Wednesday, July 15, 2015

Your Health - an asset no business owner should take for granted

Without your health, profits won't mean much

small business owner stress
Invest in looking after your well-being
At the end of the day, no matter how successful your business might be - if you don't have your health and an accompanying sense of inner well-being, then making money won't mean much.

You won't enjoy having built a profitable business unless you are healthy - and that doesn't mean only your physical health. Mental illness has afflicted many a business owner. It is not uncommon for small business owners to struggle with separating themselves from their business - typically working long hours.

Mental illness afflicts too many small business owners

That's not to say that long hours of itself is necessarily a problem .... Hey, when you love what you're doing, it's easy to become immersed and absorbed in your work. But when these long work hours are accompanied by a sense of isolation, an uncertainty about cash flow and anxiety about the pipeline for future business - then there's fertile ground for stress-related problems.

Associate Professor Angela Martin, from the School of Business at Tasmania University, in an interview with the ABC confirms that from the research she has conducted, that mental illness is indeed an issue that can confront small business owners.

She says that although there is increased awareness within larger organisations of the importance of promoting mental health and well-being, with many such programs and initiatives being implemented in these larger workplaces - often small business is overlooked and small business owners fail to get the support they need.

Some of the things that Martin's research found contribute to stress in small business owners include for example
- financial worries associated with unpredictable cash flow
- multiple responsibilities in the workplace, including responsibility for others work
- the need to continue to work, even if you aren't well
- blurring of boundaries between home and work
- business failure carries the risk of accompanying depression, and sometimes suicide

In line with Martin's research was when we saw an alarmingly high incidence of suicide in farmers along the east-coast of Australia during the periods of drought a few years ago (rural small business owners). It was tragic that such people, who must have been struggling with inner demons of helplessness, despair and isolation saw suicide as their only way out.

Developing inner well-being and resilience

Life is more than just surviving
Health and well-being now-days are viewed as much more than simply the absence of illness. In other words, just because you aren't sick, that doesn't necessarily equate with you radiating health, energy and vitality. This is similar to what positive psychology has been asserting - that the absence of depression doesn't mean that you are happy.

Many small business owners would benefit from learning to become more self-aware and being able to recognise when their stress levels are becoming excessive. Ask yourself whether you are investing enough time in caring for your own well-being. There's no point sacrificing your health in the pursuit of your goals, is there? ...... You want to be able to enjoy the fruits of your labour, don't you?

Dr. Martin Seligman is a respected thought leader within the field of positive psychology. Indeed he is sometimes referred to as its "founding father". He is a leading psychologist who for more than a decade has been applying science to the identification of the critical factors that underpin leading a happy and fulfilled life. 

In his most recent book, titled Flourish, Seligman refers to five foundations that serve to strengthen well-being within people's lives. He describes them as what can make the difference between thriving in life and not merely surviving -
  1. Positive feelings - living a life that provides opportunity to experience enjoyment and pleasure - whether this be through your hobbies, or walking along the beach at sunset, or playing with your dog. It comes from learning to focus more on what you have and to be appreciative of this, instead of focusing on what you don't have. Engaging in acts of kindness, as simple as helping a sick friend, can make you feel good about yourself
  2. Engagement - feeling immersed and absorbed in what you are doing. Having a sense that your skills and strengths are being constructively applied in meeting new and interesting challenges
  3. Relationships - feeling close and connected with family and friends that you feel provide you with the care, support and encouragement that you need. Knowing that you have people you can turn to, people who you trust and in whom you can confide your concerns and discuss your worries
  4. Meaning - feeling a deeper sense of purpose to your life and feeling that what you are doing is somehow contributing to a higher good.
  5. Achievement - the sense of accomplishment that comes with making progress, accomplishing your goals and learning new things
In addition to these 5 key ingredients, your resilience and mental toughness as a business owner will be further strengthened by ensuring that you -
  • take regular breaks during the day - making sure you stay hydrated, take time for lunch and to re-charge
  • develop a lifestyle that provides you with opportunities for adequate exercise, recreation, sleep and nutrition.
  • refresh yourself by taking annual holidays and completely switching off from work
  • learn to set proper boundaries with demanding people and manage unreasonable customer expectations
  • apply time management routines - so you plan ahead, prioritise and stay organised,  avoiding last-minute panic and drama and ensuring you've scheduled enough time for the things that are most important to you
So in summary, I would encourage you to reflect upon whether you've been taking your health for granted. Try not to lose sight of why you started the business in the first place - it was probably a means to an end, and not an end in itself. .......Remember to take time and look after your own well-being as an asset to nurture and protect, so that you can enjoy and savor the best that life has to offer!


This short animated video offers a nice simple explanation of the nature of Resilience .....

Brian Carroll 
About the author
Brian Carroll is the founder of Performance Development, a corporate training business in Melbourne, Australia.  

He is an experienced management coach and a qualified psychologist,  with a passion for helping people develop their capabilities and achieve their goals in life and business.
You can find out more about Brian at his Google + profile

Monday, July 6, 2015

Exiting Your Small Business

When you're an entrepreneur, any decision to sell, exit or get out of your business will be a gut-wrenching one. You've invested considerable time, money and probably made many sacrifices to get the business up and running.

But sometimes circumstances change - and you realise that you have to find a way to adapt ..... So if you're faced with the decision of whether or not to sell and exit your small business, then here's some things you should consider ....

1. Clarify why you want to get out of your business

There can be various reasons why you might be wanting to exit your business. For example -
  • Business compliance requirements have become too difficult or frustrating for you
  • You no longer gain satisfaction or enjoyment from running the business - and the passion and motivation you experienced in starting the business is no longer giving you the juice you need
  • Personal circumstances are creating stress and distractions for you, which could range from personal illness to family conflicts making it difficult to focus on the business
  • The business just isn't generating the profits that you need or envisaged
  • You've been made an enticing offer for the business - possibly even by a competitor, or someone who sees potential synergies with their business

2. Consider all your change options, not just leaving the business

Once you're clear about which of the above reasons is the main cause for you to be thinking about exiting, then ensure you've also considered other options that might conceivably help change the dynamics of the situation for the better. Maybe there's other things you could try, before getting out

For example -
  • Consider bringing in a partner, or an investor, who may have skills that complement yours
  • Outsource the administration of the compliance requirements
  • Delegate the parts of the business operations that you find frustrating - ask yourself if you have staff, whether you are utilising them to their full capabilities
  • Take a temporary break from the business, to see if you come back feeling more refreshed
  • Develop a succession plan and start grooming one of your people to take over running of the business, so you gradually are relieved of responsibilities in the business
  • If there are profitability issues, have you consulted a marketing or finance expert for advice? Maybe there are opportunities to reduce costs that you are not recognising. Or maybe there are different methods you could be using to more effectively promote the business to a new demographic?

3. Arriving at a valuation for your small business

Having given the matter careful thought and analysis, if you remain convinced that the best course of action for you is to sell and get out, then you will need to think about how to value the business.

A great Australian government resource site is Selling & Closing Your Business
There are some great tips on how to value your business - for example, remember to include both tangible and intangible assets in any valuation.  Tangible assets include equipment, tools, materials and property - in other words, anything that can be touched.

Intangible assets refer to intellectual property, the prominence of your brand within your industry and business goodwill.  This can be even more subjective to value but can encompass things like customer loyalty and retention, customer contact lists, brand recognition, the systems and procedures your business has developed, your employees and their specialist skills.

The value of your business can be calculated by various methods - and these can produce quite different results. In some industries, the accepted valuation method is based upon a multiple of annual profit plus physical assets. So for example, if your average annual profit over the past 3 years was $50,000 then it might be times a multiple of 3 - plus the replacement or depreciated cost of your physical assets.

The government site mentioned earlier describes a different method of calculating business value, referred to as ROI and gives a simple example of how ROI can be calculated.

4. Consider a business broker to help with your exit

If you've decided you just want to get the hell out of your business, then an experienced business broker can not only help in the planning and preparation of a measured exit strategy, but also potentially in connecting you with an interested buyer.

Denise Hall is the founder and Director of The Entrepreneurial Mother. She has started up and successfully exited three businesses herself and is well qualified as a business broker. She is based in Melbourne, but has advised many business owners around Australia in how to prepare their small business so that it can potentially sell at the best possible price.

To do this, she helps the business owner better understand what buyers look for in a business and to recognise "all of the boxes that need to be ticked". I asked Denise to share s few comments -

"If you are going to be dealing with a business broker, make sure they are licensed with the relevant State body. The Australian Institute of Business Brokers has links to the various State licensing authorities. When exiting your business, you should seek some professional advice - however even an accountant or solicitor have limitations on the scope of the guidance they can offer around the valuation and sale of a business.

A qualified business broker can help in many ways. They will prepare you for the due-diligence that a buyer conducts. They know that a buyer or investor besides looking at the current profitability of the business, evaluates the extent to which it can run independently of the seller, as well as examining the scale-ability of the business. In other words, it's capacity to actually handle growth and maintain profitability with any increase in the volume of sales generated"

Here's a short video clip in which she offers some quick tips around exiting .....

In conclusion, the decision to exit your business won't be an easy one.

Even more difficult when there are pressures that are driving the need for you to exit. But if you're in a situation where the figures on the balance sheet at the end of the day are looking gloomy to you, or alternatively you've just lost the fire within, and you really have exhausted all of your options to improve the situation - then sometimes you've just got to grit your teeth and become surgical in determining what is the best way to positively move forward.

It's pointless remaining in a situation that for whatever reason, has become toxic for you. And never for one moment beat yourself up by thinking negatively that you're a "quitter'. Hey, you'll learn from the experience and you'll never have the regret of wondering "what might have been?".

The act of courage is sometimes knowing when it's simply time to walk away and move on - and be a wiser and happier person for it. And the exit then eventually becomes an entry point for something that will be new and even more rewarding for you.

Brian Carroll
About the author
Brian Carroll is the founder of Performance Development, a corporate training business in Melbourne, Australia.  

He is an experienced management coach and a qualified psychologist,  with a passion for helping people achieve their goals in life and business.
You can find out more about Brian at his Google + profile

Thursday, June 4, 2015

Small Business Borrowing: dealing with the bank and other sources of funding

small business borrowing
What do bank's look for in a business loan application?
For many small business owners, the relationship they are able to build with their bank can become an important one. It can sometimes make the difference between whether a business is able to launch or perhaps in future, to grow and expand.  

Your business funding options

That’s not to say that a bank is the only source of financing for your small business. You can seek to borrow money through loans from directors or shareholders, personal contacts, crowd-sourced funding (eg. check out KickStarter), so-called "angel investors" and venture capital companies for example.

In Australia, if you were to join a business incubator network for example, often when making connections with other small business owners and entrepreneurs in your local community who are working at growing their business, you can learn more about the funding choices that are available to you.

In particular, if you were looking for investors to help fund the launch of your business then you need to understand the types of formula that can be used to arrive at a realistic valuation of your business, based upon your forward revenue and profit projections. Very often when negotiating with potential investors, it is the valuation of the business that can prove the thorniest issue to resolve. 
When might your small business need to borrow money?
  1. When you’re new, you may require funds to furnish your office, or to buy stock, lease equipment or vehicles, or to pay employee salaries. It is a common mistake for entrepreneurs to seriously under-estimate the capital or funds required to launch a new business
  2. Or there may be times when cash flow becomes tight. Perhaps a big customer has delayed payment on a big order. Cash flow problems can be one of the biggest stressors for small business owners. However as your business matures, by leaving some profit in your business as “retained earnings” (saving for a rainy day) then you will be more capable of adjusting to the ebb and flow of cash flow
  3. Perhaps you might seek to expand your business.  Whether this is to increase your production capabilities, or to set up an operation interstate, or even to fund an acquisition. Sometimes you will simply need extra funds so that you can “seize the opportunity” that has arisen …. You will do your sums, and assess that what you stand to gain will sufficiently exceed the costs of borrowing.
When you’re looking to borrow from the bank, they will usually seek some type of security over the debt. This may be guarantees from the directors of the business if it’s a company, with security over some type of property or company asset.
By gaining a clear understanding of what the bank looks for when determining whether to approve a business loan application, the more likely you will be to succeed with your application.
A note of caution - avoid over-capitalising in your business
small business borrowing
Never lose sight of this principle – the only reason you borrow money is because you’re confident that you will generate profits greater than the cost of borrowing.

Now admittedly, this may take some time to come to fruition …. What’s the old adage “You’ve got to be willing to spend money to make money”
So then, what are the ways in which some business owners can end up over-capitalising in their business?
Whether it’s a retail store owner or a café proprietor or a hairdressing salon owner who invests heavily for example in a major new refurbishment or shop fit-out …… They may fail to consider what they will likely recoup when they seek to sell the business in the future. Or they may be unrealistic when they do their sums and attempt to project the impact of the refurbishment upon the likely increase in sales. It's all too common that new business owners make decisions from the heart rather than the head ....... By all means be passionate and optimistic about the prospects of your business generating a healthy return on your investment - but you cannot allow emotion to drive your decisions at the expense of reasoned assessment.
So to avoid the perils of over-capitalising in your business, seek advice from your accountant to help you perform a realistic and impartial evaluation of costs versus likely profit.
small business relationshipsWhat does a bank require?
But if you decide to borrow funds from your bank, what are some of the things that they would be wanting to look at?
I asked Rebekah Haig, who is Head of SME Banking with the Bank of Melbourne, to share some of her insights on this topic.
She referred to a recent survey conducted by Business Connectors that revealed more than half of the small to medium enterprises that apply for funding do so without having a business plan and more than two out of three of them do not have a cash flow forecast.

For most small business owners, applying for funding is not something they will likely be doing more than once or twice in the life of their business. Hence for many, it is not a skill that is in any way regularly practiced.
Rebekah referred to some simple steps that a business owner could take to help improve their chances of being successful with their funding application .......
  1. Develop an up-to-date business plan that includes cash-flow projections which actually match your funding request 
  2. Prepare a cash flow forecast that incorporates the requested funds - and which shows how this loan will be repaid and over what period of time the loan will be repaid
  3. Have all your paperwork handy - such as tax returns, bank statements, and any other  statements that verify any assets you own (including super). The quality of your preparation will provide some reassurance to the funding body that you are an organised person
  4. When you are meeting with a potential investor, as already mentioned, be very well prepared. Show that you have a strong grasp of your business and the market within which it competes. Present yourself as confident and capable - because they are investing as much in you as they are in the business itself. Yes, they will want to take a careful look at the numbers - but they will also be assessing your motivation, your attitude, your clarity of vision. The success of any business plan will rely as much on the ability of the person executing it as it does on the quality of the research and analysis that might be behind it.
Lessons from "Shark Tank"

For anyone here in Australia who may have watched a weekly TV show called "The Shark Tank", you would probably have seen exactly the dynamic we have been discussing. Those entrepreneurs who are able to demonstrate a strong grasp of the financial side of their business when they are being questioned by "the sharks" project a much more confident and capable image. They are generally the ones that gain greater interest from these savvy investors because they seem so well prepared. And the business owners who are more capable of factually justifying the cause of their optimism regarding the growth prospects of their business are usually the ones who succeed in enticing an investment offer from one of the sharks.

So if you're looking for funding to jump-start your business, start with developing your business plan. Hope this has helped. Cheers

 About the author
Brian Carroll is the founder of Performance Development, a corporate training business in Melbourne, Australia.  He is an experienced management coach and a qualified psychologist, with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

Friday, April 17, 2015

Ensure your small business website is mobile-friendly

small business Australia mobile friendlyIf you're running a small business in Australia or anywhere in the world for that matter - and you're connected with some type of business network, then chances are that you're well aware of the impending change on April 21 to the way in which Google will be evaluating websites.

This change will mean that websites that are NOT mobile friendly in their design could very likely suffer a drop in their organic (unpaid) search ranking. This is especially true if the search enquiry itself originates from a mobile device.

But if you hadn't been aware of this fact - then you really need to read the rest of this post carefully.

If you already know about this - then you might find it more useful to check out some of our other posts that could be of more interest, such as getting control of your finances, or personal productivity, or maybe building mental toughness

Action might be needed to protect your small business website from a Google penalty

If your small business is in any way reliant upon your website for generating enquiries and sales - and in particular if your website has successfully ranked well in Google (ie. first page organic results) for your targeted keywords - then you need to ensure that your website is designed to be mobile friendly.

If you are fortunate enough to have a Wordpress platform, then this is generally built in what is often referred to as a "responsive" design and you don't have to worry.

Responsive web design is one that is built to provide an "optimal viewing experience"— in other words, it is considered to offer easy reading and navigation with a minimum of resizing, panning, and scrolling—across a wide range of devices. Devices now-days range from desktop computer monitors to mobile phones.

Google has recognised that a rapidly increasing number of the users / customers of their search engine are using mobile phones when performing a search - and hence the change by Google to give a preference to business websites that offer their users a better experience. Google have recently been attempting to give business owners some reassurance by emphasising that mobile-friendliness of a site is only one signal of many other signals that they use in their assessment.

Adwords is not affected by the change

However the change that Google is introducing will not affect any paid advertising that you might be doing. You only need to be concerned if your business relies upon the organic or natural, unpaid search performance of your website.

What you can do

I attended a luncheon recently, organised by the Bank of Melbourne (check out their Small Business Toolbox) especially for SME owners, and had the pleasure of listening to Leonie Valentine from Google, their Director of Customer Experience APAC. She confirmed that Google will be expanding the use of mobile-friendliness as a ranking signal and that this will impact upon organic search results across all languages world-wide. However some resource sites that might help you include ....
  1. Test if your site is mobile friendly
  2. Go to your Webmaster Tools account - and you should be able to access a Mobile Useability Report
  3. Developers guide to mobile friendly sites 
  4. Principles of mobile site design
In summary

Well, this is just another one of those changes that you simply have to adapt to when you're running a small business. But you can't afford to ignore the urgency around this.

Yes, chances are that it will cost you some money to address this issue, if you do discover that your website is not mobile-friendly ......It recently cost me around $2,500 to migrate my management training website across to a responsive mobile-friendly design - but it would have cost me a lot more if I didn't. The developer I used here in Melbourne was WebGenius - but check in with your own network and see what contacts they might have.

Before I finish, here's a video clip from Google Webmasters Central Blog, in which the speaker refers to some basic tools available to help small business ensure their websites are mobile-friendly

Hope this has helped point you in the right direction - Cheers

About the author
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

Thursday, April 2, 2015

Small business and how to boost your sales success

small business sales
Making a sale begins with finding a prospective customer
Attracting a customer and making a sale goes to the heart of any business. It’s sales that pumps money into your business. But this can’t mean sales at any price! It’s got to be a profitable sale and a win-win for both parties - particularly if we’re talking about you as an entrepreneur building a sustainable small business that is viable for the long term.

Quite often the entrepreneur is a brilliant technician. Maybe you’re like the bulk of small businesses in Australia - people who started out as “self-employed”. That is for example a mechanic, or plumber, or consultant, or hairdresser, or electrician, or musician, or artist, or accountant, or lawyer, or landscape gardener, or ……
Sales require strategy + process + selling skills
Sales and selling is often something that isn't particularly easy for many people in business – certainly this was the case for me when I began my consulting business over 25 years ago!  Perhaps this could be because many of us retain a distasteful stereotype of the old-school “pushy” car salesman seeking to manipulate us with tactics. None of us want to be seen like that …… And selling can become even more uncomfortable if you’re not naturally a so-called extroverted personality!

But in business – sales is as much about having efficient customer-friendly processes and procedures in place as it is about having selling skills. There's not much point to gaining an order for your product or service, if it's not delivered in good quality and on time as promised.
But let's return to the people side of the equation ..... I am convinced that anyone can improve their selling skills ….. It is about a combination of gaining techniques to help you listen better, to help you understand what your customer is wanting to achieve, and to help you present your solution in a clear and enticing way.

Effective sales comprise identifying opportunities and potential customers, generating leads from these opportunities and converting these leads and enquiries into sales at a profitable margin.  Sales is about attracting new customers to your business – just be careful it’s not at the expense of retaining existing customers …. And sales is about being alert for up-selling and cross-selling opportunities that genuinely benefit the customer.

I had a fascinating conversation recently with Ingrid Maynard, the founder of Melbourne, Australia based business The Sales Dr, who has more than 20 years’ experience working and consulting in the field of sales. She conducts master-classes in Selling Skills and advises business owners around Australia, Asia, the U.S and the U.K on how to leverage both their people and their technology to increase sales

1.     What was your early motivation in starting up your own business and what do you find most fulfilling about running your business now ?
I’ve always known that I wanted to create a business doing something that I loved.  It became a must for me even when I was working with The Body Shop….I just didn’t know what it would be!  What I discovered was that a business finds you, and that’s what happened to me. 

I won’t go into the whole story, but an opportunity I had grew and grew and grew to the point where I knew I had a business on my hands and could use a little help!  When I started Harvest (my first business), I wanted to bring some of the values I’d lived from The Body Shop into my own business.  So part of that was employing mums returning to the workplace and providing them with free childcare.  This meant that I was able to attract and retain loyal employees: Two of them stayed with me for 6 and 7 years respectively.

I love the creativity of having my own business, knowing that I can express what I love in a way that brings value for others.  I also love that my business will only grow to the extent that I grow, and to me, having a business is the best personal development tool in the world.

2.     You talk about the sales machine of a business comprising three core inter-dependent elements – prospecting, conversion and retention. .... In larger organisations these may be quite separate functions, with different staff specialising in each different part of the sales process  However as you know, the small business entrepreneur starting out will typically attempt to wear many different hats themselves. When should they look at outsourcing prospecting – which can be most time consuming - and what advice would you offer with this?

When I talk about creating a sales machine, what I mean is creating a sales system that works for your business.  Like any machine, it works for you not the other way around.  You program it, you monitor it, maintain/service it and make any adjustments or improvements as required.

The machine needs to have 3 key elements:

       i.         Attract new customers
     ii.          Convert contacts to sales
    iii.          Delight customers so they become part of your sales team
When it comes to small business, these functions don’t necessarily need to be people like they would be in a larger organization so leveraging technology, processes and content, with software such as InfusionSoft, sales machines are more readily available to everyone.

As the business owner, know which element of this process is your greatest strength and ensure you own it.  With the elements that you’re not as strong, get support.

Prospecting is something most people avoid, so if you know you’ll get more leverage meeting more of the right sales opportunities to convert than spending time on the phone, then it makes sense to outsource this element. 

When selecting the right provider, you’ll need to consider:

·         Investment vs return: don’t just choose the least expensive option.  Remember that for many of your prospects, this call will be their first impression of your company, and you can’t afford to get it wrong.  And you’ll also need to determine your budget or cost of acquisition.  It shouldn’t cost you more to acquire a new client than you’ll generate in revenue.
·         Training: how do they recruit and develop their callers?  How confident are you that you’ll be represented in the best possible way?
·         Reports: how transparent are they with their activity and what is their expected rate of conversion from hours to meetings
·         Be realistic: remember it’s an opportunity to meet with more of the right prospects so be clear about what is important for the callers to identify, and focus more on relationship and first impressions than on “selling” your service at this very early stag

3.     Let’s take a look at converting leads and enquiries to sales ...... Why do some businesses fail to effectively convert –  have you found that the fault tends to lie more commonly with the poor quality of  leads generated or is it with deficiencies in the personal selling skills of sales people?

Failure to convert leads and enquiries is usually a combination of both poor quality leads and deficiencies in the personal selling skills of sales people.  

Start by having absolute clarity as to your company’s why.  Once you know this, you can determine who to target and how to target them.

Without wanting to sound clichéd, take time to understand the pains and pleasures of your prospective clients and develop a question deck to use in a face to face meeting with prospects that will help you both identify their pain fast, and identify what they want to achieve and why in order for you to establish the best way for you to create value for them.

Train your team to enable them to confidently understand how to skillfully navigate these questions to qualify prospects and enquiries.

In addition, even if someone has made an enquiry, they may still have fears about working with a service like yours and it’s your job to bring any objections or commonly asked questions out on the table first.

And your process needs to reel them in gradually so that at every opportunity you’re building a sense of what it will be like to work with you, and get them keener and keener as you go.

Ask your team to individually write down your sales process.  If you have more than one version, it’s a sign that you need to regroup, and ensure everyone is on the same page for maximum momentum.

So essentially, it comes down to:

       i. Knowing why prospects have come to you  
     ii.  Possessing a comprehensive sales toolkit
    iii.  Training your staff, so that everyone is singing from the same songbook
    iv.  Efficient processes to ensure your customer receives what was promised

4.     Through your sales coaching work, you’ve observed hundreds of sales people – what are some of the most common mistakes that you see them making? ..... Do you still see sales-people out there, attempting to too quickly “sell a product” rather than find the right “solution”?
All the time!  And it’s an easy trap to fall into. ….. I’ve found the most common mistake is when we get into a scarcity mentality: “I’ve got to make my target!” and then desperation in achieving a sale at any price will flavour any conversations with prospects.  Prospects will sense this and will rarely be attracted or engaged.  Because the conversation or meeting is all about what the salesperson wants/needs and ceases to be about the prospect. 

This is where salespeople get locked into a narrow “convince and persuade mode”, where prices/margins are squeezed needlessly, where a transaction instead of a long play approach is taken and when a salesperson won’t say no, even when they know the outcome won’t be good for one or both parties.

improving sales in small businessComing from a mind-set of abundance means you can be totally present with a client or prospective client.  The conversation becomes about solving your client’s underlying pain and creating value.  Even if that might mean not taking them on as a client. 

When you are a business owner who is also a sales person, your job is to find prospective Raving Fans, so you’re qualifying prospects “out” as much as you’re qualifying prospects “in”.  If you’re not a good fit for one another, it will be better for both parties that you recognise when to walk away and refer them to someone else.

5.     What are the differences and similarities with B2B sales compared to B2C selling?
To me, sales is about building relationships and making connection and treating every person as a client (knowing they’ll either buy today, in the future or refer someone to you or all 3!)

Every customer should have an exceptional experience as they have their pain points addressed and their desires fulfilled. 

The temptation with B2C sales is to treat customers as transactions as the sales cycle is shorter than it is with B2B clients.  While that’s true, having a” long play” mentality will create a tribe of Raving Fans who are so connected to you, to your brand and organization that they drive others to your business as well as choosing you over anyone else in your space.

With B2B, you’re able to be more selective with the prospective clients you want to target and proactively approach them as well as using other marketing strategies to generate inbound enquiries.  With B2C it’s more typical to use attraction strategies such as advertising, brand and marketing to drive business to you, in order to then capture them.

6.     I know that you’re passionate about the need for small business owners to have the right mind-set..... Can you share some thoughts on this theme?
Absolutely!  “State” or mind-set is key to achieving anything. 

It’s difficult to be resourceful when you’re fearful or in a scarcity mindset because your brain literally shuts down.  So you need to have practical ways of changing your state of mind to be as useful to you as possible in order to achieve what you need to!

Regardless of whether my clients are part of a sales team, are sales leaders or business owners, I teach them why the following mindsets are crucial to their success, and how to build rituals around creating and maintaining them:

Abundance: creating a sales and business philosophy that recognizes that there is more than enough for everyone, and where I create the most value is where I’ll be the most successful

Accountability: recognizing that there is always part of an outcome that has been the direct or indirect responsibility of you as an individual.  Owning your part in it, learning from it and then moving forward

Commitment to ongoing growth and improvement: when we enter into any situation with an open mind and a sense of curiosity, we are open to learning something new.  As soon as we think we already know, we close ourselves off to possibility and new information.  It’s never ending, and as such, is exciting.

Having a clear why: when you have clarity around your purpose as a business owner, it crystallises what you need to do, how you need to do it and creates a stronger sustained desire for taking action.  Clarity of purpose enables you to eliminate activities that are not core and aligned to your purpose.

Part of my role as a sales coach is to help business owners develop rituals and routines that will empower them and anchor them in positive mindsets.  These are as individual as the person themselves, so I work to explore what works for each client, and help them to ritualize them so they can go into that state whenever they need to.

 7.     Any final tips?
Keep on learning and growing.  As a business owner you’re always selling:  whether it’s an idea to your team, selling your value to customers, getting a bank loan or marketing to your database.  Because selling well is both a science and an art, there is always more to learn about yourself so you can build on your strengths to let the world know about you and support yourself in the areas where you need help. Whether you do this formally through training, coaching or study - or informally through podcasts, books or networking, make it a regular habit. Investing in your own growth will invariably grow your business.
Thank you to Ingrid, for some great tips on both sales strategy, process and selling skills
About the interviewer
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile

Thursday, March 26, 2015

The small business landscape in Australia - 2015

small business in Australia
In a report prepared this year, 2015, for the Reserve Bank of Australia, researchers looked at some of the major challenges faced by small business. The report presented a nice snapshot of the small business landscape as it appears at present in Australia.

The report not surprisingly found that the failure rate of small businesses is significantly higher than that of large business ("large" being defined as those businesses having greater than 200 staff)

A definition of "small business"

The report used one of the most common definitions of "small business" here in Australia as ".... an entity which is independent and privately owned and which employs less than 20 staff". If they are actively trading, then these entities will require an ABN - which in turn enables the ABS (Australian Bureau of Statistics) to gather and collate data to gain a demographic profile of small business. In practice, most small business owners "manage" their business and closely control it's operations.

The wide range of small businesses in Australia

The small business sector in Australia comprises three broad parts. One part provides a range of professional services to other businesses and households such as tradespeople (electricians, plumbers, roofers, landscapers, painters), mechanics and auto sales dealers, skilled professionals (lawyers, accountants, financial planners, consultants), doctors and dentists, other health and exercise practitioners, real estate and insurance agents, information technology providers and tourism-related businesses (bed and breakfast facilities, tour operators).

Another part represents various types of retail outlets, including small shopkeepers (grocers, petrol stations, hardware, hairdressers, beauticians, newsagents, jewellers, dry cleaners, small clothing, home and hardware stores) and processed food and drink providers (liquor stores, bars, take outs, restaurants).

Finally, there are a number of companies that produce a range of niche and other goods in the manufacturing, construction and agricultural sectors

Most owners of small businesses are "self-employed"

The Reserve Bank of Australia report identified that there were over 2 million small businesses that were actively trading in Australia. This figure represents over 95% of firms trading in the Australian economy - of which more than two-thirds do not employ staff (ie. the owners are "self-employed"). And one quarter employ 1- 4 staff, and are defined as micro-businesses.

Furthermore, the report identified that over one-third of small businesses are trading within the "business services" industry.

Small business contribution to the economy

In terms of employment, the small business sector is a substantial employer - in many industries small business represents the biggest employer.

In regional and rural areas around the country (outside of the mining industry), economies of scale are reduced and do not offer large business the same advantages as what they do in metropolitan areas - so it tends to be small business that is delivering services and goods.

One of the most interesting points the research found was that although the actual amount of R& D expenditure of small business was understandably less than large business, the actual number of firms engaged in "innovative activity" was greater in small business. Over 85% of small business firms reported that they were engaged in some type of innovative activity. This represents a large number of entrepreneurial innovation activities and as such the small business sector can be an important source of bringing new products to market.

The motivation of the small business owner

The report ( The Economic Trends, Challenges and Behaviour of Small Businesses in Australia  )referred to recent research in the United States which identified three of the most common  motivators for those entering small business .....  Typically it was a life-style choice, where the establishment of the firm is driven by either one or a combination of the following -

  1. A desire to be one’s own boss,
  2. To have more control over the hours of work,
  3. To engage in a passion and hobby, that also produces income

A low survival rate for small business

small business failureMany of us have heard that there is a disturbing high incidence of "failure" in the small business sector. Anyone running a small business, particularly those in the retail sector, will tell you that it's tough and that selling prices have come under intense pressure. Hence the number of "sales" and "huge discounts" regularly advertised now-days - great for consumers, challenging for business owners. Small business have scaled back both their hiring and their capital spending - playing it cautious.

The Reserve Bank report identified that  "..... less than half of the firms that were established in 2009/10 are still operating" Although some of these figures would likely represent owners who had decided to retire, and some businesses that may have merged - the report concluded that the vast majority of these businesses that are no longer operating were the "consequence of business failure". It is debatable however, whether this is indeed a valid conclusion. Mind you, in the same way, it could be said that just because a small business continues to operate and trade, it does not mean that it is doing so successfully.
Challenges faced by small business

The report confirmed some of the major challenges faced by small business owners and which were contributing to the high exit rate ....

  1. Unpredictable fluctuations in demand, typically associated with fluctuations in economic conditions and consumer confidence 
  2. Cash flow strains - with customers delaying or defaulting in payment
  3. Difficulty to compete on prices against larger businesses who are able to take advantage of economies of scale. This advantage id not limited to production and procurement costs, but extends to costs associated with compliance
  4. Access to and availability of capital which can limit, or at least delay investment and expansion plans
  5. Management deficiencies - with technical experts taking on responsibility for things like staff recruitment and staff management, financial management and marketing - areas in which they lack capability and have received inadequate training
  6. Succession planning
More small business statistics

An  additional report that was prepared for the Australian Government Department of Trade (Dec 2012) provided some further statistics on the entry and exit rates for small business. At the time that report was written, it was interesting to note that the highest number of small business entrants were located in New South Wales, followed by Queensland ahead of Victoria.

small business Australia inspiration
So what can you take away from this report - particularly if you are a small business owner?

Well, you probably don't need a government funded report to tell you that running a small business isn't all a bed of roses. It confirms though, that there is no room for complacency as a small business owner - one of the keys is to keep on learning and improving. This allows you to adapt to changes in the marketplace. And the report is a reminder of the need for resilience and mental toughness 

But if you are new to small business, let me say this. If you find there comes a time in the future when you do need to exit the business - do NOT regard this as a failure. The failure would have been to never have attempted it. And you will have learned from the experience - so that next time, you will be wiser and better prepared should you decide to commence another business. It is a fear of failure that prevents may people from trying new things - so regardless of whether you achieved the business goals you set for yourself, never-the-less congratulate yourself for having the courage to invest in yourself.

It may well be that one of the lessons you take away from an unsuccessful outcome is the need to gain more mentoring and guidance from experienced business people to help you launch your new business next time.

Business incubators have become an increasingly utilised resource that provide both physical locations for start-ups, as well as networking opportunities with other entrepreneurs. Small business accelerator programs are also offered throughout Australia that support entrepreneurs take their ideas and commercialise them to the next level.

In closing, let me say that a smart business person knows when to walk away from an unprofitable venture. And as Richard Branson says "Business opportunities are like a bus - if you miss one, don't worry because another one eventually will come along"

About the author
Brian Carroll is the founder of Performance Development, a training business in Melbourne, Australia.  He is an experienced management coach with a passion for helping people achieve their goals in life and business. You can find out more about Brian at his Google + profile