The Question I asked 3 start-up business mentors


A few weeks ago, I asked 3, very experienced start up business mentors who between them have over 30 years of experience helping hundreds of UK aspiring entrepreneurs start and grow new businesses from scratch- They have several success stories and as you will guess, they have also seen several who failed.

I am in the process of building a small business, so I asked the all important question; can they each give me The Top 3 reasons why they feel many small businesses fail!

It was amazing , the similarity between their answers. One theme recurred with all 3 mentors and I did get one of them to give me a very detailed synopsis of her thinking on this.

Now if you are keen to know why small businesses fail and how to avoid the same fate. Stay tuned with me on Thursday night when I update the blog with the feedback from these front end operators.

Let keep a date for Thursday evening GMT.mentoring

5 things I did wrong early in my business journey.


  1.  Marketing an unproven product or service

Have you ever heard somebody say that “I am starting a business I am just waiting for the business card to arrive from the printers so that I can get started”.  Nowadays if I hear that from an aspiring business person I become sceptical about the chance of ultimate success. Starting running and growing a business has little or nothing to do with business cards!

 

It  has nothing to do with a good looking website,  if you do not believe me check out this website  http://www.berkshirehathaway.com/ , I believe it’s one of the worst business websites I’ve seen,  but you might be surprised to know  that that website is the primary business of the world’s most successful investor and one of the top ten richest men in the world today Warren Buffett.

warren buffet

Before any marketing the first task used to prove your product or service in the marketplace and obtain  feedback,  improve the product or service and  then obtain if you references in whatever format that maybe;  then maybe you now have something to market.

It has nothing to do with a good looking website

  1. Competing on Price

Whoever told you  that customers buy from the cheapest provider told you a big lie.  Yes we all like a deal but equally have attachments  to specific brands or providers for our specific products or services and those brands are not always the cheapest providers available.  People do everything they can to get the latest Apple product,  Apple is far from the cheapest product on the market.  Some people will never be caught dead shopping at Primark,  if we all shopped based on price then we will all shop at Primark.  You need to establish and create a reason why customers will buy from you other than price.  That reason may vary from quality of service,  flexibility of payment terms,  uniqueness of raw materials,  perception of premium value-  whatever it is you need to establish a very definable reason why people should buy from you and therefore pricing becomes is secondary consideration in the minds of your customers

  1. Partnering with the wrong people

“You can’t do a good deal with bad partners”,  I think it is the, now infamous, Donald Trump that made that statement,  and it is so true.  You need to establish what your values are as a business person  when you come across people news values are significantly at odds with yours,  it doesn’t matter how attractive the offer seems,  it is in long-term recipe for disaster.  However pragmatic judgement can mean you work with this people over a defined  time frame  or with clear documented an enforceable agreements or terms of service.

“You can’t do a good deal with bad partners”

  1.  Employing the wrong people

When you understand that there is nobody that is a BAD EMPLOYEE by definition but that many people even though they’re fantastic individuals they might not be the right employee for you and your business,  then you will be able to make decisions about whom to employ without feeling bad about your  employee decisions and actions.  the process of getting an employer in the right people is so complicated that there’s a field called HR  set aside for that process.  when you are starting off as a small business the best way to employ in my little experience  is by  strong competency based recommendations  from people you trust.  

trump

The day you realize that everyone cannot be your client no matter how hard you try, that day you become free and more strategic

 

  1. Loosely defining your market

Your market needs to be clearly defined not just a product or service but the geography of your operation how far from your base will you work.  I remember travelling over 200 miles to discuss with a company to take on some of my services,  I did not get the project after all that effort,  now my market is better defined to about a maximum of 75 miles from me in any direction,  it will take a real monster offer for me to be tempted to go outside of those boundaries and I have established that there is enough potential client based within  that defined geography for us to achieve our business goals.  Now are marketing and business efforts are localised meaning we spend less on marketing in a concentrated geography and therefore are potential to create a strong brand is greatly increased. The day you realize that everyone cannot be your client no matter how hard you try, that day you become free and more strategic.

Kanye West, Mark Zuckerberg and 9 reasons why Kanye-like people do not succeed in Business


Kanye West is clearly one of the few people of the rap genre who always finds a way to make it to the headlines of mainstream media on a regular basis. The last one was, as I checked both BBC and CNN as part of my daily rituals, I was surprised to see he made the headlines on both websites for asking Facebook founder and billionaire to invest 1 billion in Kanye West fashion ideas. Apparently the very successful rapper has been trying to gain access into the fashion and design industry and has met with significant failures and financial losses but based on his personal self-belief he is determined to crack that industry. In his very noble pursuit, he apparently has now acquired over fifty million dollars of personal debt. Poor Mr Kanye West! So he took to twitter to ask Facebook founder, whom he claims to be a fan of his music to invest 1 billion dollars in Kanye West’s ‘fashion/design’ ideas.

The pursuit of even more money will always make you think that building a school for some 400 kids in Africa who might become the next winners of Nobel prizes is not as good an investment as helping an already successful rich man, achieve his next dream; if we were to accept the poor tasted tweet that Kanye West targeted at the Silicon valley moguls who he asked to help fulfill his dream

First his plea helps us to understand the difference between a multi-millionaire and a billionaire. Most people will perhaps pray to have as much money as Kanye West and cannot probably think of him needing anything that he cannot afford; but here we face the reality. Money does not solve all of our problems and you can never have enough of it! The pursuit of even more money will always make you think that building a school for some 400 kids in Africa who might become the next winners of Nobel prizes is not as good an investment as helping an already successful rich man, achieve his next dream; if we were to accept the poor tasted tweet that Kanye West targeted at the Silicon valley moguls who he asked to help fulfil his dream. I will however focus on the business lessons that lie in the Kanye West state of affairs that everyone can learn from.

 

Sometimes, when we know or are related to someone who has a bit of money, we have this sense of entitlement, expecting them to ‘invest’ in our business. No it is their money, you need to respect it, if you want them to invest, then make them an offer that represents a win-win for you both.

mark zuckergerb

  1. That you are successful in one field does not guarantee success in another. Success is not directly transferable. You have to do the first works! You have to do the graft in a new field to excel and rise to the top of it.
  2. Do not borrow money to start a business. Borrow money only to grow a successful venture. We have definitely been hearing a bit about this man as a supposed designer. Now we know that all we have heard is simply from money he himself has spent on publicizing it. Probably over 100 million; his own money and borrowed money. One success though along the way was his collaboration in making sneakers, called Yeezy’s. My business head tells me Kanye West would have benefitted more investing money in growing the Yeezy sneakers brand than an idea that he seems to have tried and tried 50 million dollars deep without success. He should have stopped after the first 5 million.
  3. It will be even sadder if the debt is in his personal name- He seemed to suggest that this amount is a personal debt. I.e. if you went into Kanye West account log you will see outstanding loan of $50 million and he will probably be paying back like $20,000 every month. All smart business people trade and borrow as a company, limiting the liability to themselves. If all that money is borrowed in Kanye West’s name then he sure had better send his begging request to Mark Zuckerberg from Facebook to get Marks’ ears; otherwise we will soon be reading of another bankrupt star.
  4. Business can be a killer; you need to respect it and take the time to learn it with humility- Most people including Kanye think that business is just something they can take on anytime; maybe after they retire or simply when they are tired of being bossed around. Business is a craft; you need to learn it like you learn a profession, to learn you need to have the humility to be taught. When you are not taught about business; even when you have a failed prospect you will continue ‘investing’ in it. Most of us would have gotten broke earlier than Kanye, hence we do not even get to take our non-viable ideas as far as he seems to have; but now we know that it is all on the wings of debt.kanye west
  5. Listen to the market- If the market place is not buying your products. You will not be successful. Your business should be able to sustain itself organically from the sales that come into it. If your sales do not sustain your business, you need to make adjustments fast and realise it early enough and have the business head to identify the point at which it ceases to be a viable proposition.
  6. No one owes you nothing– I am certain that when Mark Zuckerberg purchased his Kanye West albums, he paid the appropriate price for it. That’s the transaction done. Mr Zuckerberg owes him nothing for being a fan. Sometimes, when we know or are related to someone who has a bit of money, we have this sense of entitlement, expecting them to ‘invest’ in our business. No it is their money, you need to respect it, if you want them to invest, then make them an offer that represents a win-win for you both.
  7. You need to make your business investable– I am very certain the Facebook founder will have no qualms in investing in the music of Kanye West, after all; he has millions of record sales to justify that and he is still marketable and Zuckerberg will definitely make profit from it. But what this man doesn’t get is that he simply does not have an investable, marketable entity in this fashion design field. I have only seen one picture of him standing with his models; the clothes looked like super sacks; even in this world of crazy fashion, I do not see how they can sell. If they could sell, investors would have come to him before he needed to ask.
  8. There is a way to seek investment– I wonder if this man ever reads the newspapers, he would have found out that David Beckham is planning on starting a new football club including building a stadium. It seems David had good advisers because what he did was to set up a consortium of rich folks, with him being the brand ambassador. He looks to me that he is smart enough not to have invested even 1 dime into the project, because he knows that he as a brand is the real draw and he brought the investors in to monetise his brand. What Kanye West has done is the equivalent of David Beckham, building the stadium and running the team with his own money. The ability to leverage other people’s money to achieve profit for all stakeholders is the ultimate sign of financial intelligence.                                                                                                  david beckham
  9. Stop asking the wrong question– I will be surprised if Mark Zuckerberg gave him any money. If I were in Kanye West’s shoes, I will be asking Mark Zuckerberg to come on board without a dime of his money but as a mentor to provide me the advice and business acumen to penetrate and be successful in an industry I am not traditional to. It was an opportunity missed. If the success of Kanye west’s ideas was about money, $50 million dollars would have made the ideas successful, unfortunately he seemed to be caught up in a battle with his ego and financial ignorance; which is true for most people who start out in business.

 

If the success of Kanye west’s ideas was about money, $50 million dollars would have made the ideas successful

The power of taking interest in people


 

It was 2014,  I was the subject of a professional witness examination as part of maintaining my qualifications as a lead auditor.  The person examining me  was an elderly colleague,  these kind of examinations are usually a serious faced encounter  where you are effectively walking on eggshells.  However I had taken my time to prepare and as always I felt the best way to pass through the process successfully was to be myself as I had ample confidence in my abilities,  and so right from the start I gave him a very warm welcome and tried to make the environment a bit more at ease than it would typically be.

I gave him a very warm welcome and tried to make the environment a bit more at ease than it would typically be

By the time we completed the audit witness at the end of a full day  he had gotten to know my full background and work experience particularly in food  safety and I had found out that his son  was recently appointed as a senior manager for the Audit organisation we both were delivering a service for.  He would later drop a word about me to his son who stated that at that time they desperately really needed support for managing their food safety programs and within weeks I was signed up as the technical expert to support the process from that date till now I have provided a range of consultancy support to that organisation and we have just agreed a deal for our company to provide training on behalf of that organisation at least for the next couple of years.

obama

That singular encounter with his dad whom i did not know from Adam have been worth a significant amount to our business. With this and many similar situations,  I realised as has been commonly said that business is about relationships;  and of course relationships is about people.  Unfortunately sometimes this is interpreted to mean  that it is only the people that have charisma and can be the life of the party that have a higher chance of business success. I am not one of those!  But I have discovered that simply being myself and taking a genuine interest in the people around me,  asking questions and remembering those things that seems to matter to them the most;  is a critical thing  in maintaining great relationships that can be good for business.

 I was signed up as the technical expert to support the process from that date till now I have provided a range of consultancy support to that organisation

But the unfortunate thing  is that most business people are consumed by the desire to make money and profit and therefore view people even family and friends from the perspective of what  benefit those people can yield them.  If you are able to put your business ‘greed’  aside and take interest in people simply for whom they are,  in more times than one you will also get their business and if you don’t, at least you will earn  their warmth and respect for a long time.  That seems to me a good deal. I now enjoy doing this where ever I can so much that I know, the challenges the lady who cleans our shared office area has with her two daughters and I get updated when the son of one of our clients whose aim is to get to hollywood is listed in the film credits of some of the newly released cinema blockbusters. It is fun to take genuine interest in people!

It is fun to take genuine interest in people!

By the way,  I passed the audit examination in flying colours.

What You Should NOT Spend Your Money On


This is as straightforward as the title is “do not spend your money on holidays, fast cars, and clothes”.  I stand by this but I need you to read to the end before you decide whether or not I am talking rubbish.  The actual technical name of what we call money is currency,   the word that has it roots in the word current. Current by nature is characterized by movement,  that means your money moves.  It always has to move, and it fluctuates in value. It never stays with you forever you exchange it for something of some value to you. The job of every financially smart person is to hold down money into a place,  a resource  or a format  where it,  as a minimum, holds or increases its value before it leaves your hand to flow to another place. That format is called an ASSET.

pound

Robert Kiyosaki gave the simplest definition of an asset I have ever heard; “ anything that puts money into your pocket is an asset”. A  liability on the other hand is “ anything that takes money out of your pocket”.  So holidays, fast cars and clothes are liabilities.  And we all know that if you have more liabilities than assets it’s just a matter of time you will break financially.

“ anything that puts money into your pocket is an asset”. A  liability on the other hand is “ anything that takes money out of your pocket”

I believe that the purpose of currency (money)  is not for spending on liabilities;  the purpose of money (currency) in my opinion is to purchase  assets which in turn generate the money  to create the standard of life we want.  The fact that I am able to take my kids to Disneyland out of my salary and while I am there maybe I meet Bill Gates who is also there with his kids,  In  theory both myself and Bill Gates can ‘afford’ to take our kids to Disneyland,  but my spend has reduced my salary but Bill Gates will not be paying for that visit from his salary,  he will probably the paying it from a tiny piece of dividend from his many shares (assets) in Microsoft.  I become poorer  from that visit but he is not affected because  he is spending  not his current monthly income  but the  income  from his assets, assets which continue to grow and appreciate in value, while my salary decreases and I await the next top up. That single spend therefore does not affect his current standard of life in real terms.

the purpose of money (currency) in my opinion is to purchase  assets which in turn generate the money  to create the standard of life we want

I like holidays, fast cars and clothes as much as the next guy;  but the day  I can get all these paid for  by the yields from assets,  rather than my immediate income; then,  I would have had my finances in control.  

monopoly

Use the currency in your hand to purchase assets that will yield  the returns you require to live your desired standard of life. Many people struggle to know what things are considered assets, I will therefore list some here for you. Property,  insurances (in case things go wrong and my, do they go wrong?),  pensions,  investment accounts,  bonds,  brands, copyrights,  distribution rights,  distribution networks,  patents, royalties (from books, music or related intellectual property), trademarks, buildings,  equipment, Art work,  jewellery,  businesses,  training materials among others. I hope you note that a savings account is not listed on the asset list, why will you keep currency whose value moves every time and usually in the depreciation direction? I am for short term savings that enable you to acquire assets; long term currency saving is not a financially smart move in my opinion, because your money is usually worth less than its value on the day you put it in, usually in spite of the so-called interest.

Use the currency in your hand to purchase assets that will yield  the returns you require to live your desired standard of life

Now you know what you should be spending your time and currency on.
All the best

Pound Notes Picture- https://www.flickr.com/photos/v1ctor/

Monopoly- https://www.flickr.com/photos/wwarby/

The three things you need to start a truly sustainable business


When most people want to start a business they usually think  first about having a product or is service they want to deliver.  Actually  this is not necessarily the first thing to consider when planning to start a small business.  From my experience I have put together the three things I think are critical to starting and maintaining a sustainable business,  whether or not it is a product or service you are planning on delivering.

1.  A  comprehensive list of prospects–  It is much more important  to determine who you want to sell to than what you want to sell.  I recognise however that in some instances  the latter comes before the former.  I learnt this because our company delivers consultancy services to small and medium sized businesses in a particular geography.

Business Meeting

Two business men shaking hands at international business meeting.

There are many other independent people and companies that deliver the same service that we do,  we struggled in the initial couple of years  to find clients  because we had difficulty of identifying who would need our services,  we spent lots of  time and effort meeting  various organisations who will gladly meet up with us but never truly purchased our services.  This became a significant frustration  for me.  I did not like wasting time and marketing resources on several meetings that resulted in non purchases.

Suddenly we were servicing a different market from our competitors and we had a list of over 1000 businesses that could potentially benefit from our added value service.

At one point I listened to a marketing expert who stated in clear terms that if you do not have a  list of prospects then you do not have a business. My first reaction was that’s a bit harsh especially as we had managed to coast along mainly through  a few referrals  as a business,  but I started thinking about where I could get a list of potential clients.  But the problem remained that there was significant difficulty in identifying who needed our support,  the only list I could lay hold of was a list of organisations who had already received a similar support as we also provided.  To cut a long story short we obtained that list and over a period of time re positioned our company to provide added value  to those organisations who had already received the support our previous competitors provided. Suddenly we were servicing a different market from our competitors and we had a list of over 1000 businesses that could potentially benefit from our added value service.

It was at this point that we truly started to build a business,  because our work in the last 1 year has been about working on the 1000 businesses to produce financial results.  so far we have engaged over 70 of these businesses  with them either attending a free event that we have put in place,  or having purchased Training Services from us or other consultancy interventions;  and we have very little organised competition in this new market.  Our  job now is to continue to create new services that this market you benefit from.

It is the market first that list of prospects first and then you can think of what to provide them.

2. A differentiating factor(s)- Most  of the people that provide a similar service to small and medium sized businesses in our region operate as independent self-employed consultants we are a registered small consultancy firm.  Our competitors typically charge clients based on the number of days involved in delivering the project, we charge a single fixed price for the whole project. Our competitors will spend 1 full day at the client site each time they pay a consultancy visit,  we recognise that this might not be convenient for the client all the time so we come in  as per client’s convenience meaning sometimes we do half day a visits.  our competitors insist on the client  paying as soon as the job is done,  we are happy to accept a payment plan from the client meaning they can spread payments across the year.

It is not necessarily simply because our approach is better than the competition that matters the most;  it is simply the fact that it is different (and that differentiation is sustainable and cost effective from our perspective) that is helping us to stand out in the marketplace.

it is simply the fact that it is different (and that differentiation is sustainable and cost effective from our perspective) that is helping us to stand out in the marketplace.

In the ideal world marketers will advise that you have a strong USP (unique selling point),  sometimes as in our case it might be difficult  to lay your hands on a strong USP.  You can have  several unique selling points rather than one USP,  remember the focus is on differentiation. And the ultimate goal of a USP is market differentiation. Go and be different.

3. Communicating,Refining and Patience- Now you have a prospect list in other words a potential marketplace.  Based on the uniqueness of your marketplace,   you have  a product or service that the marketplace needs and it is significantly different from the competitor in 1 or several ways  including content, delivery, servicing, payments, advertising, business structure  and even such details  appearance (eg uniforms) etc.  Now you need to start communicating with that list of prospects.

selling

One single communication does not establish a relationship with a potential client

One single communication does not establish a relationship with a potential client,  it takes several repeated and varying individual communication contacts for you to make an impact on the psyche of a person.  So you have to stick by it.  Giving out your business card is not the equivalent of having a business,  you need to continue that communication until it gets you meetings sitting face to face with people whom you never met before but have been on your list of prospects for a while.  Whilst you are there,  you should be listening watching getting clues about what that prospect expect of your business and learning what is working and what is not working and building that back into your business process.  You will continue refining this process until it becomes closest to what most of your 

potential clients wants.

Giving out your business card is not the equivalent of having a business

That takes time and patience but it is the route to a sustainable business model where you have clients and prospects that are not just customers but fans of your business!

 

All the very best

How I gained the confidence to step out on my own


Starting out in business can be a scary thing, at least from where I was coming from and I believe there might be somebody there who could be sometime near taking such a decision. This is no advice, just a quick version of how I gained the confidence to start out. While I am a person of faith, I believe that threading new waters, especially when there is a lot at stake- like your family’s sustenance; it is imperative that we test out our ideas before launching all out and especially where you do not have a direct ‘push’ to do it, like I had. Let’s know if you find this useful.

I had always planned to set up in business in some form at some stage in life. In 2011, I reasoned I was some 5 years to when I will start up my own business and so I began a gentle push towards gaining more insight on what is involved. As I Have grown I have become a very selective reader of books and therefore did not go to books primarily for information about starting business. I was lucky a part of my job then, was auditing businesses and so I dealt with owners of small and medium businesses and senior managers of the larger businesses from time to time; I reasoned this was a God given opportunity so no matter what we talked about during the audits that would usually last for a minimum one day; I got them to tell me the stories of how they started; those many stories are material for another post.
Come the end of 2011; the head of the company I worked for took ill with a long term illness and could not continue; a new management structure was put in place and it was clear from the start that their approach was at odds with that of the previous head. She was focused on growing and gaining new markets; the new guys are about consolidating existing markets and stripping down to the core competence. I was brought into the organisation to grow a new competence- therefore I knew that I was an ‘at risk species’.

Along with my many ‘interviews’ with business leaders, I had also heard the oft repeated phrase, ‘think big, but start small’. I worked out a way of testing the waters as a business person. I realised, I needed a product. I had no money to put into some product, so I thought I would make a product that did not cost me much money- and so I decided I would make hand-made greeting cards. Now the gift of art and design in our family fell to three of my cousins; it didn’t come too much near my direction. But I visited hobby craft- a shop that provides various art and design material. I saw that in this shop you can simply buy various pieces, pictures and stuff that you can attach to a card to make up the full design, you do not even need fancy writing skills as you could buy key words like ‘happy birthday’ and ‘happy anniversary’ as sticky labels. I purchased materials, made a few samples and bought the plastic film pockets in which cards are enclosed in and put my cards in them- they didn’t look bad; because they were professional pictures on a professionally cut card in a professionally designed envelop in a professional plastic pocket- all I did was glue them together.

I went on the internet goggled all the card shops in Preston. I placed over 70 calls, got about 7 appointments and went to all seven and succeeded in selling my cards to 3 stores! I had created a previously non-existent product and successfully sold it- this was January 2012.

The important thing was not the amount I sold, but that I made a product and could sell it at all! The jinx was broken; the fear of the business world was removed. If I did the right things, I can make it in the brave world of business. Six months later as it was time to leave my job as I had foreseen, due to the new direction of management; I spoke to a competitor about doing some associate work with them as I set up on my own; on the day of the meeting; I was greeted with a much warmer smile by the team than I expected- as we began to speak; the manager said Yemi; “ just before we proceed with our discussion, I need you to know that a position is now available in our organisation due to someone leaving the role for you to do exactly the job you were doing with your previous company”. I thought it was interesting, we talked about 5 minutes and then I asked how much I might earn on the role- he told me the amount, it meant I could earn about a third more than I was earning with my soon to be previous employer- it sounded fantastic; I politely said “I’d discuss with my wife and get back to you”. I got to Shimona on the phone right at the car park- she said “that’s sounds fantastic, what do you think”? I said, perhaps to her disappointment, “I believe I can make it in business”! “That means the decision is made then, we’ll tighten our belt” she said.

I had tried it out on a small scale, now my income would have to depend on it; but I knew I could make it on my own in the big world of business. We’re six months in, no regrets yet! I’m working hard to ensure a brilliant sequel to this piece…how I became successful in business!

 

Photo credit: http://goo.gl/vy7dWI