Family feud

Remember this: you should run a family business like a business – not like a family where there’s a place for all those family emotions that knit people together. I read something recently that was so spot on – family businesses often take the family to work and bring the business home.

Too often, too much emotion comes into play in a family business and this can ruin the business and put stress on family relationships. It’s important to have business meetings, but they should be run according to the rules of any meeting.

Here are some tips:
o It is important to start a meeting on time
o Issue an agenda in order to make sure that everyone is prepared for the meeting
o Send the agenda to all family and non-family members before the meeting and ask if they want any items added to it for discussion
o If anyone can’t attend the meeting, ask them to send an apology
o Conduct the meeting in an orderly fashion. Have one person chair the meeting so that this person keeps control of the flow
o Focus on the objectives of the meeting. If any issue can’t be resolved make sure a person is appointed to follow up and seek a solution
o End the meeting on a positive note. Seek to have any business issues between family members worked out as quickly as possible after the meeting. If you find that squabbling occurs every meeting it might be wise to bring in a facilitator – an independent person who can assist in cutting out the conflict
o Send out minutes of the meeting to all who attended
o If there’s continuous tension, seriously consider employing a third party to help resolve any ‘burning’ issues.

Objective eyes
Many family businesses hate seeking outside advice or using consultants and would rather struggle on with each meeting more like a battle ground. They like to keep things in the family.

A family business usually has good lawyers and accountants but they only let them get involved in the business as the need for their services arises – tax time, renewal of a lease, etc.

What happens is that family members get to a point where they’re so stressed about the business, that they don’t know where to turn.

There will often be a major turning point for one of the family members, who wants change and is prepared to do what it takes to make it happen. Sometimes it can be a spouse who’s fed up and threatens to walk out, or sometimes one of the family members gets sick – both situations necessitate change.

So how does change occur? Unravelling the issues between family members can be so complex and quite often a dispute that happens in the present can be traced back to some issue that happened way back between siblings or close relatives.

Experts in dispute resolution can help unravel some of these issues and then the family business can move on once they recognise that this conflict is negatively impacting on the family and the business.

I remember the late Jason Lea of the chocolate success story Darrell Lea. Jason was a major force behind Family Business Australia. He told me once that squabbles in his family were constant.

At one time they went public and outsiders were brought in, but every meeting was still a major fight and eventually the family decided that if they were going to fight with strangers they may as well buy back the company and just stick to fighting with family members!

Maybe a different strategy could have prevented this heartache …

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For better or worse

Employees taking employers for a ride are costing the economy hundreds of millions of dollars each year, and experts warn an increasing part of the cost is linked to would-be employees falsifying qualifications and other credentials.

“It’s an untapped and hard-to-measure problem,” says Dr Russell Smith, principal criminologist with the Australian Institute of Criminology. “It’s a global problem, where we are seeing the likes of CEOs include false information, such as degrees, to get top jobs.”

According to KPMG Forensic’s 2006 Fraud Survey, corporate fraud cost $154.9m to businesses in Australia and New Zealand during the period April 2004 to January 2006. But the big worry for employers is the revelation that 54% of corporate fraud is internal and approximately 61% of such cases are reported to the police.

Dr Smith says there is a history of unreported fraudsters re-offending.

Sally Mooney, of a Sydney-based company which runs extensive checks on potential recruits for employers, warns that there is a lot of deception by employees in the workplace.

“We conducted a survey of 1000 applicants who had been short-listed for a job and found 21% had been falsifying information,” she says.

“A common area was for applicants to leave out a job that might not have been a positive experience from their employment details.”

Identity fraud, which involves an employee ‘massaging’ employment records or personal achievement data, is on the rise. Some hopeful employees add a degree, or two, leave out a criminal record, or convert a divorce into a very happy family.

Deception could be as ‘innocent’ as losing a year, or 10, off one’s real age.

Not too long ago the analytics website suggested that there are about 500,000 false tertiary degrees in the US, including 10,000 dodgy medical degrees. The US Federal Trade Commission estimates that as many as nine million people have their identities stolen each year.

The Australian Institute of Criminology believes the overall cost of fraud in Australia is some $5bn a year.

Dr Smith says the rush to employ means that many employers leave themselves open to costly mistakes. “The pressure to get an employee through recruitment means references are not checked thoroughly.”

Drake Consulting research says it could cost an employer 30-200% of an employee’s salary to replace someone hired on the basis of deception or fraud. That means someone on $56,000 could cost the boss between $16,800 and $112,000 to simply get it right.

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Learning to sell

When a person opens up their shop or becomes a consultant for the first time, they can be surprised that they’re actually in sales. Those who work as professionals (doctors, lawyers, etc) often don’t realise the sales side of their business and the whole system of customer service behind that.

Why do some sales people have it and others don’t? What makes a person good at sales?
Brian Tracy is one of America’s leading authorities on the development of human potential and personal effectiveness. Prior to founding Brian Tracy International, Brian was the chief operating officer of a development company with $265m in assets and $75m in annual sales.

He has had successful careers in sales and marketing, investments, real estate development and syndication, importation, distribution and management consulting.

Tracy is a man who knows more about sales than most other people in the entire world and while this might be a big call, he’s certainly up there. All around the world, his writings and lectures are well attended by people who know a lot about sales.

So where did the knowledge come from?
I started off as a poor boy. I didn’t graduate from high school. I worked at labouring jobs and finally stumbled into sales when I couldn’t find a labouring job, and then I spun my wheels for months and months and months until I began asking why is that some sales people are more successful than others?
I began to ask people, and it became almost like a blazing question for me. I began to ask top sales people what they were doing differently from me and the most amazing thing is they told me. They said show me what you’re doing and I’ll critique it for you’.
So I realised that selling was not a matter of talking. Selling was a matter of, first of all, separating prospects from suspects.

In brief, a prospect is someone who needs your product, wants your product and can use and afford it – but Tracy goes into depth with the definition.

You’re not looking to selling things to people that they can’t benefit from, you’re looking for people who can most benefit from what your product does for them. That’s a critical difference in selling – junior sales people sell what the product is; professionals sell what the product does, because all people ever buy is improvement, Tracey says.

They buy to improve their life or work in some way. So you need to be clear what is it that your product or service does to improve their life or work, and then you find people for whom this improvement is a real value and for whom the benefit is greater than the amount that you charge. So that is a prospect, he says.

So if you’re wanting these prospects to buy your goods and services, what do you have to know about them?

One of the things that we teach – and we spend all day on this – is this: who is your perfect prospect? If you could identify your perfect prospect – age, education, background, income, experience, knowledge, need and capability of buying – who is your perfect prospect for the benefits that your product or service offers?.

So once you’ve developed a profile for your prospect, what next?

Where can you find those people? And then, how can you appeal to those people – what value do they seek from you, why would they buy, why wouldn’t they buy. So everything in business, from the beginning to the end, is this incredible intense focus on the customer and how you can help that customer improve his or her life or work in some way.

Some people are great at customer service, but they still don’t generate enough customers. What are those sorts of people doing wrong?

What they don’t realise is that customers have two major fears – it’s the same in Australia, it’s the same worldwide. First, they have a fear of being taken advantage of. And why did they have this fear? Because they have been. That’s the normal nature of commercial society, people will be taken advantage of.
Second, they have a fear of being hustled or manipulated, being talked into something that’s not in their best interests because it has happened in the passed.
Therefore, the second part of professional selling is to establish a reputation of belief and credibility with the prospects. The person knows you and likes you and trusts you and believes that what you’re saying is true. I don’t mean this to be manipulative – it has to be straight forward and honest because in the final analysis you can never fake it, he says.

Good business people are cognisant of how important it is to build and maintain a high quality customer relationship with a prospect.
The best sales people, the best businesses, are those who their customers like and trust and feel confident doing business with, so it’s really an essential part, he says.

How important is it to understand the needs of a customer when it comes to selling?

It’s absolutely essential. In fact, there have been millions and millions of dollars of research done and what you find is that the customer is not really on the field of play until the customer realises they have an unsatisfied need that you can satisfy.
So therefore the focus in building trust is to ask questions about the customer situation in his or her needs, he says.

Tracey refers to articles in The Wall Street Journal and the Harvard Business Review that mention a recent study on this. It was found that people had three types of needs.

There are clear needs, there are unclear needs, and there are non-existent needs. And when you meet with a person for the first time, the biggest mistake that people make is to assume that they have an existing need of which they’re aware.
Many people have needs they didn’t even know that they were aware of, and the only way you can uncover that is by asking really good questions and listening closely to the answer until it becomes clear to you and to the prospect, and the prospect says ah yes’ and realises they need that. Only then can you start talking about your products or service, he says.

How important is research? Have those who are poor at sales not researched their potential customer bases or markets?

The 80/20 rule applies to selling as to every other field. Approximately 80% of sales people are mediocre because they’re lazy. I’ve trained a million sales people and I’ve worked for a thousand corporations. They’re lazy. They do the very least to get by, they don’t make any effort to learn as much as they can about their product, their competitors’ products, and especially about their customers.
The top 20% however, are different. These people are ambitious and eager to make a good life as sales professionals, they see this as a professional field, and they’re veracious about learning. They read everything they can, they listen to audio programs, they attend courses, they study their product and their competitors’ product, he says.

I asked Tracy to give some examples of people in this 20% category.

Probably one of the best examples is Sam Walton of WalMart. On the list of the 10 richest people in American, the richest multibillionaires, five are descendents of Sam Walton.
He started off with a little store in a little town called Bentonville, Arkansas, and he had this idea of satisfying people by finding out what they really wanted and then looking everywhere to get them the lowest prices and when he could manage it to buy in bulk.
So we have lower prices – he always passed on 50% of his savings to his customers in lower prices. There’s a lot of controversy about WalMart today, but WalMart is a great company because it’s focused single-mindedly on selling the very best quality at the lowest price to people who can afford the very least, the littlest guy in society.
So what Sam Walton will do is, from the time he started his business, he would travel to other towns to visit other stores and walk around the stores and take notes looking at what they were doing right to satisfy their customers and then come back and incorporate it into the WalMart approach, Tracy says.

When talking to Gerry Harvey recently, I mentioned that when I was listening to what he does it reminded me of a top-notch athlete who is focused 24/7 on success. Is this the hallmark of great sales people and great business people?

I say that there are many qualities that are helpful to success and there are two that are essential – one is focus, which is being absolutely clear about who you are and what you want, and the second is concentration, the ability to concentrate without diversion or distraction on your most important goal.
And both of these are learnable skills, by the way, and very few children have them and you can learn them by practice, he says.

But what do you say about people who are in sales who have done nothing to actually teach themselves the skills of selling?

Recently, I heard from an expert in retail selling that it’s not smart to start off with the question can I help you? and most people in retail with no training will ask that question and annoy the customers.

That’s all they know. Many companies are started by people who are not sales people. We’ve done hundred of thousands of dollars of research – there’s two types of companies. There are companies with an entrepreneurial CEO. This is a person who worked his way up, sold his way up, and built a company. Then there are companies that are run by non-entrepreneurial CEOs. These are people who moved in from a different field and never went through the selling experience. These people have no sense for how important the sales are.
IBM got into serious trouble in the late ’80s and early ’90s and they were even talking about breaking it up. The reason was because the last of the great sales guys, Thomas J Watson Jr retired in about 1986/87 and they said we are a big company now, we can run this company with accountants’. So the person they put in charge was an accountant and the accountant felt that selling was a completely unnecessary part of IBM and began slashing sales budgets, marketing budgets, slashing rewards – basically completely, as they say, disrespecting the sales function – and the company in three years was almost like a ship turned over in the water.
And when they brought in a new president, the first thing he did was bring in McKinsey and Company, spending $3m finding out what was wrong. They reported back that low sales was the problem, and high sales the solution. What’s the key?, he asked. Get your sales people out there face to face with customers, helping them solve their business problems, and get them off the phones and out of the offices’.
And within 24 months they turned the entire company around. Every single business that gets into trouble, somebody has to say let’s get back to selling, let’s get back to getting face to face with customers and helping them with what they really want and need.

Peter Switzer’s tips

  • Appreciate this reality – when you’re in business, you’re in sales
  • Work out your prospects
  • Research these prospects intensely
  • Identify your prospects needs
  • Write scripts for your sales staff so they know how to talk to prospects and customers
  • See selling as a profession
  • Seek sales training
  • Be honest and ethical in your dealings
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29 Characteristics of an entrepreneur

So you want to be an entrepreneur? Years ago, after the exploits of Christopher Skase and Alan Bond, the word ‘entrepreneur’ fell into disuse because of the negative connotations attached to it. But hard working business owners have in more recent times resuscitated the word.

Bob Cowan, who in his time, secured multi-million dollar contracts with the US Navy to supply recompression chambers, might prefer to be known as just a ‘bloody hard worker’!

When you employ over 40 workers and you wind up building these recompression chambers for Uncle Sam for many millions of dollars, then go broke, have to sell your house and move your family into a caravan while you fight for your dream, then you are an entrepreneur in the real Henry Ford meaning of the word.

Important business lessons
I remember attending an excellent conference a few years back called ‘Encouraging Entrepreneurs – How to Build on Their Ability’ at the Australian Graduate School of Engineering at the Warren Centre in Sydney. This was not an academic blab fest, but looked to people who had actually done it, searching for the lessons everyone in business needs to learn.

The experts at this conference warned entrepreneurs they were in danger of being left behind if they didn’t embrace technology.

We agreed the new formula for success was to add new technology to existing markets, or to find a new angle. And we forecast that the most successful entrepreneurs will be small to medium operations with a technology bent, and Asia will be the place where a lot of the future will unfold. How the future becomes real!

While it sounds like we were blowing our own trumpets, while we were ‘crystal-balling’ we came up with seven personal attributes of a good entrepreneur:

6.Good health

The final sentiment may have you wondering about new businesses facing high risks as they do not have good cash flow, and that’s why good people are essential. I can’t remember who said it, but 80% of a business is people, and a good business is a function of good people. And let’s face it, sometimes finding good people, comes down to luck.

Exploiting opportunities
I’ve got to admit that we did get one presentation from an academic at this conference. Happily, he did not put me to sleep. Trevor Cole, who is the executive director of the Warren Centre, lucidly defined the entrepreneur and showed us what characteristics they possessed.

He said that people shouldn’t think they were an entrepreneur just because they started a business. Everyone in business innovates – some well, other poorly, but entrepreneurship is one level above innovation, according to Cole. The core attribute of the entrepreneur is an ability to make decisions, but essentially they stand out because “they search for change, respond to it and exploit it as an opportunity”.

Bob Cowan certainly did all that. His story gives this title of ‘entrepreneur’ a good name again. Bob was no ‘fancy pants’ engineer, but a tradesman who started up a sheet metal factory 25 years ago, virtually in the bush. But that did not hold him back from seeing an unusual opportunity and exploiting it.

The lucky break came on a fishing trip to Cairns, where a mate was talking about recompression chambers and how US naval contracts were available for someone who could knock them up economically, but to a high standard. Bob observed how they look like basic sheet metal work, so, as he put it: “I educated myself … built a mobile recompression chamber … the US Navy wanted it!”

While the idea to the receipt of payment ended up being years, his first contract brought in $2m, Bob’s second with the US Navy was worth $10.2m. While this sounds like good money, it is in fact repayment for a job well done – and one done the hard way.

Along the way, Bob had a continual battle with governments who could not share his dream. The quest resulted in Bob and his family living in a caravan until ‘pay dirt’ was hit.

At one stage, he had a gutful of bank knock-backs, so he went down to the head office of a bank in Sydney (which would no doubt prefer to remain nameless). He provoked them to ‘get off their bums’ and come onsite to see what recompression chambers were all about. The ensuing visit shocked the lenders and made money matters easier after that.

The Cowan success story is all about persistence, focus and determination to win, and considering the value of the contract and the toughness of the client – the US Navy tested the chambers at the North Pole before they gave the deal the not! – the success is Olympic-like.

Money for nothing
That emotion aside, in listening to Bob’s tale and others at the conference, it is sensible to observe that many entrepreneurs, and businesses generally, need to look more carefully at how they source their funding.

It is easy to ‘bag’ banks – and definitely they don’t always do their job professionally in assessing the true merits of a project. But there is no value in bellyaching about it: you have to accept reality and do something about it!

Memtec’s Quinn alluded to this in his presentation to the conference. He stated that since money is so important, why don’t we all put more work into our presentation to the banks?

When we go begging to the bank for money, we should make sure that the business plan is first-class. There should be audio visual aids as part of the presentation, and every trick know to mankind should be employed in order to jump one of the biggest hurdles facing the business heading for gold.

Peter Switzer’s 29 characteristics of the entrepreneur
Check out these characteristics that are typical of those people who call themselves entrepreneurs:

1. Can’t work for anyone else – like to be the boss

2. Egalitarian – like to be the boss, but they’re not elitist

3. Takes action – they are not daydreamers

4. Their business doesn’t make them a champion – from an early age, they are champions in the making

5. Often launch with very little money

6. Speak their mind

7. Handle rejection

8. Like to prove others (doubting Thomas’) wrong

9. Know how to get around obstacles

10. Believe in being hands on

11. Don’t mind being alone

12. Can cope with failure

13. Like control

14. Future focused – don’t get caught in today

15. They tick faster than the clock – they never watch the clock

16. Adrenalin charged

17. Manage time well

18. Goal oriented

19. Into self improvement

20. Often want to move faster than time

21. Strong work ethic

22. Having nothing is no barrier

23. Often have a naïve confidence in their own ability to do things

24. Respect staff

25. Understand the importance of systems in the business growth process

26. Not afraid of making mistakes

27. Make decisions even if they are wrong ones

28. Don’t like to be penned in – look for challenges

29. Retirement is not an option

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Marketing magic

Can you learn by reading about other’s success?
The whole point of reading about successful small business operators is simple – you want to be told something you don’t know. You want an edge you can take to market that will end up with you having a first-rate business. It’s what’s called the copycat strategy.

The great artists are copied by the up and comers and Ian Thorpe was inspired by Kieran Perkins and Perkins got his lift from Stephen Holland.

Virgin’s Sir Richard Branson is often held up as a great pioneer of new business and rightfully is lauded for his inspiration to other aspiring business operators.

Though he can teach anyone a whole pile of valuable lessons, the one that is at the core of his smart decisions has been to pick a hole in the market where he could drive his Virgin juggernaut into.
A recent stunt to move into superannuation is a classic example of what I’m talking about.

Branson-like observations are at the core of many successful small business operators. Let me give you a case in point.

Where do ideas come from?
A couple of Kiwis celebrating an All Blacks victory over the Wallabies 18 years ago was the setting for a sleeper of a business with the provocative name of Holy Sheet!

The bed linen store opened its doors in 1990 in the bohemian Sydney suburb of Newtown and was the brainchild of New Zealand mates, Edmund George and Daniel Hochberg. The two first met as students at the University of Wellington but went their separate ways and eventually bumped into each other in Sydney.

‘We started with eight grand each and were a couple of marketing guys who knew nothing about retail,’ George recalls. ‘We did a lot wrong but we did one thing right – we picked the market and the location.’

So they saw a gap in the market?
At the time, George said two big firms dominated the bed linen market and protective trade policies had put limitations on what consumers were being offered.
‘I had run a business importing woollen products from New Zealand and knew some of the suppliers in the industry who regularly had difficulty getting rid of ends-of-lines and seconds, so we thought we would give them an outlet,’ George says. ‘Daniel’s wife came up with the name and I suppose it shows the kind of fun attitude we brought to the business.’

Despite some early setbacks, including a fire that gutted its head office a decade ago, Holy Sheet! is now a franchise system with 28 outlets in NSW, Victoria, Queensland, Tasmania,ACT and Western Australia.

‘Within three years, we have hopes to have 40 stores in Australia and also intend to explore opportunities overseas,’ George says.

So you have to know who to target?
Holy Sheet! is a modern business with the marketing push not only targeted at women, who invariably assume the role of interior decorator in most households.

‘The average Holy Sheet! customer is one who enjoys relaxation time, a contemporary lifestyle and a sense of humour,’ Hochberg says. ‘When a customer visits any of our 28 stores, there is that element of surprise about the type and range of products we have and this is what makes our concept so captivating. The urban male of today plays as important a role in our marketing as much as the usual fashionable female does.’

The plan to create a retail chain was not the only part of the picture, as they also wanted to build a brand. Nowadays more than 50 per cent of the products sold are under the Holy Sheet! brand.
‘Our product ranges are regarded by many as the benchmark in fashion and our views are regularly sought by suppliers in their stock selection process,’ Hochberg explains. ‘We work to be three to four steps ahead of the rest.’

On the experience of being a franchisor, George says getting the first few franchisees wasn’t easy, but after six were in place the numbers increased quickly.

‘We actually came at it from a different angle because we had been franchisees ourselves earlier in our history, opening up the first House store in Sydney,’ George says. ‘It gave us a perspective on what franchisees need from their franchisor.’

What gives winners the edge?
The pair say you have to be always open to learn new things to give you an edge.
‘We recently took on a new partner, Nick Hillyard, who has had vast experience in UK retail outlets,’ George says. ‘He has come in and has shown us better ways of doing business and what he knows has been eye opening.’

This is not just a story about someone taking a good business into a franchise system, which is something many small businesses aspire to do, but it’s essentially about how they saw that the domination of the market by two big players created an opportunity for Holy Sheet!

Don’t just think about your business and your competition today, but also think about what you could do to your industry and your competitors tomorrow.

Any tips?
o The big players don’t have to rule.
o Look for gaps in the market and you will find them.
o Brainstorm ideas. You never know what can come out of people’s minds, even over rugby and a beer!
o Copy the best in business. They set great examples.

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Money talks

Being an effective salesperson comes naturally to some people and the experts argue there are several key characteristics of the top sellers.

People in sales are a special breed. Lots of people can do a pitch, which mainly requires an ability to communicate. That’s the easy part. The tough part is closing the deal and getting the sale, and this takes a special personal trait. Some say it’s courage, others say it’s having a thick hide, while others even suggest it takes a ‘win at all costs’ attitude.

Undoubtedly, there’s a little bit of all of these characteristics in a good seller. Good sellers insist there is an exhilarating buzz from closing the sale. Some say it’s addictive.

What’s really interesting are the lessons from some of the internationally renowned sellers – Zig Ziglar, Tom Hopkins and Jay Abraham. All three do the same thing — they sell the secrets of doing business better.

The small business proprietor should be lining up to listen and learn from the top hands of selling. Ziglar is internationally renowned as a guru of sales. It seemed his ideas on selling were as unforgettable as his name, so when I was offered a chance to do a phone interview with Ziglar, I was in and dialling in a flash. Here’s what I learned.

If you’ve read my pieces before, you could have noticed I picked up a hefty serving of cynicism over the years, but Ziglar passed the Switzer ‘not another Yank expert’ test. This guy is worth listening to.

Book-wise, he has pumped out eight, but his most well-known is See You At The Top, which focused on personal growth and has had a print run of two million!

I asked Ziglar, ‘What advice would you give someone who reads your books, follows your advice but still winds up with poor progress?’

Like many top motivators, he reeled off one of the profound observations upon life which gives you something to carry along your own road. He pointed out that the psychiatrist, Alfred Adler, once defined the quality of hope as ‘the foundation quality of all change’.

The message is to keep your hopes up, never go negative, and keep working on your game.

My next question was one that has always bugged me: ‘Can everybody be taught to close a sale?’

Ziglar carefully insisted that everybody can substantially improve the closure strike rate by improving the closure procedure.
To sell well, he maintains, you have to do three things:
1. Have an intimate knowledge of your product or service.
2. Have an absolute conviction about the quality of what you’re selling.
3. Back it all up with hard work.

He says the three ‘Ps’ should not be forgotten. Do what you do professionally, politely and pleasantly, as selling is a transference of a feeling.

So is there a standard winning formula which will work for all sale situations? Ziglar thinks not. He believes you have to set your tone to suit your customer. If your customer is a trusting type, it’s easy. But if he or she is an individual who is a prosecuting attorney type, it is entirely different. A ‘solid Sam’ type usually wants minimal dialogue. An impetuous type will say ‘yes’ or ‘no’ at a glance and the high percentage sales pro must learn to adapt.

Ziglar advises that if your customer is a fast talker, speed up, but if they are slow and deliberate, check your speed. This way you create the notion in the mind of the buyer that the salesperson is like themself.

Another guru
Tom Hopkins is often referred to by salespeople in the tones reserved for Don Bradman and Mark Spitz.

Apart from his endless record of speaking and educating across the world, what I like about Hopkins is the clarity with which he communicates his message.

He keeps it simple. He uses teaching tools like The 7 Fundamental Selling Techniques Of A Champion which instantly makes you want to know what they are. He is master of the better business tip and seems to have a bottomless bag where he stores them.

Try this one on for size: ‘Use your energies to out-work, out-think and out-service your competition. Follow up like never before. Write thank-you notes. Return phone calls. Show up on time.’

The key to winning in today’s fast-changing world is to become a reliable, dependable and steady partner to the customer. Hopkins knows small business and has devised the best game plans to help them win. He is a business thinker who is on everybody’s wavelength and does not deserve to be ignored.

On the home front
Closer to home, Jodie White has over 15 years experience in hospitality, retail and training, dealing with Asian clientele. She also spent several years in Japan working with Ricoh, Toshiba and Sanyo.

White says: ‘If you are in the business of selling and your customer base includes Asians, you need to understand their wants and expectations.
‘Clearly, language barriers exist, so if you’re in retail and have a customer base that is Japanese you MUST know that base. The Japanese are such sophisticated shoppers, as are the Chinese, but they are different. While the Chinese pursue discounts with ferocity, discounting too much may lead a Japanese customer to think the product or service is without value.’

The message is clear: to maximise sales, know your customer.
The expectation of service is a major difference between Australians and tourists that come here. ‘In Japan, the customer is a god,’ says White. ‘As soon as you walk into a department store everyone says, ‘Welcome’. White believes we must train and motivate people to sell, because when it comes to selling, ‘We are so lazy!’.

While Americans rate highly as the best sellers (tipping is a powerful motivation), the Japanese are up right up there. Australians can give first-class service, but our friendliness doesn’t make up for our inconsistency and laidback style, which can look unprofessional.

The 5 steps of selling
1. Seek out the ‘suspects’
These are the people who may need your product. You must get out and show it to them. If your product is good, your communications skills reasonable and the demand is there, then what are you waiting for?
2. Locate the prospect
Talk to the person who ultimately makes the decision – otherwise you’re wasting your time and everybody else’s.
3. Present the product or service
Know your product, warts and all.
4. Overcome any objections
Make sure you tell them how your product will suit them. Remember that you have to believe in your product first for others to be convinced.
5. Close the sale
You’ve done the hard work and now you need the signature on the bottom line. For many people this is really the hard part. Try asking for the order with a trial close at any time during the sales process. If you’re finding it difficult, remember, when the going gets tough, the tough get going.

Setting sales goals
o Set specific targets based on figures that are achievable. Don’t merely pluck a figure out of the air. Take into consideration what’s happening in the economy and other external factors that may affect your target
o Increase your sales budget each year based on what was achieved last year – and again what can be expected to happen in the economy
o Train your sales staff (even yourself) so they have a chance to achieve or even exceed these budgets. You must arm your salespeople with the knowledge and resources for them to succeed
o Keep in mind that selling is hard work and reward your sales team when they succeed.

*Sales tip *
Learn how to sell. Some sales people just have the knack, but for most people there are things to be learned about selling. These include:
o Develop a love for your work and pride in the product or service you are selling
o Believe in your product – you won’t be an effective salesperson if you don’t
o Be positive and create a positive attitude from the beginning
o Establish what the prospect really wants
o Always dress appropriately when dealing with prospects or clients
o Set aside time to meet to regularly meet with clients or prospects
o Prepare professional-looking proposals and presentations
o Test how committed a prospect is to your proposal
o Be confident and ask for the sale.

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Effective Communication

The legendary American screen actor Rod Steiger once said something to Paul Newman in the movie In The Heat of the Night that all business owners should remember if they want to build a great business brand. It was simple but it said it all: “What we’ve got here is a failure to communicate. Some men, you just can’t reach.”

The great business builders are champions at communicating and reaching their audience. And just about all of them used that Communications 101 technique of public relations to get the business noticed and growing.

My experience is that few businesses have made their mark through advertising first. If they did they would have had a brilliant product and a brilliant ad campaign.

About five years ago I interviewed arguably the world’s greatest self-generators of free publicity — Richard Branson. This guy is the master of public stunts to get noticed and he admits that in the early days his lack of money made it compulsory. However, he says as the brand grew, it had to be reinforced in the mind of the public by having an advertising spend.

History of the great business communicators says you have to have a strategy or a plan. You have to anticipate the needs of your market or potential customers and you then have a find a way to their eyes and ears.

Lateral thinking is at the core of finding a cheap way to get to your market.

Think outside the square
When John McGrath kicked off his real estate empire he used a PR person, who became a permanent fixture in his business, to get his story to the media. There were stories that helped journalists fill holes in their newspapers and their bellies at lunches with influential people.

Margaret Butler of homewares business Anasazi Trading cleverly linked up with celebrity chef Nigella Lawson and her new kitchenware range. The very utterance of the name Nigella Lawson is bound to launch a thousand journo’s keyboards.

The use of the celebrity can be a way to generate promotion for your business but it can backfire. Sportsman with a penchant for racy women and mind-altering substances can be challenging when trying to build a brand.
Tim Pethick, when he kicked off Nudie would have a team turn up to events and give away free samples, which can be the best way of marketing a business. However, he also used a clever piece of communication.

In giving away the juice he also gave the samplers a flyer, which said something like: ‘If you like this juice, and you would like your local store to stock Nudie, then give them this flyer and we will see that it happens.’

The action made the customer an advocate for Nudie and it was a cheap way of getting word-of-mouth advertising, which is the best kind of promotion.

The lesson is lateral thinking is at the heart of smart
business communication but this does not come naturally to everybody. To some yes but others no and so a vital question is relevant.

To take some inspiration from Clint Eastwood’s Dirty Harry character: ‘You’ve got to ask yourself one question: do I feel lucky?’

You could be playing with your business’s future if you test your luck and draw on your own communications strategy, especially if you have no form on the board in this area.
Sure if you read examples of others who have got it right and copy them, you could come up trumps.

However, if you suspect that the communications business is not your long suit, it might be smarter to throw your hand in with a professional mob who could draw up a winning plan.

Remember, most small businesses don’t plan to fail, they fail to plan. I hope I have effectively communicated my message.

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Networking nous

Let’s look at a common question many SMEs ask themselves: how much time, money and most importantly energy do I have to expand on networking to achieve rewards for my effort?

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Business leaders are decision makers

When you’re in business, the most important thing to do is to make decisions, which means taking a risk. Sitting on the sideline will get you nowhere.

Here’s some things to consider: do you pride yourself on making instant decisions,and believe that sitting down and thinking a problem through is a total waste of time?
Making decisions this way, you believe, enables you to get on to the next problem – and there are always problems, you can never get away from them, they never stop.
Well, consider this: could it be that these incessant problems arise from the snap decisions on which you pride yourself?
John Arnold says that problem solving is a skill, a process with a beginning, where you identify and analyse the problem; a middle, where you consider a variety of solutions; and an end, where you implement your decision, and follow up and evaluate the results. To shoot-from-the-hip, tackling problems methodically and objectively may seem painful and a time-wasting exercise. However, in the long run, carefully defining and analysing problems actually saves time.

Isn’t nipping trouble in the bud the easiest way of resolving it?
Ideally your antenna should be tuned so you’re alert to potential problems. And you’re right to avoid the temptation of ignoring symptoms because they won’t go away and they’ll erupt, eventually.
A wise person does watch for those early-warning symptoms and heed their message. Arnold says that you should think of the time you lost a valued employee: when she handed in her notice, you were shocked to the core. Later, when you recovered from your hurt, your annoyance, your concern about whether you would find someone as good to replace her, little things started niggling your brain. Absenteeism marring her previously perfect attendance record; her recent penchant for cynicism; the way she had become slightly withdrawn. John Arnold says that if you had been alert to these symptoms, you may have been able to address the problem before losing this talented team member.
Experts like Arnold say that the data is always there, whether in employee problems, production problems, supplier problems, computer problems, customer problems. He advises people to read reports that a computer churns out and to look and listen to what is going on in your environment.
During the identification process, he advises that you monitor yourself to ensure you consider only relevant facts; inestimable amounts of time can be lost examining irrelevant facts. He says another time-wasting trap is seeking out additional facts when those that are already available paint a complete picture.

How do I work through to a decision?
After identifying the problem, you need to decide the end result you want: that is, the outcome you desire after you take appropriate action.
Arnold says to help you clearly establish your criteria, divide them into ‘musts’ and ‘wants.’ For example: your current computer system has to be either replaced or upgraded in order to install certain software essential for improving the efficiency of your business. Your ‘must’ list will include your absolute budget limit for the project and the essential features necessary for your computer to run the software. Your ‘want’ list will include all the features you would like to have in that computer system.

Once I’ve worked out a problem how do I solve it?
You can’t remedy a problem until you uncover what caused it, so you must now determine its cause. Remember: symptoms are the results of problems. Arnold says that focusing on symptoms won’t solve the real problem, all they do is alert you to the fact that a problem exists.
He says that analysis is the painstaking “sit down and think it through, examine it from every angle” aspect that many of us prefer to skip. Yet taking the time to assemble the facts and obtain input from everyone involved can save you a great deal of trial and error in formulating an effective solution.
Avoid the temptation to jump to conclusions about the cause of the problem, or settling for the first remedial action that pops into your mind.
So Arnold advises that you:
1. Analyse the symptoms.
2. Work out the likely causes of the symptoms.
3. Examine those causes to ascertain if they are indeed the root cause of the problem.

Using the example of that key staff member you lost: for months, or years, she never took a sick day. The first day she calls in sick, everyone is in a state of shock. A month later, she is absent for two days – unheard of! Over the next six months, she has several more single days off.
You didn’t take a great deal of notice because, although you were surprised at her absences, the amount of time she was taking off wasn’t really out of hand. You assumed that she, like half the population of the country, was catching every cold and ‘flu doing the rounds that season.
20/20 hindsight tells you that you were wrong to jump to those conclusions.
Arnold says that if you had taken the time to analyse her absenteeism, you may have come up with several other causes:

  • Impaired immune system. (Why? Stress, overwork?).
  • Relationship or family problems, at home or work.
  • Unhappy in job: lack of promotion prospects, no new challenges, boredom.
  • Attending interviews for other jobs.

Taking into account those other symptoms – her new tendency to be cynical and withdrawn – the alarm bells should have jangled a warning in your brain, prompting you to investigate the cause of those symptoms, find the problem, and take remedial action. You may have been able to retain her services.

How do I find the right solution?
To find the solution that will best achieve your objectives, you need to come up with several possible solutions, even though only one may be effective in the long run.
Arnold says that generating ideas demands that you switch off your logical, left-brain thinking, and rev up your creative, right-brain thinking. He says that brainstorming does this: you can brainstorm alone, or involve others who may be able to offer valuable input.
Arnold identifies five rules for successful brainstorming:
1. Don’t judge any idea – either positively or negatively – because seemingly crazy ideas can spark practical ones through the process of cross-fertilisation.
2. Go for quantity rather than quality of ideas. Just let them flow – it doesn’t matter how wild or unworkable they appear.
3. Don’t constrain your thinking. Allow your thoughts to freewheel, to travel in all different directions.
4. Write the ideas down because they can dissipate if not captured immediately. If you are in a group, use a board or flip chart so that everyone can see them; if you are alone, a notebook is fine.
5. Don’t give up the moment you hit a block and the ideas stop coming; hang in there for a couple of minutes until they start again. Only when you experience the third dry spell should you stop.

Now you can pass judgment on those ideas, weeding out those that are unsuitable. Problem solving now metamorphoses into decision-making. Keep in mind that a solution is rarely perfect: inevitably, there will be some negatives. However, Arnold says that asking these six questions will help evaluate each idea, eliminate the ones that are unworkable, and arrive at the solution that will have minimal negative consequences.
1. Will it achieve the desired outcome?
Strike out any ideas that don’t meet the criteria set out in your ‘must’ list.
2. What are the financial and resource costs of implementing this idea?
Delete any ideas that would demand more than your budget or that staffing would allow.
3. If you choose this idea, will it impact on other employees or departments?
Make sure you have covered all contingencies, and that your decision won’t create a precedent that may have undesirable repercussions later on.
4. Will implementing this idea create other problems?
Be sure that by solving one problem, you are not setting off a domino effect of others.
5. What could go wrong if I went with this idea?
Decide how serious it would be, and what steps you could take to lessen the effects.
6. Will this solution be readily accepted by employees/customers/suppliers/financiers?
Consider their objections and how you can sell the idea to overcome their reluctance.
When you have chosen the most suitable solution, commit yourself to working with it until it succeeds.

Once I’ve made a decision how do I put it in place?
A little more time is needed to plan the implementation of your decision. You must first decide how, what, when, and who does it. What you need to do is to assume the role of devil’s advocate and think about what can go wrong, how you’d recognise potential problems, what damage-control actions you can take, and how you’d recover if the worst-case scenario did occur.
Few decisions are made in isolation. If your decisions affect others, make sure that you talk to them regularly. Keep the lines of communication open throughout the decision-making and implementation process. Answer any questions that they might have truthfully and thoughtfully. This is particularly important when dealing with employees: by seeking their input, communicating with them each step of the way, you have a much greater chance of gaining their co-operation and making the solution work. When you regularly talk with your staff you can also help them overcome any resistance they might have to change. It’s best to remember that most decisions mean disruption of familiar routines. You’ll also need to engage your motivational skills to sell your decision to employees, to inspire them to accept it and make it work.

Anything to do after it’s implemented?
Never just implement a solution and leave its success in the lap of the gods! Things will probably go wrong: that’s not being negative, just practical. And the more people involved, the more chance of hiccups.
Regularly check in to see that things are running smoothly, according to your plan. Doing this will highlight errors or problems before they get out of hand. Talk to everyone involved to find out how the new procedure is working, whether it has improved efficiency, if more training is needed, if they are aware of any potential problems.
After you have allowed sufficient time for your decision to bed down, evaluate the results. Has the solution achieved the desired outcome – the objectives you set at the very beginning of the problem-solving process?
If your plan did not achieve those objectives, find out why. Decide what corrective action you should take. The important thing is to look closely at any failures, highlight where you went wrong, what errors you or others made that can be avoided in the future. Seek input from others about what went wrong, why it did not work. Solicit their advice about how things can be improved.
Arnold says to review the seven-step problem-solving process you used to see if you made errors of judgment. Perhaps you did not spend enough time on one of the steps – or even omitted it completely?
If your plan was successful – congratulate yourself! However, do take the time to look at precisely why it was successful so that you can use those ideas or methods in the future.

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Think like a manager

Think like a manager
Managing a small business demands that you develop not only a whole new set of skills, but also a completely different way of using existing skills.

You are responsible for everything: setting it up, getting it established in the marketplace, growing it, employing staff and moulding them into effective, empowered team members who will support you in achieving your goals and objectives.

The first principle for improving your management skills is to identify areas where your performance is not up to scratch. Once you know your weak areas, you can start working to improve them: read magazines like Grow Your Business, buy self-improvement books on the specific subject, find a mentor who can help you, attend seminars or courses.

Consider your performance in the following areas of effective management.

Staff motivation
As a manager, you’re responsible for creating a happy, fulfilling, challenging work environment and keeping your staff motivated. Motivation is the ‘enabler’ that inspires your employees to willingly do what you want them to do, embracing your goals as their own. In turn, the confidence that flows from employees’ increased sense of accomplishment fires greater drive and incentive to give their best.

Employees crave managers who can assist them to enjoy, and derive satisfaction from, their jobs. A manager who sincerely believes that most people a) are not inherently lazy and b) do not like being lethargic and bored, and also understand that their role is to channel their team’s energies into an acceptable work performance, has a head start to becoming a top motivator.

While numerous theories about motivation have been formulated through the years, the tools of motivation can be distilled into two basic types:

Tools of maintenance
The practical tools that maintain rather than inspire employees’ efforts on the job. They include salary, fringe benefits, job security, working conditions, company policy and administration, status, and management competence.

Tools of satisfaction
These are the less-tangible tools that inspire employees to greater achievement. They include recognition, the work itself, achievement, advancement, additional responsibility, and personal growth. Research shows that the last factor is so important that employees often accept a lower salary in exchange for the opportunity of growth.

While it’s essential to get the maintenance tools right in order to satisfy basic needs, the majority of your motivational efforts should focus on tools of satisfaction.
Praise, feedback and open, free communication are the primary motivational keys in a small business.

Be generous with feedback and sincere with praise. Routinely thanking employees for their daily efforts is essential, but it is especially important to recognise extra effort, as people need this individual recognition and boost to their self-esteem.

Recognition not given for work ‘above and beyond’ has an extremely de-motivating effect that leaves employees wondering why they bothered – and next time, they won’t!

Be imaginative so that praise never becomes mechanical, and personalise it by making specific mention of the action you are praising. Sometimes public praise is appropriate, at other times a personal handwritten note or even a token gift is warranted.

Encourage open, honest, two-way communication with your staff in an atmosphere of trust. Talk to them about how they are doing, their progress, problems that may be evident. When you need to discuss a shortfall in performance, use the opportunity for coaching.

Get the message out
If you choose to enhance just one set of skills, make it your communication skills. Even if your overall management skills are superb, poor communication ability can result in less than optimal performance.

Good managers keep their staff informed, knowing that open sharing of information leads to empowered people. The more clearly you detail your expectations, goals and objectives, the more concisely you give instructions for each task and explain the reasons for doing it.

The more feedback you provide about completed tasks, then the greater the chance that employees will meet performance requirements and expectations, and the less chance there’ll be of serious mistakes arising from misinterpretations.

Plan of attack
Many managers get so caught up in the day-to-day running of their business that they find they have no time to spend in forward planning. Big mistake: lack of planning makes it almost impossible to achieve business goals, which puts your business’ future at risk.

Ideally, your basic planning tool should be the business plan you prepared when you set up your business. Keep this plan alive and evolving: conduct a major review at the end of each financial year, comparing results against estimates, analysing the differences to identify where you’ve fallen down and where you’ve done better than predicted, and determine – in both instances – how you can further improve performance.
Measure your performance against your mission statement to ensure the two remain aligned.

Prepare a SWOT analysis (strengths, weaknesses, opportunities and threats) and write up a plan to build on your strengths, address your weaknesses, capitalise on opportunities and address threats.

Update your plan for the coming financial year by preparing new sales, expense, profit and cash flow budgets for the entire year, and also broken down month by month.

Each month, compare your actual financial results with your budgeted figures. This lets you identify potential problems such as poor sales performance or expense blowouts and nip them in the bud before they get out of hand and negatively impact your business.

With each goal you achieve, set a new one so that you are constantly stretching your own and your staff’s abilities.
If your business starts moving ahead more quickly than you anticipated, more detailed planning becomes critical to ensure you can sustain that growth and your cash flow.

It’s also important to have five and 10-year plans in place to help you structure long-term growth strategies such as expansion through branch offices, e-commerce, diversification; increases in staff numbers; creating new jobs and reallocating tasks within existing jobs to make better use of the employee skills.

When you talk growth, inevitably the question of finance will come up: any bank manager will tell you that they like organisations that use their business plans as an operational tool. A dog-eared, annotated, coffee-stained business plan is always looked on more favourably than a pristine document clearly produced to impress.

A manager needs vision
A man whose greatest claim to fame was that he was a good encyclopaedia salesman has become the guru of small business owners, writing the greatest selling small book of all time called The E-Myth.

Michael Gerber said the biggest mistake made by a small business owner is to believe that his or her business is different to every other business.

“Many business owners are simply technicians and not true entrepreneurs,” he argues. “Technicians see their business as a job but it should be a product of an entrepreneur.”

The argument runs that as a consequence the technicians, be they hairdressers, consultants, retailers or manufacturers spend most of their time working in their business, where on the other hand, entrepreneurs work on their business.

Gerber says the starting point for creating a successful business is to look to the future, then look back at your life. “You need a retroactive view of your life as if you are at your own funeral,” he says. “You need to create a vision of your business and your related life and be happy with it.”

Implementing systems throughout your business creates the opportunity for the entrepreneur to work on the business.
“The technician is work-centric, the manager is systems-centric and the entrepreneur is vision centric,” Gerber insists.

The bottom line is that becoming managerial and implementing systems creates the time to work on the vision for the business. “Vision is the most critical thing,” Gerber says. “The vision will determine whether you are really going to be successful.”

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