Questions for a new entrepreneur: Alignment

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Is your client portfolio aligned to the size of your business?

Do you look after your small clients like you do big clients?

Small businesses always aspire to get one or two big clients. Getting big clients means we get more revenue. There is nothing wrong with aiming high.

Startup entrepreneurs always aspire to get that one big fish, because we assume that if we catch a big fish, it will make us a big fish service provider.

Big companies are in most instance not structured to do business with small businesses.

Big companies can ask another big company to 60 to 90 days payments terms and that will be okay for both of them, but it a small business cannot operate its cash flow on a 90 day payment terms.

Big companies can place an order of millions of items without paying a deposit and another big company will be able to deliver, because they have capacity and reserves to absorb executing the order without paying a deposit, but a small business cannot executive that order without a deposit being paid first.

One mistake I made when I started out in consulting was when I secured a big client with a huge juicy contract, I let go of small clients because I felt it is important to focus all my energies to one client with a big juicy deal.

After completing the project, this big juicy client took about 6 months to pay me, which meant that I had not cash flow for 6 months. All my staff members left me, my suppliers stopped doing business with me, my credit card was maxed out. By the time the juicy payment finally came, it bounced once in my account and it was gone to pay long outstanding debts, by that time my credit name was messed up.

I had to start over again. This was a painful but important lesson that big companies and government contracts are attractive but they are not necessarily what keeps you in business.

Small clients they keep you in business, big clients makes you rich and pay for your bonus.

Never underestimate your small clients. Look after them with the idea of growing with them.

A big client may unintentionally bankrupt you because they are not designed to deal with small service providers.

A big fish can sink your small boat.

Look after your small clients, they will look after you. As they grow, you grow with them.

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4th Year Anniversary of Blogging

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Today marks the 4th year anniversary of me vandalizing my blog wall thoughts with so-called ideas.

In 4 years I have blogged 1465 blog thoughts, which basically translates into one blog post a day for the past 4 years.

It was author Seth Godin that motivated me to begin this journey.  He said:

“Don’t wait for a chair at the table.  Bring your own chair…or table.”  

This blog has become my “table.”

I’m not quite sure what the future is for this blog, but I sense there is much more. The more I write everyday, there more thoughts, ideas, and stories I dream.

| Dream | Write | Innovate | Love | Leading | Repeat |

Writing is like a dream come true, I write what I like and occasionally I like what I write, Still passionate about innovating certain concepts. Without Love, there is no point, its about leading yourself, and repeating again, everyday.

For those who read this blog daily and seek to use its stories, experiences and sometimes rantings in order to change the world, whether globally or locally, thank you:

Thank you,

  • For the difference you are making;
  • For the courage to stand out and not fit in;
  • For starting that movement of elites, not the elites of class or wealth, but the elites of curiosity, passion and taste;
  • For imagining a better world and doing work worth making a remark about;
  • For having the humility to say “It’s okay, its not for you” to non-believers;
  • For having the guts to say “This might not work” but we will do it anyway because it might work;
  • For teaching us that if you don’t require the journey to be easy or comfortable or safe, you can change the world; and
  • For caring enough to stand up and say, “here, I made this.”
  • For embracing the notion that popularity is not success.

Being on this journey with you is the reward.

 

 

Questions for a new entrepreneur: Patience

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Do you have the patience to build a business that will take you more five years before it starts to bear fruits?

Are you willing to stick it out?

Are you willing to see through the dip for longer periods of time?

Do you have the patience to wait, and put in the hours even when the rewards are taking long to show?

Do you have the patience to roll with the punches as and when they come with the hope and faith that over time you will land your strong punch and knock the challenge out?

We are told from a very early age that patience is a virtue. However, very few of us are ever really shown or taught how to be patient.

Patience is not something we have, it is something we consciously do.

Patience is like any other hard-earned discipline: The more we practice it, the more patient we become.

Patience is an acquired skill. You can learn to be more patient.

When you deal with people, you have to be patient.

To be successful, we need patience when it comes to employee relations, business negotiations and communications, as well as achievement of the strategic goals you set.

Further, you have to remain calm amid the big and small twists and turns that come with life. It is only through being patient that we you truly learn from the curveballs which get thrown in our path.

Build your skill, perfect your craft, build a reputation, build a client base. All these traits takes time to perfect.

Put in the hours, if you are planning to do this business then for the rest of your life, why are you rushing? Where are you rushing too? Take your time. Don’t standstill, but don’t rush the process.

Like Warren Buffet said:

“No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”

In business, you cannot short-circuit your way to success.

Patience is not easy to come by.

Be the type of businessperson who is making sound decisions based upon solid values rather than impulsive reactions.

Patience takes time and conscious effort to master, but impatience can lead to demise.

As Thomas Edison said, “Many of life’s failures are people who did not realise how close they were to success when they gave up.”

Patience is for the impatient.

I learned quickly why people say that the two big reasons you fail in business are that you underestimate the commitment and you underestimate the capital needs.

Sometimes life with throw you challenges that might take 15 years before you get what you want? Are you willing to keep the faith for 15 years waiting for your solution?

Passion and patience are the keys to success in starting your own business.

Thank you for having the patience to read this article to the end.

Ps: Here is shortcut that’s certain to work every time: 

Take the long way.

Do the hard work, consistently and with generosity and transparency.

And then you won’t waste time doing it over.

Questions for a new entrepreneur: Cash Flow

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A few things came up over coffee the other day. His idea is good, his funding is solid, there are many choices. Some of the questions that don’t usually get asked:

Are you aware of your cash flow?

Often entrepreneurs are obsessed with getting that million rands deal. On the outset there is nothing with getting that deal, but is it a good deal? Just because it is a million rands deal does not necessarily mean it is a good deal.

What makes a deal a good deal:

  • Does this million rands deal give you a good profit margin;
  • Will you be paid by the client as soon as you have delivered and invoiced him; and
  • Is this deal advancing your business in the direction you want.

Businesses don’t go bankrupt because they don’t have sales, or are not profitable, they go bankrupt because they don’t have enough cash flow to pay their debts as and when they are due.

You must not allow yourself to be seduced by big deals. Sometimes it is the big deals that may sink your business.

Turnover is vanity, profit is sanity and cash flow is reality.

One of the earliest lessons I learned in business was that balance sheet and income statement are fiction, cash flow is reality.

Cash to business is like petrol to a car. You need to have enough in the tank to start the engine and you need to maintain enough in the tank to keep it running. Now the car [your business] will take you where you want to go. If you run out of gas [cash on hand ] at any point along the way, well…we all know what will happen.

The thing about a fish in the stream is that it does not care if the water is six inches deep or a foot deep. As long as it never (ever) goes to zero, it is fine.

Don’t run out of cash.

What is your zero point? What are you doing to ensure you get to keep swimming?

Cash flow is reality. 

Plan for your cash flow, it is what will keep you swimming.

Familiarity breeds contempt

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When you drive after getting your license, you push your seat closer to the steering wheel, you hold the steering wheel with both hands, you make a complete stop at the stop sign, you use your indicators when you turn, you drive cautiously, and you keep a safe following distance.

When you bake a cake for the first time, you follow the recipe step by step until you get the cake you want.

Over time something happens when you get comfortable, you push your seat back, put your sunglasses on, hold the steering wheel with one hand, you yield at the stop sign instead of stopping, suddenly a safe following distance doesn’t make sense anymore, you drive fast and even hoot at other drivers when they make a mistake.

After you have baked the cake several times, you start baking it without following the recipe.

When you drive on a road for the first time, you drive cautiously but when you have driven on that road for a long time, you tend to speed and cut corners.

We have respect for something when it is new to us. Something happens when the new stops being new to us.

It is a good thing to have experience, to be familiar with something because you become comfortable.

It is when you become too familiar with something that you take it for granted that is problematic.

Familiarity breeds people who are not afraid to drink and drive. Familiarity breeds people who take others for granted, it breeds comfort zones.

This not only applies to driving and baking, but it applies to work, relationships, businesses, projects.

When we value something, we respect it. At the least, this feeling of being valued tends to limit hostility and scorn. When we devalue something, contempt becomes very prevalent. 

The pendulum swings from respect to contempt quietly.

People don’t announce when they push the seat back and hold the steering wheel with one hand and start shouting at other motorist,

People don’t announce when they stop using the recipe.

Over time we subconsciously stop respecting and sometime unintentionally adopt the attitude of contempt to things we should be respecting.

Whether this is due to the boredom that comes with the routine of doing the same thing over and over, or the excitement and novelty wears of, contempt creeps in silently uninvited and without knocking.

We must pay close attention to the slide into the devaluing that which we had respect for.

It is important that as we get comfortable with certain things, we maintain the same level of respect 50 years later like we did on day one.

Be comfortable? Maybe, but not disrespect things we should be valuing.

If you want to be respected by your customers/peers/partners/competitors/constituents, the best way is to begin by respecting them and the opportunity they are giving you.

As Hafiz has said:

Even After
All this time
The sun never says to the earth,

“You owe Me.”

Look
What happens
With a love like that,
It lights the Whole Sky.

Let your respect levels be as constant like the sun it is to the earth.

Familiarity should breed more respect.

Keep a safe following distance of respect with people and things that matters to you.

You are not your job

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By the time you were probably in your standard three [grade five], you were asked the question “What do you want to be when you grow up?”

In our society, job titles have come to define who a person is.

By defining yourself by what you do rather than by who are you can put yourself in emotional jeopardy.

By losing touch with who you are, coping with life transitions, such as job loss, can be even more difficult.

When your job defines you, your world becomes very narrow.

Thoughts about your job and the challenges you face are always on your mind no matter what you are doing or whom you are with.

You subtly begin to value people, activities and relationships based solely on how they can help your career. And you consistently withdraw your time, talent and energy from other areas of your life so that you can give more of yourself to your work, leaving you emotionally empty outside the office.

When you are not at work, you have withdrawal symptoms because your work is you.

When your job defines you, everything that happens at work seems personal.

Why are you here on this earth? Who are you, stripped of the work that you do?

Your career is not meant to be a limiting factor, but rather an enabler.

Your career is meant to be a means to an end, not an end by itself.

If taking a chance and doing your best work means getting fired, then it is time to get the out of there. Go find something that matters. We need you at your best.

You are not your career. Don’t confuse your career with your life.

Your job should never define you.

You are not your job.

You are not how much money you have in the bank.

You are not the car you drive.

You are not the designer labels you wear.

You are not the contents of your wallet.

Life is about living and making a difference, doing work that matters.

Though some jobs allow you to make a difference, one should always have outside interests so they broaden their horizons and do work that matters.

You are more than what you do. Your title should not confine you and your job does not define you.

You are a talented, unique, and important contributor. Don’t waste it. You won’t make it out alive.

Win the fight, lose the customer

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Does it really matter if you are right?

Given the choice between acknowledging that your customer is angry or proving to her that she is wrong, which will you choose?

You can be right or you can be happy.

You can be right or you can have empathy.

In most instances you can’t do both.

It is not the nature of capitalism to need to teach people a lesson, it’s the nature of being a human, we just blame it on capitalism.

Smart entrepreneurs understand that the word ‘right’ in “The customer is always right” does not mean that they would win in court or a debate. It means:

“If you want the customer to remain a customer, you need to let her believe she is right.” 

If someone thinks they are unhappy, then you know what? They are.

Trying say this to yourself:

I have no problem acknowledging that you are unhappy, upset or even angry. Next time, I would prefer to organise our interaction so you don’t end up feeling that way, and I probably could have done it this time, too. You have my attention and my empathy and I value you. Thanks for being here.

If you cannot be happy with that, then sure, go ahead and fire the customer, cause they are going to leave anyway.

The way to lose an argument is to have an argument. 

Once you start an argument, [not a discussion] you have already lost. Think about it: have you ever changed your mind because someone started arguing with you?

Sure they might get you to shut up, but it is unlikely they have actually changed your opinion.

You may be right, but that does not mean that people will care. Or pay attention. Or take action.

People care about how much you care about them.

Losing an argument is better than losing a customer, or a friend.