What About Starting Your Own Business? A Way Back To Employment Or To Escape A Job You Don’t Like

After dreaming about winning the lottery the next most popular lifestyle dream is working for yourself. Just last week the Government minister, David Willets, suggested graduates should think about starting up their own business last week as an alternative to struggling in the current job market.

[geoads2]

Often our work involves working for clients who started their own business or through circumstance have ended up working for themselves. We’ve also seen a few people/businesses struggle and fail. Below we’ve put together a list of some of the key criteria that seem to make the difference between being a wage slave and being in charge of your own density:

  1. Working for yourself doing the same job as you did as an employee is not the same thing. We see a lot of internal consultants and trainers who think they will just do the same role, but as a free-lancer. Not understanding EVERYTHING is different; the psychological contract, the success criteria, the value equation, the feedback mechanism, everything.
  2. Your idea has to be different enough in an overcrowded market. It’s no good having a quite good idea, or something like something else. Your idea has to be better. It has to have something that meets either an unmet need/want, or activates an unarticulated need/want in the mind of your prospective customers. Key possible variables to consider are; price, location, functionality, quality, practicality, brand, service, & novelty.
  3. A poor business idea won’t come good if you give it time. Indifferent offerings (think of your local high street) don’t improve when the market does; they just go bust at a slightly slower pace. Grants and subsidies are no substitute for a strong value proposition.
  4. It’s all about cash not profit. Free (unspoken for) cash is what drives successful businesses. That unencumbered cash can be turned into profit, dividends, reinvestment, acquisitions or lifestyle. NEVER borrow money (after the initial start up phase) to fund running expenses or your own wages. More businesses/people fail not because they are unprofitable but because they run out of cash.
  5. Technology can be your BIG idea or your downfall. Technology can deliver fantastic opportunities – Facebook, iphone, etc. Can you exploit these new technologies in some way? Equally, many business models are being threatened by the internet, make sure you test your (off-line) idea against an online alternative. Try to look at least 5 years out.
  6. You could be the problem. Some people can’t work for themselves; they haven’t the discipline, the work ethic, the resilience, the right approach to risk, or the personal support. Make sure you develop enough self-awareness to understand YOU, before making an expensive mistake.
  7. Pay attention to everything. Planning, attention to detail, checking and analysis should all be key activities in the pre and launch phases. If this isn’t your bag, find a partner or some hired resource you trust, who loves sweating the small stuff.
  8. Create a good business plan. One that covers all the bases; finance, sales, marketing, operations, people and compliance.
  9. Desire always beats ability. Nothing more to add here.

If you think you’ve got our checklist covered, go for it, you’ll have a great (and sometimes scary) time!

Can You Future Proof Your Business By Making The Right Strategic Decisions?

In our work it’s fascinating to see where businesses have ended up and where they are thinking, or not thinking, of going. All businesses need to periodically reinvent themselves, to find a new direction; if they don’t, they wither and die.

[geoads2]

Iron Mountain is a world leader in Data storage. You may remember the fantastic free publicity they received when Lehman Bros went bust and ex-employees were photographed carrying out their belongings in Iron Mountain boxes. This business grew out of a mushroom farm in 1920s East Coast America. Herman Knaust needed to expand his business so he bought a dilapidated iron ore mine to grow more mushrooms. By the 1950s this idea had run its course so used his ‘Iron Mountain’ to securely store public and private records. The rest is history.

Nokia began life as a 19th century paper and wood mill. It then moved into rubber and, through circumstance, got involved in early telecommunication in the 1960s. It finally made a strategic shift into becoming a pure telco business in the 1990s.

Some would argue Nokia is at another inflection point in its long history. Unless it calls the Smartphone market correctly it could become an also ran as it continues to lose market share and brand leadership to Apple, Samsung and other Far East competitors.

Today, many other organisations are at their own strategic inflection points. Do they carry on as before, trying to optimise further their existing business model? Or do they take a radical departure away from what got them here, to something that might get them to a viable, more profitable future?

What are the two business obstacles in making a strategic shift?

[geoads3]

One is a people issue. A lack of vision, combined with being in denial is a fatal C-suite combination. Having two feet firmly in the past, means you are not moving forward. Unless someone has the courage to firstly challenge the current business orthodoxy, and then drive their point of view through to big decisions being taken, the business will continue to drift.

The other is an economic issue. There are two common financial symptoms of businesses that are at their strategic inflection point. The first is that they may be very profitable. Often a mature marketplace with a highly evolved operating model, with fully written down investment is highly cash generative, and the Board have got used to turning that cash into profits, bonuses and dividends. When the heretic makes the cry ‘We need to (expensively) change’ the answer comes back ‘Why? We’re doing great!’

The second is the death of a thousand cuts problem. The business keeps having bites taken out of them by (often) new, upstart competitors, none of them fatal, and no one competitor takes them head on, but slowly the business is drained of its future health. Short termism becomes the natural order, the occasional serendipitous win promoted as a ’turning point. ’

One of our favourite jokes is ‘When you come to a fork in the road, the best decision is always to take it’ .

Two Views Of Facebook – Would You Be A Buyer Or Seller Based On What You Read Below?

We all know about how Facebook is occupying a larger space in many peoples’ lives. If you were still unconvinced, have a look at the figures below:
[geoads2]
What is really interesting is not the member growth but the intensity of use. People are unloading more, updating more, just being on Facebook a lot more. As the network has grown so has the value of being connected to it.
BUT – has Facebook peaked? Have a read of this article from Wired Magazine earlier this month. If Facebook has reached all the people who are interested in joining what they have got to do pretty quickly is find a way of monetising all those members, to find a way of commercially binding them in to becoming customers. If not, this fantastic rise could turn out to be just as a spectacular fall.

Getting Behind Sales Results – How Data Interrogation Can Lead To Insight

Did you see the Wimbledon mens final on Sunday? Raffa Nadal won in straight sets – 6-3, 7-5, 6-4. Imagine not seeing the game and just having the result, how insightful could you be about how he won?

 [geoads2]
For many sales managers, that is exactly the position they are in. They have the sales results or Key Performance Indicators (KPIs), but don’t have any meaningful or accurate Critical Success Factor (CSF) data. Consequently their capacity to interpret the results is very limited.
Have a look at Nadal’s data sheet below:

 

[geoads3]

 Once you know he won the match, notice how uninteresting the KPI data becomes and how your interest is drawn to the CSF data. The next striking thing is how close the Service battle was, on many of the factors Nadal did worse than Berdych. Several of these CSFs don’t seem that critical when they are delivered to a minimum quality level.
Have a look at the last CSF, if you want to understand in an instant how Berdych lost, there it is. He didn’t win a single break point whilst Nadal won 67% of his opportunities.
Apart from that huge differential another, almost contradictory theme is how Nadal won through being consistently better around other variables. The number of winners hit – 2 more, first serves in – 10% better, first serves won – 1% better, second serves won – 6% better, unforced errors – 4 fewer, but it’s the compound effect of these small differentials that creates this winning performance.
Finally look at his aggression. Nadal came to the net almost 20% more frequently than Berdych, putting additional pressure on his opponent, taking the game to him, being more pro-active.
Imagine having an accurate data set like this, correlating all the CSFs of your sales process to the KPIs achieved, split by individual. It would give you a laser like focus on where both the quality and quantity of activity needs to improve. It would also show you where potential best practice exists for you to model and disseminate across the whole team.

Speed To Competence

If you are recruiting you will need to think about inducting/onboarding your highly motivated, keen to learn, potential sales stars of the future. However, within three months your new recruits will have become institutionalised, demonstrating the standard distribution of performance – 20% doing really well, 20% doing really badly and 60% contributing to the existing average by being, well, average. What happened?

[geoads2]

Odds are the induction didn’t align with the ‘advertised’ interview rhetoric or the reality people found when they joined their new front line colleagues. Typical induction processes do not engender fast delivery of the required performance – what we call ‘Speed To Competence’. New sales people joining an organisation actually want the same thing as their leaders – to become as successful as possible as quickly as possible, and to be effective and happy in their work. The right induction process harnesses the new recruits’ high levels of motivation, their willingness to learn and their desire to impress, and then channels it through a high impact, experiential learning environment. This creates not only improved profitability in the short term, but also accelerates employee engagement and motivation over the longer term.

Key Questions:

  • How quickly do you expect new recruits to recoup their full recruitment and ongoing employment costs?
  • How quickly do you expect them to reach the average performance standards?
  • How long does it take them to be in the top 20% – doing really well?
  • How quickly do you expect new recruits to set new sales performance/productivity standards

What Does Structured Training’s Speed To Competence Deliver?

[geoads3]

  • Integrate your organisation’s purpose and culture into the required working practices, creating a real seam of consistency from the board-room to the frontline.
  • Embed sales best practice from day one. The right things being done in the right way.
  • Establish a high ownership, high accountability norm. Salespeople doing what it takes, not just doing what they’re told.
  • Create a value-adding, pro-active, high-performing work tempo
  • Give people the confidence to challenge the status quo but always from the credible position of being a significant contributorIncrease engagement and motivation through clear expectations and commitment to common objectives
  • Equip sales managers and sales directors to be effective role-models and coaches, creating a sales culture as obsessed about Critical Success Factors (inputs) as Key Performance Indicators (outputs)