfully used this technique in order to get a key partner. This entrepreneur’s name was Chet Holmes. And one of the key reasons that Mr. Holmes achieved success was through his partnership with marketing guru Jay Abraham.

How did Holmes get the partnership with Abraham? Like many people, he tried to reach him by phone, fax and mail. But Holmes did it every other week...

...FOR TWO YEARS!!!

Then, he finally got a call from Abraham's business manager for a lunch appointment, flew to Los Angeles for lunch, and established a very profitable partnership.

So, what's the answer to the question of how to woo investors, customers, partners, advisors, key hires, and more over six months?

Effective and persistent communications. In other words...

FOLLOW UP.

You must consistently, over a period of time, hammer home your message to investors, key customers and others.

What exactly does this mean? For investors, once you meet them, you should follow-up with them at least twice per month to update them on your progress. For prospective customers, you should contact them on an ongoing basis to continually give them value and convince them of the benefits of working with you. And of course, don't forget to follow-up with your existing customers.

And a key here is that this follow-up should NEVER END unless or until the costs of the follow-up clearly outweigh the benefits.

Remember that people invest in, buy from, and partner with other people. So, who would you rather work with? Someone who has been contacting you for two years with quality messages regarding why you should partner with them, buy their product or invest in them? Or someone who you just met yesterday and tells you how great they are?

The answer is clear.

Don't stop at the first contact. Choose the appropriate frequency (i.e., you don't want to be perceived as too obnoxious or pushy to potential investors), craft quality messages, achieve your milestones, and convince investors and others to work with you over time.

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The One Thing Every Venture Capitalist Wants


 

A venture capital firm is a financial institution that focuses on providing capital, in the form of equity, to companies who offer them the prospects of significant growth. 

The partners and associates at venture capital firms are known as venture capitalists. The term "VC" or "VCs" applies to both venture capital firms and venture capitalists. 

Unlike angel investors, who invest their own money, VCs are professional institutions that invest other people's money. VC firms raise capital for their own funds from sources which primarily include pension funds, financial and insurance companies, endowments and foundations, individuals and families, and corporations.

The VCs are then charged with providing a solid return on investment on this money. This is the one thing that every VC wants. By providing a solid ROI to their investors, VCs earn bonuses and raise more funds so they can stay in business.

VCs earn returns for their investors by finding high growth companies, making investments in them at favorable terms, guiding and nurturing them, and enacting a liquidity event (e.g., selling the company or having it complete an initial public offering).

Because they are utilizing other people's money, and are judged and compensated by the performance of their investments, venture capitalists are extremely rigorous in their investment decision-making process.

Importantly, VCs tend to only invest in companies with significant market potential of $50 million, $100 million or more. This is because even with all their relevant experience, the average venture capital firm will lose money on half the companies they invest in and only break even on a third.

Where VCs make their money is on the approximately 20% of companies they invest in that see explosive growth and provide remarkable returns of 10 times to 100 times or more on their investment.

Industry insiders sometimes refer to the 2:6:2 rule. This rule is that an average portfolio of ten VC investments will include two losses (e.g., companies go bankrupt), six moderately performing companies (may break-even on the investment or lose a little) and two very successful returns.

In fact, an analysis by Bygrave and Timmons of VC funding found that just 6.8% of investments returned ten times or more on the invested capital (these "home runs" are what give VCs high overall returns). Conversely over 60% of investments lost money or failed to exceed the amount of money earned if the capital had been put in an interest-bearing bank account.

The result of this analysis is that typically a venture capitalist will want to see the ability to get 10X their money back or more from investing in your company (they are seeking "home run" investments which compensate for the 60% of their investments that don't pan out) . As such, for every $1 million you are seeking from VCs, you must show them a realistic scenario where you can turn it into $10 million.

So, importantly, when approaching venture capitalists, remember 1) their primary goal is to make significant money from investing in you; and 2) you need to show them how they can earn a 10X return.

Now, if your company can potentially give VCs a 10X return, then seeking venture capital might be right for you. However, raising it is virtually impossible if you don't know what you're doing and haven't done it before. So follow this plan:

1. Develop a list of VC firms.

Start by creating a list of venture capital firms.

2. Narrow your list.

Each venture capital firm invests based on particular characteristics (e.g., some only invest in software firms), so you need to make sure your list only includes VCs that are interested in your type of venture.

3. Make sure the VC is active.

Many VC firms that have websites aren't active. That is, they aren't making new investments. You don't want to waste your time contacting and talking with these firms.

4. Find the appropriate person to contact.

This is critical. Venture capital firms are comprised of individual partners and associates. If you contact the wrong one, you'll be dead in the water.

5. Send the VC partner or associate a "teaser" email.

You don't want to send the VC a full business plan or executive summary initially. Rather, you need to send them a "teaser" email to see if they are interested. You don't want to "over shop" your deal.

Once the VC "bites" on your teaser email, the next step is generally to send them your business plan. Following that you'll do an in-person presentation(s), receive and negotiate a term sheet, and then sign a formal agreement and receive your funding check.

The process is a lot of work, but once you receive their multi-million check with which you can dramatically grow your company, you'll agree it's worth the effort.

Suggested Resource: In Venture Capital Pitch Formula, you'll learn exactly how to find and contact venture capitalists, exactly what information to include in your presentations, and how to secure your financing. This video explains more.

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How Reverse Logic Doubled Profits


 

I find it amazing how many entrepreneurs and business owners get burned by thinking about things incorrectly.
 
Here’s an example from a recent conversation I had with an entrepreneur who sells professional services. His sales were strong, but his profits were weak. In trying to figure out a solution, he started by suggesting he layoff part of his staff. If he cut his staff, costs would go down and profits would go up.
 
However, he then realized that if he had less staff members, he couldn’t close as many sales nor complete as many projects. So, sales would go down about the same as costs, and profits would remain flat.
 
The solution I gave him was to cut costs by reducing his staff (either through layoffs or natural attrition) and to boost employee productivity. Because if he were able to serve the same number of clients with a smaller staff, then profits would rise. In fact, if the staff were pared down enough, he could even afford to pay each staff member more than they currently make.

There are several great example of this “reverse logic” of paying employees more to increase profits.
 
One example is The Container Store. The Container Store has just one employee for every three their competitors have. But, they pay their employees double the industry average and spend 160 hours training them.
 
What is the result of this strategy? The Container Store employees are better trained and happier, and thus provide superior service. All this at a 33% lower cost than competitors.

Interestingly, when The Container Store opened in New York City, it had 100 times more applications than available positions. With numbers like that, they can hire the best of the best each time.

Similarly, Harry Seifert, CEO of Winter Garden Salads gives employees bonuses just before Memorial Day, when demand for its products peak. The bonuses boost morale and cause the company's productivity to jump 50% during the busy period.

Paying employees more to improve performance and boost company-wide profits is a historically proven tactic. In fact, back in 1913, Henry Ford doubled employee wages from $2.50 to $5.00 per day. The move boosted employee morale and productivity and caused thousands of potential new workers to move to Detroit.

Your employees can and should be a source of your competitive advantage. Recruit them slowly and wisely. Train them well. Give them a voice in your company and respect them. And pay them well. When you do this, you’ll have employees that perform at three times the level of your competition. And even if you pay them double the industry average, you’ll still have huge profits and outperform your competitors.

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Answers to the 5 Most Common Angel Investor Questions


 

On Wikipedia, I found the word "angel" defined as "a supernatural being or spirit, often depicted in humanoid form with feathered wings on their backs and halos around their heads."

While this might depict an "angel," it certainly is a far cry from the definition of an "angel investor."

Below I define exactly what an "angel investor" is along with answers to the other most common angel investor questions.

1. What is An Angel Investor?

 
The term "angel investor" is officially defined as a private investor who offers financial backing to an entrepreneurial venture.
 
When several private investors form an organization to collective fund ventures, they are known as an "angel investor group."
 
The act of providing the financial backing is known as "angel investing."
 
The amount of angel financing is significant. According to the Center for Venture Research at the University of New Hampshire, each year over 60,000 ventures raise over $20 billion from angel investors.

2.  Will an angel investor invest in my ______ (insert restaurant, hotel, technology, website, product, app, salon, etc.)?

The answer to this is "yes."

Software is the top sector that receives angel funding, representing approximately 23% of total angel investments annually.

Healthcare Services/Medical Devices and Equipment (14%), Retail (12%), Biotech (11%), Industrial/Energy (7%) and Media (7%) are the next top sectors.

Importantly, that leaves an "other" amount of 26%. And ìotherî includes every type of company there is. So, yes, there is an angel investor out there who would fund your type of business.

3.  What is the difference between angel investors and venture capitalists?

Venture capitalists differ from angel investors in that they typically provide more money (generally at least $2 million) and focus on companies that have achieved more operational milestones than companies generally funded by angel investors

Other key differences include the following:

  • Venture capitalists are professional investors. That is what they do for a living. Angel investors do not invest for a living.
  •  
  • Venture capitalists invest other peopleís money in ventures. Conversely, angels invest their own money. As a result, angel investments are not always based on the potential return on investment (ROI) of the deal (the primary concern of venture capitalists) but may result from other factors such as simply liking the entrepreneur and wanting to help them out.


4.  What return on investment do angel investors want?

There is no set formula for the return angel investors want. In general, they simply want a "fair" return. "Fair" might imply millions of dollars if your company eventually goes public and is valued at billions. Or, "fair" may be a 15% return, or a reasonably higher return than they would receive if they invested in the less-risky public stock market.

The key is to figure out what the prospective investor deems to be ìfairî and offer it to them.

5.  Where can I find angel investors for my company?

The best place to find angel investors is through networking. Who do you know? Who do your friends know? Who does your attorney know? And so on.

And then once you meet those referrals, ask who they know. And so on. By networking, you can reach tons of prospective angel investors and raise the funding you need.

Importantly, the vast, vast, vast, vast (yes, I know I just said ìvastî four times!) majority of angel investors are what I call "latent angel investors." That is, they don't know or walk around thinking of themselves as angel investors. But, they have the means, interest and ability to make angel investors.

Latent angel investors are the BEST for entrepreneurs, since they arenít seeing tons of potential companies to fund. As a result, if they see one good deal, thereís a good chance theyíll fund it. Conversely, those investors who see tons of deals are less likely to fund any particular venture.

Now that you know the answers to the five key angel investors questions, use this knowledge to raise this great funding source for your business.

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Growthink Business Plan


 

A great time to review your 2016 business plan

As we are now near the half-way point of 2016, it is a great time to review your 2016 business plan, decide on your key goals for the second part of the year, and start thinking about your 2017 business plan.

This article will explain precisely how to accomplish these key tasks. Importantly, what you’ll learn today is far different than what you would have learned just a few years ago. That’s because markets and customer needs shift far more quickly today than they ever have. And the goals you set often don’t stay relevant as long.

Let’s start with reviewing your 2016 business plan. Specifically, think about the goals you set for the year. Have you accomplished half of them at this point? Are you on track to completing them by the end of the year?

What often happens is life and business “get in the way” of us accomplishing our annual goals. That is, things come up that distract us (sometimes rightfully so) from focusing on and achieving our big objectives. Other times, you try tactics (e.g., a new online marketing strategy) to achieve certain goals and they simply don’t work as expected. The bottom line is that you mustn’t get discouraged if you’re not on pace to achieve your 2016 goals. Rather, it’s time to modify them. Specifically, it’s time to create new goals for the second half of 2016 and an action plan to achieve them.

In deciding what goals to accomplish in the second half of 2016 think about your long-term goals. For example, is your ultimate goal to sell your company, grow revenues to $100 million, etc.? Whatever your long-term goals, think about what your business would have to look like at the point you achieved it. For instance, how many customers will you have? How many employees? How many office locations? What type of systems will you have in place then?

Next, work backwards. That is, answer this question: What does your business have to look like at the end of 2016 for it to be on the right trajectory to achieve your long-term goals? This same question should guide you to start thinking about your 2017 goals. Specifically, what do you need to accomplish in 2017 to put you on the right trajectory to achieve your long-term goals?

Importantly, in planning out the remainder of 2016, think about how you can get a “running start” into 2017. For example, if it takes 4 months to hire and train a new salesperson, maybe you should start the process now, so come January you’re in a position to grow more rapidly.

Business plans are critical documents to small and large companies alike as they force executives to think through what they’d like to achieve and how they will achieve it. But, in today’s world, flexibility is also important as environments change. That’s why it’s so important to review your annual goals now, reset goals as needed for the remainder of this year, and start thinking about how to start 2017 on a great note. This will put your company on the path to achieving the long-term success you desire.

Check out this Growthink Business Plan Slideshare for additional information.

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8 Ways to Maximize the Value of Your Business


 

The lifecycle of most businesses from the owner's perspective is generally the same. First, you start or buy the business. Then, you grow the business. And finally, at some point, you exit the business.

During these second and third phases the differences between higher quality and lower quality entrepreneurs is really apparent. Specifically, the best entrepreneurs are able to maximize the value of their businesses and exit them at a price substantially greater than the price they paid to acquire or start the business.

So, what do these entrepreneurs do that increases the value of their businesses to themselves and potential acquirers. Here are the eight most common things they do.

1. They position their companies in a clearly-defined niche

Your business must be the best it can be at what it does, without trying to be everything to everyone. A business that knows its customer segments, their needs and language, and how to solicit a response from them is a lot more valuable than one that is a mixture of everything, or an unknown in its market.

2. They coach their teams to run the business without them

Could other people ever run your business without you? They'll have to, if you're selling! So why not make this your goal from Day One?

Make an organizational chart of how your business will look when it's time to sell it. List all the various workers in marketing, operations, and those they report to.  It's okay if it's just you or a handful of people currently filling all those roles. Doing this will help you organize who is going to do what in your business before you hire a new person.

Then, over time, you can find other people to fill those positions one by one until you're out of the picture.

3. They build relationships with customers

Goodwill, such as your reputation and brand in the minds of your current and prospective customers, is considered an asset on your company's balance sheet. You build this over time by treating people right and maintaining good relationships.

If you intend to sell your business someday, or if you just want to have the option, this is something you have to make a priority throughout the business's life. You can't just start doing it well suddenly in the final year. Relationships and recognition take time.

4. They make sure their businesses are stable

Make sure you're not overly dependent on any one customer, vendor, employee, or anything else. Diversify your strengths. If you have any "whale" customers that make up a large portion of your business, try to get at least 80% of your business from other people.

The new owner does not want to take the reins and have revenues drop in half in the event your biggest customer leaves.

5. They maximize their revenues

This one's self-evident, but deserves to be repeated. Make sure you leverage the 4 proven ways to increase your revenues: getting more customers, increasing your average order size, get customers to buy more frequently, and finding new ways to monetize your customers and visitors.

A company with higher revenues and which shows growing revenues will be more valuable and attractive to buyers.

6. They hold expenses accountable


You boost your net profit (and therefore the value) by reducing your expenses. However, no one ever shrank themselves into wealth. You're not going to grow your business by keeping expenses lower-but the numbers will increase as it grows.

Your goal is to keep the percentages the same, such as keeping advertising at 20% of your revenues whether earnings are $100,000 or $1,000,000 per year.  

Basically, you'll want to make sure that budgets are made and followed, to keep spending within projected limits and to avoid costs creeping up that don't generate more revenue in return.

7. They keep great records


Keep excellent records of everything for the new owner-your files, databases, customer communications, marketing materials, financial records, employee agreements-everything.

Committing to do this now will make your life so much easier between now and the time you sell. Keep good records for your own efficiency, protection, and to make your business look a lot more attractive to buyers than one where all the records are filed away in the old owner's head.

8. They develop a plan for when it's "done" and ready to sell


I don't want you to have plans on top of plans, but each of these will take certain actions to make them happen.  So here's what to do:  Add these end results into your existing business plan, and use your best judgment when choosing how to make each of them happen in your company.

When it's all said and done, the next few years are going to go by whether you maximize your business' value or not. At the end of, say, 5 years, would you rather have a stable, attractive, polished business ready to sell for top dollar, or be left taking what you can get for what you have?

If it seems like a lot, remember you have until the time you sell to take care of these things. You don't have to do it all now! Just add these elements I described to your vision of what you want your company to be, and keep your eye on it until the big day finally comes.

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The 5 Questions That Determine Your Business' Value


 

The biggest aspiration of most entrepreneurs and business owners today is to grow and then sell their businesses. And why shouldn't it be? Selling your business creates more multi-millionaires than any other endeavor.

The key issue however is this: are you growing your business the right way, and are you focusing on the right things? You see, when it comes time for buyers to appraise the value of your business, they might find different things to be important than you do. And the last thing you want to do is focus your time developing aspects of your business that buyers don't value. Particularly when doing so forces you to neglect the things they do.

Below are five key questions that will determine your business' value. Answer them honestly. And then work to improve your position on each.

1. How replicable is your business?

When corporations consider buying a business, they make a "build" or "buy" decision. That is, they ask whether the time and money it would take to build a similar business from scratch is greater than the cost to buy the business from you now.

As such, the more unique and less replicable your business is, the better. So think about how replicable your business is. For example, could another company easily replicate your products or services? Could they easily hire and train a team as good as yours? Would it be simple for them to build a customer base like yours?

Answer these questions honestly and focus on building a profitable AND harder-to-replicate business going forward.

2. How easy will it be to run your business after acquisition?

Why do we pay a premium for a new automobile versus a used one? Because we know the new one doesn't have any problems. It hasn't gotten into any accidents. It doesn't have an oil leak, etc.

Similarly, acquirers will pay a premium for a business that is in great "running condition." Sure, every business will have its challenges, but a business that is simple to run, like a new car, will be highly valued.

So, let me ask you this: if you sold your business today and retired, would the new owner be able to easily run your business thereafter?

  • Do you have systems in place that enable your business to run consistently every day?
  •  
  • Are your employees trained to handle all key issues that arise?
  •  
  • Will your customers continue to buy from your company even though you're no longer a part of it?

Always think how your business will run after you're gone. And if currently it wouldn't run smoothly, take actions now so that it will.

3. How has your business performed financially?

Unless the majority of the value of your company is in unique and patented technologies, buyers will thoroughly review your financial performance.

Clearly, they want to see strong revenues and profits. And they want growing revenues and profits. If your revenues or profits are on the decline, many buyers will project that decline will continue, and thus significantly decrease the valuation of your business. Fortunately the opposite is true, so do whatever you can to have strong and growing revenues and profits.

4. How stable is your customer base?

Your customers are the lifeblood of your business. The revenues you generate from them pay the bills and ideally fund great profits.

As such, acquirers will scrutinize your customer base. And the most important question is how stable that base is. For example, do they expect 50% of your customers to leave after the acquisition? Or 25%? Or 10%? Or none?

Clearly, the more stable your customer base, the more attractive you are to an acquirer. In the ideal situation, you have signed contracts with customers so the acquirer has complete certainty they will be retained. If not, ideally your customers have gotten in the habit of buying your products or services, or have a solid preference for them, so their continued patronage is likely.

Likewise, having a diversified customer base, as opposed to just a few very large clients, helps. Because with fewer, larger customers, there's more risk that one will leave and take a large chunk of your revenues with them.

5. What are the odds of sustainable future growth?

When you combine the four questions above, much of what the acquirer is trying to answer is what your odds are for future growth.

For instance, if you have a stable customer base, your financials are strong and growing, your business is unique, and it will be easy to run your business post acquisition, then your odds for future growth are great and you will have tons of suitors.

And tons of suitors interested in buying your business means that they will bid the value up and up, so when you sell, you will get a great premium. Which is probably one of the reasons you started your business in the first place. So do this, and make it happen!

Suggested Resource: If you want to build a sellable business, watch this free presentation called "Million Dollar Exits: How to Build a Business You Can Sell For Millions of Dollars." It starts by explaining the 3 most dangerous trends facing entrepreneurs today. Click here for this must-know information.

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In Business, Your Destination Is Your Reality


 

The last time you needed to drive to a place you had never been before, what did you do? 

Did you the load the specific address of your destination into your GPS, determine the best route, and then follow the directions?

Or, did you print out and follow your directions?

Or, did you do the opposite, that is, did you aimlessly follow random roads hoping that eventually you would arrive at your destination?

Sounds crazy, right that someone would consider this?  But, that is exactly what millions of business owners do every year and it is the reason that less than 20% of businesses succeed long-term. 

Building a successful business is not a collection of random acts of guess work and blind decisions.  To realize your dream of a successful business you have your make your destination a part of your current reality.

Know Your Destination

When Alice was in Wonderland she asked the Cheshire Cat which road she should take.  He asked her where she was going.  Alice replied that she didn't know.  Then came the much quoted Cheshire Cat reply of, "Then it doesn't matter which way you go".  

That may work very well in fiction or for a day of exploring a new hiking trail.  But it doesn't work that well in business.  Most business owners don't start a business thinking "Okay, I'm going to sink all my money, time, and effort into this venture, play it by ear, and if I lose all my money that is perfectly okay." 

Businesses are typically born out of a goal or a dream, such as "to be the best Italian Restaurant in the Tri-County area and be booked 3 months in advance" or "to grow my consulting business to $2M in revenue by my fifth year in business."

These aspirations and reasons for even starting are also the destination -- and they cannot be forgotten or buried in the frenzy of daily operations.  

Your destination must be known and visible every day.  It must be at the core of every decision you make. 

Large corporations don't have a vision and a mission just as a fad.  They have these plastered all over the walls because knowing your destination helps assure you will get there. 

The same way you would enter the precise address of your destination on your GPS, so it is in running your business.  Know your goals and keep them front and center to make sure you are in route to achieve them.

Importantly, take time to review your business plan or your 5 year strategic plan.  What were the main objectives of your business?  How do you describe your end-game?

Have Milestones

When planning a long road trip, you typically break it down into small pieces.   You study the map and learn the paces you will drive through.  For example, when going to New York to Las Vegas, you may map stops in Ohio, Missouri, and Colorado.  Because you prepared, and know what to expect along the way, and you know that if you see a sign that says "Welcome to North Carolina," you have veered off course.

Marking key places in your road map to business success is equally important. If you determine that for your business to thrive, you need to have 100 new clients by December, then reasonable milestones would be 25 by March, 50 by June, and 75 by the end of September. 

By planning milestones in advance, you know whether or not you are on track to meet your goals.  If by July you only have 30 new clients, you know you are off track, and need to reconfigure.  On the other hand, if you have 80 new clients by August, then you know you are ahead and can consider revising your goal upward.

So review your strategic plan, and then break down your goals into shorter term objectives.  Identify specific, objective measurements that you can take at precise intervals and map them out.  These milestones can take many forms such as sales, revenue, profit, clients, etc.  The important part is that you use quantifiable data that will tell you clearly if you are on track. 

Institute Scalable Systems


People, especially business owners, dream of success.  They have very vivid visions of the day they will "make it big," but so many are not really prepared for success.   Very often a business owner will successfully pitch their product only to have to turn down a lucrative deal because they don't have the production capabilities.

Take the "Wal-Mart Catch."  Inventors of new products salivate to have their product on the shelves of every Wal-Mart in the country.  However, when Wal-Mart puts in an order, it's not for 100 units.  It's for tens of thousands of units.  Inventor after inventor has lost their distribution contract because they did not have the systems in place to allow them to quickly scale up their business.  They did not have the manufacturing support to produce so many units. 

They knew the destination, but were unprepared to arrive. 

What is your end state? Do you have the systems in place to support having your dream come true tomorrow?  Be prepared.  Know exactly what it will take to run your business such as it will be at the end of your 5 year plan, and have all the partnerships, alliances, agreements, channels, support staff, and raw materials identified and ready to access when needed.  

If you want outrageous success, you have to be outrageously prepared for it.  

Your Destination is Your Reality

Your everyday business operations need to be focused on your destination.  When you are driving to the mall, you are driving to the mall.  Every turn you take, every road you choose has one purpose, to get you to the mall.  The same applies in your business.  Every product you manufacture, every service you provide, every relationship you cultivate must align to your target end-state. 

Avoid falling into auto-pilot.  Actively work toward your "end" every single day. Be conscious of how every sale gets you close to hitting your next milestone. 

Carefully measure your progress.  If you are off track, don't wallow.  Make adjustments and keep moving forward.  If you are ahead, pin-point the actions that are giving you an advantage, and do more of that! 
Keeping your destination alive and visible in your daily functions will keep it as your current reality and help you prepare for the success that comes with arriving!

And make sure you have a written strategic plan that maps out your end-vision and your periodic goals and milestones. If it's not written down, you can't achieve it. My strategic plan template allows you to quickly and easily get your plan down on paper.

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Never Say This to a Child or Entrepreneur


 

When my kids were younger, I recall one night when we were eating dinner. My kids were saying "I want this" and "I want that."

And then I said something that I immediately realized I should never tell my kids, or any entrepreneur for that matter.

What I said was this: "you know, money doesn't grow on trees."

Now, you may not think saying this is so bad. So, let me explain.

The reason why I said this was to show my kids the value of money. And that we have to work to make money to spend on the things we want.

But here's the negative: saying this paints the wrong picture. It paints the picture that we can't always get what we want. Which is the exact opposite of the attitude I want my kids, and all entrepreneurs, to have.

What my kids and all entrepreneurs MUST be thinking is YES, I CAN get whatever I want. Yes, it won't just come to me, but with hard work and ingenuity, I can and I will get what I want.

Fortunately, right after I said that to my kids, I caught myself.

One of the reasons I caught myself was from the interview I did a while back with Ken Lodi, the author of "The Bamboo Principle."

In the interview, Ken explained that timber bamboo shoots grow very little for four years while their extensive root system is growing and taking hold. But once the roots are firmly in place, the bamboo can grow a shocking 80 feet in just six weeks.

This story made me realize that money does in fact grow on trees. The key is to work on the tree's roots. To build such a strong foundation that generating money becomes easy.

Every great company has a strong foundation. They create a brand name, sales systems, delivery systems, etc. And then, they can generate cash and profits each and every day.

So, focus on building an extremely strong foundation. Think through your business model. Learn the best practices for each of the key business disciplines - marketing, HR, finance, sales, etc. And then, put your thinking into a strategic plan.

Your strategic plan is your roadmap to success. It is the tool that turns your ideas into reality. For example, the great marketing idea in your head isn't going to become reality unless it's documented in your plan and a team member(s) knows to execute on it. Likewise, your new products and services won't be built or fulfilled unless they are documented and your team knows what to do. Get your ideas in your strategic plan and then you build the tree from which money does grow.

So, never let anyone tell you that "money doesn't grow on trees" or that you can't have everything you want. Because money does grow on firmly-rooted trees and you CAN achieve and get everything you want out of life if you resolve to do so. They key is to build your plan -- your foundation -- and then grow systematically from there.

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