Let’s face it, it is tough building a business today. There is more competition then ever. There are new widgets and gadgets, that are confusing your clients, every day.
Long gone are the days when your customers would just buy because of a good product and a good price – they want more! Consumers are looking for an experience or a feeling. Your customers want more then ever for their money. They want to be emotionally stimulated.
Your competitors have already figured it out and they’re stealing your business. Twenty years ago, business owners made it a habit of holding all of their information “close to the chest.” It would seem insane for the principle of the business to go out and speak publicly about how they were different, why they were growing so fast or why new customers were flocking to their doors. We use to call this information “trade secrets.”
Today, those same principals and CEOs have realised that sharing the secrets is the key to winning the loyalty of clients and customers. New terms like authority, expert and thought leader have completely changed how people do business today.
In the best-selling book Behind The Cloud, Salesforce.com Founder Marc Benioff goes into great detail on the strategy that he used to bring significant attention to his SaaS start up. He positioned himself as an authority on anything to do with human resources, politics and business.
Whenever something was happening in the media, Benioff would reach out to TV and national radio and get himself on air to give his opinion. Sometimes, he would have to make up his opinion as he went on.
Benioff proved that becoming an authority would propel his business onto the world stage. Today, Salesforce.com is the market leader. They host annual events with over one hundred attendees from all over the world, and they are 10 times bigger then their closest competitor.
If asked, Benioff would undoubtedly agree that his authority status was worth millions of dollars in advertising and new revenue. If we dissect Benioff’s authority strategy, we can quickly see three good reasons for you to focus on becoming an authority in your industry.
1. Brings attention to you
You are the principle of the business. This is one case where a little ego will go a long way. Any attention that comes to the founder or CEO of the business will inevitably bring more revenue to the company.
Every time you are introduced as an authority, the first thing said after your name is the name of your company.
The more you are speaking on stage, being interview on TV or giving an opinion on radio, the more people are going to learn about your business. If you’re really savvy, you will also figure out how to weave your business into then things you say as examples.
2. Brings new customers to your business
Consumers always want to be associated with the best-in-class product. If you have ever tried to launch a new product in a crowded space where there is a true market-leader, you understand how difficult it actually is.
What is most frustrating is when you know that the reigning “best-in-class” is an inferior product. The only thing that trumps the best-in-class spending habits of consumers is a new product being launched by the leading authority in the space.
Look at what is happening with Tim Fargo’s startup, Tweet Jukebox. Fargo has been one of the leading expert users (authorities) on Twitter for years. He recently launched a new tool to help Twitter users post better content, more often – and it’s an overnight success.
Now, I am addicted to Tweet Jukebox and think it’s a great product, but I wouldn’t have wasted a second looking at it, if it weren’t for Fargo’s authority status on Twitter.
3. Increases loyalty in your customers
Real “authorities” will be incredibly passionate about a chosen subject. They will be publishing articles with their thoughts regularly. They will be Tweeting, Facebooking, Pinning and writing on Reader’s Legacy on a daily basis, and their customers will follow every word, loyally.
Ken Blanchard wrote a wonderful parable on the art of creating customer loyalty called Raving Fans. In it, Blanchard touches on the importance of authority positioning. It is becoming harder and harder to win the hearts of new customers, so you need to do everything you can to keep the ones you have.
Positioning yourself as an authority and communicating with your customers, through every means possible, will increase their loyalty.
Customers want to follow the champion.
I am going to spend the next couple of months studying and writing on the art of becoming an authority.
I am convinced that it is becoming a pre-requisite in business that the founder, CEO or principal must become an authority in their industry. If you don’t do it, you will be destroyed by your competition – because their principle is taking this stuff seriously. They are becoming an authority.
This article was originally posted here on Entrepreneur.com.
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.
Jeff Bezos Reveals 3 Strategies for Amazon’s Success
One of the richest men in the world shared his leadership tips for running a company.
“It remains Day 1.” That’s how Jeff Bezos, founder and CEO of Amazon, signed off in his 2018 letter to shareholders. He’s been propagating the “day 1” mantra for decades, and it’s meant as a reminder that Amazon should never stop acting like a start-up – even though the company now boasts more than 560,000 employees and more than 100 million members of Amazon Prime, the company’s paid service for free shipping on select items.
Here are some of the most useful nuggets of wisdom Bezos shared in his letter and during a recent onstage interview:
1. Standards are contagious
Bezos says he believes high standards are teachable rather than intrinsic. “Bring a new person onto a high standards team, and they’ll quickly adapt,” he writes. “The opposite is also true.”
If a company or team operates with low standards, a new employee will often – perhaps even unwittingly – adjust their work ethic accordingly.
He also says that high standards in one area don’t automatically translate to high standards in another – it’s important for people to discover their “blind spots.”
Try making a list of your duties, then ask trusted colleagues to tell you which responsibilities are your greatest strengths. If certain things from the list don’t come up during the conversation, it might be useful to think about how you can up your personal standards in those areas.
2. Set clear, realistic expectations
If you’re looking to raise your standards in a particular area, the first course of action is to outline what quality looks like in that area. The second is to set realistic expectations for yourself – or for your team – regarding how much work it will take to achieve that level of quality.
Exhibit A: You won’t find a single PowerPoint presentation at an Amazon company meeting. Instead, teams write six-page narrative memos to prepare everyone else for the meeting.
Bezos says the quality of the memos vary greatly because writers don’t always recognise the scope of the work required to reach high standards.
“They mistakenly believe a high-standards, six-page memo can be written in one or two days or even a few hours, when really it might take a week or more!” Bezos writes.
3. Stay involved with the people you’re serving
Whether you’re selling a product or service, it’s a good idea to make sure you never lose touch when it comes to the people you’re serving – no matter how high up the ladder you climb.
Bezos says he still reads emails from his public inbox (email@example.com) as a way to keep his finger on the pulse of what’s happening with Amazon customers.
He says he believes focusing on what customers are saying is much more important for success than focusing on what competitors are doing, and he often compares customer feedback to company data to see where they misalign.
“When the anecdotes and the data disagree,” Bezos said at a recent leadership forum at the George W. Bush Presidential Center, “the anecdotes are usually right.”
This article was originally posted here on Entrepreneur.com.
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