I have applied for and received many loans for clients. Whatever the amount and reason, I warn my clients that such requests lead to the same requirements. The application process demands that you understand exactly why you need the money and how you will pay it back. In other words, before being awarded a loan, you are forced to answer questions you may have preferred to ignore, such as who are your competitors; what is the expected upturn in sales and how will it be achieved; why will new equipment cost so much.
Isaac had been self-employed for nearly thirty years. His accountant was happy, and he kept aside a healthy salary for himself. Yet he was working 70 hours a week and he could not see a way out. In the first meeting, I established that Isaac had never studied business and his prices had remained the same for years, while he offered an elite service in his field. Within weeks, the pricing model had been altered upwards. Hours per client were curtailed. And he barely lost one customer.
I have witnessed several clients, especially those new to commerce, who refused to plan their cash balances. Their excuse? Why bother, if you can remember everything and the bank account is healthy. However, their assumptions are invariably unreliable. The crunch arises when expenses are met, just, but there is no money left for the boss. My mentoring explores how as firms grow, there are more factors to forget. That includes the flow of money, which becomes too complex to manage in one person’s head.
I spent a year working with a small chain of shops. A family business, the top team refused to initiate a marketing strategy. Stock was kept high;egal cases were allowed to drag on, wasting time; Resulting in banks becoming increasingly reluctant to issue more loans. I convinced my client to draw up a detailed budget and future cash flow analysis. For all the skillful talk and explanations, they could not escape the fact that with their current structure the numbers stayed in the red. To address this, they recruited a top sales person and saved their chain.
If you have a high-tech start-up, you know that sooner or later you are going to have to pitch investors. At such meetings, I find that many entrepreneurs spend too much time doing the talking, and usually concentrating on detailing their technology, which most people fail to comprehend. I encourage the techies that I work with to enter any such presentations with a validated business model. This is where my successful clients stand out in seeking the attention of the people with money, because the technology may be a “wow”, but it is sales that do the real talking.
Some very talented accountants formed a partnership to appeal to a niche market. They planned to develop a low cost website with minimal input and planning, a common mistake. My coaching convinced them of the importance of investing time into positioning themselves properly to potential customers, including devoting time and energy into their marketing and website.
Tourism is a notoriously temperamental industry, with political circumstances causing unexpected cancellations or sending customers looking for alternatives. A tour guide approached me, asking for help with his revenue stream. I asked him for his definition of an ‘ideal customer’. The answer was too brief to be useful. In other words, my client had lost his ability to identify which part of the market he was targeting. A new focus helped redirect his marketing, and he is now too busy to meet me.
Selling hardware is never an easy game. The competition is often strong. The sales cycle can be laborious. And then there are numerous internal factors that are beyond your scope. This is typical of many sectors of commerce. My client often found themselves close to the finishing line, but never quite crossing it. What my client has learnt is to agree on specific terms early on in the selling cycle. These ensure that when the prospect is presented with a purchase deal, there are no more reasons to delay. As for my client, sales are growing from year to year.
In an era of globalization, it is easy for many of us to justify how and why we can get along with people from other countries and to understand their requests. Judging whether an Israeli is bluffing, or explaining the context of a British understatement, or justifying an American outburst of anger is one of the tasks that I face regularly. For example, an Israeli web designer was unable to fathom the despair of a client, born outside of Israel. The result was a shouting match via emails. There was no effective communication until I stepped in.
The issue of time management comes up at least once a day. It is staggering how many people are running businesses, yet have little concept of how to allocate their time to numerous tasks. One of my key challenges for clients is to encourage them to consider a printed diary instead of a digital one because paper diaries allow you to see at a glance what you have planned ahead and what you can truly achieve in any given amount of time. Most also allow for a clear separation between tasks and meetings. For the record, every week, I fulfill over 90% of all planned tasks.
One of the first things I teach is that you have to know what you want to achieve. This is called having a vision. Many CEOs turn round to me and say that they just want to make money, to which I suggest that they fill out a lottery ticket. Those clients of mine that spend time developing a defined vision – not a simple process for many – are often the ones who succeed the best. In one specific case, it led to my client finishing up with most of his customers, as he realised he was losing money and in a sector which he did not want to be.
I am approached by many clients who offer salaries for employees on a commission basis or through a flat structure which includes overtime. While working with one manufacturer, it took me a long time to convince the CEO that the best way to ensure a happy customer base was by building up a loyal workforce, who will give you everything. Part of that process included a pay scale that allowed for advancement. Commissions and overtime do not achieve that and therefore often result in de-motivation.
We all know that we have to deal with suppliers. Many see them as the enemy and feel that they come off second best. While working with a cash-strapped food company, I encouraged the CEO to have a full and open relationship with his suppliers. They were to call him regularly at the beginning of each month, so that he knew how much he had to pay. Then, he would carefully allocate the resources available for payment, and tell them who would be paid how much and when. They did not always like it, but he was respected. Moreover, he always received what he wanted.
Product or service definition can seem an easy task. It allows you to choose your market and thus create a framework for prices. However, I frequently observe how few people fully appreciate what they are selling. For example, as per the MacDonald’s theorem, I teach catering businesses that they are offering an experience, with food as one integral part. A provider of office services learnt that what he was offering was actually “sales” – the lost or potential sales growth of his own clients.
“I can do this by myself” is a phrase that I often hear – and usually from one of those bosses who likes to do everything thing themselves. Over the years, I encouraged several business owners to employ an additional person at a lower wage in order to release trained staff for work that has a higher value. It is also worth noting that most of them sought young recruits, although I have frequently encouraged clients to seek older members of staff. Maturity and experience have an underrated value.
Keep Fit Society is a local franchise of an American company. The CEO had little commercial experience, but was driven by a passion to expose his locality to this form of training and fitness. The business coaching covered key basic principles of opening up an enterprise; creating an initial budget, finding a loan on affordable terms, locating premises, confirming issues of insurance, and of course recruitment of clients. In addition, as many of these tasks did not come naturally to the CEO, Michael spent much effort working on the client’s emotional fitness. At the time of writing, the company is hosting its first annual event in conjunction with well-known local restaurants.
Light Us Up manufactures an energy product. Despite nearly twenty years experience, sales had dwindled to a minimum and the bank was threatening the owners. Debts to statutory authorities were building up. Michael initially concentrated on confirming the strengths of the CEO and on establishing the unique selling position of the company. Within a short period of time a marketing strategy was put into place. Within three months, the company became cash-flow positive. In addition to sales, the company was approached by leading competitors to act as an out-sourced production line. After nine months of mentoring, the monthly take home of the CEO had shot up at least five times.
Design House is a family business of architects. They provide a boutique service, specialising in high value projects. Although the partners have considerable experience, most of it was gained abroad. Neither did they understand the local business culture nor did they have the local contacts to get started. Michael’s remit included helping guide them through building an initial budget and cash flow projection. He also became instrumental in helping Design House form a marketing strategy, as they initially chased all vague opportunities. After nine months, the company had moved to permanent offices, had set up a website, and had established a working revenue base.
Applebaum is one of Israel’s leading artists, and many of his works can be found overseas. Locally, Applebaum had been increasingly frustrated with the demands of his prime distributor and gallery host. Up to that point in time, Applebaum had effectively been ‘going along’ with what had been asked of him. Michael was called in to help with the negotiations. It became imperative to establish at an early stage just what Appelbaum required from his associate and then to confirm that the specific service was achievable. The resulting new contract allowed both sides to live together, so that both of them would benefit financially at healthy levels.
PlastiCo manufactures and distributes quality plastic products for the packaging industry. The company has an established overseas network, which had repeatedly failed to deliver an increase in sales for several years. Michael was asked to travel and to meet with the team on their home territory in order to understand the precise factors that were holding up the creation of new export orders. The final report, which was delivered to the CEO and then approved by the board, led to a series of operational changes both locally and abroad. New back office personnel were employed. The quality of products available was raised. Supply lines were shortened.