I am sure that all of us have either experienced, or know someone that has experienced, a really tough 2013. I remember distinctly getting to the end of 2012 (which was a stinker as well!) and thinking 2013 can’t get any worse. Boy was I wrong!
2013 has tested me at every level and as we approach the end of the year and looking back over this tough period I have to reflect on what made me get up after every setback and keep pushing forward? This is my take on it:
1. Passion and purpose
What is your end goal? Without being passionate about what you are doing and knowing why you are going after it, you will run out of the fuel that energises you.
This is the ‘magic’ that separates entrepreneurs from merely being employed. If you do not love what you are doing what will force you to keep getting up after the endless knocks along the way?
2. Never give up
Like most entrepreneurs not making it or giving up was ever an option for me. There is always too much at stake and too many people relying on to consider giving up.
Based on economic reality finding a decent job in the market is not as easy as it sounds and to go back into an environment where I am building someone else’s dream was no longer a proposition.
3. Keep evolving
When I look back to where I started in my consulting business two years ago to what it looks like now it is on a different planet. By climbing into the market place with a far from perfect offering I quickly realised that in order to survive I had to keep changing and evolving in order to match what the market needs and what I could offer.
Easier said than done. It is the ultimate ego killer to have to keep going back to square one, but ego has no place in this space, no matter how successful you have become.
The ability to keep re-inventing yourself and your business is hugely powerful and character building. Instead of your self-confidence being destroyed it is bolstered along with business maturity
4. Do what it take to survive but always keep your eye on the ball
It would be short-sighted of me to sit here and not admit that there have been exceptionally tough financial times and my core business not being able to deliver the required returns as I was building it. I had to diversify and often take on work that was difficult.
However I always saw this as a tool or stepping stone in the right direction. I started an on-line business with a great colleague and friend of mine for two reasons. As a consultant there is the old criticism that ‘those who can’t do…teach’ and we wanted to take something we knew nothing about and build a successful business.
Secondly we need a way to earn more money to get through every month. I am proud to say that in 4 months we have built a business that is now turning over some real money.
5. Eyes wide open
Starting and running your own business is all about risk. Having come from the lending space I have learnt a lot about risk and learnt even more running my own businesses.
Always take calculated risks. Understand as much as you can before taking a leap of faith. You will however get to a point where you will experience diminishing returns.
You will reach a point where you will have to jump. Many others will not, and that separates you from the observers and ‘commentators’.
6. Action learning
What separates being a successful entrepreneur from everyone else? Well getting on and doing it. Taking failures in your stride and continuously learning and adapting.
It’s so easy to sit on the side-line and being a world champion commentator, but only a select few climb into the ring knowing that there is going to be a whole lot of pain.
We all know that if starting your own business was easy everyone would do it. There comes a time in your journey of, what seems like, endless challenges when thing start falling into place. I salute all of you who are currently in a similar boat or who are about to embark on this amazing journey. Hold your line and you will succeed.
9 Ways To Get Employees To Buy Into Your Vision
Your business is your dream come true, now it’s time to include your employees in your vision to drive future success.
Your vision statement is the foundation of your business. It is the baseline against which all strategic planning is assessed and the benchmark against which all results are measured. However, as important as it is to have a vision when it comes to business success, it is equally important to get your employees to buy into this vision to ensure that success.
Here are nine ways to get your employees to buy into your vision by making it their dream, as much as it is yours…
- It must be believable – Your company vision needs to be within the realms of possibility otherwise people just won’t believe in it. It must be steady, achievable and relevant.
- It must be inclusive – Employees need to see how they can play a part in achieving this vision to make it relatable and inclusive. If they don’t understand what the business does, they won’t care how well the business does.
- It must be reinforced – Talk about your vision all the time. Don’t assume everybody has read it or is familiar with it as new people may not have seen it and older people may have forgotten. Constant communication is critical to ensure everyone is, literally, on the same page.
- It must be transparent – Make sure your communication around your vision is open and clear. Talk about it with clients, with all staff members, at all meetings and keep on talking until everyone understands it. When a vision is tangible and accessible it is far more achievable than when it is ethereal and vague.
- It must be practical – Don’t make flamboyant statements that are almost impossible to achieve like, ‘We will be number one in X!’. Be practical. It doesn’t matter if you’re not number one, it does matter that your vision is practical.
- It must be shared – Connect people’s careers to the vision by creating opportunities for them. Show them how the work they do is tied back to the vision and the business. If the business is only about profit and customer, then employees often don’t see how they fit in or why they are important. Create opportunities for them and they will be inspired to achieve your vision.
- It must be people-centric – People make up the core of your business. It is bigger than just one person or one idea. So, give them something to aspire to with a realistic, practical and human company vision.
- It must have purpose – Embed your vision and its values into the way you do business. The way you treat your employees and your customers and the choices you make should all reflect your vision. Take it beyond just ‘We want to make money’ and show how your vision positively affects your community and others.
- It must be visible – Put your vision on doors, in emails, on letterheads, in proposals. Show what you stand for at every opportunity. Employees need to feel that there is a cohesive plan for the future. This will not only drive engagement but it will keep them steadfast when times get tough – they believe in the ship too much for it to sink.
What’s Your Number? How To Unpack Company Valuations
Business is booming. Investors want in. But how do you put a price on the value of the company you have built with your own hands?
Company valuations is such a hazy part of the scale-up journey of a private company. Putting a price tag on a business is both art and science. At the end of the day, the number that makes the headlines (if ever disclosed) will be where willing buyer and willing seller meet.
But how do you , as business owner, go about setting your asking price? Before approaching investors, it’s a good exercise to determine your own valuation range for the business. Choosing the right valuation method is the first big question. The answer has many parts to it, but the most important driver is the stage of the business.
Let’s look at some of the most commonly accepted valuation methods in our market:
Applicable stage: Established, profitable companies
Listed companies, institutional players and private equity investors normally invest in a company for its cash flow profit that can contribute to their portfolio income. More often than not, companies will be valued based on their current earnings (bottom line profit after tax).
This method can only be used for companies that consistently make a profit. A multiplier will be chosen based on the company’s perceived risk. Younger, more risky businesses will likely have lower multipliers (as low as 3 and 4) and high growth, well established, lower risk companies will get higher multipliers (8-15).
Sometimes small adjustments are made to current year earnings (like non-standard, non-repeating income statement items) after which the valuation is set at Earnings times multiplier equals company valuation.
Discounted Cash Flow (DCF)
Applicable stage: Post-revenue start-ups, growth companies and established businesses
The most commonly used method in practice, the DCF method argues that a company’s value is determined by the future cash flows that it will yield to investors.
The starting point is creating a five to ten year cash flow forecast for the business. This is no small feat. In order to create a full financial model – income statement, balance sheet and cash flow statement – for the next decade requires a lot of work, both from a strategic and technical perspective.
Investors love this model because if forces the owners to put a clear strategy and expansion plan for their business into numbers. It will include dozens if not hundreds of assumptions – all of which can be scrutinised for reasonability. The result of financial model will be five to ten years’ worth of projected cash flows. These amounts are then discounted to present value at a discount rate that reflects the company’s risk and expected cost of capital.
The sum of the discounted future cash flows plus a terminal value (that represents the value after the five or ten year period of the model) then represents the valuation of the company after some final small adjustments for things like existing debt in the business.
A revenue multiple valuation approach is focused on the market for similar businesses and is underpinned by your company’s current turnover. It seeks out the sales price of other similar companies in the country or worldwide, adjusted for size, stage and market differences.
A company that sold for R100 million at a turnover of R50 million would have a two times revenue multiple (valuation/revenue). If the average revenue multiple for similar companies is in a certain range, this multiple is then slightly adjusted and applied to your business.
If the average sale in your industry has been two times revenue but you are growing much faster than the average with a better competitive advantage, you can argue that two and a half times revenue is a more applicable number for your business. Revenue multiples are often used as a reasonability check in the market for the current asking price.
Most established companies are valued using one or a combination of more than one of the above three methods. At start-up stage, there are a number of other methods like Cost to Replicate or the Scorecard Method that early stage investors look to. When a company is simply in too early stage to practically value it, seed stage investors would also consider SAFE Agreements (Simple Agreement for Future Equity) – an instrument that determines that the percentage of the company the investors are buying with their investment. This is only determined when the Series A round is raised at a future date and under certain conditions, generally at a discount to the price the series A investors are paying.
Company valuations are complex. Many of the above technical factors play a role. A lot of it also comes down to the salesmanship of the owners and the negotiating capabilities of the parties. In ‘How Yoco Successfully Secured Capital And The Importance Of A Pitch’, the Yoco team speak about the importance of the right approach in their recent R248 million fundraising
Don’t go into this process without seeking some kind of expert advice. The price of the wrong valuation is simply too high. Make your numbers and your arguments bulletproof and you will be on your way to defending a strong and exciting valuation for your next raise!
3 Keys To A Vision Others Can Own
Trying to get others to buy into a vision that is all about you getting more money is not going to excite people.
I get really excited about my dreams. Over the years, as I have led my team, I have realised that they aren’t as excited about my dreams as I am. I own two restaurants and employ minimum wage employees. In the early years of owning my restaurants, turnover killed me. I used to fight for them to have the same passion for my goals and dreams as I had and as a result I had extremely high turnover. Confused and frustrated, I knew I needed to change the way I was leading a team.
A few little changes have created a committed team and extremely low turnover. If you don’t have a passionate, committed long-term team, check these simple vision casting strategies.
Often our vision that we cast is shallow and self-serving. A vision that is all about you getting more money is not going to excite people. Take some time to uncover what you are trying to accomplish. When you can cast a vision beyond your selfish desires, others can sink their teeth into the vision. For my company, I wanted to raise up leaders to change the community.
My focus changed to my crew and they could feel the shift in perspective, which also helped me to earn a bi-product of more money, my original desire.
Our deeper vision helps us keep and build a team, but it’s still our vision. We need to really understand the goals and dreams of our team to find untapped potential and loyalty. No one will ever care as much about our vision as us because it’s ours. The more focused you get about helping your team and their wants and desires, the more they will care about yours. In my restaurant I had a young lady who wanted to be a teacher. I thought about what it takes to be a great teacher and how I could help her toward that. Find out what they care about and dig deeper to see what is behind that desire.
Marry the Two
If you have a team running around caring only about their vision they may be loyal and passionate, however, they will not be united in one direction. Magic happens when we combine our vision and their vision. At the points of intersection, our interests and theirs are united to accomplish more. I want to encourage leaders who can change the community.
As for the employee I mentioned above who desired to be a teacher, I trained her toward being a better teacher so that she could raise up young leaders to change the community. Now she is one of my top supervisors and teaches many other crew members. She will be an awesome teacher someday, but in the meantime, she is a valuable team member.
Caring for a team and helping them see how your vision and their vision can help each other will change everything. Growing people is the business no matter what business we are in. Care for others and they will care for you. Care only for your own wants and you will never get the most out of your team. Find a deeper vision, figure out your teams’ vision, and combine the two and your business will transform.
This article was originally posted here on Entrepreneur.com.
Start-up Advice2 weeks ago
Outdoor Versus Indoor: How Different Conditions Will Impact Your Budding Marijuana Business
Business Ideas Directory2 weeks ago
300 Business Ideas To Inspire You Into Entrepreneurship
Women Entrepreneur Successes1 week ago
How A Serious Car Accident Led Founder Relebohile Moeng To Starting Afri-Berry
Are You Suited to Entrepreneurship1 day ago
Entrepreneurship: The Secret To Reaching Entrepreneurial Success And Fulfilment In Life
Lessons Learnt1 week ago
(Slideshow) Top Advice From Local Entrepreneurs That Will Change Your Business In 2019
Company Posts2 weeks ago
Travel At The Touch Of A Button
Performance & Growth1 week ago
Taking Care Of Business
Company Posts2 weeks ago
Access To The Best In Travel Excellence