Archive for January, 2013

Roll With One Idea

Tuesday, January 29th, 2013

Our guest again this week, Startup Expert, Roger Pierce, produces articles, videos and blogs to help companies engage business owners. He’s worked with Scotiabank, Visa, Staples, Bell, HP, FedEx, Cisco and Microsoft. Roger is the co-author of the book, Thriving Solo: How to Grow a Successful Business, and writes startup columns for The Toronto Sun, 24Hrs and Profit Magazine. www.NewcomerStartup.com

It’s the folly of startup entrepreneurs: We pursue too many business ideas at once.

Unwilling to commit to any one single enterprise, I’ve watched entrepreneurs waste their time, money and sanity by trying to launch too large or too much.

Pick one

Entrepreneurship is highly addictive, which partially explains why we get easily excited and distracted by shiny new initiatives. It’s more fun to start a business than to grow one.

If you have several ideas buzzing in your head, pick the one that best combines your passion with marketplace opportunity. The best business idea will have people pay you to do what you love. Next step, write a business plan.

List the rest

What about the rest of those fabulous business ideas? Because it may be too painful for you to say “no” to them forever, instead say “not yet.” Write down those ideas in your journal or create a file marked “future opportunities” on your computer.

A successful startup requires focus. Do one thing, and get better at doing it really, really well.

You can contact Roger at 416-302-5251 or pierce@newcomerstartup.com

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Strategy, Gambling and Uncertainty

Tuesday, January 22nd, 2013

The argument that strategy has become irrelevant and obsolete in our fast changing, unpredictable world is still, unbelievably, being promoted.

Beware of it. It’s just plain wrong.Strategy - a way to deal effectively with inevitable uncertainty

Business owners and management teams who buy into it limit their ability to grow and to make money. They’re playing with their own and their employees’ futures.

The people behind this “pop”, flavour-of-the-month thinking, are confused. They don’t understand either strategy development or execution.

Last week I read a great blog post which, I think, puts the case for strategy very succinctly and clearly. And while I’d like it to put an end to the “no strategy” lobby it almost certainly won’t.

In Placing Strategic Bets in the Face of Uncertainty, Roger Martin hits several key points:

•    Strategy isn’t about turning uncertainty into certainty. No one can do that because no one can accurately predict the future.

•    Strategy is about making the best possible, most informed choices that can be made now. Then responding quickly and with flexibility if those choices don’t pay off as hoped.

•    If a business owner and his/her team don’t develop and share a desired “future state” for the company how can progress toward it be tracked? And without that reference point, how will they know what matters and how to make sense of what actually happens?

•    Only by making assumptions about what has to happen in order for their desired state to be reached, can the team determine what has to be monitored – to see if the assumptions become reality.

•    In other words having a strategy is the only way to figure out what to pay attention to. And if you don’t know that, how will you be able to respond quickly to developments, which will prevent you achieving your aims?

•    Strategy is helpful (to say the least) in two ways.

o   First, the owner and her/his team are able to closely monitor their assumptions, see deviations quickly and take appropriate action immediately.

o   Second, they have a logical base or structure to which they can apply new data, updating their original thinking. This also allows a faster, better response than having to keep rethinking and recreating their approach.

Makes sense, doesn’t it?

Strategy isn’t a way to get rid of uncertainty. It’s a way of dealing effectively with inevitable uncertainty, by making and updating well-considered bets about the future.

Top Ten In 2012……

Tuesday, January 15th, 2013

The votes (page views) have been counted, the results can be announced!

Our top 10 blog posts in 2012 were:

1.    Do You Know What You Don’t Know? was the winner by far. It talks about how consultants and business owners are doing the same thing wrong, with the same outcome.

2.    Why Would Anyone Hire A Management Consultant? is a question put to business owners whose businesses have stopped growing.

3.    6 Ways a Business Owner Can Influence Culture outlines how a business owner can influence the culture in his/her company.

4.    10 Tips To Improve Your Public Speaking Body Language, written by Mark Bowden of TruthPlane, is the first of our guest posts to make the list.

5.    Things Really Good Consultants Say outlines what consultants who get results and deliver a great service say while pitching for business.

6.    Strategy, Culture and Leadership deals with how these 3 things affect the development and the execution of strategy.

7.    3 Times When You May Need To Change Your Strategy explains when a company should review its strategy and what makes that review and any subsequent actions necessary.

8.    6 Challenges Fast Growing Companies Face discusses the 6 challenges of execution which, if not dealt with, could prove fatal.

9.    Why You Need A Consultant With Hands-On Experience is one of several posts we wrote during the year about how to work with consultants.

10.    So Tell Me, What Is Strategy? In some cases strategy and strategic are being imbued with mystique and complexity in order to create a need for “expertise”.  Here are 2 reasons why should we care.

If you haven’t seen them before, here’s your opportunity!

How to Save Money When Buying a Business

Tuesday, January 8th, 2013

Our guest this week is Mark Toohey, Legal Director at ADROIT LAWYERS in Australia. Mark is an experienced commercial lawyer who has worked with both major law firms and as General Counsel in the media, telecommunications, software and IT industries. Read more about Mark below.

 

Buying a business is horse trading. As any good haggler knows, you need to go into the negotiations armed with reasons why the sale price should be lowered.

Here are some tips that may help you to pay less to buy a business.

Some of these tips are ways to justify your insistence on a lower price for the business you are considering buying. Others are tactics and strategies that will help you to get a better deal or make a wiser decision.

The process of looking into a business and determining its worth is known as due diligence. It is best to get professional and/or legal advice and assistance to conduct those investigations. A due diligence checklist is always a useful tool.

As I have explained elsewhere, a seller can use due diligence to justify a higher sale price. Equally, an astute buyer can use the same process to unearth facts that support a price reduction. It really is a two-edged sword. So, make sure you get good advice and wield it properly to your best advantage.

Armed with credible information gained from due diligence you can quite reasonably demand a lower price that takes the risks and shortcomings of the business into account.

Here are some methods to reduce the purchase price of a business and to pay less.

1. Look for indicators of a distressed sale.

• business owner is retiring;
• poor financial position;
• urgent sale schedule;
• been on the market for a long time;
• sale price has been repeatedly lowered;
• disputes between the owners;
• changing legislative conditions; or
• changing market conditions.

2. Look for performance reasons that support a price reduction.

• declining sales;
• diminished profit margins;
• poor financial record keeping; or
• poor administrative or legal record keeping.

3. Look for signs of shoddy management practices.

• low returns on investment;
• bad administrative practices;
• bad employment practices;
• threatened or actual litigation;
• high number of customer complaints;
• high refund or repair claims;
• continual discounting;
• poor marketing results.

Key Factors

Two key factors regarding price are:

1. Knowing what it is currently worth.
2. Knowing what it could be worth in the future.

We’ve now covered the first steps of conducting due diligence and determining the worth of the business you may buy. Once you have investigated things and found the flaws in the business (they exist in every business) you should then have a good idea of the price that should be paid.

Positive Steps

The next step is another investigation, but this time it is with a positive twist. You should next look at what changes could be made to the business to improve its performance or to turn things around. Of course, this involves a frank assessment of your skills and the financial or other resources that you have available.

You should also make a candid assessment of your own strengths, weaknesses and capacity. Assess whether the potential upside is really worth the time, effort, expense and distraction from your current operations.

Analyse the business’ financial position and sales performance and look for ways that you may be able to turn the business around.

Some proven business transformation methods are to:

• cut wasteful expenditure;
• cut staff levels and only keep the high performance staff;
• lease cheaper premises (provided this will not adversely affect sales);
• sell underperforming assets or business units;
• reposition the products in the market;
• release new products.

About Mark Toohey

Mark has been a lawyer, company director, marketing director, company secretary and entrepreneur. Mark’s commercial experience extends way beyond the theoretical. He has helped launch a number of start-up businesses and his hands on experience was gained from negotiating and documenting deals for a wide variety of business initiatives. To learn more about Mark, go to http://www.adroitlawyers.com.au or you can contact him at mark@adroitlawyers.com.au.

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