Strategies for Growth

To get market traction – we need to choose ONE strategy and do it well…

Growth in a business comes from either selling more to our existing customers or getting more customers. Either way we need to gain a position of strength and differentiation to grow our business.

In the jungle economy, if we are not growing and taking some one else’s customers, they will take ours. Equally so we have finite resources, so must choose a small list of things to do and do them well.

How do you get to “own your customers” i.e be the supplier of choice?

Too many businesses attempt plans that are incompatible with their balance sheet, their personal circumstance or even reality or worst still a potpourri of every possible strategy. My recommendation is choose one.

 Strategy Primer Questions

Strategic planning is about exploring and debating options in an iterative loop.  Before working out how to win customer mindshare you need to define what is your target market. A key step in this iterative cycle is to decide where long-term opportunities exist.

  • What is your long-term market opportunity?  Have you explored what’s going on in your industry ecosystem? What facts do you have that support your market will exist in 2 or 5 years time?
  • What is you competitive advantage or point of difference?  Is it a truly sustainable competitive advantage?  Do you have the skills to deliver this?
  • What is your strategy to maximise your competitive advantage?

Next you need to work out how you will get to “own your customers mind”, i.e begin your growth – to create a change in the market place.

 Unfortunately in the real world, we do not have unlimited resources – so despite ambitious intentions, we do need to make some choices of what do we do first and what takes priority. Most SME’s can only afford to invest (people & money) in one strategy at a time.

Strategic Priorities & Restraints:

  • What is your key strength?   Product, operational excellence (process) or customer intimacy
  • What is your no.1 priority? –  Market Share or Profit or Revenue (Prioritise these options)
  • What market segments are you going to take on and in what order? (geography, demographic, etc)
  • Have you got the make / buy split correct? Where do you add most value to your clients & yourself (who will you partner with).  Are some of your business activities a major distraction and not make you any money?

WIN THE RACE to OWN YOUR CUSTOMER’S MIND: – Choose one  

Strategy guru Michael Porter was of the belief that you only have two options to gain strength in a market Cost leadership or Differentiation.   

Winning market reach & share quick

  • Freemium (give your product or a cut down product away for free)– do a land grab then start charging or kick in alternative revenue streams later eg trademe
  • Partner with large organization – preferably corporate challengers rather than the giant that already has the customer, as they can up sell something “additional” to them (your product or service). Note Giants are typically too arrogant and do not need you
  • Merge – with other small players to increase efficiency and customer reach

Win the technology/product innovation race

  • Create products that others do not have and your customers will lust after – that have amazing customer pull eg killer apps
  • You may need to use a strong IP strategy that can not be worked around (trade secret) and patents or simply just obsolete your own products with new ones so people can not copy  (eg Apple, Microsoft)
  • In the services space this race is often influenced  with “thought leadership”

Create / Find a new market

  • Legislation change
  • Disruptive technology – new product paradigm eg MP3 players – ipod
  • Use existing technologies in a new way

Win the cost race

  • Make your product cheaper than all others. Organisational and cost efficiencies.
  • Warning – making products cheaper does not mean start a price war. Price wars in most cases become a race on who can hold their breath the longest.

Win the heart – BRAND

  • Build a brand experience people fall in love with – this may include service paradigm

What is your strategy to capture the mind of your customers?  – Is it one of the ones listed above or do you have another? Please share.

If you want a hand generating your strategy, how about coming along to a Business Dominoes workshop? We have just started running 3 day workshops that take in a weekend day, so you can have some tools to take on summer holiday.

A Strategy or a Goal? (Good Strategy / Bad Strategy)

A strategy is not a financial goal or a motivational slogan, it is a plan that has been developed to surmount a challenge, based on a considered choice, created from a thorough understanding of the environment you exist in.

What is the “rationale that says your business will be successful in the long term”  and “how will you exploit your competitive advantage”? 

 Your understanding of the environment that you exist in, to the point where you can attempt to predict the future, so you can see long term positions of strength will enable you to create effective strategy. Without undertaking this exercise you are operating without a key piece of “intel” you will stumble from one short term opportunity to another, missing out on long term profitable markets.

Wikipedia defines Strategy as:

A strategy is a plan of action designed to achieve a specific goal. Strategy is all about gaining (or being prepared to gain) a position of advantage over adversaries or best exploiting emerging possibilities. As there is always an element of uncertainty about the future, strategy is more about a set of options (“strategic choices”) than a fixed plan.

The problem with most entrepreneurs is their unwillingness to stop and analyse the market or the eco-system they exist in long enough to create multiple options to create an informed strategy.   A crucial step in creating good strategy is that you present multiple options and that you are forced to debate and create stronger arguments to support them.  To often we either go with the first option or just operate in committee mode and merge the options together. Powerful strategy often involves hurt – some one not getting their way and stopping pet projects.

Our impatience and desire to “just do it” – makes us jump directly to creating a plan, missing out on the great power of “true strategy”

There are two orders of power when looking at strategic planning.

  1.  Business Planning:- Operational Excellence: Gaining clarity in what you do and are good , deciding what to do and not.  BHAG (Big hairy audacious  goals), purpose, defining immediate goals and tactics to achieve those goals., basic competitor analysis.This business planning by itself does produce improved performance, but will not de risk the business in the long term.
  2. Strategic Market Analysis:  This higher order activity involves deeper understanding of what is going on in the market, where long term opportunities lie, maximising gains over industry trends and predicting trends.   Although this activity requires in depth market research and evaluation of multiple paths it will result in a simple statement.

In Richard Rumflet’s book  “Good Strategy Bad Strategy – the difference and why it matters” he makes a strong case for taking the time to do what I refer to as Strategic Market Analysis before business planning. He make brutal comments about what he calls bad strategy. He has brought a new clarity to me around business strategy or more importantly non strategy that will help me in my work. Below are few excerpts – learning’s from his book (available on kindle) …

  • Good strategy almost always looks this simple and obvious and does not take a thick deck of PowerPoint slides to explain. It does not pop out of some “strategic management” tool, matrix, chart, triangle, or fill-in-the-blanks scheme.
  • Unlike a stand-alone decision or a goal, a strategy is a coherent set of analyses, concepts, policies, arguments, and actions that respond to a high-stakes challenge.
  • The core of strategy work is always the same: discovering the critical factors in a situation and designing a way of coordinating and focusing actions to deal with those factors
  • If you fail to identify and analyze the obstacles and opportunities, you don’t have a strategy. Instead, you have a stretched goal, a budget, or a list of things you wish would happen.
  • The kernel of a strategy contains three elements: a diagnosis, a guiding policy, and coherent action that respond to a high-stake challenge.
  1. Diagnosing the specific structure of the challenge or change rather than simply naming performance goals.
  2. Choosing an overall guiding policy for dealing with the situation that builds on or creates some type of leverage or advantage.
  3. The design of a configuration of actions and resource allocations that implement the chosen guiding policy.
  • Good strategy is not just “what” you are trying to do. It is also “why” and “how” you are doing it. Combining all three elements mentioned above.

Even after working out what needs to be done “Good Strategy” is explicit in how you will do it.  Steve Jobs’s guiding policy  is legendary: (1) imagine a product that is “insanely great,” (2) assemble a small team of the very best engineers and designers in the world, (3) make the product visually stunning and easy to use, pouring innovation into the user interface, (4) tell the world how cool and trendy the product is with innovative advertising.

My observation is that we are all jumping over step one in Richard’s process or simply restricting it to a basic SWOT and competitor analysis.  Explore more on this topic in another post called  finding new strategic opportunities or come along to one of our business dominoes strategy workshops

Take the time and watch Richard’s three minute video.

At very least challenge your strategy : is it a slogan or a goal or does it have some decent market intelligence behind it?
And more importantly have you had it challenged?

GMC Business Model Canvas V2

Clarity and definition of your business model is one way to give your business an instant steroid shot.  From a planning perspective it is also worthwhile exploring a range of “what if” scenario’s around applying different business models to your business. Prepare your Business as usual (BAU) canvas, then challenge yourself to look at new canvas mixes: different business models and make/buy combinations.

The business model canvas is a great way to brief new stakeholders who work with you including new staff, bankers, advisors and potential investors. Once developed it can be used with the GMC Guide to Saying No.

The original book “Business Model Generation” by Alexander Osterwalder & Yvess Pigneur provides great examples of how to document business models, along with methods to brainstorm innovative changes in business models for existing businesses.

I have been using my own variant of the business model canvas for some time. I  have recently remodeled my GMC  variant and thought it was time a shared this.

Its great to see the Business Model Canvas is gaining wider use, many of the universities are picking up on it, using it as tool in their entrepreneurial programmes. 

(Click image to download pdf template)

The GMC Canvas Components:

Value Proposition (VP):
The value proposition (VP) must be at the absolute core of any business. When defining your VP it is worth while to also clarify your “Customers Problem” that they will pay to solve and make sure that your VP definition include your Unique Selling Proposition (USP).

  • Is your value proposition unique to you, or would it work for any one else in your space?
  • Do you need to separate out the value proposition for the customer (the person paying the bill) from the end user of your product/ service?

 Market Segment (MS):
Define your market segment as tightly as you can. Often it pays to focus on your beachhead market  – i.e the market where you can make the most money the quickest.

If you have a planned phase approach to your go to market strategy list the markets separately.  Do not forget to include a psychographic (decision making priorities – traits) and behavioural definition if relevant.

  • Challenge yourself to narrow your definition so you can easily qualify out C grade customers (the ones you do not make much or any profit off)
  • Do these customers have budget to spend on solving your the problem you have identified?

Core Competencies:
What key skills and knowledge do you have? These will come from the strengths you have listed in your SWOT.

Have you listed the ones that enable you:

  • Create value for your customers
  • Acquire customers
  • Differentiate you
  • Generate profit
  • Sustain your competitive advantage

Assets:
Remember to include intellectual property, customer relationships, key contracts and brand if they are assets for you.

  • Don’t include items that can easily be replaced or that are low value

Key Partners:
List only KEY partners that help you build your product or service or reduce risk in your business.

  • If a partner competency is too crucial to your business highlight it perhaps and an arrow to internal competency list  (You may need to plan to bring in house or get a good contractual arrangement)
  • The make or buy decision will be represented by whether you list something in the key partners or competency box

Channel to Market:
 In this section include key pathways to acquiring customers and leads.

Cost Structure:
Split overheads and variables.  Explicitly list any major costs or contractual arrangements. List items from your P&L that equate for more than 20% of your overhead cost.  Show a reference metric eg % of cost.  Show raw cost (or margin) of and manufactured items that account for majority of your revenue.  Don’t forget to list any major debt.

Revenue:
Split revenue into major revenue streams – product lines/channels.

BHAG  (Big hairy audacious goal)
What is the BHAG that motivates people to join the cause. Refer BHAG post

  • Your BHAG needs to be more than a revenue target.

 Brand Essence / Values
What are the top 5 – descriptors of your brand essence and culture values.

  • Most HR issues stem from failure to adhere to core values. Makes sure they are explicit and all staff, understand how they apply to them.

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What’s Missing: 

If something is missing in your current canvas that should be there – eg your brand should be an asset but it isn’t add it to the canvas and highlight it in some way.

Create Multiple Canvases

Take the time to explore multiple canvases and then do a cost/benefit scenario analysis using a simple comparative matrix

Rapid Analysis of ‘What If’ Strategic Options

Too often we are stuck trying to evaluate a multitude of ‘what if’ options when it comes to strategic planning; trying to tabulate a massive matrix of all the variables.

Scenario Evaluation

A tool we use at Business Dominoes is to map out the different scenarios on a simple cost vs benefit matrix (click image below).   Simply referencing the centre point being business as usual (BAU) i.e what we are doing now. Then referencing the alternatives based on the relative cost and benefit.

Our brain has an amazing “gut calculator” that enables it to subjectively accumulate of all of the data to evaluate what does total cost and benefit accumulating a multitude of variables.

(click image for larger version)

This analysis will quickly highlight both quick wins and potential long term strategies, bearing in mind often you will need to adopt a couple of interim strategies to achieve your end goal.

Competitor Profiling

You can also use the same tool to compare your competitors. Remember it’s from your customers perception, not yours. The diagram below is an easy way to illustrate your market positioning.

(click image for larger version)

Business Dominoes – Strategic Development Programme

If you are after some fresh thinking around how to handle some major strategic decisions for your business and avoid being blind-sided by some giant guerrillas in the market I would suggest attending the Business Dominoes Programme. It’s a 4 day intensive boot camp, where you will be armed with and use a variety of tools to aid you strategic thought processes, make decisions and chart a lower risk path to success.

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Free Entry to MyBizExpo:

The My Biz Expo is running from 14-16 October, ASB show grounds, Auckland.  Business Dominoes will be on stand 2023Register online now at www.mybizexpo.co.nz and save yourself the $20 entry fee.

 Free 1 hr Seminars at Biz Expo
Monday 15th Oct 2pm

Creating Powerful Elevator Pitches

Tuesday 16th  Oct – 1pm
Funding Business Growth  – Tools and strategies to build a scalable business
Presenter  Mark Robotham

Finding New Strategic Opportunities

 Take yourself out of your business and explore the industry view

 We all suffer tunnel vision when it comes to running our businesses. Even worse, when it comes to finding time to do some true “blue oceans” strategic thinking.

Too often our thinking is constrained by looking at our world from our own perspective rather than that of the customers and the industry eco-system we exist in.

We all got a great reminder of this when Kodak got into major financial trouble in Jan 2012. How could such a giant with 1000+ patents in digital photography screw it up so bad.  My take, they failed to adapt the culture (attitude) of the business to the new value chain and eco-system that emerged into the new digital age.

Real Strategy

Strategy is most probably the most miss used word in business. Strategy is about understanding the lie of the land, understanding the geography you are about to do battle in, assessing the enemies strengths and weaknesses looking for gaps and opportunities to capture a market.  Its not about what to do every day operating your business – alah business planning and execution.

Mine your external value chain for opportunities

If you are looking for investment, market or channel partners the best place to start is looking at your customers and end users. Then map all of their suppliers, customers and their influencers out on a huge mind mapped value chain. Documenting suppliers, to suppliers, to customers and so on. By reviewing all the players on this map e.g. who holds the power of influence, who owns critical scarce resources and who is making the profit etc you will uncover a raft of possibilities.

Include in your thinking competitors as well, most NZ business shy away from conversations with their competitors let alone doing deals with them to collaborate in the global marketplace.

Look for market trends that will uncover future change in your industry

Take the time to look for current trends across your complete value chain so you can spot hot spots or market opportunities to take advantage of.

 Business Dominoes – Strategic Development Programme

If you are after some fresh thinking around how to handle some major strategic decisions for your business and avoid being blind-sided by some giant guerrillas in the market I would suggest attending the Business Dominoes Programme. It’s a 4 day intensive boot camp, where you will be armed with and use a variety of tools to aid you strategic thought processes, make decisions and chart a lower risk path to success.

_________________________________________________

Free Entry to MyBizExpo:

The My Biz Expo is running from 14-16 October, ASB show grounds, Auckland.  Business Dominoes will be on stand 2023Register online now at www.mybizexpo.co.nz and save yourself the $20 entry fee.

 Free 1 hr Seminar at Biz Expo – Tuesday 16th  Oct – 1pm
Funding Business Growth  – Tools and strategies to build a scalable business
Presenter Business Dominoes – Mark Robotham

7 Ways to Stop Wasting Time

Is your business focused on your Value Proposition?

How much of your business activity is focused around adding value to your clients – i.e delivering your value proposition. The base logic behind  Kaizen is removing waste, while optimising value to your clients.

Prior to commencing the valuable process of eliminating waste I suggest getting great clarity around your core value proposition and what target market you are taking on as well as your strategy to maximise it.

Kaizen or “Lean” has been popular in large business for some years now. Most of the evangelists like John Cook from Stainless Design in Waikato all come from the larger end of SME or big corporates.   After attending an inspirational seminar with Julie Hazelhurst (Kaizen guru), she has got me thinking about the implications of this thinking to the smaller end of SME.

Waste (Muda) comes in 7 forms

  • Motion – people movement, searching
  • Waiting – stalled customer processes
  • Transport – Information and material
  • Storage – Information and material
  • Defects – rework
  • Over producing – doing more than client pays for
  • Over processing – over engineering, more precision

Julie’s premise was “if you’re running short on time and money in your business perhaps you should tackle your waste first and maximise the value out of your talent in your team, before looking at taking on more staff”. She took us through the basic process of mapping your internal value chain and observing the “waste” processes  typically interleaved with the activities that your client values.

Its interesting that in Business Dominoes we use a similar focus on value chains to spot new market opportunities and strategic alliance partners outside the business, where Kaizen uses the internal value chain to focus process improvement.

7 common waste areas that I continually see SME’s wasting time on:

  1. Potential & current clients not in your target market Get clear about what is and isn’t an ideal profitable customer. Create a bullet list of their characteristics : eg revenue, location, ability to “get” your value etc
  2. Distractions of activities off “piste” Get clear about your business competencies and larger goals, then “stick to your knitting”. Too many businesses never achieve anything because their visionary leader is always chasing the next big idea. Put some structure around your business and then say NO to stuff that will not achieve your goal.
  3. Poor performing staff. Failure to deal with non performing staff will scare off the bets performers. Despite the hassles of our employment law – act now.
  4. Over engineering products and services, rather than selling Get the balance between engineering and marketing spend right. Know when you have that minimum viable product and then go sell, sell, sell. Craftsmen are never satisfied and continue to tinker with the machine when they should be bringing in revenue. If you have zero sales stop everything and validate your market before progressing.
  5. False economy of not having or having  a low performing professional service providers  Get some great outside help to challenge you on your big decisions and to have a shoulder to cry on as well as celebrate success with. If you have zero budget start with a fellow entrepreneur and meet them for a coffee once a fortnight.
  6. Inefficient accounting systems If you are not using auto bank feeds to avoid entering transactions – try Xero with bank feeds –use bank accounts that auto feed transactions into your accounting system -link your credit card as well. Learn how to do your own GST return, it takes minutes and you get a  great check point on your business.
  7. Outdated IT systems If technology is not helping your business you are doing it wrong – get a new IT supplier.  If you have less than 50 staff throw out your email server and replace it with office 365 (a great cloud computing service). Share electronic contacts and calendars around your organisation and embrace smartphone technology.

What’s your biggest area of waste?

Add a comment below with the big saving areas that you have made in your business.

Redefining – employee commitment and work life balance

Pigs or chickens?

Too many employee’s have an entitlement attitude and its killing business owners – who’s fault is that the employee or employer?

The employee owner – divide is a constant challenge for business owners. How do you motivate your employees to go the extra mile and behave more like owners? Mastering the art of people leadership, is the toughest of all talents a business leader must acquire if they are to be successful and not die of a heart attack due to “staff issues”

Owners and employees are as different as the pig and the chicken in the “bacon and eggs” business – the pigs are committed and the chickens are involved.

Are your staff pigs or chickens?

 One of my biggest observations after working with business owners is that most people have never worked for an “inspirational leader” or in a “high performing team”.  As such they have no role models or experiences to reference to, or emulate.

 Are you an Inspirational leader and do you have a high performing team?

Yes we need to recognise that employees will never behave exactly like owners mainly because they will never have as much on the line as owners do but …

as business owners it is our role to lead and develop a culture where we can get the best out of people.

Too often I hear business owners complain about the performance of staff, in particular well-paid senior staff, yet as leaders they have not been clear and upfront with what they expect from their staff.

In my blog post on Daniel Pinks – book Drive I referenced one of his concepts that has stuck with me has been the concept of “pay people enough, to take money off the table as a motivator” and “replace it with purpose”.  Its we worth watching, RSA’s Daniel Pink Drive 10 minute video summary of the book– it is great at positioning money is not the best motivator.

A well-crafted BHAG (big hairy audacious goal) is a great way to clarify with your team the purpose. For tips on this read my BHAG blog post.

So lets set the record straight: what do we actually expect from our staff and in particular our staff paid more than $70K a year. My guess is to many people are being held ransom by their employees and are not clear enough on expectations.

 Redefining “work life balance”

One of my pet issues with “employee” logic as a opposed to “owner” logic is the distorted and biased view of work life balance.

I quote from the Department of Labour website – which typifies employee logic:

Work-life balance is about effectively managing the juggling act between paid work and other activities that are important to us – including spending time with family, taking part in sport and recreation, volunteering or undertaking further study.

Interesting all the examples on the DoL are about employees getting rather than giving.

Here is my redefined definition of work-life balance

Work-life balance is acknowledging that modern work and home life are integrated with each other and cannot be separated. 

It means: just as its ok to have time off to go watch your kids athletics, or bugger off early on a Friday to go on that Mountain bike trip with you mates, its ok to check you emails in the weekend, stay late at the office because we have a deadline.

It is not about clock watching and collating time in lieu, it’s about being part of many winning teams : at work, at our sport and  family – all simultaneously.

 Signing up staff to a new commitment contract 

How would your staff react if you asked them to sign up to a commitment pledge?

Commitment contract

I agree that I get:

  • Fair compensation for my contribution to the company?
  • An opportunity to share in the upside of the business? (profit share, bonus, promotions) 

 I commit to:

  • Being as passionate about work as my non-work life.
  • Not switching my phone or brain off as I leave the building:  So I am constantly thinking about how our business can be improved and do better , sharing my ideas with other team members
  • Spend company money as if it was my own
  • Not clog up our finance system with petty little expense claims (items less than $100) – noting it costs most organisations more than $100 to raise and settle an expense claim
  • Go the extra mile on a regular basis including doing extra hours over and above 40 hours per week

What else would you add ? …

Don’t let your public speaking skills limit your potential

Finding your voice – could be the easiest way to accelerate your business or careers success.

Whether you are a business owner or executive trying to get ahead, your success will be severally limited unless you can master the art of public speaking.

Standing out from the crowd is an essential element of success for people and businesses alike. Public speaking is one of the easiest and cheapest ways to stand out in the crowded market place.   Whether it is how you speak at meetings or getting a speaking engagement at trade conferences.

Some people love public speaking, others dread it… but whether it’s speaking to conferences, sales calls or just plain networking and major meetings; it is clear that even to day in the digital age you need to master the art of speaking to get ahead.

Only 7% of message impact comes from the words we use. The rest from the way we deliver it.  The way that you deliver “your words”, comes from how we process things internally and can be reprogrammed.

To develop confidence and passion into your speaking here are a few tips:


Personal brand – Consciously own a style

Too often the inexperienced speaker will put on their “speaking voice”, inadvertently becoming someone other than themselves on stage. Generally that “speaker voice” is a poor version of you and they are selling you short. Save the being someone else to the professional actors. The easiest person to be is you.

Get clear about who you are and what your personal brand stands for. Develop a written list of key characteristics of your person brand, values and style in your normal non-speaking business life. Then use this list to encourage and challenge yourself to be that on stage. Remember being “consciously competent” is the step in learning before “unconscious competence”.

If you work for a corporate do not loose your individualism and personal brand completely to the company brand. For “owner managers”

Use a topic you are passionate about to start

Ask yourself “What part of my topic am I most passionate about?”  Use this in your opening, if you are truly passionate about it, your body will change its physiology and you will become alive on stage.

Stand for something: Have a few “soap box” topics

Have a few pet topics that you can speak on, so that given short notice you always have something to talk about. Make a bold claim; debate is one of the most powerful ways to engage audiences.

Just Do it

Yes nothing will get you better at speaking than practice. Take every opportunity to practice. Start by always asking questions at conferences and large meetings. Hunt down speaking opportunities; industry associations are a good place to start.

If you lack speaking opportunities join a toastmasters club. Toastmasters provide a friendly and inspirational environment to learn and improve every week. I personally got a lot out of attending a club for a while and was blown away by the relaxed format and inspiration speeches I heard.

Get Help

The quickest way to improve you learning is to get some one on one coaching and critique.

Basic steps to finding your voice:

  1. Personal commitment to fix it
  2. Process of creating a conscious personal brand – and using it as a strength in presentation style
  3. Learning some mechanics / tools of delivery that are compatible to you
  4. Creating the message to deliver for the voice medium.
  5. Personal coaching on all above – including follow up coaching

At GMC we help business owners and executives who want to “find their voice” in the business environment,  helping you discover what to say and how to say it. Unlike traditional speaking coaches we get business and business people – and come from a business perspective rather than entertainer or actor mind-set.

Good planning = Asking the right questions (Bisvision Toolkit)

“A clever man gives the right answers” … “A wise man asks the right questions”

One of the big conundrums facing business leaders is what they don’t know, they don’t know.  Damian D’Cruz  has gone a long way to helping business people ask the right questions with his business planning tool kit called BisVision.

This great kit uses 5 decks of cards to ask probing questions around SWOT’s, Vision, Planning, and Execution.  You can use the kit to take you through a structured planning approach.

I have used the kit for a number of years and have found it great in its simplest use of – “what have I not considered in developing my business plan?”

Damian has produced two versions of the kit one for Businesses and one for the Not-For-Profit sector.

Asking the Right Questions

The opening quote, regarding asking the right questions, is so true. I have now come to the belief that any professional service provider can best be measured by the quality of those questions.  As a consultant myself, I have realised it is not the tools we use, but the way in which we use the tools that produces the best result. 

“I can give you the paint brush, but it will not make you an artist”. It’s on this basis I believe that by passing on as many tools and techniques I can, I will help people, but if they want true art give me a call 🙂 Happy reading.

For those who like DiY planning, this kit will be invaluable. Support this local company and  purchase it on the Bisvision Website

Better ways to finance your business than investment

So you are short of working capital (cash) for you business:
Is getting an Angel Investor the best option? Most probably not.
Should you get investment ready – definitely!

In most cases, the act of preparing for investment will eliminate the need to raise money.  Companies that get investment typically will receive the capital to accelerate growth, not initiate it. 

Apart from having a realistic valuation expectation, being “investment ready” is simple, get clarity and focus around:

  • Product or service value proposition
  • Business model, strategy, and plans
  • Having something unique and defendable in your product offering
  • Building and maximising the productivity of your team, including governance
  • Have customers that buy stuff

There is no rocket science around all this, but I consistently see companies going to the market to talk to investors that do not have their act sorted. Equally so, they are attempting to do too many things with mediocre results.

Now for the reality – raising capital is slow and arduous process.  Typically it will take you six to 24 months before the money appears in the bank account and will consume at least 200 hours of your time.

Many businesses seeking capital will go bust before they get there and the more fragile their current position, the more likely it is they will not attract the capital.

Without a clear strategy and go-to market model, you are unlikely to find an investor.

So if Angel Investment is not the magic answer what is?

One of the issues of technicians starting businesses, apart from those raised in my e-myth blog post, is their lack of experience in structuring deals of any type, too often playing with price as the only negotiating tool.

Other options for funding growth include:

  • Selling more
  • Charging more for your product – what effect would there be by increasing your sales price by 30, 50 or 100%? In many cases increasing sales price will increase sales.
  • Establishing better sales channel partners – preferably ones that already have your target market as customers
  • Using customers as promoters of your product
  • Sharing promotion costs with distributors
  • Licensing deals
  • Structuring payment options eg. 50% deposit with order
  • Debt finance
  • Invoice factoring
  • Government grants – yes there are still some available

For those who are looking to get smarter around strategy and structuring their business for growth, Debbie Humphrey and I run a four day workshop called Business Dominoes to tackle this very issue.