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Business Coaching

Traction by Gino Wickman

The full title of this book by Gino Wickman is

Traction: Get a Grip on Your Business

In my review posted on Amazon.co.uk, I gave the book a 5 Stars rating. This means it is Excellent.

Here is my book review.

Comprehensive high level view of what to do to grow your business through internal excellence

I can understand why some ambitious entrepreneurs and business owners love this book. Its operating system makes a great deal of sense at a high level. While Michael Gerber’s classic small business book “The E-Myth Revisited” presents some similar ideas, this is much detailed and more of a “how to do it” guide. [continue reading…]

in 7 – Employees And Suppliers, Best Business Books, Business Coaching

My Mentors – The Key Experts Who Have Inspired Me

You may have seen that I am a business nerd and especially a marketing nerd, as shown by the vast number of marketing books I’ve read and reviewed.

This list doesn’t cover the many business growth and marketing courses I’ve worked through and there are a lot of those. I thought it would be nice to:

  1. Pay tribute to the main people who have inspired me and my thoughts about small businesses and marketing.
  2. To let you know the source of ideas I draw upon in my coaching and business advice.

This could develop into a long list of names but I want to keep it short so you can see who have been my main influences.

Jay Abraham

What I like about his ideas is the way he can find opportunities for more sales and profit in unconventional ways. He very much creates a profit opportunity seeking mindset in the people who study his methods as he looks inside and out, up, down and around. I like that because there are often hidden assets which can be turned into more revenue and profit.

Jay is the man who really emphasises the title of his well known book, Getting Everything You Can Out Of All You’ve Got. This book is in my Top 12 Books for business owners and entrepreneurs to read.

Much of my knowledge of the Abraham techniques comes from expensive courses I’ve collected over the years. [continue reading…]

in Business Coaching

If you’re the owner of a small business based in the UK with a marketing problem, I offer a 90 minute consultation to help you.

I call it my Business SOS which stands for Second Opinion Session.

We’ll take a look at what’s happening in your business and what you need to do to improve your marketing results.

There’s a small payment of £60 to be made upfront and £240 more to pay when you find the consultation to be very helpful. I offer a free 60 minutes follow up call for those who pay in full but there is no obligation for further services.

To find out more, please click over to Business SOS.

I believe there are 7 big areas where marketing succeeds or fails. Any of these could be the constraint that is holding back your business and stopping you from having the success you want.

Six of them are explained in my free report, The Six Step Profit Formula and the seventh concerns the mindset of the business owner or manager making the marketing decisions.

in Business Coaching

I’ve been trying to come up with a short phrase which is the equivalent of gary Player’s legendary statement

The more I practice, the luckier I get.”

I don’t think most of us like to focus on how much luck can be involved in business. It does have an effect but, as business owners, you and I will both have a strong preference for being in control.

What I’ve come up with is

The More You Do Right In Your Business, The More Your Business Will Do Right By You

This is consistent with a number of my business models which I use to explain business success:

  • The five pathways to business success or failure
  • The eight pillars of business prosperity
  • The six steps profit formula

All involve doing more right in your business.

As for your business doing right by you…

As the business owner your profit (or loss) is what’s left after everyone else – after your suppliers have been paid, after your employees have been paid, even after the bank has been paid its interest.

Every other stakeholder in your business – employees, suppliers, bank and the tax man – has a formula for how much they will get.

You have the residual.

You want it to be positive (a profit) and hopefully highly positive but you can’t manage profit directly. You can only manage the components of profit, the sales revenue and the costs and how they can cascade down into their own detailed measures.

Your sales revenue and your costs are determined by how much you do right in your business.

The better you are at sales and marketing, the better your sales revenue.

The better you are at purchasing, the lower your costs. The better you are at managing your staff, the more they will give back for their wages and salaries.

It pays to do more right in your business.

Luckily, there is a vast range of tips, ideas and advice for you to tap into so you don’t have to learn from scratch.

You can do it yourself

There are many thousand of business books, you can see the full list of my reviews at Business Books Reviews by Paul Simister (Please click). I've also narrowed these down to a list of the 12 Best Business Books For Business Owners & Entrepreneurs (Please click).

Or lean on someone like me.

Get To Know Me

[sos]

Don't forget to download and read my FREE Report - The SIX Steps PROFIT Formula: The Simple Rules That Every Small Business Owner Needs To Know available to download at Six Steps Report (Please click).

 

in Business Coaching

Business Turnaround Coaching: Who Can It Work For And Who Needs More?

What is Business Turnaround Coaching?

Business Turnaround Coaching is halfway between traditional business coaching and turnaround management.

Traditional business coaching works very well for many growing businesses and is often a six months or twelve months improvement project as the coach and business owner work together. You would systematically work through your business, improving areas of weakness and testing new ideas in areas of strength.

Turnaround management is much more dramatic. It involves a turnaround specialist taking over management control of a struggling business that is on the verge of failure. It’s normally full time and the duration depends on the severity of the problems and the size and complexity of the business.

Business Turnaround Coaching recognises the need for fast improvement in a business but is less intrusive than turnaround management but much more intensive than traditional business coaching. For example, my 30 Days Business Coaching Boot Camp has daily contact with the business owner for 30 consecutive days Monday to Friday to maintain focus and accountability on the most important improvement efforts. [continue reading…]

in Business Coaching

Turnaround Management vs Turnaround Coaching

How Do Turnaround Management And Turnaround Coaching Compare For A Small Business In Financial Difficulties?

There are three main ways businesses get into financial trouble:

  1. A business start-up that has failed to achieved lift-off to become a viable business.
    .
  2. A business that has hit a sudden financial problem often caused by a large bad debt, losing a contract with a major customer or a disaster situation like a major fire or flood.
    .
  3. A business has gone into gradual decline.

If the business is to survive, it must be turned around before the money runs out and before it becomes insolvent without any realistic prospect of recovery.

Please note, insolvency is a legal issue where there can be serious implications for the directors and shareholders and you will need to check the legal situation in your own country. If in doubt, my advice is to consult an insolvency professional.

The turnaround solutions depend on the cause of the problem. [continue reading…]

in Business Coaching, Business Problems And Mistakes

What is A Living Business Plan?

What is A Living Business Plan And How Does It Work?

The big problem with a traditional business plan is that it takes a lot of effort to prepare, and then, when it’s done, it’s forgotten and ignored.

What a crazy waste of time, unless you must do it to get money from a bank or key support from someone else.

Plans Must Change

It was Dwight D. Eisenhower, Supreme Commander of Allied Forces in World War 2 and 34th President of the United States of America who said

In preparing for battle, I have always found that plans are useless but planning is indispensable.”

World heavyweight boxing champion Mike Tyson said

Everyone has a plan until they get punched in the mouth.”

Prussian (German) field marshall Helmuth von Moltke the Elder said

“No plan survives first contact with the enemy.”

Business is also a contact situation, even if you’re not killing or punching other people.

What customers say and do, should change your mind and how competitors react will also mean you need to adjust.

Eisenhower accepted that plans change but said “planning is essential“. You must think about what you’re going to do in a structured way. [continue reading…]

in Business Coaching

Some business coaches love working with successful business owners and get a great buzz from helping them to become more successful, turning them from millionaires into multi-millionaires.

Other business coaches, including me, get much more satisfaction from helping struggling business owners to turn around their businesses when they are not performing well.

The financial rewards aren’t as good but I get more satisfaction from making a big difference to people’s businesses and lives.

Small Business Turnaround Coaching

In this article I am going to look at how feasible it is for owner-managers to work with a turnaround coach to put their businesses back into the black and to create a long term profitable business.

I’ll look at:

  • Whether your business is already insolvent?
  • The role of a turnaround manager.
  • The compromises involved with hiring a business turnaround coach.
  • Whether your business can be turned around.
  • The turnaround priorities.

Is Your Business Already Insolvent?

In the UK, the two main tests for whether the business is solvent rather than insolvent are:

  • The cash flow test – can the business pay its debts to creditors as they fall due?
  • The balance sheet test – is the value of assets greater than the value of liabilities?

A company that fails either test can be considered as insolvent.

There is also the issue of whether the company has not paid a statutory demand (including a county court judgement) of more than £750 within 21 days.

I will write more about this but if you fear your business fails these solvencies tests, you must talk to a qualified insolvency practitioner immediately.

When you are insolvent, you must act in the best interests of your creditors.

If the business continues to trade after the point when insolvent liquidation becomes unavoidable, the directors risk serious consequences including being made personally liable for the debts and being disqualified as directors in the future.

Get the proper advice from an insolvency practitioner. It’s much better to deal with knowledge of the facts rather than uncertain fears.

It doesn’t mean the end.

Some businesses can trade out of the difficulties.

Others can go through a formal insolvency procedure like a creditors voluntary arrangement (where creditors agree to write off a proportion of the debts) or administration.

Businesses That Are Technically Insolvent

Many start-up businesses are technically insolvent but the owners have the resources and intention to stand behind the business.

Ideally, they should invest their own money as share capital to correct any balance sheet deficit where liabilities exceed assets and make loans if the company doesn’t have the cash to meet its obligations as they fall due.

Older businesses that can’t build up their retained reserves may also be technically insolvent on the balance sheet test but because of a favourable working capital cycle, they may be able to meet their debts as they fall due or at least before legal action is taken.

Again the owners should increase the share capital to cover the balance sheet deficit.

They’d also be advised to take steps to improve the business so that profit could be retained in the business to build up a reserve buffer.

The Turnaround Manager Or Consultant

Large companies hire turnaround managers or consultants, often called Company Doctors.

These hard-nosed professional managers take control over the business and do what the existing senior management won’t do or can’t do.

The existing directors and owners may be completely sidelined or may be used to implement the recovery plan of the turnaround manager.

In the article Business Turnaround Specialists: Help In A Recession I explained the five stages of business decline identified by two academics Weitzel & Jonsson.

These are:

  1. The first stage is that managers are blind to the problems,
  2. The second stage is a period of inaction as they assess what is happening,
  3. Third is a faulty action stage where actions are taken but they fail because of inadequate diagnosis,
  4. The fourth stage is crisis, by which time it may be too late to recover. A firm cannot sustain losses indefinitely and
  5. In the fifth stage, dissolution occurs and the business is declared bankrupt.

Stage 1 can exist for a long time as the business has an inadequate system of key performance indicators and doesn’t even use break even point analysis and the margin of safety as an early warning system of the health of the business.

Eventually things get so bad, the managers can’t help but notice.

The further through the process before the turnaround manager is appointed, the less chance there is for recovery. The business runs out of resources and time.

The turnaround consultant is experienced in recognising and diagnosing the symptoms and causes of business decline and finding effective solutions. Things will stand out as unusual, odd and wrong that the owners accept as “the way things are done here”.

The Problems With Appointing A Turnaround Manager In A SME Business

  1. Cost – a good turnaround manager will be expensive. This is a full time role and the person won’t be prepared to work for nothing. He or she is likely to demand a payment upfront and regular ongoing payments, a success fee and even a share in the future ownership of the business.
  2. The owner has to give up day-to-day control. Most business owners have a big problem with this. The business is their baby and they don’t want to be bossed around. Ultimately the owner can sack the turnaround manager but it will be expensive and is likely to accelerate the decline and collapse of the business.
  3. The business owner has to swallow his pride and accept specific, public and implied criticisms of what has happened in the past to get the business into trouble. The turnaround manager will do things very differently to the owner and will sacrifice various sacred cows.

On the positive side, the owner may be relieved that someone else is making the tough decisions and has accepted the responsibility to prepare and implement a recovery action plan.

The Turnaround Coach – The Affordable Solution For Small Businesses In Financial Difficulty

The turnaround manager / consultant will take control from the owner-manager and do whatever is necessary to move the business towards recovery.

The turnaround coach works through the owner-manager to create change in the business.

This puts the coach as the advisor and guide but leaves the owner responsible for making the final decisions and taking the necessary actions.

This may be good:

  • It costs much less than a turnaround manager and may be the only help a business owner can afford.
  • It keeps the business owner in charge.

It may be bad:

  • The business owner has to be persuaded and encouraged to take actions that he or she has previously dismissed or postponed.
  • The coach sees the business partly through the eyes of the business owner. Instead of being there every day, seeing and hearing what is really going on, the coach has to rely on the owner accurately reporting the situation. Without going too metaphysical on you, none of us see reality but our own perception of reality influenced by our values and biases.
  • Recovery is likely to take longer and be less certain. The business needs expensive intensive care but it receives less.

That may sound dismissive of the role of a turnaround coach. It’s not meant to be.

A coach is much better than having no outside help.

  • The coach will challenge the way you are looking at the business. The process can give you fresh eyes so that you see for yourself what is going wrong.
  • The coach will help you diagnose the problems of the business and the independent and objective view will reduce the chances of getting the diagnosis wrong.
  • The coach will provide new ideas and solutions.
  • The coach will help you to create a recovery plan that closes the gap between where you are and where you want to be.
  • The coach will hold you accountable to the plan.
  • The coach will help you solve problems implementing the plan and deciding when the plan needs to be adapted and updated to the new situation.

These actions can make a very big difference to the probability of effectively turning your business around.

Can The Business Be Saved Through Turnaround Coaching?

This depends on:

  • The business owner
  • The business
  • The market
  • The coach

Some owners don’t respond well to coaching. They resent being held accountable in their own businesses and having their thoughts, decisions and actions challenged or guided.

Others thrive on having a new “business best friend” when the going gets really tough. Someone who they can finally share what’s really going on and discuss their worries and concerns without having to put on a brave face and act confidently.

The business may be in too much trouble. The market may be too tough.

I recommend you read 21 Reasons Why Your Business Isn’t As Successful As You Want It To Be and the associated articles to take a new look at what is happening in your business.

Finally there is the coach.

The person has to be right for you and your business. General management skills are needed with a strong emphasis on finance.

Please read How To Choose A Business Coach

The earlier you start working with someone to turn around your business, the more chance there is to succeed.

Does A Small Business Owner Of A Struggling Business Have Any Alternatives To Working With A Turnaround Business Coach?

There are always alternatives but they may not be very attractive.

Assuming that a full time turnaround manager is out of the question, the business owner can:

  • Do nothing. It doesn’t sound sensible but that’s exactly what happens in many troubled businesses. There are the twin problems of 1) total denial of the problem and 2) blind hope of a miracle solution.
  • Do it on their own, possibly with the help of business books and courses. In one way this is good but it is time intensive when you should be taking action.
  • Work with the help of a friend or relative. This can be good or it can be terrible. Sometimes friends are kind and encouraging when they need to be blunt and truthful. You may have experienced that for yourself if you’ve ever shown any marketing to a friend and heard nice things back and it flopped. Sometimes the friends can be very experienced and knowledgeable in business but not always.
  • Join a mastermind group of other entrepreneurs. This can be an excellent idea for successful businesses but it’s probably not going to work fast enough for you.

If you think that your problems come from having an unbalanced management team e.g. you’re great at sales but hopeless at finance and administration, it might be an alternatie to hire a part time finance director.

Coaching is expensive and the business is short of financial resources.

I think it’s worth it to increase the chances of finding business success in the future.

But then, as a coach, I am biased.

The Business Turnaround Priorities – Establish the Position, Generate Cash, Cut Costs And Build Revenues

You might be wondering what you will do with a turnaround coach.

I believe the work falls into four main areas:

  1. You will need to establish the position of the business. What is the financial situation? Is it already insolvent and should you be talking to an insolvency professional? What are the underlying causes of the business problems?
  2. You need to get in control of your cash flow and generate more cash. It gives you more time and reduces the day-to-day stresses. Some may say generating cash is your #1 priority but decisions that are correct the right side of insolvency may be wrong if the business is beyond redemption.
  3. You need to cut costs. It’s not nice but reducing your cost base (which you are in control of) means you have less problems persuading customers to buy (which you don’t control).
  4. You need to build revenues. Cost cutting will only take you so far and to create a long term viable business, you need to get your startegy and marketing right.

I Wouldn’t Start From Here

Business turnaround is a bit like the old joke of someone stopping their car and asking for directions only to hear “if you want to go there, I wouldn’t start from here.”

It’s much better to make sure your business doesn’t get into trouble than to have to get it out.

Company A sees the problems early and can slowly and surely make changes, testing ideas to see what works and what doesn’t.

Company B has to create a much bigger change in direction and momentum. Because of the accumulated losses, it will have fewer resource and more pressure to make things happen with less time available. While there are some things that are basic common sense and the business owner won’t regret changing, there may be some risky gambles necessary. They may work, they might not.

Company C has ignored all the warnings and collapses.

If you’re are somewhere between company A and B, you should seek out help as soon as possible. Start talking to people. Face up to your situation.

If your company is between B and C, you need to talk to an insolvency professional. It doesn’t necessarily mean your business is finished because of the formal recovery procedures.

in Business Coaching

Why Don’t Business Owners Buy More Business Advice?

I’ve written about buying business advice from the perspective of the business advice junkie or addict in the past.

These are the business owners who buy too much and never get around to implementing much in their own businesses. Unfortunately this has become particularly prevalent in the make money on the Internet niche. I’ve written an article, Protect Yourself From Guru Greed for these people.

Today I thought I’d look at it from the other perspective…

Why Don’t Some Business Owners Buy More Business Advice?

First, why should they buy advice?

Many Small Businesses Perform Badly

Various statistics are bandied around for small business failure (see What Causes Business Failure) that may exaggerate the situation but too many businesses fail.

Even more struggle to survive. One of the big insights I received when I was a trainee accountant in the early 1980s was that the dream of being your own boss wasn’t as good as most people think. Since I’ve gone back to work with small businesses, I know this situation hasn’t changed.

Even if a business is doing well, I don’t believe that there is a business that can’t be improved by an injection of new ideas.

The Different Types Of Business Owner And Their Response To Business Advice

Business Owner Type 1 –  “I don’t need any business advice.”

Some people are born with incredible instincts for what customers want, have a clear vision of how it can be delivered, the confidence to take action and the natural ability to lead and persuade other people.

It sounds like you are a budding Bill Gates or Richard Branson destined to change the lives of millions of people. You’re a natural risk taker.

However, while these people have great insight, if you read their biographies, they surround themselves with excellent people to compensate for gaps in their skills and knowledge.

Business Owner Type 2 “I don’t want any business advice.”

You may not be happy with the performance of your business but you don’t want to take business advice.

Perhaps you believe that you’ll just be told what you already know or that business advice is only common sense anyway.

Often there is a good dose of common sense but I often hear clients say “Why didn’t I think of that. It’s obvious when you say it.”

It’s often difficult to see what’s happening (or not happening) in your own business because you are so close to it.

Perhaps your pride gets in the way and you are determined to do it your way without any outside interference.

I wish you luck, but tactfully I feel obliged to point out that you are likely to get better results if you open yourself up to ideas from other sources.

Why try to invent the wheel when it’s already been done?

Business is difficult enough without trying to start from scratch every time you try something new. It’s better to build on the accumulated knowledge and best practices of the past.

I don’t understand why you are prepared to waste time and money making mistakes which can be avoided.

Business Owner Type 3 “My friends at the golf club (or pub) give me all the business advice I need for free.”

That’s great if your friends are business professionals or fellow business owners who have committed their life to learning.

It’s not so good if you are benefiting from their bravado that masks moderate performance in their own businesses that comes from doing the same old things in the same old ways.

Appearances of success can be deceptive. There is no shortage of stories of businesses collapsing when the top managers and owners appear to be financially successful.

A famous insolvency practitioner in the UK had an informal early warning system to identify distressed companies. These warning signs included businesses where the owner drove a Rolls Royce or a similar fancy and expensive car. These status symbols can be leased while there is money but when the money runs out, everything collapses.

Your business friends have the advantage of knowing you and your situation. Or at least the situation as far as your pride lets you admit. It is tough to say that things aren’t going well to friends who like and respect you so you be not even be giving them the chance to help you as much as they could.

Business Owner Type 4 – “I can get all the business advice I need free off the Internet”

It’s true there is a lot of business building information available for free on the Internet.

Some of it is very good, some is OK and some is poor.

There are two big problems:

The first is being able to assess the quality upfront. If you can’t, you waste a lot of time while you are searching for the golden nuggets.

The second is that you are rarely given the complete answer. Most business advice information is posted on the Internet by business advisors, consultants and coaches of one variety or another. This is part of their marketing strategy and tactics and it’s designed to attract and convert you to buy their services or products.

I admit that I am the same. I sometimes write very long, informative blog posts but I know that the advice I give to clients is even better because it’s more comprehensive and tailored to their particular businesses.

I accept that one of the big problems with business advice is that it is expensive.

I should also remind you that free advice is only good value if you gain from it. Even then, it may not give you the best result.

Learning how to make £1,000 extra profit for free is great – you’ve got £1,000 that you didn’t have before.

Spending £1,000 to earn £5,000 is even better because your gain is bigger.

This is a key issue to think about because it’s not the cost of the advice that matters but the difference between the gain you make and the cost of the advice.

There’s a danger to thinking that the marketing consultant who charges $2,000 per hour is much better than the one charging $200. You might hear the same ideas from both.

However, if you’re much more likely to pay attention to what the expensive consultant says, he may be the one to hire.

Business Owner Type 5 – “I only need specialist advice.”

You accept that you don’t know everything about the specialist compliance subjects like tax and employment law because it is impossible to keep up-to-date with everything.

You will therefore pay your accountant and lawyer, perhaps not willingly, but they are saving you money over the long term.

However, you don’t believe that you want or need general business advice on sales, marketing, finance and team leadership.

You could be right or you could be leaving yourself open to making common mistakes that cost you time, money and lost opportunities for extra profit.

I’m not going to try to convince you that all business coaches, advisors and consultants are great or that you should buy a multitude of books and audio programs.

You’ve made your own mind up and whatever I say isn’t going to convince you.

Will you do one thing for me?

Will you commit to learning from your experiences as a buyer and a seller, as an employee and a manager, as a borrower and a lender.

You can learn a lot from watching and listening to other business people.

It takes an open mind and plenty of effort to keep alert to the tactics that work and don’t work. It is well worth doing if you’re determined that you’re not going to tap into the knowledge of the people who make it their business to learn about business improvement ideas.

Business Owner Type 6 – “I can’t afford to buy professional business advice”

This business owner knows that there is a gap in knowledge and other people have good ideas, but they’ve got themselves trapped in a money-saving mindset.

They know professional business advisors are expensive. The better they are, the more expensive they will be.

And they’re scared of the costs, not recognising that it’s not what you pay that matters but how much you gain over and above what you pay.

How Much Should You Pay Yourself As The Business Owner?

Do You Recognise Yourself In One Of These Business Owners?

I’m the opposite. I believe in business advice and I buy plenty of it.

I believe in constantly improving my knowledge, especially in the areas of marketing and strategy because that’s where my interests lie.

I know a lot but I know that there are always more ideas to learn.

Even If You’re Reluctant To Buy Business Advice, Isn’t It Worth Trying Some?

You may have lots of doubts about the benefit of business advice but don’t you think you should suspend your disbelief occasionally, if only to prove that you are right?

Just as I encourage the business advice junkies to stop buying and go “cold turkey”, so that they can start implementing, I encourage you to try it.

in 2 – Your Inner Game, Business Coaching, Business Problems And Mistakes, Great Business Questions

What Is Business Prosperity?

Last week I introduced you to my business coaching model – “The Eight Pillars Of Business Prosperity“.

What do I mean by business prosperity?

Why did I change it from my original concept, the Eight Pillars To Business Growth and Profits?

The dictionary describes being prosperous as being successful, thriving and flourishing.

This describes better my objective with each and every new business coaching client.

My aim, if you become a client, is to help make you more successful but it’s success on your terms.

It’s easy to think more prosperous to mean more sales and profit in your business. Often that is exactly what clients want but not always. [continue reading…]

in Business Coaching