Business advice from Australia's best
I recently wrote a blog post about Sjorcha Daynes from Bubba Moe Slings and how she used the Your Business Success Program to turn her business around.
She made some really interesting changes to her business along the way based on ideas she learned from watching the DVDs and working through the workbooks.
Bubbamoeslings Interview Nov 2010
It only runs for about 10 minutes but worth a listen.
Don’t forget to leave a comment.
Regards
Andrew Vincent
What do you do when a series of events puncture your balloon of confidence; a slow leak to start with and then a big bang when you business goes from being a great success to a near failure almost overnight.
That is what happened to Sjorcha Daynes from Bubba Moe Slings. Daynes sold baby clothes at market stalls and to comfort one her new born child, she made up a sling to hold him on her chest while she worked. Customers started asking about the sling and if they could buy one. Through word of mouth sales gradually increased until Daynes was approached by the first of many retailers in 2004 to buy the slings on a wholesale basis and sell them in their stories. Bubby Moe Slings was born.
A New Business Is Born
Daynes now found herself with a whole new business. She stopped selling baby clothes and focused on perfecting the baby sling with the help of medical professionals. Daynes built the first version of her website www.bubbamoe.com.au for customers and retailers to place orders. The next step was a warehouse and employees to make the slings and get the orders out.
Losing Confidence
Then in 2009 a string of events shattered her confidence and her business almost failed. Daynes was so busy on the nitty gritty of the business that she didn’t notice that competitors were entering the market and undercutting her on price. Then one night when she was working back late, she disturbed two men that had broken in to her warehouse. The experience shattered her confidence. She stopped marketing her business and getting out and talking to people; ‘the business became invisible’ Daynes said.
The phones stopped ringing and the orders on the website dropped away. Daynes didn’t know what to do or who to talk to. Her sister had taken her to business seminars where she “felt all Ra-Ra’ed walking out, rearing to go”, except by the time she got back to the business, “the Ra-Ra had gone”. She likened it to “being all dressed up and nowhere to go”.
Lack of Business Knowledge
Daynes realised that her business was going to fail due to her lack of business knowledge and “ignorance of the process of carrying the business to the next level”. She did some research on the web and found out about the Your Business Success Business Improvement Program and decided to buy it as way of improving her business knowledge. But to start with she didn’t do anything with the program. Then, late one night after 3 months of not sleeping, taking up smoking again and drinking coffee for the first time in 20 years, Daynes watched the first case study.
She was relieved to see that so many other businesses had struggled and then succeeded show she took on board many of the ideas started to make some changes.
As she worked through the program her confidence grew and she has a totally different business. These are just some of the ideas she has implemented.
Refresh the Brand
Daynes started by looking at the business from the customer’s point of view. She upgraded the signage, letterhead, office space and website.
‘So What’ Technique
One technique she learnt was to always ask ‘so what’ about every feature of her product, this forced who to think in terms of benefits for her customers. In particular she realised that the wording on her website was all wrong. She re wrote the copy in a way that wasn’t telling customers what to do but educating them on the benefits of her products. This technique also helped improve the copy of her brochures and sales script when talking to potential customers.
Time for a New Accountant
The more Daynes learnt the less she realised her accountant knew about growing a business. All he wanted to do was the BAS Statements and annual tax returns. Every idea she ran past him was dismissed. Daynes used her network to identify accountants who were focused on helping people grow their business and interviewed a number of them. When she found the accountant she wanted she moved her business and personal finances over.
Funding and Business Angels
Daynes had never heard of Business Angels and had never thought of approaching potential investors. When she ran the idea past her new accountant he did some research and introduced her to a couple that had just sold their business. They are now partners in Daynes business and have provided the capital to take her business to the next level. More importantly the new shareholders bring many years of business knowledge to the table and will be her mentors.
Diversify
One of the key lessons Daynes picked up was the importance of diversification. There was too much risk in having one product line so Daynes has started the process of expanding her range. The first new product is Mini Moe Dolly Slings for kids to carry around their dolls and toys.
Delegate Don’t Abdicate
Daynes learnt from one of the Case Studies she watched that she could improve how she went about employing and managing people. She had let people do their own thing and often been disappointed. What she now does is make sure each employee understands the direction the business and then delegate what she wants done rather than just abdicating responsibility. It is then up the each employee to their initiative to improve how things are done.
Networking is Vital
Everyone is looking for direction but when you are running your own business you can become insular. It is important to find other people to bounce ideas off and learn from.
A Bright New Future
Daynes says that with a new level of knowledge has helped her rebuild her confidence so “instead of closing the doors and shrinking away into obscurity, they are stepping higher”.
The Your Business Success Program has given her clarity and helped her understand that the business is the entity you need to work on – not just the product.
Working as an Anti-Submarine Warfare specialist in the Navy is a long way from running an internet business but that is exactly what Rod Cohan is doing. Rod and his wife Chantelle, who had worked as a nanny, heard from many people how frustrating it was to find a good reliable cleaner. After seeing the success of websites that helped people find services like baby sitters and nannies, they decided to set up an online private domestic cleaner directory for households called Hello Cleaner.
The website www.hellocleaner.com.au allows households to find a cleaner with minimum fuss. Cleaners pay a small fee to advertise their services and potential customers pay a small fee to advertise the type of cleaning work they want done and the amount they are prepared to pay. Confidentiality is important and only registered members are provided details if there is a potential match.
I interviewed them about what the first couple of years has been like and what they learnt along the way.
Getting Started – It Always Takes Longer than Planned
In 2008 they started the process of building their website. They received many quotes in the $20,000 to $30,000 range but eventually found a local designer who would build a website for around $5,000. Lesson number one says Rod, you must do your research and keep talking to people, don’t just accept the first quote that comes your way.
It took about 12 months to get the website up and running mainly due to Rod having to spend so much time at sea. On the 16th September 2009 Hello Cleaner was launched. They made a few thousand dollars to start with but became frustrated when their dreams of quickly expanding the business around Australia and then overseas didn’t happen.
They had a “loose sort of business plan” says Rod and no financial model that clearly outlined the sort of revenue they needed to run and grow the business. After some initial success with their marketing, things started to slow down and although they were spending a lot of money on advertising, the results just weren’t there.
Getting Some Help
Neither Rod nor Chantelle have any formal business education and they realised this was really holding them back. They didn’t know who to talk to or where to go for information so they started to look around for some help. They couldn’t afford the services of a business coach which can be up to $2500 per month so after some research they purchased the Your Business Success program that comes with support of an experienced business coach, Owen Joyce.
Getting Some Focus
Since they started improving their business knowledge and skills, Rod and Chantelle have made some major changes to the business which they would never have done without help. One of the first things Joyce had them do was develop a Financial Model for their business using a template set up in Excel. Rod and Chantelle could then easily work out what sales they needed to break even and then make a profit.
From their Financial Model, they updated their original business plan and made more concrete strategies and action plans. The strategy they decided to pursue first was to just focus on getting the model to work in Sydney first, then NSW, before expanding to Australia and taking on the rest of the world. This decision has taken a lot of pressure of them both and given them more focus.
Rod says that he also now has a better understanding of the capital they need to take the business to the next level and how to present their business to potential investors in the not too distant future.
Getting Your Marketing Right
The focus for the Hello Cleaner team over the next few months is getting their marketing right. “Before you know it $12,000 has gone out the door and you are wondering what happened” says Rod. They have tried a lot of marketing initiatives but didn’t measure the success rates of each activity closely enough and they realise they need to be more targeted. Rod says it is daunting looking at all the options like Google Adwords, SEO, Facebook, Twitter, local newspaper advertising, Yellow Pages, public relations etc. They now have a more focused approach and understand what they need to do to get their marketing right.
Business Tips for Budding Entrepreneurs
It has been a tough couple of years but on the way they have learnt a lot. Rod’s words or advice for other budding internet entrepreneurs are:
How the Your Business Success Program Helped Us.
I asked Rod and Chantelle about what they got out of the YBS Program to date. They said they have completed the watching the four discs and workbook in Volume One – Marketing and Winning New customers.
Rod said that “the beauty of all the material is that we can work at a rate that suits our time constraints and business progress which is great!”
Rod emailed me a list of the min things that he has found useful so far:
Disc 1: Building Your Brand
Have a Unique point of Difference
Protecting your Brand
Funding Asset Growth
Disc 2: Promoting Your Business
Word of Mouth
Advertising Options
Newspaper Advertising
Tracking Results
Disc 3 – Power Networking
Press Releases
Live Marketing
A Business Quickie
Updating the Plan
Disc 4
Marketing Plan
Strengths and Weaknesses
Your feedback.
What are the two or three key things you think people need to get right when starting a business?
Written by Andrew Vincent, Business Coach, Your Business Success
Some businesses fail, some go on to be very successful and some are in what I call a perpetual state of failure. In other words, the owners are getting no return for their sacrifices yet they persevere anyway. Why do people do this?
The first reason I think is that people feel like as long as they stay in it they haven’t failed. We’ve spoken to business owners that are unhappy, poor, working around the clock and their families are miserable. They’ve been doing this for 5,10,15 years. But at least they haven’t failed right! If you have tried everything (truly tried everything) and your business is not working, wouldn’t you be better to redesign your model or go and do something else? The question is have you really tried everything? Do you even know what you should be trying? The solution: Face the facts head on and either try something new or look for another opportunity.
The second reason I think is that people wait for some divine intervention. We often hear people say “We’ll wait until next year and see what happens” or “Things will be better next year”. If you wait and see what happens, nothing will happen. You need to make things happen. The same business owners look for overnight, magic-wand solutions to their business issues. There is no such thing. The solution: Act or be acted upon.
The third reason. We often hear people blame their issues on the environment, the economy, their staff, their spouse, lack of time or money, the elections, their customers, someone from their past or some other external factor. The big problem in thinking this way is that you are essentially admitting that you yourself have no control over what happens to your business and therefore what happens to you. I’m not suggesting these things don’t have an effect but you should always accept responsibility for everything, control what you can control and make decisions accordingly. The solution: Don’t make excuses and take responsibility. Control what you can.
I think the fourth reason is because there is no real plan. There is no vision of what the business should look like when it is successful. Imagine for a second what your offices, your staff, your bank account, your customer base and your own personal lifestyle would need to look like in order for you to think “I’ve done it.. my business is a success”. Without some sort of an indicator a business will plod along and never really get anywhere. The solution: Make sure you know where you are headed. If you can’t get there consider if you would be better to look at other opportunities.
Finally, I think there is a lack of innovation. I spoke to a business owner recently who owned a ‘run of the mill’ type of business with lots of competition. She was wondering why she couldn’t get her business to make millions of dollars. If a business does what all of its competitors do, charge the same prices, offer the same products or services, is not innovative in its products/services or marketing how can it become really successful. Innovation doesn’t happen overnight and that’s part of the problem. Have you ever had a headache when you tried to come up with a solution to an issue? The headache is because you are missing some information and your brain is going round in circles. The solution: Learn more and look for unique opportunities. Be patient.
On a positive note, we’re proud to announce that Marnie Douglas who we told you about a few weeks ago won the NSW Telstra Womens Business Award for Innovation. I’m very proud to have played a small part in this story. Talk about having a vision, taking action , being responsible for her own business and being innovative! 5 years ago Marnie’s business was one of 168 physiotherapy practices in Sydney CBD. Now Marnie is selling a one of a kind software solution (which she owns) to national and multinational blue chip clients. Marnie is evidence that following the rules does work!
Written by Owen Joyce Business Coach with Your Business Success.
Over the years, we’ve recognised something very important. We’ve recognised that when a business owner tells us about their challenge, we must work with them to translate that challenge into what it really means. Some business challenges are described in terms that are too broad to be useful. In some cases the business owner is completely focussed on the wrong task. Consider these common challenges:
Let’s translate these issues into what they really mean. After some questioning ‘I have a staff issue’ becomes:
We hire great staff and we get really busy working to complete the jobs we have on. A few months later the work dries up and we just don’t have enough work to keep the staff on so we end up having to put them off. A few months after that the work comes in and we have to go and find new staff. We’re always training new staff when we’re already very busy.
So is this a staff issue? Not really. The business is able to get good staff and train them but they lose them because when they get busy their marketing suffers. If this business worked on a marketing approach that worked well and was consistent, the so called staff problem wouldn’t exist!
‘We’re constantly competing on price’ becomes:
We do get enquiries but generally by the time we get an enquiry the customer has already had three quotes. We don’t spend a lot on marketing so when we get an enquiry it’s like gold and we have to have a very high conversion rate. In order to keep our conversion rate high we have to keep the prices low.
So again, it’s not necessarily a competitor problem. It’s important for business owners to control what they can control rather than worry about external factors. In this case the enquiry rate needs to be increased so that they can afford to lose some quotes and preserve their profit margin. Their sales tactics needs to be addressed too. Being proactive about sales means that you bring people into a buying cycle before they start shopping around. While they will probably still shop around, you will get the opportunity to build a relationship with them and sell them on other things besides the price.
Talking through challenges makes a huge difference and while you should never expect a miraculous turn around on any issue, getting a different perspective on it and understanding the root cause of any problem is the first step in being successful.
About a year ago I was at a BBQ with a group of friends and one of them announced he was going into business and wanted a few words of advice. For the sake of this article let’s call him John. A few of the people attending had run successful businesses and each one made the mistake of offering some advice on what he needed to do to succeed.
I say it was a mistake because everyone was met with the “my business will be different and that won’t happen to me” response. Then one of the guys gave up in frustration and before walking off said “best of luck mate you just haven’t suffered enough yet! Get back to me when you have and I will be happy to help”.
I realised he was spot on. Why is it that when people first go into business they are reluctant to take on any advice? And then once they are in the thick of the day to day of running a business they are then too busy to ask for help?
Last weekend I caught up with John and I asked him how the business was going. He was busy working 6 days and sometimes 7 days a week. Then the usual story of trying to do the books at night, chasing debtors, his employees were all hopeless, not enough “good” clients, not making enough money etc. etc.
I reminded him about the conversation from 12 months earlier and he did remember the comment about “not having suffered enough”. He says he is suffering from the long hours, stress and uncertainty and wishes he had taken on a lot of the advice given. Unfortunately he was now too busy and would like to chat again about how to improve his business “when he wasn’t so busy”.
I think that means that he still has some more suffering to go.
What John has to realise is that the difference between success and failure for him is some basic business knowledge. He just doesn’t know what he doesn’t know.
As Albert Einstein said, “We can’t solve problems by using the same kind of thinking that we used when we created them.”
But why are business owners in particular so hard to help?
Is it because people that go into business are born optimists? They dream of the big house, lots of money, spare time to play golf, being the boss and driving around the BMW company car. These dreams provide the motivation to go into business but from my experience they don’t provide any motivation for people to listen and take advice from those that have already been there and done that.
So what will motivate John to start learning and doing things differently?
Is it the cold hard facts of business failure in Australia?
I have often heard the fact that 80% of small businesses fail in the first 5 years so I went searching for some supporting statistics. I found a research paper from the Australian Bureau of Statistics (8165.0 – Counts of Australian Businesses, including Entries and Exits, Jun 2003 to Jun 2007) which said that things were nowhere near the 80% failure rate; it was only 42%.
Wow, I was so relieved to read that. Then I looked at some of the actual numbers. Over a four year period 777,106 businesses ‘exited’ (i.e. quit, went broke, some sold). This is an average of 3,736 businesses per week. That is a lot of shattered dreams.
What about the lack of financial success of many business owners?
The good news was that 58% of businesses survived the first four years. But are these businesses making money? I couldn’t find any statistics so I rang some accountants that I knew that had a lot of small businesses (<20 employees) as clients.
I asked them what percentage of small business owners would be earning more money if they were putting in the same number of hours working for someone else. The responses were in the range of 50-60%. One accountant tells his clients that they should be earning what they could as an employee plus a premium of 50% for the risk and effort of running their own business – very few follow this advice.
What about making money when the business is sold?
When you tell people that 60% of business owners would make more money if they had jobs, one of the first responses is that that it is fine because they will make up for it when the business is sold.
I rang a number of business brokers and ask what percentage of people sell their business for the type of premium that would make up for all the years they earned less than they would of as an employee.
On average I was told up to 70% would get much less than they expected or need as retirement comes knocking. One very successful broker told me that he 90% of the businesses he sees aren’t even saleable. He gives advice on what people should do to improve the value of their business but by the time they have decided to sell, they are over it and don’t have the interest, desire or energy to reinvent the business.
So what is the greatest motivator for a business owner to change?
I am afraid that I have to say in the majority of cases it is a good old dose of pain and suffering. The greater the suffering, the more willing people are to start asking questions, listening , learning and then changing the business so it has a chance of succeeding.
I just hope that John makes the changes he needs too before he becomes a statistic.
What’s your strategy? Do you wait to experience ‘the pain’ or do you favour a strategy that involves learning in advance? Do you accept that your business has little value or doesn’t pay you enough or is now the time to do something about it.
Article by Andrew Vincent
Someone asked me the other day if I could only give one sentence of advice to a business owner what would it be. It’s a tough one but the answer I gave was “Don’t undercapitalise and don’t apply quick fixes to your issues”.
Many business owners do both so I figured why not expand on this sentence this month. The biggest problem with undercapitalising as I see it is that business owners start to place arbitrary (and often unrealistic) targets in place. For example, a business owner might say “I have $30,000 left in the bank so by the 8th of September I need 10 new clients on board”. While targets are important this one may have no basis in realty. What happens if the 10 clients are not on board? It’s important to have a plan so that you can access capital for your business in cases where your goals are not met.
Start-up businesses are often advised to have 6-12 months running expenses on hand to fund new ventures. We would say that existing businesses who are planning new expansions, products, markets etc. should think the same. In business, nothing ever happens as quickly as you would like and the fact that your bank balance is going in the wrong direction does not change that.
On the second part of my one liner, I believe quick fixes are your enemy. As business owners, we get tempted to apply quick fixes when we’re running low on money and when we’ve ‘hit a brick wall’ i.e. what we’re trying to achieve has gotten too hard. In talking to business owners every hour of every day we’ve learned to listen for the language that people who are attracted to quick fixes use. It’s in the way they start a sentence; here are some examples: “All I need is to raise about $200,000 in private equity”; “I just need to find a top notch sales person”; “I only need to get about 30 more clients”.
The problem with these sentences are that the person has completely underestimated the difficulty of the problem so they can’t have committed to the solution. Only when you know how hard something is going to be to achieve can you commit to achieving it. Raising capital, finding top notch sales people and getting 30 clients are not easy things to do. Because this person thinks “all they need to do is….” they are prime candidates to give up easily when it doesn’t happen immediately. Three months later they’ll be saying ‘there’s no money out there’, ‘it’s hard to get good people’ and ‘advertising doesn’t work’. When they start to form these opinions, they’ll be reluctant to look for capital, hire people or advertise thereby putting their business in a pretty bad position.
Throughout the Your Business Success program there are key messages that we try to put across time and time again. For the next month, try to examine the language you use when you describe your issues and the solutions to those issues. It’s not easy but it can be a great insight into why those issues are present.
About 3 weeks ago I hurt my ankle while out for a run. Actually truth be told I hurt it about 5 weeks ago but kept running on it until I couldn’t run anymore. I tried putting a bandage on it myself at home and rubbing some anti-inflammatory cream into it. That seemed to work until I tried to run again. Then I thought “I’ll stop running for a while and give my ankle a chance to recuperate properly” i.e. it will get better on its own. After 5 weeks I ended up at the Physio who sorted my ankle out in two sessions.
So what on earth am I telling you this for? Simple. Because having worked with hundreds of businesses we know that this is exactly what business owners do with their business issues. Typically whether in life or business here are the silly things we will do:
We become aware of problems forming but carry on as if they aren’t there. It’s just a ‘glitch in the system’ and it will sort itself out.
We treat the symptoms of a problem ourselves because sometimes we don’t know what the root of the problem is. In my case my ankle was sore because of problems in the ankle, Achilles tendon and knee. I was trying to treat the ankle and in fact probably making things worse. Business owners try to treat cash flow problems when they’ve really got a marketing problem or they keep adding to their product line when really their sales approach is broken.
We let problems ‘run their course’ for far too long. My problem was never going to go away itself and I could have solved it 4 weeks sooner. It leaves me asking myself why on earth I hobbled around for 5 weeks in pain rather than see a Physio? You may have business problems that you’ve put to one side e.g. that staff member who is not going so well if left alone, will improve or eventually that marketing campaign that hasn’t worked so far will bring us in some business.
So why do we do this? I’ve been thinking about it for a few weeks and the only answer I can come up with is this. Even though we have problems, unless they are really threatening to us in some way, we will not set aside time to solve them. The ‘pain’ we are experiencing is not enough to trigger us into action and it’s easier for us to leave things as they are. At some stage the balance goes in the other direction and we jump into action.
In my case I thought it was a simple ankle problem that would soon go away. Only when the problem started to impact my ability to walk did I get help at which time I found out my lower leg was a ticking time bomb.
Do you truly understand the root of all of the issues in your business? Are they simple problems or are some of them ticking time bombs? What ‘trigger’ events will you wait for before acting? Are some of your habits sabotaging your success?
Don’t you just love human nature!
Best regards
Owen Joyce
At the moment there are supposedly 2 million plus businesses in Australia. This isn’t a very accurate figure because a lot of businesses get registered and never make it out of the gate. Plenty of other businesses do get started but trot along never getting anywhere. Many business owners remain at the helm of these under-performing businesses because;
The reality is that as business owners we can hide behind the façade and let everyone around us think that we are running really great businesses where everything is going well, staff are really happy and we’re making heaps of money. The real story is of course often quite different.
In one case I asked a client why he liked being in business. Essentially he told me he felt there was a certain prestige from having your own business and that he liked his friends knowing that he was a business owner. I asked him what he’d think if I brought his friends in and showed them his Profit and Loss. I don’t think I’ve ever seen the colour drain out of someone’s face quite so quickly.
The reasons above are not good reasons to stay in an under performing business. If your business is not profitable, not creating wealth for you, not paying you a good salary or leaning towards giving you a great lifestyle then you have to ask ‘Who am I fooling?’ and ‘How long should I let this continue?’. A quick way to determine whether you’re going well is to ask yourself this simple question; “If I hired a general manager to do my job and they performed like I did for the last 12 months, would they still have a job?”. If you’ve said yes, congratulations. If you said no, think about the consequences of your business never improving. The effects reach wider than your own pride.
So how do I turn this around?
The first area you may need to work on is you. If you have been in the habit of letting yourself off the hook then that needs to change. You need to be ready, willing and able to run an organisation that is goal oriented and target focussed.
Then you need to look at your model. Is the business model that you have chosen the best it can be? Is your business consistent? Do people want to work for your business? Many people focus on the product or service but it’s not just about that. You may have a product or service that is better than your competitors but if you’re not marketing, managing cash flow, hiring people and creating systems better than they do, your model is not working properly and could be improved.
Here’s a question. If a trusted adviser analysed your business and told you that it will be very difficult in the current configuration to make significant profits, would you continue doing what you are doing or would you stop and regroup?
We often find that business owners continue along the path that they set out on even though years later they might be miserable, getting nowhere and making little or no money. It’s vitally important to get the ‘business model’ that you follow correct as early as you can.
I spoke to someone before Christmas who described himself as a ‘busy fool’ which I thought was a great expression. He elaborated by saying that he was busy all the time but wasn’t getting anywhere, had no exciting prospects to speak of and his business was barely breaking even. These are just a few signs that your business model is not working properly.
Here are the reasons why I think business owners sometimes get caught in this trap:
We want to encourage business owners away from making these mistakes so that they can make good business decisions and develop a business model that will deliver sound results over time.
By investing time on yourself, you will learn the skills and attitudes you and your staff need to avoid the thinking that leads to the issues above. Making mistakes is part of being in business but continually making the same mistakes is not.
Thinking about your model, is it a good one? Do you have all of the information you need to make good decisions? It’s not uncommon to feel overwhelmed by the amount of work that needs to go in to correcting flaws in your model however remember that you don’t need to fix everything .. just choose one problem and persist with it until it’s a problem no more.
