The Business Site

The Laws of Prosperity

2011-07-19T01:49:00.000-07:00

f you can imagine money as a person, you can begin to understand what money is like – what it likes to do, who it likes to be with and why it prefers some people to others.

Money Likes to be Liked

A client of mine had three jobs, was working very hard and couldn’t understand why she was constantly in debt. I asked her what she thought of very wealthy people.

“Oh, I hate them. You can’t trust any of them!” she said. She was aspiring to be something she hated and it didn’t work.

Would you go where you knew you were unwelcome? Would you associate with people who hate your friends? Of course not. And neither does money.

If you’re jealous of Richard Branson, distrustful of Rupert Murdoch, hate Sir Alan Sugar or hold negative thoughts about anyone with money, you’ll find that it avoids you.

So, change your mind. Start to see wealthy people in a new light – admire their successes, respect their achievements. Don’t look at their mansions, boats and helicopters with envy but with a new attitude of longing and pleasure. Realise that banks are not there to rip you off but they’re there to give you access to all life has to offer.

If you like money, it will like you and come to you.

Focus on Money

Take three people and show them an old industrial site. A photographer will see interesting photography opportunities, a landscaper will see massive landscaping opportunities and a business person will see profitable business opportunities.

We always see opportunities that are in line with our foremost thoughts.

So, refocus. Start thinking about money and the lovely benefits it can bring you – not the misery it has brought you! As you wake up, each morning, wonder what money opportunities will come to you, feel the pleasure of a rising bank account and what you can do when you have money.

If you’re thinking about money, it will begin to think of you and present opportunities that you’d never seen before.

Create a Vision for Money and for Yourself

Like you, money likes to be busy and to feel useful. It hates to be sitting around doing nothing and feeling useless.

Start creating a vision – what would you really, really like to do over the rest of your life? What assets and things would you like to have? What experiences would you like to have? What would you like to do for other people? Start writing … NOW! Keep your vision notes handy and add to them as you think of other things. This will do two things:

By creating a vision, you’re creating opportunities for money to be useful. As you begin to create an abundant future – even on paper – that abundant future will start to happen. Money, knowing what you want it to do, will come in and get busy.
When you create a larger plan than just the small day-to-day desires that you have, your focus changes. With a bigger vision, it’s easier to forego the “little treats” and unnecessary purchases you might make. Then, you’ll discover your bank balance is improving – it hasn’t been depleted by those little treats you didn’t need and money is beginning to flow in to help that new vision along.

Start treating money just how you’d like to be treated and you’ll be surprised at how it becomes your friend and sticks around!

Turning Complainers Into Campaigners ... or the one rule for dealing with customer complaints.

2010-05-27T01:56:00.000-07:00

In the blog "To Sale Or Not To Sale" we talked about the fact that we are more swayed by one moaning customer than the hundreds of happy, profitable ones. Now, how do we deal with them?

The one and only rule for dealing with complaints is ... People. Do. Not. Want. You. To. Fix. Their. Problem. Did you get that? People don't want you to fix their problem by fixing their problems. Universal Law #1.

They do, eventually want their problem fixed - but not initially. Initially, they are upset and you need to deal with that, first.

Recall the conversations you have about problems dealing with large companies like Telstra. Do you discuss the fact that your phone doesn't work or do you moan about the way they treat you:
* having to deal with call centres,
* being grilled for "security" information, over and over,
* being passed around from consultant to consultant,
* not being called back when they've promised to,
* not being understood or listened to,
* not being cared about, and on and on.

The things that irk you about Telstra (or any large business) are the things that irk your customers about you and your business.

The technical stuff (like your phone or internet connection) can be easily fixed but the problem - the REAL problem - is that your customer wants to know they're being heard, they're being listened to, that you care about them ... that's what we all want.

A friend was getting married and he asked his father-in-law for advice on marriage since he had been happily married for so long. The older man said, "Agree, agree, agree." That's what you must practice here and you'll gain a long-term customer and all their friends. If you don't, you lose them all. Your choice.

Here's what not to do:
Don't get defensive and make excuses (Defences are but foolish guardians of mad illusions - ACIM),
Don't leap right into the middle of their conversation and tell them what's wrong,
Don't answer the phone, talk to anyone else or let yourself be distracted,
Don't immediately apologise and/or interrupt their conversation.

So what do you do? Simply shut up, listen and, when they've stopped talking (and ONLY AFTER they've stopped talking) ask them how they feel about that. For example:
"Gosh, so how do you feel about that?"
Or sympathise with them:
"I see, you must feel angry/sad/upset* about that." (*use the emotion words they've just used)
"Yes, I can see why you're upset about that."

If possible, take them into your office or a quiet space, give them a cuppa and make them feel you have nothing else at all to do right then. The financial return will be worth it - on this rock I stand.

Sounds like a psychologist, doesn't it? Absolutely! Just keep asking questions and if you can't think of anything to say, say, "Gee, I really don't know what to say". Honesty is always appreciated and give them another chance to speak. Let them keep going till they run out of steam and then there will be a turning point - they may say something like, "You must think I'm a right moaner," or "I'm sorry to be so blunt, I don't mean to hurt your feelings," or "Maybe it's not such a big problem after all". The turning point is when they change sides and join you - they apologise for complaining or sympathise with you in some way. At that point, you ask the next question:

"So, what would you like me to do about this?"

Don't pretend that you know what they want - you don't. So, you give them the feeling of being in control and that you're REALLY listening. If you've done this right, they'll probably ask for less than you're prepared to give for you've actually given them something they don't get very much - respect. They'll love you for that and they'll tell all their friends and they'll be life-long customers.

Then you fix the problem ... right at the end.

Complaining customers are one of your greatest opportunities for success and profit. They aren't like "nice" people who tell you that your shop, factory, products and/or service are all nice - no use if you want to improve things.

Moaning customers will tell you things that may hurt but that can improve your business. Once you've listened to a complainer, and turned them around to be on your side, they can be your greatest campaigner and a free consultant.

Complainers - welcome them, listen to them, love them and use them to improve your business ... for free!

NB: Next week we'll give you some ideas on raising sales without having a sale - win/win ideas where no one loses.

The following week I'll explain how you calculate the life-value of a customer - some accounting stuff!

KPIs for Managing Your Greatest Asset - People

2010-05-25T01:59:00.000-07:00

When you look at your financial statements, you might wonder why you go to all the trouble of employing staff. The only two places you see mention of employees are as expenses (wages, salaries, training, canteen, uniforms, staff amenities etc) and as liabilities (wages owing, holiday pay owing, PAYE owing etc). They either cost you or you owe them!

However, there is more to your people than just costs and debts for, if there weren’t, you wouldn’t employ them! Without them, your business is never going to:
1.      Grow beyond a one-person enterprise,
2.      Allow you time off, or
3.      Grow large enough to be a substantial asset to sell, when you get too old and/or crotchety to enjoy it, to afford you a retirement in the luxury you deserve.

None of this would be possible without staff and yet their benefits to you and the business are not shown anywhere in the accounts.

A few multinational accounting firms realised, some twenty years ago, that staff were not just a cost and a debt, but, more than anything else, a huge asset. They have been trying, all these years, to perfect systems for valuing staff and showing them as an asset in their Balance Sheets – or Statements of Financial Position, for those of you who like big words! In these systems, employees are rated, based on things like their qualifications, experience, particular expertise(s), charge-out rate and other things, including their health which can affect an employee’s long-term benefit to the firm. These ratings are then converted to dollar values in the assets of their balance sheets.

Some people may find it insensitive – even obscene – to put dollar values on people. These employee valuation systems are not perfect but they are these particular accountants’ best attempts to put a value, in the accounts, on the biggest asset of any business enterprise – people.

No matter how clever these employee valuation systems are, they’re for accountants and, at the moment, very complicated and time-consuming to use. However, there are more simple and effective ways that you can see:
1.      Where things are going well with your staff,
2.      Where things are not going well, and
3.      Give you pointers on what you can do about them.

KPIs for Your Employees

These KPIs are simpler tools to use than the above employee valuation systems and they give you the information much sooner – in time to do something about it.

As with all other KPIs, these ones don’t only cover financial data – they also bring in ages, staff numbers, processes (e.g. interviews), meeting outcomes, resignation reasons and other non-financial data.

By narrowing down your most pressing employee concerns – is it their health, their qualifications/training, their dissatisfaction for work or whatever? – you can design KPI measures that give you management tools to help your employees help your business profit better. Below are some examples of employee KPIs.
·      What are the ages of employees?
·      What percentage of employees will retire over the next three years?
·      Number of employee resignations?
·      What were the reasons for staff resignations?
·      Were any exit interviews carried out?
·      How many employee sick days were taken?
·      How many employee accidents occurred?
·      Number of employee training hours achieved?
·      Staff meetings held – outcomes of these meetings?
·      Number and cost of potential accident claims?
·      Sales achieved per employee?
·      Gross profit earned per salesperson?

Remember, you can easily come up with KPIs that are specifically tailored to your business needs. If you need any help in doing that, don’t hesitate to call Kathi Fowler at The Bean Countess, who can steer you in the right direction.

Daily Management with KPI's

2010-05-10T06:16:00.000-07:00

You all spend a lot of time and money in getting your annual accounts prepared and squared away ... who could forget that! Those accounts are helpful for keeping the tax and bank people happy, for selling your business and for bringing in new investors/partners.

However, even the most efficient of you don't have your annual accounts done till two months after the end of the financial year - 14 months after that year started. These accounts do have their uses (as above) but you cannot run your business on a day-by-day basis from them - they're too blunt an instrument for such a fine job.

Many of you do (or have done) monthly accounts and these are, at your most efficient, done three weeks after the action, so to speak. These monthly accounts are a finer tool for the job but, like your annual accounts, take a lot of effort to prepare - accounting for debtors and creditors, counting stock (inventory) and so on.

The huge effort and cost in preparing accounts and the fact that they're available long after the action, is the main reason KPI's were invented.

What are KPI's
KPI does not stand for Kerry Packer Industries! KPI stands for Key Performance Indicator - a big phrase that means that you choose, in your particular business, what the key or essential ingredients are to making profit. Every business is different so KPIs vary.

KPIs aren't always financial indicators. A KPI is a way of measuring a particular business process, a bit like evaluating how well the company is doing in that particular area. By recording and analysing KPIs company-wide, the business owner can see at a glance which processes need attention.

How KPIs can help?
KPIs provide the detail measures of your business that purely financial measures can't. For example, what use is a great profit when you're losing customers hand over fist through slack customer servicing? If, however, you were using KPIs to measure ...

    * What customer deadlines have been missed?
    * What is the conversion rate from quotations to sales?
    * For which department were customer complaints received?
    * What is the direct cost of complaints?

... then you would already have seen why you were losing customers, how much it was costing you and exactly where you would need to start making some improvements.

Sample Customer KPIs
    * What would be the impact if a major customer failed or left the business?
    * What percentage of sales is being exported?
    * What is the level of customer complaints?
    * What delays are being caused by the Quality Assurance System?
    * What are the results of customer surveys undertaken?
    * What customer deadlines have been missed?
    * What is the percentage of complaints to sales per department?
    * What is the number of new customers per department?
    * What is the average sale amount to new customers?

Surviving in business today is more about measuring the value you add [see previous article Adding Value to Customers]. This means measuring how well you are performing against your business goals and objectives and, significantly, where you can improve.

Your accounts will tell you if you're making a profit or not and they may give you an idea of where problem areas may be. KPIs, on the other hand, tell you exactly what is going wrong, where it is going wrong and they usually help you in deciding what to do about it.

Ask me if you want to set up useful KPIs for your business - particular KPIs will be more helpful than others, for your business, and there are simple ways of instituting and analysing them.

Are You a Leader or a Follower?

2010-01-03T09:15:00.000-08:00

Most people aim for nothing and hit it with amazing accuracy! And, as a business owner in these changing times, it’s often difficult to know what to aim for - they keep changing the rules!

The crazy thing is that though we’re supposed to be very afraid because of this credit crunch, there are more opportunities than ever before. During times of depressions, more millionaires are made than at any other times. Successful business people rub their hands with glee when the economy turns down, while other people are looking the wrong way – out there, where they perceive the problems to be – and opportunities go begging ... for want of straight thinking and sharp focus in the right direction.

You are bigger than the Credit crunch
From 1965 to 1985 in USA - despite inflation, oil shocks, recessions and major job losses in certain industries and government - there was a huge growth in jobs. These jobs – 40 million of them – were not created by large corporations or government, but by small and medium-sized businesses. Most people thought the growth was from “high tech” industries but only 5 (of the 40) came from there.

According to Peter Drucker, the key “technology” driving jobs growth was entrepreneurial management. The force of the entrepreneur, he suggests, is always greater than the state of the economy ... you are bigger than the Credit Crunch!

Your business is about who you are ...
In The E-Myth Revisited, Michael Gerber says that going into a business is as much about who you are and who you want to be as a person as it is about the business itself. If you are disorganised or greedy, he says, or if your information about what’s happening in your business is not good, the business will become a reflection of these things. If your business is to thrive, it will engage you in a process of constant personal development. For it to change, you have to change too.

Gerber says that if you start a business with full knowledge of what doing so means to you and why you are doing it, it can be a wonderful experience. Go in blindly and it can be - as so many people discover - a nightmare.

You have a choice ...
The choice is whether you want to keep doing the same thing and expecting a different result – the definition of insanity – or whether you want do things differently. The sane ones among us know that to get a different result, they need to do something differently ... and, to do something differently, they need to start thinking differently.

So, what are the 10 tactics of tycoons … of successful tycoons ... click here to receive your FREE report.

4 Steps to Beating the Credit Crunch

2010-01-03T08:54:00.000-08:00

The Credit Crunch has been a painful time for many, many people. However, for every 100 in pain, there's one who's leaping in joy ... oh, ok, so statistics are a group of numbers looking for a fight and it might be 1 in 85 or 1 in 54 or 1 in 123 ... let's not quibble over trivial details and agree that, despite the ravages of this financial storm, there have been many who have done well from it.

The BIG question is, of course, what did the winners do that the rest of the herd didn't ... and what can you do right now and when the next crisis hits? Sorry dudes, but there will be another financial crisis and another and another, so the sooner we learn from the last one, the more likely we'll be in the winning team next time.

The first thing to do is look at what the losers did - they followed the other losers. As soon as the stampede starts, they all head off in the direction everyone else is going.

What do the winners do? They do the opposite. They stop and look around at what has caused the stampede and, often as not, in buffalo society, it's no more than a puff of wind that turned dust into the shape of a predator. So stop, look and go nowhere - with the rest gone, there is more grass for you to feed on, right here! Whenever the Titanic sinks, the majority go down with the ship. However, there are always some who immediately pop up, look around and go build a better ship, an aeroplane or something that doesn't head downward at the first sight of frozen water.

That's the theory. Let's look at what one company in Norway did, for a practical lesson:

Started by Mr Nordheim-Larsen, NLI started life as an engineering workshop for the lumber industry in 1936 in the little town of Tønsberg. For many years it hummed along happily and then, in the 1970's, a slump in the worldwide forestry industry hit. NLI watched as their competitors crashed, one by one. This was not a good scene and Mr Nordheim-Larsen could have panicked, shut up shop and opened Starbuck's first Norwegian franchise ... anything but the beleaguered forestry engineering industry. He didn't. He sat back and saw not problems but opportunities.

After every financial crisis there is a financial recovery.

With every engineering shop collapse there is a cheap business to buy.

With every industry failing, there is always another on the rise.

He looked around and saw that the oil industry was suddenly interested in Norway and he was suddenly interested in the oil industry. Mr Nordheim-Larsen was not only a calm visionary, he was a courageous warrior - he acted. He bought up failing competitor after failing competitor, as long as they had synergies with NLI's regrouping and retooling for the oil industry. His vision and courage were rewarded.

Then, by the early 2000's, many of Norway's traditional engineering workshops were feeling the bite of another economic downturn. Though the market was low, Mr Nordheim-Larsen not only saw the potential but also dared to act and acquired companies with their own technologies - technologies that complemented NLI's. Again, Mr Nordheim-Larsen knew the hard economic times would not last. His company started acquiring struggling businesses that were in line with both the NLI expertise and the oil and gas industry market. In the last 10 years NLI has continued to grow both organically and by acquisition.

NLI's turnover for 2007 was 900 million NOK and for 2009 it was 1.5.billion NOK. And, no, 2010 does not promise to be a great year. In fact, it could be a bad year. However, what NLI have done is anticipated the credit crunch over a year before most people knew it was here, made their staff reductions, cut back on plant and material orders, restructured loans and now they're ready to ride the next (rough) year with more finesse that most ... and they're already picking up failing businesses that will enhance their stable of technologies into the next financial upturn.

Mr Tor-Martin Roed, Chief Operational Officer Marketing for NLI, says that, besides vision and courage to act, there are two other factors to their success:

Firstly, they concentrate on what their particular skills are and they develop those with total focus. It is always tempting to leap into other markets or acquisitions that show promise but, unless they have synergies with NLI's core competencies, they are rejected. They look closely at where their skills are and continue to develop those further.

Secondly, they have a high focus on developing their people. Because the company has a large percentage of highly skilled and educated people, the continuing training and development of everyone, from management on down, is a top priority.

So, whether you're an international engineer to the oil industry, a cafe or an individual, what can we learn from this? Four things:

1. Vision - rather than follow the hoi polloi, the herd, stop and look around. Things are never as they seem and all things must pass ... even credit crunches.

2. Courage - back your hunches, take action. Do something to tell your grandchildren about.

3. Stick to your knitting, boys - what do you do best? Do it better, differently, with more creativity, with more panache. However you do it, make it the thing you're best at.

4. People your life with people - none of us is an island and the more we connect with people - especially successful people - the more we can all help each other.

Sermon over!

To Sale or Not To Sale ... or why not to have sales.

2009-12-08T08:13:00.001-08:00

The reigning theory is that price is the only thing that motivates people to buy – reduce the price and they all flock in, increase the price and they all flock off somewhere else. We take in less to have more!

Before we look at profitable alternatives to sales, let’s see why we really reduce our prices. Let’s get honest.

Get a piece of paper and write down your scariest or most embarrassing moment. Got it? Yes, that was probably easy to remember.

Now, write down the time when you felt the most safe or comfortable. Got it? No? Not so easy is it?

We remember the negative things better than we remember the positive things. You have 200 customers coming in and buying your products/services and they come back again and again, saying, in effect, “we like you, what you sell and your prices”. Then you get Grumpy Joe – who is not grumpy at you but at something that happened hours, weeks or even years before – and he complains about your prices and/or quality. What do you think? That he represents all those 200 happy customers? Yes, insanely, you do, as does every other business owner.

You begin to doubt yourself and your business. None of us like criticism and so we drop our prices, hoping to avoid Grumpy Joe’s (or his sister’s, Moaning Minnie’s) criticism. The moaner is more powerful than the 200 happy customers. Is that insanity or what?

So, start believing in yourself, in your products/services and, most importantly, start believing in the majority of your happily spending, profitable customers. Those customers are never wrong!

A timber/hardware store in Mt Maunganui, New Zealand, decided to address their huge cash-drop over Christmas. At this time, people preferred to put their money into Christmas gifts, food and holidays. This was 10 years ago when computer games were very new and de rigeur. No, they did not have a sale, they had a competition. They advertised that every customer who had an account with them would be in to win a Gameboy (the perfect family Christmas gift) if their account was paid in full by November 30th. Not only did their existing customers pay up but they got in a lot more new customers and their bank account rose by $380,000. The game cost them $140. Therefore, they got a lot of new customers and they avoided the usual wrestling match with their bank manager over temporarily extending their overdraft limit. In fact, they had plenty of cash to maintain their post-Christmas stocks for all those home handymen (and women) who were on holiday and wanting to improve their properties ... and they were able to get great bargains from their suppliers who gave them discounts for early payments.

They didn’t take anything away (as a sale does) but they added to – added customers, added cash and added something to a customer. They created something where everyone won – them and their customers.

A sale means you lose something and your customers may gain. A sale rarely works if it’s the same old stuff, suddenly cheaper – people think it’s the same older (can’t get rid of) stuff. We are so jaded by the word sale, especially since the credit crunch, that it means little now.

The other problem with a sale is that it slowly erodes your reputation. Today’s sale may bring in more customers and a little more cash but, in the long term, people see that you’re a price discounter – someone who sells cheap stuff. If you’re a constant discounter (saler?) you’ll probably notice that the customers who come in your door are driving cheaper and cheaper cars, their clothes are getting cheaper ... your customer base will slowly evolve into one of cheap customers, people with little to spend.

So, if you must have a sale, the least you can do is call it something different:
Knock 10% off everything and call it a Community Tithing Project.

Or call it a Price Holiday, an Inflation Deflation or a Gratitude Attitude. Go wild (or silly) with your imagination, but if you’re going to have yet another sale, let people know that it’s not just the same older stuff in yet another old sale.

We’ll talk about how to measure sales, customers and the lifetime value of customers in three weeks time and, when you do that, the facts will speak for themselves – sales may (or may not) give you a short-term benefit but, in the long term, you suffer.

NB: Next blog we’ll show you how to deal with the Grumpy Joes and Moaning Minnies ... how to deal with unhappy customers and turn them into lifetime advocates.

The following blog we’ll give you some ideas on raising sales without having a sale – win/win ideas where no one loses.