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Succeeding in business pt 1


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21 Lessons i wish i was told before i went into business

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Succeeding in business pt 1

  1. 1. Succeeding in Business Part 1 21 easy steps to greatly improve your chances Tony Morrison 1-10
  2. 2. How easy is it to succeed in business?
  3. 3. Succeeding in Business • Whether you are starting a business for the first time or you have created and run businesses in the past, in my experience there are certain lessons that you should follow to give yourself the absolute best chance to succeed. I have detailed these on the following slides. Tony Morrison CEO Harcourts Real estate Tasmania
  4. 4. 1-Personal Preparation
  5. 5. 1-Personal Preparation • The skill set that made you a great employee won’t necessarily make you a successful business owner or a great leader of people. • In fact the technical skills you developed as an employee may hinder you in developing the entrepreneurial and managerial skills that you need to be successful in business as when things get tough it is too easy to fall back on to what you know best instead of developing new skills. See The E Myth Revisited by Michael E. Gerber
  6. 6. 1-Personal Preparation • One of the hardest and most underrated skills in running a business is people management. • Have you had any formal or informal training in this field? • Do you have experienced, successful role models, mentors to talk to? • If the answer to these two questions is no then you need to seek advice.
  7. 7. 1-Personal Preparation • Do you have a clear vision as to what you want to achieve in your business? • Do you have a set of values that you want to run your business by? • If you don’t have either of these two you will end up running your business to the vision and values of your staff which may be not what you want.
  8. 8. 2-Create a Plan
  9. 9. Create a Plan – Why? • It forces you to think about the future challenges that you’ll face like: – Your financial needs – Your marketing and management plans – Your competition and overall strategy – To understand what is your core business? – To document tasks that need to be done to achieve this plan.
  10. 10. What should be included in the plan? • Research on market and competition • Analysis of what you bring to the market and what your challenges will be : Strengths, Weaknesses, Opportunities, Threats(SWOT) • Goals, short and long term • Time frames to achieve these goals • Who is responsible for what in the plan? • Who you are accountable to? • How often is the plan reviewed? • Key Performance Indicators (KPI’s) • Exploration of ideal location (If start up business)
  11. 11. A plan is useless without implementation
  12. 12. Implementation of the plan • Men become successful, not because of what they know, but because of what they do with what they know.
  13. 13. 3-Choosing a Partner
  14. 14. 3-Choosing a Partner • The first question is do you actually need one? Why? – Make sure there is a genuine need. – Your partner needs to have the same goals, work ethic, will and determination as you. – Their skills should not be the same as yours but they should be complimentary. – You need a written exit strategy in place in case the relationship doesn’t work. – Be wary of friends and family, business can destroy relationships.
  15. 15. 4-Get the right people on the bus In the right seats
  16. 16. • Don’t except mediocrity • Find people with a passion for their job • People who buy into what you are trying to achieve • Average people may not necessarily lose you business but they may lose you opportunities • Even the best employees need constant up-skilling • Having great people is no good if they aren’t doing the jobs that suit their skill set best • Challenge your staff but reward them and praise them when they succeed, give them public recognition on their success and then nurture them to develop further • Always hire on attitude before experience • One wrong person can effect the entire attitude and performance of the team 4-Getting the right people on the bus in the right seats
  17. 17. 5-Financial management
  18. 18. • Are you financially solid? Things always seem to take longer to develop than you think. Lack of cash flow is the biggest reason businesses go bankrupt. • Do you have a basic understanding of financial management and reporting? • If not, do you have a person to turn to who does? • Financial incompetence is a major reason for business failure. 5-Financial management
  19. 19. 5-Financial Management • Make sure you have plenty of start up capital plus some reserve capital if things don’t run as smoothly as anticipated. • Make sure you are given a copy of your profit and loss every month to carefully monitor all your expenses and income. • Make sure you create a budget at the beginning of each financial year with cash flow projections. • Understand that income doesn’t always relate to profit.
  20. 20. Cash Flow
  21. 21. Cash Flow- It’s all about sales and marketing • “The argument could be made that the mindset of a business owner is the key to success. Although that maybe true, mindset doesn’t bring in cash to maintain the business. What mindset does is keep the owner focused on taking consistent actions to keep cash flowing into the business. • Mindset by itself will never pump cash into a business. Only actions can. If this were the case, there would be millions of multi millionaires. • Therefore, if cash flow is critical to a business staying in business, what are the actions a business has to take to generate profits in the first place? The answer is sales and marketing. • Without marketing and making sales, there are no profits. When there are no profits, there’s no cash flow. Without cash flow, there’s no business. Profits are like the oil that keeps the machine running; when the oil runs dry and the owner of that machine doesn’t maintain it, it stops working altogether. • In fact, not only will it stop running it could damage the engine that makes the machine run because of the extra tension and stress.
  22. 22. Cash Flow- It’s all about sales and marketing • Bankruptcy is a result of lack of capital; not a surplus of it. The main way capital is raised to sustain business is to sell something of value to the end user known as customers or buyers. When there’s a steady flow of buyers for products or services, a business generates cash flow – therefore driving profits. • The easiest way for struggling businesses to get customers is to attract business through marketing, and then closing a deal with a sale. Although some forms of marketing are free, generally marketing requires a budget to pay for the advertising medium which in turn requires cash flow. • If a potential buyer contacts the owner, the buyer has already shown interest in what the owner has to offer. Little effort is required to close the sale and make a profit. This allows more time to focus on more potential buyers – which equals a bigger cash flow. • If, however, the owner contacts a potential buyer, the buyer’s in control of the outcome of the transaction – making it harder to close the sale and leaving less time to reach more potential buyers.” CRR Consulting
  23. 23. 6-Don’t try to grow too big, too soon
  24. 24. Don’t grow too big too soon • If you grow too fast there are so many things that can potentially go wrong from: – Compromised quality of product or service causing customer complaints – The back end support system, delivery and order fulfillment systems, monitoring systems and various processes not being properly established to support and survive growth – Employee skills not growing in line with the expansion of the business thus creating loyalty and morale issues – Expansion requires major financial investment that can turn sour if a company cannot keep up with the resulting financial obligations – Cash flow shortages caused by expansion costs exceeding revenue – Loss of control.
  25. 25. Dilution of Vision • One of the biggest challenges that a business leader faces as the business grows is their ability to sell their vision, to transfer their passion to their staff. What can easily happen is that the business owner’s vision can start to be slowly diluted as new staff don’t buy into what they are trying to create. • It is critical that anyone who joins your business totally understands what your goals/vision is and what is expected of them in their role.
  26. 26. Dilution of Vision
  27. 27. 7-Understand the value of existing clients
  28. 28. 7-Understand the value of existing clients • Spend more time appreciating and more money rewarding existing clients and less chasing new clients. Most businesses do the opposite. • Happy existing clients will help you find new clients without any cost to your marketing budget. • It is much cheaper to keep long term customers than to find new ones. • Do you have a marketing budget to reward existing clients?
  29. 29. The No.1 reason clients leave you
  30. 30. 8-Develop a great culture
  31. 31. 8-Develop a great Culture • Workplace culture can be defined as the “way of life” for those in a particular workplace. This has many elements including: policies and procedures, language, dress code, attitude to training and development, support mechanisms, authorities, power relationships, conventions, recognition,conflict management and dispute resolution processes.
  32. 32. • You need to develop a great culture of people being happy to come to work and wanting to buy into what you are trying to build. • A culture where there is opportunity for growth and good work is recognised and rewarded. • A safe environment where employees feel comfortable, valued and enthused. • Ultimately to become an employer of choice 8-Develop a great Culture
  33. 33. The Financial argument for building a great culture A Great culture in your workplace
  34. 34. 9-Create business on your terms
  35. 35. 9-Create business on your terms • By becoming a marketing expert • Great marketing will draw clients to you on your terms whereas prospecting for new business will generally draw clients to you on their terms. • It is obvious which method is more profitable • Remember, when people contact a business owner about a product or service, the owner's in control the entire time. Who contacts who first makes a huge difference in the final result.
  36. 36. • Great marketing will also compensate for average closing skills if your business is sales related. • Great marketing creates competition which does the closing for the sales person. • If you are not a good closer become a great marketer. 9-Create business on your terms
  37. 37. 10-People will pay more for skill than they will for service
  38. 38. 10-People will pay more for skill than they will for service • Great service is mandatory to have people return to your business. In today’s competitive environment having people return to your business, whilst increasing your turnover, does not necessarily increase your profit margins. • It is great skill, expertise or knowledge that will generally allow you to charge more than your opposition for similar products or services and therefore increase your profit margins.
  39. 39. • Think of the following • If you had the choice of a very friendly dentist who was always on time, remembered your name, was quite competitive on price but sometimes hurt or a dentist who didn’t have any bedside manner, was more expensive but you never felt a thing? • Who would you go to? Example 1
  40. 40. Example 2 • Ladies, If you were going out for a big gala event and you had the choice of two hairdressers, one who greeted you with champagne, was on time, cheap and was always very friendly but the end result was 50/50, or a hairdresser who was a bit of a gossiper, was always running late, as well as being a bit more expensive but she made your hair look amazing. • Which one would you choose?
  41. 41. • If you were in need of critical surgery and had the choice of an expensive but brilliant doctor who was terrible at small talk but had never lost a patient on the operating table or a lovely, friendly, cheaper doctor with a great bedside manner who had a pretty good but not perfect record under pressure? • Who would you choose? Example 3
  42. 42. Conclusion • In all three examples most people would choose the more skilled person at a higher cost. • People want service, expect service, demand service and may not return if the service is not acceptable but they will pay more for skill, knowledge and expertise than they will for service.
  43. 43. 21 Lessons of successful Businesses 1-Prepare yourself personally before going into business 2-Create a plan and make sure you stick to it 3-Be careful in your reasoning behind and choice of partner 4-Getting the right people to help you is paramount 5-Correct Financial management is critical 6-Don’t try to grow too big too soon 7-Understand the value of existing clients 8-Developing a great culture is so important to ongoing success 9-Create business on your terms by becoming a marketing expert 10-People will pay more for skill than they will for service 11-21- (follow Tony Morrison on Slideshare to view)