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Dabbling Was Cute.
 Now, Are You Ready To Dominate?

How you can become the Branson of Business, the Clarkson of Cars, the Oprah of Talk Show TV.

Douglas Kruger

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successful-business-leadership

When Arnold Schwarzenegger began his career, he studied bodybuilding icons — not to emulate them, but to surpass them. His strategy was always to top the best.

From the roaring mosh pits of an Iron Maiden concert to the welcoming ambience of Nigella Lawson’s kitchen; from the secretive rainforests of a David Attenborough nature documentary to the sweat-soaked gyms of Schwarzenegger’s legendary workouts — every industry has its top name icons. What do they all have in common? What makes them rise to the top? And most importantly for entrepreneurs, what can we learn from them?

I’ve spent a decade trying to discern and decode what distinguishes the leading names in any field, and whether their approaches can be emulated. Here’s the secret I’ve discovered: We tend to think of experts in terms of superior knowledge or academic skills, but that actually misses something. There’s more to it. You can be highly qualified and yet completely unknown. Instead, to be truly iconic, you need to combine three non-negotiable qualities: Knowledge, personality and publicity.

You have to know it, you have to show it and you have to be it. You need to build an identity or ideal that tribes of followers want to emulate.

The following is an excerpt from What Makes Them Great? 50 Ways to Become an Industry Leader that focuses on four ways you too can become an industry leader.

1. Benchmarking globally, not locally

arnold-schwarzenegger

In his early twenties, Arnold Schwarzenegger made an interesting decision. Upon deciding that his life’s course lay in pursuing bodybuilding, he moved from Austria to California, to study the world’s top athletes in their own backyard. But he went with a philosophy that was quite remarkable. More than just wanting to study what the top practitioners did in order to emulate them, his stated goal was to study what the top practitioners did, in order to surpass them.

When last did you observe the best in the world, then think: “I could top that”?

Here’s why this dynamic matters: Today, your potential customers aren’t just benchmarking you against your exact equivalent locally. In reality, they are even benchmarking you against completely different industries and practitioners.

In the same way that a restaurant does not just compete with other restaurants — it also competes against the lateral options of movies, concerts or home pizza delivery — you are not just viewed against the backdrop of others who do exactly the same thing. You are viewed against the backdrop of an increasingly globalised market, by people who travel all around the world.

Your target market may be ‘just’ a mom with a simple problem to fix. But that mom has also been to London, New York and Sydney, and her perception of your levels of professionalism, as you operate in her home town, are not relative to others in your home town.

Moreover, the local mom evaluating your professionalism has Googled videos about how to solve this problem, and watched entrepreneurs from California talking about sleek and clever solutions. If she’s gone to the trouble as an outsider to your field, you certainly should have done the same and more as a practitioner. And that is her rightful expectation of you.

Related: Research: The Power Of Meditation That Will Blow Your Mind

2. “Good enough” for the locals, and other myths

Eiffel Tower

Fairly late into its lifespan, the Eiffel Tower acquired a glass floor. You can now go halfway up the Parisian landmark and scare yourself rigid by stepping onto a transparent walkway and looking straight down. It’s a great addition to one of the world’s most popular tourist destinations… that took about 15 years too long to implement.

Many years prior to its implementation, my wife and I went up the CN Tower in Toronto. Somewhere up near the Canadian clouds, its bulbous dome has a similar walkway, which has been there for decades. I remember watching my wife, who is no friend of heights at the best of times, crawling out onto the glass and smiling gingerly for a photo, then retreating to the safety of concrete as though she were on fire. Other places, like a tourist spot at the Grand Canyon, have since copied this notion too.

Why did it take one of the world’s leading tourist destinations — the Eiffel Tower in France — so incredibly long to do something so seemingly obvious?

The answer is: Because the custodians didn’t think of themselves as part of a global network of international travel. They thought of themselves as ‘custodians of the Eiffel Tower.’ Subtle shift; huge difference.

Do you still view yourself as a local operator? Increasingly, this view is becoming self-deluding. Many of your potential fans, tribes, clients and customers are now extremely well travelled, and may be comparing you to a much better version in Tokyo or Tel Aviv.

3. Contexualising yourself upward

improving-self

‘Imagine the government passes a law,’ a fellow speaker said to me one year, at the Professional Speakers Association convention, ‘And you are no longer allowed to charge your current fee. You have to double it. Non-negotiable. What would you do differently? And which clients would you target instead of the ones you currently deal with?’

I took the question seriously. And it’s a good one. What would you do if forced to take your business up, not just a notch, but a couple of tiers, in one fell swoop? Grapple with the answers to this question (and there are answers to them, in every industry) and you are actively engaging yourself with the problem of how to position yourself as one of the premium players in your game.

If forced to face that test, what would you do? It is a good idea to keep graduating yourself upward; to compel constant growth by design. In your quest to become truly iconic, do not benchmark yourself against the immediately available, local talent. Contextualise yourself upward, and think about your own performance relative to the global best.

This may entail a few practical things:

  1. You may have to stop doing the low-level and/or free stuff. Being valuable, and being seen as valuable, is everything here. But you have to go first. The market doesn’t just assume you are.
  2. You must find ways to actively display your new, greatly increased value.
  3. You may have to cull the cues that disqualify you as premium, such as low pricing, amateur visual cues in your marketing, etc.

4. Pricing yourself correctly

dr-frasier-crane

By the time the sitcom came to an end, after 11 Emmy-award devouring seasons, Frasier had established itself as one of the most popular and successful comedy shows in television history. Toward the end, each of the main actors was earning in excess of a million US dollars per episode. The show’s success was a fabulous argument against the notion that one should simplify everything and ‘pander to the masses,’ given that the two lead characters, psychiatrist Dr Frasier Crane and his brother, Dr Niles Crane, were highly intellectual, unapologetically snobby, sophisticated patrician elites, who pontificated in sentences one might typically hear at a medical convention. Or Mensa.

In an episode of season ten, Frasier and Niles are seated at Nervosa, their favourite Seattle coffee shop, along with Niles’ wife, Daphne. Daphne is pregnant. Egged on by another couple, Daphne and Niles are trying to find ways to ‘heighten’ the experience of childbirth. The whole thing becomes competitive, and they end up hiring a doula to guide them through the event — more to impress their friends than anything else.

Frasier, meanwhile, has been suffering through a dating dry-spell. He has hired a professional matchmaker and is about to meet up with her. Donning his jacket and excusing himself from the coffee table, Frasier says, “I’ve signed up with a matchmaking service.”

“Frasier, a matchmaker?” Niles responds, aghast. “I’m surprised you’d use a professional for something as personal as your love life.”

“Well, I could say the same thing about you and your doula,” says Frasier.

“Well, our professional comes highly recommended,” says Niles.

“So does my professional,” says Frasier.

“Well, our professional is at the top of her field,” Niles counters.

“As is mine.”

“Well, our professional charges two hundred dollars an hour.”

“Mine charges ten thousand!”

Niles gasps. “She sounds fan-tastic! Congratulations, Frasier!”

“Thank you, Niles…”

The dialogue concludes with Daphne rolling her eyes. The scene was obviously created for comedic effect, but there’s an undeniable grain of truth in this overblown observation. We do perceive quality according to price. It’s a natural human bias that you will read about often in books on behavioural economics, and which you will see reflected in the purchase price of your next luxury car.

If you are too cheap, you will be perceived as amateur. Here is another example, from author Robert Cialdini. A lady owns a jewellery store in a coastal town, and she’s struggling to sell a particular range of jade jewellery. So begins the true story in Cialdini’s book Influence. Before going on leave, the owner instructs her sales person to halve the prices. The sales person misreads her note and doubles the price. The entire range sells out before the owner returns.

Behavioural economics are fascinating. In this particular case, the items sold more effectively because they were more expensive. The reverse dynamic applies too. Set the bar too low, and you will raise innate suspicion from high-level buyers (Hmm… No, thanks. You’re too cheap. Sounds risky).

Mindset tip: Where it matters, be a surgeon

Going about their daily work, doctors are required to make use of competing skill-sets. They have to be dispassionate enough to be able to do necessary, hurtful things to their patients; injections into delicate parts of the body, cutting open skin and billing them right in the soft spot.

But they must also show compassion. Doctors are typically sued more often when their bedside manner is lacking, even for the same results as their more compassionate contemporaries.

An ideal doctor, if such a thing exists, is able to be compassionate when it counts, but dispassionate when it is necessary.

I’d like you to remember this concept the next time you struggle with stating your price: Be a surgeon.

The pricing is not an emotional aspect of the thing you do. This is merely ‘part of the procedure.’ Just do it, and do it dispassionately.

You don’t have to ‘believe in it,’ or ‘feel anguish about it,’ or in any way emotionalise the scenario. That’s for amateurs. This is the part you do clinically, simply as a step in the procedure.

If they can’t afford your fee, that’s fine. Nobody is going to shout at you or place you in stockades in the town square for a dose of public humiliation. If they can’t afford you, they are not your customer, and that’s all there is to it. If they can, they are. You can then continue on together to the next part of the professional relationship, at which point you will display empathy for their needs.

Pricing is not emotional. It’s procedural. Get it done. Like a surgeon.

Douglas Kruger is the only speaker in Africa to have won the Southern African Championships for Public Speaking a record five times. He is the author of ‘50 Ways to Become a Better Speaker,’ published in South Africa and Nigeria, ‘50 Ways to Position Yourself as an Expert,’ and co-author of ‘So You’re in Charge. Now What? 52 Ways to Become a Better Leader.’ See Douglas in action, or read his articles, at www.douglaskruger.co.za. Email him at Kruger@compute.co.za, or connect with him on Linked In or Twitter: @DouglasKruger

Leading

4 Common Myths About Leadership That Can Hold You Back

Alignment with your values and belief systems is the foundation of becoming an effective leader.

Malachi Thompson

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To be a great leader in today’s world, being a brilliant knowledge expert or technician is no longer enough. Even harder is trying to learn the golden rules of the wrong and right ways to be a great leader. The amount of content spouted in countless books and resources is overwhelming let alone confusing.

To be unstoppable leaders for our businesses and our people, tuning out from the noise and distractions potentially misguiding us is pertinent now more than ever. Pay attention to any presence of these four myths and make guiding your people a more soul-enriching journey that they and you will want to continue well past your leadership term’s end.

Myth 1: Great leaders are highly ranked individuals

Richard Branson proves a classic example of how great leaders can get to the top without having ivy-league school connections and astounding qualifications. Having had enough of struggling at school, Branson dropped out of the highly reputed Stowe boarding school at the age of 16 to start a magazine called Student. The first publication sold $8000 worth of advertising. We all know the Virgin story from there on. Then there are the likes of Rachael Ray, food industry personality whose empire has amassed a $60M fortune without her having any culinary qualifications whatsoever.

There’s a common entrepreneurial DNA that runs through the veins of such leaders. An avant-garde vision, tenacity and patience seem to be common underlying themes for many. For others, it’s about making sacrifices and taking risks that could cost their life to serve a cause extending far beyond serving their own needs.

Related: 22 Qualities That Make A Great Leader

By publicly speaking out against the Pakistan Taliban’s extremist rulings, one of which of was to prevent females from accessing education, Malala Yousafzai became a target. At 15 years of age, a masked gunman boarded her school bus and shot her in the head. She survived and many months of rehabilitation spurred her determination to fight for every girl to have the opportunity to attend school. The work she achieved through establishing the Malala Fund with the undying support of her father, earned her the Nobel Peace Prize in December of 2014.

Whether from desperation or a happy place there is always the genesis of a passion driving a persistence to go against the grain and to continue the fight. Often there’s no formal training, qualification or certification in sight.

Myth 2: Following a certain checklist of behaviours will make you a great leader

The ‘fake it ‘til you make’ adage has become a common throw-away phrase consultants and coaches spout as a means to quickly build confidence. Following advice to merely emulate the behaviour of those you admire and respect can pose grave risks, especially when you become a leader by default as opposed to by your own audition. Smart teams can smell falsehood and copycats a mile away. Your integrity will often be scrutinised and your jury will constantly evaluate the values and principles you lead by. One foot wrong might end your leadership term just as quickly as it began and not necessarily by your team’s choosing.

Imagine being tasked with driving credit card sign-ups yet you yourself struggle to make repayments on your own overdraft. How long can you resist your inner conscience? You’ll feel the tug every time you invite a customer to sign up and at every request to your team to follow suit. At some point, you’ll be struggling to face yourself see in the mirror.

This article was originally posted here on Entrepreneur.com.

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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.

Nicholas Bell

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leadership-advice

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…

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.
  9. 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.

Related: 22 Qualities That Make A Great Leader

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Leading

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?

Louw Barnardt

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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:

Earnings Multiple

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.

Related: 7 Factors That Influence Start-up Valuations

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.

Revenue Multiples

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.

Related: Why Start-ups Like Uber Stumble When They Scale

Other methods

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!

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