Everyone knows that in business (as indeed with life in general) the best way to be successful is to understand where you are going and what success looks like when you get there, but how on earth do you stay focussed on your goals for the business when they are 10, 20 or 25 years away?

Essentially you need a plan, once you have clarified what success is and what your business looks like in 10 years (say), you need to break that plan down into sizable chunks, right down to quarterly goals, once you know that, you can then split your quarter into months and each month should have 4 “one things”.

“One things” are just that, they are one specific task that you need to do, over and above the day to day stuff that will inch you closer to achieving the big goal.  Can I ask you how much closer would your business be to achieving what you want it to do if you could achieve 46 “one things” each year for ten years?  460 one things is a lot of tasks to get done, specifically to achieve your vision / long term goal.

“One things” can be used for the day to day stuff too, how many of you reading this now are snowed under with work or administration?  How many of you have fallen behind in one or several areas of your business?  How do you address that problem, you prioritise what needs to be done, break it up into a series of manageable “one things” and  deal to one each week, before you know it you will have caught up with the back log and in doing so will have created a habit of doing a “one thing” every week, it’s at this point you can start getting a head of the game.

The old saying goes “Rome wasn’t built in a day”, that’s right it was built brick by brick over time, business is the same, no business is created and successful over night but they are all built on the ability to achieve a series of “one things” over time.

What’s your “one thing” for this week?

Hunter or Farmer?

Having a successful business is all about getting the right team, doing the right job at the right time, the sales side of your business is no different.  The sales team are at the coal face, they are the one’s that interact with your clients day in, day out so they had better be good at what they do!!

As I have written before in a previous article there are generally two types of sales person, there is the “hunter” and the “farmer” and they are very different types of people with very different strengths and weaknesses, so which one is right for you?

The Hunter

These sales people are hungry, they are highly focussed individuals that revel in the chase, they love closing the deal but don’t expect them to hang round too long after that as they are off hunting down their next prey.  If you need to break into new markets, or saturate your current one, these guys will get the job done, but you had better be sure to have a robust follow up process in place as they tend to leave plenty to tidy up.

The Farmer

These sales people are extremely focussed on keeping their clients happy, they will go out of their way to ensure their clients get what they want, when they want it.  Due to the time they spend with their current clients, they have little time to chase down new business (not that they wont recognise an opportunity when it presents itself), but if you are trying to consolidate a market or provide premium service as part of your offering, these guys will get the job done.  The down side to farmers are they can erode the bottom line if the are not managed properly, due to the amount of time some of them can spend securing that extra dollar from their client base, again you will need to have a robust process in place for them to follow.

These are extreme behavioural examples of both, most sales people are a bit of a mixture, but will have a stronger emphasis one way or the other.  As a business owner it is up to you to find out where they naturally lean towards and utilise that information to your advantage especially when you are incentivising and motivating them.  Which ever type you have they must be managed well, they will need good sales processes, they will need their call cycles established and they will very definitely need to understand your customer’s resonating factors in order to achieve their sales goals.

There is no doubt that since the GFC (Global Financial Crisis) the value of business sales in New Zealand has significantly reduced. This is due in part to businesses making less profit, and therefore being less attractive; and the difficulties in obtaining finance with which to make the purchase. However Tabak’s experience is that the bottom of the market was back in the 2011FY and sales are definitely improving again – both nationwide, and within Canterbury.

Reasons why Tabak believe now IS a good time to sell include:

• Record levels of recent sales
• Banks’ improved appetite for lending
• Improving pipeline of “larger businesses”
• Canterbury driving NZ’s GDP growth in next five years i.e. strong markets within most industries
• Beat the “baby-boomer” bubble

Recent Sales

Tabak Christchurch sold more businesses during the 2012FY than ever before. Indications for the new financial year are also very positive with four more sales in “due diligence” at the time of writing; and our Queenstown branch is also experiencing increased demand from both buyers and sellers.

Pipeline (or WIP)

Our South Island “pipeline” showing businesses that Tabak is either marketing; preparing for sale or valuing is now around $50m. This is the highest it has been for some time, and includes several larger businesses in the $1m to $5m category, that are now performing strongly.

Bank Lending

Most bankers (and economists) would agree that lending is unlikely to be returning to the days of pre-2008 any time soon (and it could be argued “nor should they”). The virtual disappearance of the second tier finance market is starting to be filled by non-bank lenders/finance brokers such as www.tbkcapital.co.nz and the six main banks are clearly now “open for business”. Cashflow lending remains a more challenging proposition but deals are being done and there is an improved appetite for lending that was missing several years ago.

Canterbury/South Island Market

The Canterbury EQ’s are resulting in an unprecedented amount of money that is being recommitted to the region over the next 3-5 years. There will be a significant flow-on (or multiplier effect) throughout the region, and in all likelihood, the South Island. This will ensure that most businesses, including those not directly feeding into the rebuild, will experience improved demand for their products & services.

The Baby-Boomer Bubble

It is an oft-reported fact that the average age of business owners is increasing (now somewhere between 55-60) and at some stage these owners will want to realise the value in their business for a tax-free gain i.e. sell the business. The challenges of the recession; GFC and (in Canterbury) the EQ’s have all delayed business owners from acting in the last three years. People do not live forever and Tabak’s view is that this “supply-side” bulge will start sooner rather than later….so a vendor wanting to come to the market prior to the “bubble” will need to move even more quickly.

Whilst it may be in Tabak’s interests to “talk up” the market, the above points are all FACT – not opinion, and it is for this reason that Tabak are firmly of the view that now is a good time to sell your business.

1. When are you at your best?

This might seem like I’m teaching you to suck eggs but if you are an early riser, the chances are you will be able to accomplish complicated mental tasks more efficiently earlier in the day so that should be when you schedule in that complicated proposal or project.  If you have to do overtime, do it before the office opens for business, you will get far more done.

Equally if you struggle to get out of bed in the morning and you are the type of person everyone avoids until morning tea break,don’t even think about getting stuck into that complicated project, find some less mental challenging jobs to do until lunch time, after which put your head down and get that complicated task out of the way.  If you have to do overtime, you are more likely to get stuff done after the office closes.

Important – The mind can only sustain highly focussed mental effort for approximately 90 minutes but only needs 15 minutes to recover – make sure you take regular breaks from what you are doing!

2. Delegate Effectively

This in itself is a big topic, but I’ll ask you to consider point one.  Do not treat all your team the same, if you have a combination of people that are either one of those examples in point one (or a mixture of each – quite common), then delegate the more complicated tasks when you know the individuals within the team are working at their most focussed and efficient.  You will get far more out of them, get more task completed thus potentially lighten your own work load.

3. Never Book Out Your Calendar

Curve balls are a part of business (and life for that matter), the unexpected always rears it’s ugly head when you least need it, so plan for it!!  Leave 25% of your day unaccounted for, if the unexpected doesn’t happen, excellent, you can slot in something else to do, but if it does, you have a window of time that you can dedicate to it without causing too much upset to the rest of your day.  The biggest problem we all have with the unexpected is the waste of time and mental energy worrying about how you are going to find the time to deal with the problem, rather than putting that energy into finding a solution, gaps in your calendar reduce the stress of worrying about the time element.

4. Prioritise Your Tasks

Decide what is essential (critical to the business performing) and what isn’t then prioritise your list of tasks accordingly, if you find your list of tasks are almost all critical, try prioritising them by filtering them in proactive (make money now) or reactive (make money later) tasks.  Ultimately we are all in business to make money so it makes sense that income should be the deciding factor in the decision making process.

5. Say NO!!

Managing your interruptions will have the greatest impact on your time; is your service time critical? If not what is a reasonable length of time to reply to a clients email, would it really matter if you didn’t get back to them for 4 hours could you stretch them to a 8 hour window?  If you could, why then do you need to check your emails any more than once or twice a day?

Do you have staff that can answer the phone?  If you do, get them to filter the calls, if you are busy, tell them you do not want to be disturbed until a certain time.  Can other people in your business deal with certain inquiries, if so, let everyone know within your team that if a call comes through inquiring about a specific service / product then they should direct it to that specific team member.  Just because you are the owner or the manager of a business, it does not mean the clients have access to you 24/7.

Check out this book by Marc Mancini, Time Management 24 Techniques to Make Each Minute Count at Work it’s a great little book with lots of great tips.

It is true, you are only as good as your last job, so it stands to reason that if the last job was a good one then you have nothing to worry about, right?  Wrong!  There is another factor that you must keep front of your mind and that is the human mind, more exactly the memory.  Think about the last time you received fantastic service, received a great product from a polite and knowledgeable staff member, how did you feel at the time?  How many people did you tell about it shortly afterwards and do you still talk about it with the same enthusiasm now?  To the last question the chances are you don’t, why, because time dilutes emotions and it is for this very reason that it is essential that you keep in front of your clients minds, how do we do this?  We practice sales farming 

Sales farming or farming the client base is a practice that I developed many years ago as a key account manager for a communications company and has five stages to it (check out my a previous article on this subject).

1. Plough the Fields – Research the company(s) that you intend to call upon, what have you already sold them?  Who is the key decision maker?  What plans do they have for the business this year?  Have they diversified in any way since you last talked to them?  Is there any additional products or services that you now have that compliment what they have already bought from you?
2. Sow the Seed – Arrange a meeting with them, have an objective for the meeting, find out what the business’s plans are, introduce a new product or service that you may have or  meet the new purchasing officer.  Whatever you do, do not waste their time or yours by going to a meeting without a purpose!
3. Nurture the Crop – Follow up on the previous meeting, ensure you fulfil any promises that you have made.  It is at this is the point in the cycle that you prepare quotes and continue the process of educating the client.
4. Harvest the Crop – You get the clients commitment to purchase your product or service, again you make sure you meet your clients expectations around delivery and quality of product or service.
5. Plough the Fields – Follow through with the client after they have received the product or service, make sure they are happy, if they are not, what can you do to change this and get any feedback you can from the client about their experience buying from you and your business.

Maybe?  The problem is at the point you decide to sell everything changes, the business is no longer about you it’s all about the buyer!!  What do I mean buy that?  When it comes to the “worth” of your business, do you think your opinion counts?  I’ll tell you right now, it doesn’t and the sooner you get your head around that concept the better!!

It’s all about generating value, the more value you can generate to a potential buyer, the more they are likely spend.  So what do you need to think about now to help increase that value.  Here are the top 5 things you need to do:

1. Strategy: Ensure you have a solid vision for your business, put a plan in place as if you were never going to sell it.  If you have a strategy in place that focuses on longer term growth that takes the company past the time you intend to sell, how much potential value will that give a potential buyer?
2. People: Employ staff as if they are going to stay with the business until they retire, ensure they are well skilled, motivated, feel like they are an important  part of the business but above all they perform well.  There is an immense amount of value to a potential buyer if they know that the staff on board have all the skills and knowledge they need to keep the business performing well.
3. Governance: Do things right!!  Make sure that your business has its policies & procedures in place and they are adhered to.  Ensure all your compliance requirements are up to date.  If you can show this is the case, you will be adding more value to the buyer.
4. Research: Understand where likely buyers will come from and anticipate how your business can add value to the buyer, especially if that buyer is another business.  What value would there be to their existing company if they could:
• Have access to your current market place.
• Sell your product / service in their market space.
• Develop new products or services jointly for both existing or entirely new markets.
5. Seek Professional Help: This is a major undertaking, do not do it on your own, ensure you have at least a good business broker on board.  When you do, make sure they are fully aware of the research you have done and the potential value your business may be to others.  Make sure their focus is on selling the value not just the assets and profit!

"Do I have to phone them again!!"

Following on from last weeks sales article about managing your revenue I wanted to talk this week about the processes you should think about putting in place to really optimise your sales activity for your business.

Did you know that you should only ever “cold call” any particular company once, but many businesses continue to cold call the same companies, often over extended time periods over and over again, why do you think this is?

They have no process!!

This year I was asked to help a sales team, improve their cold calling hit rates to help their parent company gain market share with one of their premium products.  On further investigation into the process the sales team followed, we discovered they did not have one!!  They never recorded who they spoke to, their Sales Manager had a weekly meeting which discussed very little, the sales team had no targets and it wasn’t unusual for one member in the team to talk to a potential customer on the Monday, just to discover than another member of the team talked to the same potential customer on the Thursday!!  Again why was this happening?

They had no process!!

Am I starting to make my point here?  If you want you or your sales team to be effective, you must have some sort of processes in place, here are 4 for your to think about.

1. Set some targets:  Whether you are the sales team or whether you have 20 in your team, you need to have a goal, how much do you need to sell each month to make your desired level of profit?  Break that down into weekly or even daily targets for every member of your sales team.  If they don’t know what they need to achieve, they will never achieve it!
2. Record all sales activity:  My comment earlier about “you should only cold call a company once” refers to this.  Once an initial contact and conversation has been made with a potential client it should be recorded on a database, preferably a sales data base called a Customer Relations Manager (CRM) system, there are many on the market, a simple but effective one that we use is called CapsuleCRM.  Every entry should have the following information; who you talked to, what was discussed and what action is to be taken.  With this on the system, the next time that potential client is contacted you can refer to the last conversation which no longer makes the call a cold one!
3. Conduct effective sales meetings:  If you have a sales team, meet with them regularly, discuss the hurdles they faced since the last meeting, educate them in promotions or new products, ask them how you can further help or support them in their role (especially important for those out on the road all the time),  review how they are performing in relation to their targets but most of all, ensure they leave the meeting positive, fired up and motivated.
4. Keep the sales team accountable: Everything in business needs managing, not necessarily micro managing but they will need some degree of managing.  When I talk about keeping sales teams accountable I’m not just talking about their sales targets, I’m talking about making sure they are all using the sales processes ALL of the time.  Are they seeing enough new clients, how many quotes are they generating, are they following through on all these quotes, what is their conversion rate from “sales quoted” to “sales won” and are they following up and adding their new clients to their call cycles after the sale is completed?

In our experience it is one of the least organised, least thought about parts of the business, why?  Because as business owners we just do it, if we didn’t we wouldn’t have any customers and so, would not be in business!  We don’t need processes for this part of the business because we already know what we are doing …. right?

We would say to some degree this is true, but what we see are huge inefficiencies in sales processes which regularly lead to missed opportunities, lost sales, slow growth or declining revenue, but it doesn’t need to be like this.  There are four key areas any business owner should focus on to help grow their sales revenue.

Process

Every business should have a process to record ALL sales activity done by the business owner and their sales team, if you do not continually record who you have talked to, what were the conversations about, what opportunities may arise (now and in the future), what quotes have you done, how many have you won or lost, the list goes on, how are you ever going to understand if what you are maximising your efforts and getting the returns you want?  Our next blog will concentrate specifically on this subject and will be published within a week of this article.

I would ask you to look at your current sales system, are you in a position to answer the above questions right now, do you have this information at your finger tips?

Call Cycles

Every sales process has a life, it has a natural cycle of growing, harvesting and re-cultivating, we call it farming.  When was the last time you spoke to your current customers to get their feedback on your product or service?  When was the last time you actively networked with other professionals that also have access to your customers, have you thought about educating them in what you do or provide, so they in turn can refer you on to their customers?  If you do these things, when was the last time you spoke to them, do you need to speak to them again, how soon is too soon?

Understanding what farming your client base means, will minimise the loss of opportunities and will reduce your cost of sale to, again more about this in this article.

Sales Team

How are you or your sales team approaching the market?  Is there pressure to get sales quickly, do you have a more aggressive approach to ensuring your sales figures are met?  Maybe you already have a substantial customer base and most of your time is spent looking after your current customers, when new ones come along they are usually being referred from other customers so you have a more passive approach to sales.  It doesn’t matter whether you approach sales from one extreme to the other or hover around in the middle somewhere if you don’t understand what works best for your customers, again, you will not be optimising your sales team.  We will talk about this specifically in a separate article.

 Resonating Factors

What is this?  How does it affect the sales process? This is one of the least understood principals of sales, yet it is one of the easiest to apply, if you, as a sales person can understand how to “resonate” or connect with your current and potential clients almost immediately the the rest of the sales process becomes so easy, you wont even have to think about it.  Like the other three points I will be talking about this in a separate article, that will be published soon.

As a business owner you may well have some of these areas covered, I would encourage you to read the supporting articles of the areas that you cannot comfortably say you have and if you know any other business owners that may benefit from these articles, please forward the articles link to them.

Steve Richens from Moneta Finance has been helping business owners protect their businesses for over 20 years.  Being based in an active earthquake zone the need to protect your business has never been more relevant and never far from most business owners minds.  In this article Steve talks about the need to protect the business for the day that one of the business partners can no longer work, what can be done to protect the business? 

The New Zealand psyche is to own your own business if you can.   Taking a business partner means you can share the costs, and have someone to work with and bounce idea’s off.

A Partnership or Limited Liability Companies can work very well UNTIL one of the partners dies, becomes critically ill or disabled.

Then, one partner tends to be left holding the can, doing the work and building up resentment that the “disabled” partner is not pulling their weight, or maybe not doing anything, but is still reaping the financial rewards.   Or if they have deceased then the survivor has a new business partner (wife, banker) who knows nothing about the business but perhaps wants an input.   After all, they do have a financial interest.

So how do you combat this in your business?

Answer  -  A simple Buy/Sell agreement.

The way this works is that both or all partners sign to an agreement that says in the event of death, disability etc, the “injured” party will sell their shares in the business to the survivor(s) for a pre-determined amount.

This amount is usually reviewed annually when financials are completed.

One party must sell their shares and the other must buy – and this is normally funded by an Insurance package.

This then benefits all parties.

For example, I  have a 50% share in a business worth $600,000 say.   If my business partner dies or becomes disabled, I probably do not want to be in business with  his wife, children or bankers.   I therefore would like to buy them out, but do not have $300,000 ready cash available.   This is where the Insurance policy will fund the purchase.

Likewise, should I become incapacitated, my partner will not want to carry me, and I or my wife want our money out of the business.

The “well” partner makes a claim on the policy, pays me out my share and I must sell my shares to them.

Outcome, a positive predetermined result for all concerned.

The agreements are pretty easy to put together, but do require your Solicitor to draft them to make sure they are fully functional.

If you would  like to know a bit more about how you can protect both your business and your families interest in your business, then please contact Steve direct on steve@moneta.co.nz

Nobody likes feeling like a fish out of water!

There is a saying “do what you have always done and you will get what you have always got” and how very true this saying is.  2011 has been a year of challenges for most business owners in and around Christchurch, having to cope with over a year of earthquakes (9500 shakes at the time of writing this have been recorded in Canterbury since the first big one on September 4th 2010!) which followed a couple of bad years in the economy in general.  One thing this has taught us, is the need to get out of our comfort zones so that we can do what needs to be done to grow our business.

What do I mean by this?  As a business owner it is important to continue to learn and up skill yourself to help you adapt to changes in your industry, in your environment, in your customers buying behaviors and technological developments to name but a few areas.  Often it is hard to find the time, once you have found the inclination to do the learning but once you have done this you will be benefiting yourself and your business, right?

Not necessarily, it is one thing to go on a workshop, attend a seminar or two or even hire the services of a business coach but if you do not have “balls” to carry what you have learnt through to implementation then what changes ……… nothing, the only thing you have done is added cost to the business with no benefit.

To implement knew ways of doing things into your business WILL take you out of your comfort zone, it is not unusual to think “what if this doesn’t work?”, “what if I can’t get the staff to buy into this?”, “what if this ends up costing me more than I originally thought?”.  I would ask you “what will you lose by not doing it?”

How Can You Make This Process Easier?

• If you are going to attend a workshop or seminar, be sure to research the subject a bit before you decide to go, try and understand how easy it will be for you to implement the subject matter into your business.
• Will you need to employ the services of an expert on the subject to help you implement it into the business, find out how much that will cost, can you afford this too.
• If you are worried about getting your staff to accept any change, why not get their input as to what they think may work for the business, getting them to think about the challenges of the business in advance may well make it easier for them to accept change when it comes, rather than springing it on them.
• If you are worried you wont implement the new skills into the business, find someone that will make you accountable for your actions (or lack there of), this could be one of your trusted staff members, a partner or a business mentor.

What ever you do, don’t try to implement new ways of doing things without some form of support, challenging your own way of doing things and often your beliefs is extremely challenging and will always throw you outside what you find comfortable, someone nearby to support you when this happens is the best thing you can do for yourself and your business.