Transformance 90 Day Business Turnaround Program

Transformance 90 Day Business Turnaround Program: 90 Day Business Turnaround
For people who want to see their businesses improve, and achieve greater success

Success and Significance Part 2

Success is often associated with people who feel they have everything they want so in that respect you could say that it is often materially based. The success may be visible to all, so in effect success means that you have added value to yourself and by relationships and association, some people around you.

However significance is when you hit the top of the Maslow needs pyramid, because you feel so comfortable and confident about your own success that you can now seek to add value to others.

Sports stars are great examples of this process in action. Some end their careers (perhaps prematurely through injury) and then fail to adapt to their new situation. They miss the previous trappings of success and often decline into a “vicious spiral” which may involve alcohol and drugs. Fortunately many others are inspired to reinvent themselves, to a new sustainable level of success, but that still leaves the “what’s next?” question.

Bill Gates (irrespective of whether you love his software!) created a massive level of success that carried with it huge financial success. In the process you can also say he provided many others with opportunity as employees and partners of Microsoft. So what did he do to? He created the Bill and Melinda Gates Foundation with a view to giving away a sizeable portion of their wealth to help others. Warren Buffet and more recently Richard Branson have also committed to giving away at least half of their wealth. They are doing this because they have nothing left to prove to themselves or others in the fact that they are successful businesspeople and entrepreneurs.

They are sharing the fruits of their success and are not holding on to wealth just to make sure that they qualify for the next millionaire/billionaire list.

Just a suggestion, but perhaps in order to start moving from success to significance and the desire to add value to others, that you have to:

• ·      really know your purpose in life (and we know how well they teach that in schools, colleges and the workplace)
• ·      have a strong desire and a clear vision to be more than you currently are, by growing towards your maximum potential
• ·      begin planting the seeds that will benefit others by providing them with their own means to grow ”harvests”

Significance, like success is not an overnight journey – it takes time, but it does require steadfast commitment, passion and a strong sense of purpose and direction. Becoming significant will most likely take you from a place of comfort into the great unknown, but that is what makes it challenging and exciting.

In short it is about signing up to something that is bigger than we think we are. But if we start to make the stretch, when we get to the final account we can say we truly lived, loved and made a difference.

Meaning and achievement

Events are happening in all of our lives, at all times. We interpret these events and add our meaning to them, as a result of our experience, conditioning and beliefs. You could say that the meanings we apply to events become our frame of reference to make sense of what is going on.

Some people see things half full and others see them half empty. Both points of view are valid, but one is more empowering than the other.

At one time in my life (I suspect like many other people too) I felt very disempowered and felt that life and events around me were responsible for how I felt and how my successful career was falling apart. In other words I took no responsibility – it was out of my hands and in the hands of everyone else.

Sadly this road leads to one of being a “victim”, disempowerment and possibly depression or worse.

I now term this kind of spiral as one of being insignificant. Insignificance often leads to two unfortunate states. One such state is apathy – “why bother to do anything when I have no personal power?” Another major state that can occur is frustration. At least frustration can lead to a sense that something has to be done. When you reach a point of frustration and say enough is enough then change can happen. When locked in apathy it is literally a moribund state.

Victor Frankl wrote an outstanding book called “Man’s search for meaning” (1959) based upon his experiences in a German Concentration Camp. Most of us cannot imagine the horrors that he witnessed personally on a daily basis. He observed however that “hope” was essential for survival, but so many fellow prisoners slipped into apathy.

By remaining in a state of insignificance and apathy it is a form of complete suppression. The longer you suppress and accept an undesirable situation the harder it is to break free of disempowerment. In fact you may have to relearn empowering things like hope, joy, happiness and love. Fortunately we now know that our brains do have “plasticity” so you really can “teach an old dog new tricks”. Many stroke victims have to do just that – they rewire their brains so that they can regain their lives back. New neural pathways must be created.

OK so there has been a lot of focus in this article on apathy and disempowerment, now what are the real keys to starting on the road to empowerment? Well Frankl quite clearly puts “hope” as an important step in the right direction. Can you attain a sense of being hopeful? If that is a stretch from where you are right now, ask yourself, has anyone else in my situation found way out?  If the answer to that is yes – it can help turn your own beliefs around. You can research, read and often listen to their stories and “model” the steps they took.

The rocket fuel to change and ultimately arriving at achievement is knowing your WHY. I meet so many people who when asked what they have or would like to have as goals, trot out things like “a new car, a new house, money, travel” etc. These things may be true, but often they are the “consumer society” ideas of what you should want. In other words they are someone else’s dreams and goals implanted in your mind (yes advertising really does work!).

To get to your real why, any achievement or goal has to be authentic to you. The attaining of what you want will lead you to the real why, not just to the thing or object but to the actual “end state” you want – it may be freedom, security, self respect, happiness or some other “feeling state”.

So I hope you can see that to break free of insignificance and apathy, you have to find a way to have hope and from that new empowering vantage point, work on your real emotional, driving reasons to attain achievement and significance

Age is no barrier to business start up

Bill Gates, Deborah Meaden and Sir Alan Sugar certainly haven't hung up their boots since turning 50. McDonald's founder Raymond Kroc didn't even begin the world's most famous food chain until he was 52. Colonel Sanders, was around 65 when he embarked on the franchise operation that became Kentucky Fried Chicken.

The message is clear, turning 50 isn't the end of a business career - it's the beginning. And an ever-growing wave of 'olderpreneurs', are proving life's later years can be the most colourful.

Research shows that businesses started by people over 50 have a 70% chance of surviving their first five years - compared with only a 28% survival rate for those younger than them.

So what's fuelling the entrepreneurial impetus of the 'silver startup', and why are they doing so well?

The over-50s age group has been particularly hard-hit by the recession. Last year, the UK Office of National Statistics (ONS) revealed 28% of those aged between 50 and state pension age were out of work - compared with only 20% of those aged under 50. Unemployment figures among the over-50s were up compared to younger people over the same period.

Why? One of the biggest factors is the rife ageism that permeates practically every industry in the UK, that anyone over 50 who's been forced to look for employment will testify to with a weary nod. To put a chilling number to the common knowledge: the ONS estimates those who lose their job aged 50 or over have only a 10% chance of being re-employed.

Yet this same group has a wealth of experience and often many years track record of success. More and more 50+ are reaching a life changing cross-road and are pursuing their own business start ups, so that they can take control over their circumstances and still enjoy a quality of life. The criteria for success are not always based on income; freedom and control of time are also becoming increasingly important to this age group.

A Niche That is Large Enough

Pick a niche that is large enough!

You know all about your “secret sauce” – the things that make you and your products or services unique. Hopefully if you have been methodical in your approach, and you have matched your product/services features and benefits to appeal to a target segments(s) so you can create real value propositions that are appealing and will get you customers.

Many small businesses compete successfully against larger rivals by selecting and specializing in a niche market or segments. However, you need to be extremely careful and do your homework diligently, to ensure that the niche is large enough to support your business and that customers are not too expensive to find and serve.

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Marketing budgets can soon get swallowed if prospects for your products are hard to find. The more you spend and the less enquiries you get, then the cost per enquiry can reach a point where sales can be unprofitable!

You also may discover that niche markets can be just as fiercely competitive as the mass market. You need to figure out how fast your niche is growing and how much market share you can realistically expect to capture.

If your financial projections require you to hold more than a few percent of market share to remain profitable, be careful. Don't press ahead unless you can convincingly demonstrate to yourself how your competitive advantages will enable you to become the market leader.

However, on a positive note, if you find the right niches you can dominate them and provide barriers to entry by bigger players. Also your smaller size should make you more nimble and adaptable to market changes.

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Undercapitalizing the Business

Being Undercapitalizing the Business

Maybe you should've waited to order that red Ferrari after all...

When we review business plans for start-ups, cash is often estimated to flow in 3 months or even less. The reality is often somewhat different; we often find that real cash flow doesn’t start until 6, or even 9 months after starting the business. Obviously for retail businesses this would not apply, but if services and goods are being applied, then our standard rule of thumb is to double the period that the new owner is predicting for the commencement of regular cash flow. 

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If new entrepreneurs grossly underestimate the amount of time and capital necessary to reach cash flow breakeven, it causes many promising ventures to shut down prematurely. Be conservative with your financial projections and plan on having adequate funds when you launch to cover all sunk costs (including startup losses) until your company becomes cash flow positive.

It means that apart from the business costs, you also need to cover your personal expenditures such as mortgages, loans, every day living expenses and so on.

If you don't have enough savings to cover the required investment, it may be tempting to launch your startup under the assumption that you will be able to obtain additional funding at a later date. While staging investment has advantages (preserving the option to abandon, higher valuation and—therefore—less dilution, etc.), this strategy can backfire and leave you unable to get cash when you need it most or force you to negotiate with banks and investors from a position of weakness. It's often better to change the business model to bring required investment in line with available resources.

The moral is clear, unless you have a very generous benefactor to bankroll you through the cash flow weakness in start-up it is probably best to avoid extravagant expenditure on vanities – so hold off ordering the red Ferrari company car.

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Too Much Leverage

3. Too Much Leverage and too much financial optimism

One of the key things all start ups are encouraged to do is the financial forecast and the business plan.

By virtue of the fact that you, as the owner want to be successful means that often the financials are extremely optimistic.

Will sales happen as fast as you are predicting, but the most important question of all is when will the cash actually hit your account?

Mature companies can predict revenues over the next few quarters with some degree of certainty. These businesses can make prudent use of leverage, both financial (debt) and operating (fixed overhead costs), to improve equity returns.

Revenue projections for early-stage companies can be all over the map, which means that new ventures have even less margin for error than larger competitors. In this environment, it can be dangerous to take on more than a modest amount of debt or other fixed obligations (rent, salaries, etc.). Revenues frequently take longer to ramp up than expected, so you may find yourself handing the keys of your business over to your creditors, or at least start to experience nights of not sleeping while you think about the mounting bills. We recommend that whatever outlook you have forecast for revenue to start to flow, add at least three more months, and in some instances add six months.

It's best to keep most costs variable at first and use equity capital to finance your startup until your company has been around long enough to develop confidence in your ability to forecast sales. Delay making investments or taking on fixed obligations until you have a critical mass of customers. You'll know when it's time to rent a larger office space or hire that second shift when you've got a backlog of orders on the books. A wise entrepreneur once told me “securing cashflow is sanity, all other expenditure is vanity.”

It’s great to have nice offices and maybe a great company car to drive around in, just make sure before making these commitments that you and the business can really afford them.

Cash really is king in a start-up, so make sure you have it flowing in before major expenditures and investments.

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