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Take a Fresh Perspective

In tough times, you need to look for new opportunities.

Ray Silverstein

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When business is tough, like it is right now, you can’t afford to hold onto your old ways. The world around us is changing, and if you don’t want to be left behind, you need to change your point of view now. If you don’t like what you see right now, ask yourself, “What can I do to change this picture?”

To make a real change, you must approach problems differently. You need to consider opportunities you may not have entertained in the past, venture outside your comfort zone and take some carefully weighed risks. In other words, it means exchanging your tunnel vision for a wide-angle lens. That’s much easier said than done, so here are some ideas to help you start thinking.

Has Your Customer Changed?

Think back over the last year or so. Is there anything different about your customer? For example, one entrepreneur I know owns a martial arts studio. In the past, he required that students register for six months of classes at a time. Back in the good old days, customers signed up without thinking twice. Today, registrations are plummeting. Yet he’s still sticking to his six-month rule because, he says, “I have to pay my rent.”

The problem is that customers are increasingly unwilling to commit to six-month programmes. What if their kids lose interest? What if the parents lose their jobs?

His classes haven’t changed, but his customers have. Because of the tight economy, they’ve become commitment-shy. And if he wants their business, he’ll have to find a way to accommodate them. He could offer month-to-month memberships or take a cue from the auto industry and guarantee tuition refunds if someone loses their job.

Yes, he has to pay the rent. But getting the rent money one month at a time beats not getting it at all. He’s operating by an outdated assumption. Are you operating by obsolete “rules” that discourage customers from buying?

What Aren’t You Selling?

  • Let’s take it a step further. Think of all the recent sales you failed to close on. What were the reasons your would-be customers gave you?
  • Are they asking for a product or service that you don’t offer? In that case, is it time to expand your portfolio to include something new?
  • Are customers objecting to your prices? Should you re-evaluate your pricing methodology? Provide less expensive versions of current offerings? Expand payment terms to make purchasing more attractive?
  • Are customers asking for smaller quantities than your current minimums allow? In a soft market, increasing throughput is smart. Can you adjust your workflow to make smaller orders profitable?

What Do You Like Best About Your Business?

I often preach that during tough times, entrepreneurs have to steel themselves to do things they find unpleasant. However, if you’re brainstorming ways to strengthen your business, it helps to focus on the aspects you enjoy most. Chances are, these are your strengths, and if you like what you’re doing, you’re more likely to stick with it. With this in mind, are there areas you can build on? Are there related services you’ve considered offering, but never implemented? Perhaps now is the time to act.

Ray Silverstein is a leadership expert at Entrepreneur and is the author of “The Best Secrets of Great Small Businesses”.

Strategy

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.

Kyle Torrington

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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.

Related: 7 Factors To Determine Who Are Your Employees (And Who Aren’t)

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.

Related: Reality Check: You Probably Don’t Own That Work You Outsourced

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.

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Strategy

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.

Henry Sebata

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The staff that work for you determine:

  1. How happy your customers are with your business
  2. The quality of the things that you sell
  3. The costs that you incur to sell your products and services
  4. 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).

Related: Why Innovative Employee Benefits Are Your Competitive Advantage

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?

Everyone wants:

  1. Job security – knowing that you will still have a job next year – and that you will get paid on time.
  2. 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!
  3. 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.
  4. 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.

Read next: Understanding Your Responsibility As An Employer

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Strategy

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.

Hayden Field

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“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.”

Related: Executive Director Hasnayn Ebrahim’s 5 Rules For Strategic Growth In Your Business

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.

Related: Jeff Bezos: 9 Remarkable Choices That Shaped The Richest Man In The World

“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.

Related: Lichaba Creations Founder Max Lichaba’s Inspiring Journey To Entrepreneurial Success

Bezos says he still reads emails from his public inbox (jeff@amazon.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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