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Performance & Growth

Find Unlimited Growth

Deliver real value to clients and watch your business boom.

Pavlo Phitidis

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How do you position your business within a customer problem, and not through product and service features?

Entrepreneurship has many attributes ascribed to it. Passion, creativity, interest in knowledge, adaptability, industriousness, and the list goes on. Over the years, we have developed an entrepreneurial assessment that looks at 14 attributes.

We use it for a number of purposes that can be roughly divided into two camps:

In service of the entrepreneur (your attributes; how they work for you and against you in your everyday life), and in service of building a business (the process of building a business into an asset of value requires particular support structures to achieve the end goal of a successful sale in three, five or even 15 years from today).

We build our business in the image of our personality, with all the attributes impacting on the end result. Being aware of them makes the difference between moving forward and remaining in one place, irrespective of how smart or hard you work. Being aware of them helps prevent self-doubt creeping in where awareness of an unproductive, personality-driven pattern of behaviour should be.

Separate your business from yourself

Andre has an interesting entrepreneurial profile. His attributes are weighted heavily in favour of interest in knowledge, innovation, adaptability and industriousness.

Backed by his technical skill set, these attributes fuel his desire to make his products better. And make more products. However, 16 years on, business growth eludes him.

His business seemed stuck in an annual turnover band of R18 million to R23 million. For the last seven years, the turnover bounced within this range. His furniture was well priced, well made, well designed and very competitive with many wonderful features that, as he explained in detail, set him apart from his competitors.

After further discussion, we agreed to work together to tackle this problem. The market opportunity in the furniture industry is in the billions. Doubling his turnover in two or three years should not be a hard task.

When I asked him why he did what he did, he spoke with excitement about his products. He was elated by the new CNC panel saw that he had recently acquired.

His meticulous nature had seen him break up his production process into neat, well-defined activities making up four business units of design, production, promotion and dispatch. This new investment would increase the efficiency of his operation by 13%, he proudly explained and showed me how the CNC machine would hopefully improve his sales performance.

I was doubtful about the acquisition and also struggled to see the link. He went on to explain that his sales staff could then take the multitude of briefs from clients and translate them quicker than his competitors into quotable, better priced designs. I continued to ask questions about the machine’s necessity.

Service, he said, better service builds trust and confidence in our ability to deliver, he told me with pleading eyes whilst he stood by the CNC machine, resting a hand lovingly on the control panel as if it were his star performer. I could see that Andre was not even that sure about his argument himself!

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You Can Dominate Business in 2014. Here’s How

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Productive allocation of resources

We ran a business diagnostic on his operations. The results were not surprising. His business systems were heavily weighted in favour of the back-office activities of design and production capability. The front-office was very light in sales and marketing.

It was clear that Andre had built his business in the image of his personality, both consciously and unconsciously. He found his greatest meaning in design and production and his thirst for innovation, new product development, industriousness and conscientiousness had resulted in directing all his investment, time and energy into the part of the business that fed his personality attributes.

Immediately we knew where to look and went out to the market. He had a very exciting group of clients. Andre served corporates, big, medium and small business with office furniture. In some cases he secured work from the companies’ CEOs and designed and built furniture for their homes too.

He had a number of independent retailers on his books, some historical sales with a big brand discount retailer and had recently opened up business with a competing retailer group that served the middle market with furniture credit sales. Andre proudly told me how this left him with a well-diversified customer base to counter the risks of an uncertain economy.

Like Andre, many of us have to operate with limited resources. Directing these resources to give us the best result is one of the single biggest challenges we face as business owners. Andre’s ‘spray and pray’ selling strategy was tearing him, his staff and his business apart.

He could never build momentum in any one direction. His sales staff were all over the place and seldom was the same product sold more than three times. His design and machine repurpose costs were consuming the profit he was making and the business started and ended every year as it had started that year. There was no real progress being made.

Market segmentation

One of the first tasks that I set for Andre was to segment his market. This required him to define the multitude of people and businesses that needed furniture.

Once this was done, we organised them into groups with common features. For example, businesses were broken up into corporates, big, medium, and small businesses and small-office-home-offices (SOHO). We further broke them up into regions and type. Some of the types were service businesses, manufacturing business and retail businesses.

Regions located the businesses — provinces and then proximity to Andre’s factory. We indulged ourselves further by organising these businesses into groups that included more features such as ‘care about design or don’t care about design’ and so on.

We landed up with 47 groupings all in all. The next step was to assess the sizes of the groups in market potential. Once done, we combined groups that had 80% similar features and settled on 15 groups of which eight were sizable groups in terms of market potential.

The fight began. Andre wanted to serve six of the eight and include three of the remaining seven since the work would be interesting. I locked the door of the meeting room. At 3am the next morning we had agreed on the single group Andre would focus on. It was to be the SOHO.

With the recession on hand, retrenchments likely and job growth slow, we believed that this would be a growing market. It was already sizable and Andre was getting 37% of current sales from this market. Full of enthusiasm, Andre started to create designs on his pad that he thought this market would love. We produced a ‘research questionnaire template’ for Andre to take to his current customers. It was designed to ask them what design features they wanted.

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Want to Grow Your Business? Just Let Go

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Repositioning to achieve focus

What he came back with astounded him. The designs that he had played with three weeks before, after we agreed on the SOHO, were all ripped out of his file and torn up. Back at the drawing board, Andre created final designs that went well beyond furniture features.

They included the method of selling, now that he understood the problems of his SOHO clients. They incorporated annual sales calls to touch up the furniture at no additional cost, giving Andre a long-term relationship from his previous once off sales. It also gave him sight of which SOHO clients were growing; the leap from a SOHO to a medium-sized office for any of his clients was a small one. So too was the design capability that Andre offered and that his factory could deliver.

The designs were also exciting. They gave his clients versatility. A set of three tables could double up as a board room table as well as three separate workstations maximising the use of small spaces. The materials he used gave the furniture a very classy feel, something important to a SOHO entrepreneur who wants to lift his image for clients.

Three and a half years on from our first meeting, Andre’s business is approaching R49 million in annual turnover. He does one thing very well; design, produce, promote and deliver furniture suited to the SOHO market. He is now looking at the early stages of increasing his range to accommodate some SOHO clients moving into medium sized offices.

The lever to get Andre’s business to grow annual turnovers from R20 million to R50 million was largely one thing. He positioned his business to solve the problems of a well-defined customer group.

Checklist

Have you considered the following when choosing your market segment:

  • Separate your market into categories. Now give each category a % of your sales. Who is your biggest segment, and where is there room to grow?
  • If you were to narrow your focus, which segment offers the biggest growth opportunity?
  • Have you created a questionnaire for that segment asking what they want and need from you? You might be surprised by what they say.
  • Based on the above questionnaire, does your product or service offering deliver on these needs?
  • What can you change to meet those needs?
  • What value adds can you offer that will make the lives of your clients easier

Pavlo Phitidis is the CEO of Aurik Business Incubator, an organisation that works with entrepreneurs to build their businesses into valuable assets. Pavlo is a regular commentator on entrepreneurship on 702 Talk Radio and 567 Cape Talk Radio. He can be contacted at www.aurik.co.za

Performance & Growth

How You Can Achieve Growth Through Access To Markets

If your goal is to scale your business, you need to increase your sales and access to markets. We found the best way to do that was through key strategic partners whose existing clients were our target market.

Dov Girnun

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Many sales-led organisations have come to the same conclusion at some stage in their business growth life-cycle: In order to build a sales-led business for scale, you need to adopt a multi-channel sales distribution strategy. In our world, this means a combination of direct sales (boots on the ground), digital marketing and strategic partnerships.

After five years we had grown Merchant Capital as far as we could organically. We needed a much larger sales distribution channel. Understanding the need for a multi-channel sales distribution strategy is one thing, execution is something else entirely. After paying significant school fees, our strategic partnership distribution strategy was crystallised, and off we went to bring our chosen partners on board.

1. Finding strategic partners

Re-calibrating our sales strategy led us to the conclusion that we needed a strategic partner who could bring us ‘one-to-many’. In other words, we needed to identify potential partners (‘one’) who have ‘many’ sweet spot clients who are also our target clients, and whom they are already servicing with other products daily.

The end result of this three-year process has been strategic partnerships with Standard Bank and Discovery Insure. In the case of Standard Bank, every business that utilises a Standard Bank point of sale (POS) system can apply for a cash advance from Merchant Capital. Thanks to the partnership, Standard Bank POS merchants can access a cash advance within less than 24 hours of application.

It sounds incredibly simple and straightforward, but the process of identifying the right partner, creating the value proposition and then building a relationship that can result in such a partnership is anything but.

The most crucial element in this process was identifying partners who could benefit as much from a relationship with us as we could from them — in other words, ensuring a strong mutual value proposition.

When you have a business need, it’s easy to convince yourself that your prospect or potential partner needs you as much as you need them. Unless you are absolutely sure that this is the case however, there’s a strong possibility that you end up having a life-changing initial meeting and then never hear from them again.

This can happen for one of two reasons: Either you haven’t found the right partner who will also benefit from a partnership with you, or you haven’t been able to adequately distil that value. If this happens, very often you’ve missed your opportunity and won’t get a second chance.

Related: How Merchant Capital And Retroviral Were Built To Sell

We therefore had to be extremely disciplined in identifying which partners we wanted to approach. We focused on removing any subjectivity from the process by building an objective ‘partner scorecard’ that allowed us to weight certain attributes of the partner (such as a large client base, deep client relationship and mutual value proposition) with what we could offer them. This empowered us to make educated decisions.

2. Making first connections

Identifying the right partners is only the first step — now you need to make contact. By design, the partners we had identified were behemoth corporates with much larger priorities than meeting us, and convincing them on the upside of a strategic partnership needed to be robust and well-articulated.

Step one is getting your foot in the door. We began the process by identifying ‘champions’ within the partner organisation. This process takes time. We were able to secure meetings and found that running pilots was a good way to provide demonstrable evidence of the proposed ‘win-win’ proposition.

Early on in a business life-cycle (before any traction and brand equity exist), we found that leveraging off our network of shareholders and mentors to make introductions to the appropriate decision-makers within the organisation was of great assistance.

When we signed our previous investment deals, this was actually a key consideration for us. For obvious reasons, growth funding holds value, but the network and mentorship that the right board and shareholders bring to the table can be much more valuable.

Until you’re able to build brand equity and gain traction with a partner (or client), the right networks, introductions and referrals help you secure the meetings you need to prove yourself. And then you need to start small. Don’t expect a meeting with the CEO. Start with someone who could be your champion within the organisation.

3. Finding your champion

Finding a business sponsor to champion the partnership within the corporate partner is fundamental to your overall success. They will understand the internal friction and potential hurdles in navigating the naysayers within the organisation.

There will always be people, and rightly so, who challenge the partnership and ask why they can’t just do it themselves. If you don’t have an internal champion who is engaged and passionately buys into the partnership, then the initiative will most likely fall over and die.

Being the first mover in a partnership with an innovative start-up has many advantages if the product takes off. Often, these people want to be involved on the ground floor.

That said, big corporations are still taking a chance teaming up with young companies (brand risk and financial losses, to name a few). The upside of having already landed a smaller partner where significant traction can be demonstrated goes a long way in softening the initial concerns and risks from the large corporate’s perspective.

4. Nothing worth having can be rushed

The one word that comes to mind when thinking about this journey and the past three years is grit. In our experience, landing great partnerships takes many years of relationship-building and demonstrating solid business metrics and track record.

Related: 5 Lessons for Entrepreneurs from the Most Famous Sling in History

As I’ve already mentioned, our discussions with Standard Bank began three years before doing the deal. What we found useful in the early days of the partner discussions was communicating that in the next quarter we were going to achieve certain results and then coming back the following quarter and presenting the fact that we had hit our milestones, or hopefully exceeded them.

Just as you would do with an investor, this built a track record and credibility. The rhythm of checking in every few months and reporting back on progress is a great way to build the relationship over time without being too pushy as well.

Pulling it all together

There are two types of growth: Organic growth and scale. We’re an organisation that wants to scale. We’re aiming for exponential growth. This wouldn’t be possible without exponentially increasing our access to market.

We identified that the best way to do this was through the right strategic partner, but there are many channels that business owners can consider.

The important thing is not to just do what you’ve always done, unless you’re comfortable with organic growth. Evaluate your current model, and critically examine what you need to do to increase your sales, distribution and access to market. There is no one right way to do this. It took us time, and we needed to learn a few tough lessons before we were confident in the direction we wanted to take.

Related: My Business Is Growing… What Now?

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Performance & Growth

5 Lessons On Scaling Up Your Company From An EOY Winner

It takes a combination of grit, hard work and the right strategies to navigate the challenges of the scale up journey. What do some entrepreneurs do differently to make it to the top?

Louw Barnardt

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Building a successful company is really hard. Even when you have made it through the start-up phase – product development, market fit, building a team, earning first traction – the process of scaling up remains a challenging road.

Louw Barnardt CA(SA), recently named the Emerging Entrepreneur of the Year at the Sanlam/Business Partners Entrepreneur of the Year® Awards, shared his five top lessons learnt from fast-growing clients and from their own journey of scaling up Outsourced CFO to twenty five full time professionals.

“There are many stumbling blocks that hinder exponential growth at the scale up phase. Successful start-up founders do not always have the right skill set and experience to build a business from five to fifty people or from twenty to two hundred.”

Louw and his team have taken the concept of an ‘Outsourced CFO’ – a go-to finance person for emerging companies – and built a very exciting business from it. “There are hundreds of lessons one learns on the journey of building a scale-up company. These five stand out among all of the biggest lessons learnt.

1. Invest in People

Doing business is all about people. In start-up phase, founders are able to manage almost everything. From the social media post to the invoicing to the recruitment – it all falls on you. One founder can manage this for a short while and a founder team for a bit longer, but somewhere between five and twenty people this changes. The founders can no longer make every call, have every meeting, answer every client query.

It’s critical to build a solid leadership team and then to equip them with enough autonomy and authority to run with the various portfolio’s within the company. Put a head of HR, head of sales, head of client engagements, head of operation and head of finance in place as soon as you can and keep investing in them – it’s the only way to scale out of start-up mode.

Related: The 4 Steps To Scaling Your Start-up To The Next Level

2. Manage Cash Flow

The finance function sits at the heart of every business. If the numbers don’t add up, everything comes to nothing quite fast. Founders need to make sure that they have a firm eye fixed on financials. New cloud systems enable entrepreneurs to have access to every detail of revenue, profitability, debtors and cash flow in real time.

That’s right – exact live financial information at your fingertips for decision-making. Foreseeing cash crunches ahead of time and actively being able to navigate to avoid them makes all the difference in the scale-up process. Growth eats cash, so be sure to manage yours on the way up.

3. Streamline and Automate

A start-up can afford to do what needs to be done in the moment. Scale-ups cannot. Automation of company processes is key to enable scale in various company functions.

Automate your sales process with a tool like Sales Force or HubSpot. Automate your marketing with a tool like Hootsuite. Automate your finance with a tool like Xero. Automate your company culture input with a tool like Hi5. Putting a good system in place and investing in the understanding and utilisation of all of its functions is a prerequisite for high growth.

4. Prioritise Strategy

As execution becomes a bigger and bigger part of your company, the strategy that directs that execution plays an ever-increasing role. The most successful management teams set and stick to good habits around strategy: Annual breakaways to direct long term strategy. Quarterly strategy days to cement key strategic priorities for the next 90 days and the likes.

It may seem counterintuitive to have your full management team out of action for so many full days of work, but putting the right strategy in place to execute is the real deep work required to scale.

Related: Infanta Foods’ Marisa da Silva On Why Scaling Is Tougher Than It Seems

5. Brand and Awareness is key

The value of owning a top brand and of being top of mind with all your stakeholders cannot be overstated. A stronger brand lifts the market’s perceived value of your offering. Continuously starting conversations and finding ways of reminding your networks and target market of who you are and what amazing things you are doing opens up ever-bigger opportunities that play a huge part in creating scale for our top entrepreneurs.

“Building a company is hard work. But if you do it smartly, the juice is worth the squeeze many times over. Make these five lessons your own to hack the scale up journey as you build the business of your dreams.”

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Performance & Growth

Use Growth To Help You Live Like A Hero

Often strengths become weaknesses as we progress through our business journey. If you want to remain the hero, you need to focus on growth.

Erik Kruger

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“Do our heroes fall from grace? Sometimes.

However, what makes them a hero is that they fight and crawl their way back to the top. You aren’t a hero because you were once great. You are a hero because you continually strive to be great.”

I am a big Batman fan. The 2008 film, The Dark Knight, gave us an iconic line. In it Harvey Dent, who later becomes Two Face, says, “You either die a hero, or you live long enough to see yourself become the villain.”

It’s a cutting view of a fall from grace: How our heroes often become vilified through their actions or our perceptions of them.

But I would like to suggest a different context for this quote. As an entrepreneur, you must develop certain qualities and characteristics to become successful. The problem is that those same qualities and characteristics, once the tools that pushed you to success, can at a later stage become the stumbling blocks that prevent you from progress.

Growth beyond abilities

Here’s a quick example. You wake up one morning with a great idea. Soon after, your idea has been translated into action and your business is up and running. You find yourself jumping between different roles. Sales. Marketing. Accounting. Operations. All your time and energy gets funnelled into the business. You work late at night. Sure, it impacts your social life but at least you don’t have a family to worry about.

Related: 5 Fierce Ways To Become The Ultimate Entrepreneur

Then, growth. Things change. And your superpowers become weaknesses. You need to hire a team to help with the increasing demand on the business. But you struggle to let go. You want to hang on to your ability to control every aspect of the business. It’s how you have always done it. It’s what led you to success. However, the business requires you to change with it. To learn a new skill; finding the right team and trusting them with your dream.

You might then find yourself in a serious relationship or married. Perhaps even a kid. And the amount of time that you can dedicate to the business is impacted. You must find ways of staying productive at work while making time for your family and close relationships. Your previous ability to pull all-nighters becomes futile in the face of new expectations as you need to divide your time in a meaningful way.

What once was a strength now becomes a weakness, and this happens much faster than you might think. So, how do you prevent your superhero abilities from withering?

Truth in reflection

Everything we do starts from knowing. You would be surprised to know how much of your behaviour is driven by subconscious programming that you grew over the years.

Since this behaviour becomes a part of your identity it becomes almost impossible to see how it affects the way you interact with the world and those around you.

So, the only way to really create a new set of behaviours is to pause the auto-play function. And for this to happen you need self-awareness and reflection. You do this by creating time for meditation, journaling, and spending time with a coach or mentor.

Perpetual Evolution

In my experience, entrepreneurs are pretty good at learning new things. Especially in the early days. So, as your business grows, you need to grow with it. Unfortunately, many entrepreneurs get left behind. It’s much more ideal if your growth drives business growth than the other way around.

I am not going to harp on about this because I think there are more than enough resources that can help you to evolve your thinking, and they aren’t hard to find, in fact you are holding such a resource in your hands right now.

Related: Want To Achieve Greatness? Be 1% Better

People Are Mirrors Too

The people around you are pretty good at holding a mirror up to you. They aren’t always aware that they are doing so. They hold up the mirror by reacting to you in a certain way and by speaking to and about you in a certain way.

If you are paying attention, then you will pick up on the clues that they leave behind. You will be able to read between the lines and hear their cries for support, encouragement, and trust. But of course, what you are seeing is not a reflection of them but rather a reflection of you.

What part of your identity is robbing people of support? What have you done that created a culture of mistrust?

It all comes back to you and the way you have been conditioned and how you are, in turn, conditioning those around you.

You can stay the hero

That’s why you can’t give up. Heroes don’t give up. — Kiera Cass

 

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