Woody Allen once said that 80 percent of success in life is just showing up. Now granted, Woody Allen also defended dating his adopted daughter by saying, “The heart wants what it wants,” so holding him up as a paragon of sound judgment may not be my best move. But if Woody is right, then I (another man whose history of poor judgment and worse choices would give a prudent person pause) would offer that the other 20 percent of success is following up.
Entrepreneurs often fail on both these counts. Showing up is more than merely putting in a physical appearance. It’s also intellectually showing up. When you show up intellectually it means you are truly listening to your customer’s needs and pain points and crafting a solution to their problems. Instead, too many solution providers come into a sales call with a solution in mind and then expend copious amounts of energy trying to convince the customer that the prefabricated solution will fit the customer’s needs. When you sell hammers, all you see is nails.
I see a lack of follow up torpedoing more deals than a lack of showing up. Some vendors (and I admit I have been one) practically make you beg for a quote. They get busy, and I get that.
They have bigger and more exciting quotes to write; I get that, too. But I have an immediate need, and if they aren’t there immediately, well, there can be only two outcomes. Either I will get someone else to do fill it; or, I will realise that my immediate need wasn’t all that immediate – or indeed, even a need.
I’ve seem more deals evaporate that way than ones that collapse. In fact, I have lost more deals because of a lack of follow up than I have lost to price, to competition, or to outbreaks of the plague (an admittedly low percentage of my losses), added together.
So why do we do it? Why do we fail to follow up to be responsive to existing or potential customers? The most common excuses are:
Saying you don’t have time to follow up is ridiculous. It’s like receiving atrocious service in a restaurant and being told with a shrug, “Sorry, we’re really busy.”
Being the charmer I am, I usually respond by saying “that’s the kind of problem that tends to solve itself.”
Not following up because you are too busy resolves itself in the same way that water finds its own level. Customers who don’t want to get poor service or have inordinate wait-time go elsewhere, and you’re left with a clientele that is the appropriate size for your capacity to deliver.
Not exactly a solid growth strategy. You had better hope that this clientele size matches up with your ability to make a profit or you will “too busy” yourself into bankruptcy. Not having time to follow up is akin to saying you don’t have time to be successful.
You make time to be successful, and if that means biting the bullet and hiring more staff or weeding out the low performers, then that’s what you need to do.
Too much on our plates
Having too many things on your plate may at first seem to be the exact same condition on as being too busy, but it really isn’t.
How often do we find ourselves with hundreds of tasks that would take only a moment to complete, but we become so overwhelmed in the minutia that we don’t get them done? Or we tell ourselves that because it will only take a minute we don’t have to worry about it.
The task gets pushed and pushed, and pretty soon the opportunity is gone. This isn’t a case of being too busy; it’s being too disorganised.
This can be easily fixed either by delegating effectively, getting a highly organised assistant to nag you into getting things done, or training and discipline. But whatever you do it has to get done.
Related: 5 Mistakes To Avoid In Sales
Bottom of the pile
Not all business opportunities are created equal and to treat a low potential or low yield opportunity the same as you would a game changing opportunity is just soft-headed. But you can’t keep stacking “higher priority” opportunities atop the less promising leads, otherwise there will never be any follow up.
Instead of piling on top of the opportunity that requires follow up, delegate the opportunity to a lower level worker – it’s a great learning opportunity and you risk very little by giving it to them.
Remember those who cannot be trusted to handle small projects won’t get the opportunity to handle large ones.
This article was originally posted here on Entrepreneur.com.
You Are Your Own Client
Before you can build a start-up that takes over your industry, you need to treat yourself as your own best client.
In business, when you have a client, the relationship is formalised into a structured one where there are defined expectations and regular meetings. For example, if you are a consultancy and have a one-year contract to deliver services to a client, the relationship will be formalised, structured and possibly include monthly status meetings. Some may be report-back meetings while others may be briefing meetings.
Your client will receive a monthly invoice and there may be quarterly reviews of the work you have done. Your general mindset is one of service to the client because they are important and worthy of the effort. Crudely speaking, most service-provider arrangements work in a similar way because the structured model works.
In contrast, as entrepreneurs, our relationship with our own business is often far more chaotic or ‘organic’ than formal. My contention is that it is also much less effective. When I work with SMEs, one of the first things I do is encourage the entrepreneur to treat his or her own business as a client by formalising meetings, ensuring that there is a feedback loop and having a service-provider mindset. By making these philosophical and structural changes, you will create a far more efficient and well-run business.
There are four aspects to any business which, in my view, should be formalised.
It still astounds me how informal the meetings are between partners in SMEs, especially when they operate from the same office. There are no set times, no agendas and no outputs required. The fact that you might sit in the same office or chat regularly is the problem because it’s interpreted as proper communication while it’s actually a very undisciplined and unstructured process. Casual chats do not ensure that all the requisite items or issues are being properly discussed and dealt with.
The often-given excuse for not holding weekly, biweekly or monthly meetings with team members at the same date and time is that the business is fluid and the entrepreneur needs to be responsive to their clients’ urgent needs whenever these might occur. And so non-rhythmic meetings are occasionally inserted into the gaps in between the chaos.
The discipline that I try to imbed in the SMEs I work with is to hold rhythmic meetings at a certain time and day every week, month or quarter. Should there be a need to cancel this meeting for whatever reason, it should be rescheduled. The simple discipline of rescheduling and not cancelling allows for a compromise between the practical reality of an entrepreneur’s life and the discipline required to build a sustainable business.
Agendas are often seen by entrepreneurs as an icon of the structure of the corporate world. They smack of rigidity, stuffiness and boredom so they are often discarded and replaced with warm and fuzzy chats. In reality, in order for it to be an effective use of time, every meeting requires a structure, outline or agenda.
This can be a comprehensive agenda similar to that used by corporates or as simple as each person in the meeting talking about their three top-of-mind issues. What is important is that there is structure and outputs, otherwise the meeting’s output is merely that it’s nice to know. The output from a meeting with a formalised agenda is that it’s nice to do.
4. Product review
When last did you, as an entrepreneur, formally ask yourself if your products are still relevant and effective in the market? One of the greatest oversights made by SMEs is not regularly reviewing the appropriateness of their existing products or services. In a high-growth, chaotic environment that is attuned to constantly producing new products, existing products soon become the ugly stepchild, only getting attention when the client cancels the contract because your competitor has a faster, shinier and cheaper iteration of your product. An incredibly important discipline in any business is the regular and formalised review of products and services.
We resist structure as entrepreneurs and the price of that resistance is ineffective and inefficient businesses. By simply treating ourselves as we would our clients, we are able to imbed a level of structure to our businesses that will create a far more effective and enduring business.
What’s The Worst That Can Happen With A Disgruntled Silent Shareholder?
Whether a shareholder brings capital to the business, experience or connections, you need to ensure everyone has the same vision and values.
While we often hear that it can be bad to have a silent shareholder that does not want to play ball, it is not often that we make enquiries about how the governance of a company can be hindered by a disgruntled shareholder.
Most of us assume that as long as they own more than 50% of their own company, they are entirely in control of all aspects of the company and how it is governed. This is not true: Even if you are a majority shareholder, holding less than 75% of all the shares in your company can still result in headaches if a minority shareholder, holding at least 25% of the company, becomes disgruntled and neither participates in the decisions of the company, nor consents to the decisions being made.
What is set out below highlights, among others, why it is so important to give shares in a company to prospective shareholders over a period of time, rather than from the outset. This allows for shareholders to prove their worth without you potentially placing your company in a position where it could be held at ransom for many years.
The illusion of holding more than 50% of the shareholding in a company
- Many people assume that by holding more than 50% of the shares in a company they are free to do with the business as they please. This generally only holds true for basic decisions of the shareholders, such as the removal and appointment of directors. The most important decisions of a company are based on special resolutions. A special resolution requires that shareholders, either individually or collectively, holding at least 75% of all the shares in a company, vote in favour of a specific decision.
- Examples of decisions that require a special resolution include:
- Amending a company’s Memorandum of Incorporation
- Approving the issuing of shares or granting of other similar rights
- Authorising the basis for determining directors’ salaries
- Disposing of company assets
- Mergers and acquisitions.
So, what does this mean for you and your company?
- If you are a start-up looking to raise funds, apart from some exceptions, you will not be able to issue further shares to new shareholders or anyone other than existing shareholders if there is a shareholder that is effectively dead weight.
- Should you manage to vote a new director to the board, you will not be able to determine the basis on which they are compensated (their salary) without a special resolution.
- If you intend to merge with another company, you will not be able to pursue this without a special resolution.
- If you plan to raise money by disposing of or selling most of the assets of your company you will, once again, be prevented from doing so.
Accordingly, it is always best when starting a venture to vest your shares over a period of time. This means that, for example, shareholders are only entitled to have their shares allocated to them after a certain period of time to avoid a situation where you have a dead-weight equity shareholder hindering the governing of your company, and requiring possible litigation to remove them.
There’s More To Team Management Than Leadership
When you’re running a business you need to ensure that your employees are on your side, helping you to make profits. Giving them job security, taking them seriously and treating them with respect, will go a long way in enhancing loyalty and productivity.
The staff that work for you determine:
- How happy your customers are with your business
- The quality of the things that you sell
- The costs that you incur to sell your products and services
- Your risks – the things that can go wrong and how much it costs you
All of these things determine your profitability and how competitive your business becomes. How do you ensure that everyone is on the same side and helping you to make profits?
At work everyone believes that they are getting something (such as money) and are giving something in return (such as time and effort). They are weighing up in their mind “how much am I giving, how much am I getting in return and is this fair?” If they believe that they are:
- Giving too much or
- Getting too little
- Then this is unfair, and they won’t work well (poor productivity – how much they produce).
The manager needs to:
- Know what people are thinking about what they are giving and getting and
- Manage the giving or getting side
- So that people become more productive
In a smaller business you sometimes cannot afford to pay more or provide the sort of benefits (pensions, medical aid, bursaries etc.) that larger firms can and so the staff may be unhappy, not be productive and be on the look-out for something better.
How do you increase happiness without money?
- Job security – knowing that you will still have a job next year – and that you will get paid on time.
- Contributing to the success of the business. If you train staff to have the knowledge and skills to do a better job and you then encourage and support them to do this then they are happier, and you increase profits. If you then share some of these profits with the staff that helped you to make them then everyone wins!
- To be taken seriously and treated with respect. If you do this then staff are happier, and they will also treat your customers with respect.
- To be part of the team. You can often do this by having a regular briefing on what your plans are and discussing ideas. Because staff are doing the actual work they will often have good ideas and then will be motivated to implement them – it was their idea after all!
Staff leaving you all the time is a can destroy significant value. If you implement the strategy above, you will have happier staff that are more productive and a more profitable business.