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strengths and weaknesses

Good mentors worth their weight in gold

This article was published in a Business Partners newsletter of 24 November 2015, and appears here as a guest post by Christo Botes, then Executive Director of Business Partners Ltd. Business Partners Ltd is an African risk based Finance house and Venture capitalist focused on SME’s. The company has a mentors arm staffed by experienced specialists, and co-manages the South African SME toolkit.

 

There is no shortage of business advice in the world. It comes in the form of consultants, coaches, advisors, professors, management gurus and self-help celebrities. Each has its place, but for Christo Botes, executive director of Business Partners Limited (BUSINESS/PARTNERS), there is a special breed of business adviser who are worth their weight in gold: the business mentor.

 

For Botes, the distinction between a business mentor and other forms of business advisers is subtle, because a mentor can play any number of roles, sometimes that of strategic adviser, technical expert or business consultant, and sometimes all of them at once. But the key characteristics of a mentor has to do with their experience, attitude and approach. They practice the science and the art of business, not merely the science, says Botes.

An ordinary business consultant usually has a clinical approach, coming into a business to solve a specific problem and impart formal, defined pieces of knowledge or procedural know-how. A mentor can do this, but also strives to impart wisdom based not on textbook learning but on his or her experience.

The ordinary consultant keeps within his scope of work, and his interest stretches as far as the settlement of his invoice. A mentor can also work with a defined plan and for a fee, but gains his satisfaction from seeing his client succeed as a result of his work. Even if he is brought in to implement a technical process in a business, he does so with passion, and with a broader view to empowering the entrepreneur and the business.

A consultant can be a fresh-faced graduate with an MBA. A mentor can also have an MBA, but can only be someone with experience, or “scars and medals” earned in the real business world, says Botes. Continue reading

Plan for a better year ahead

This year has been a bad year for many companies – here is how to make sure 2017 is better

 

 

The past 12 months have not been a great time for many businesses. It started with the economy struggling to recover from the effects of the double change in finance ministers, was threatened by potential downgrades to sub investment grade by the rating agencies and characterised by shocks like Brexit, the Trump victory in America, local government elections, the #feesmustfall movement and the State Capture report. The serious drought saw food prices rocket and water restrictions added to the difficulty of doing business. All these issues make buyers nervous, and nervous buyers will delay all but essential purchases.

On top of all this the South African national pastime of sharing bad news brought a mood of pessimism and resignation. We know that water restrictions and high food prices will continue well into 2017 and the ruling party will have an elective conference which could be abrasive in the coming year. What, you may ask will make this year any better than the previous one? One of the answer to that question is you. There are many things you can do to shield your business from negative external events, and to seek the opportunities that any adverse event brings. Continue reading

Taking stock of your performance

 

This article was first published in the Sanlam Business Tips for Business Owners newsletter of December 2015, an excellent resource for entrepreneurs distributed free by a wonderful company. Entrepreneurs would do well to subscribe to this newsletter.

 

Comparing actual performance against planned results pays dividends

 

At year end many companies take stock of all inventory items. Taking stock of how your company performed against your plan is even more important. Pull out the business plan you completed earlier and make a comparison between what was planned and what actually happened. Of course if you never did a business plan cannot do this, and you should take note of Dave Ramsay’s wise words “A goal without a plan is just a dream”. Stop dreaming, plan and implement

The easiest way to do this is to develop a spreadsheet or table with the targets from the plan listed. Be as comprehensive as you can be. Obvious items are sales, profitability and cash flow forecasts, customer and staff retention, staff and management development, customer service levels, planned marketing campaigns, planned product development / improvement and competition monitoring and reaction. If those were not in your plan take this as a good reminder about what should be included when you do your plan for the following year. Now you should enter the actual results and show variances.

When you compare actuals to plan be brutally honest. If your plan had a non measureable goal like “give great customer service” assess honestly how well or badly you did, ask a few customers, and not only the friendly ones. Continue reading

The right workload

2015 MarchThis article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in March 2015 and is posted here by their kind permission

 

Entrepreneurs work hard but should get the balance right

 

 

It is routine for entrepreneurs to work very hard for long hours. Hard work is a part of entrepreneurship, but how balanced is that workload? Do you handle customer complaints, check quality, answer e-mails, expedite deliveries, do progress chasing, and fix problems? These are all reactive. Your may also do some proactive work like designing the website, selling to customers, developing products and similar tasks. Even these may really be reactive – arising from the lack of a website, no trusted salespeople and customer gripes about product deficiencies. If this sounds like you, you are working in the business, not on it, and working at a low level as well.

You should be focused on beating competitors, innovation, customer retention, structuring finances, building the brand, managing budgets and forecasts, getting the right people in place and a host of other managerial tasks. These are working on the business not in it. At least some of your time must be devoted to strategy – have you got the right products? Are you in the right markets? Should you buy competitors or be bought? Is your buying strategy right? Your pricing? Does your structure support your strategy?

Life balance is equally important. Family, health, friendships, networking, learning, spirituality, hobbies, holidays and entertainment will often be sacrificed for long days working, but there is a cost. Continue reading

Competitive strategy

2014_AugustThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in August 2014 and is posted here by their kind permission

 

Is this only for the big corporates?

 

 

Large IT companies spend millions on market research to see how they stack up against their competitors and use this information to figure out how to be different and better than them. Automotive manufacturers and importers watch every move competitors make, being first-to-market with a new fashion trend can mean the difference between a clothing brand outselling its competitors or disappearing. Even cities position themselves against other cities to attract tourists and businesses. Why should competitive strategy, a vital part of marketing strategy only be relevant to very large organisations? Why not your business?

Being competitive is a core requirement for all businesses irrespective of size. Not-for-profit organisations like charities, schools and religious organisations compete for funds, members and media attention. Very small business and start-ups must wrench business away from competitors or alternatives just to survive. Without a compelling message about what advantages they offer over others many of these organisations will fail as consumers take the easy route of buying the most popular, the most accessible or the most familiar.

Competitive

More than 30 years ago Michael Porter defined competitive strategy as “The plan for how a firm will compete, formulated after evaluating how its strengths and weaknesses compare to those of its competitors”. This plan should be focused on getting a sustainable advantage over competitors so it is much more than simply reducing price or having a special offer. Continue reading

The dreaded top of the “S” curve

2014_March This article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in March 2014 and is posted here by their kind permission

 

A threat or a real opportunity?

 

 

Successful start-ups normally begin slowly, then grow rapidly. Growth is not usually a straight line, but can be compared to an elongated “s” curve, with a slow start then strong growth until it levels off. Think about a flat topped mountain – the lower slopes are quite gentle then the sides steepen until the plateau on top, where the business becomes static with little or no growth. Arriving there can be a problem where the company depends on growth to pay the bills, and if nothing changes then like the mountain example the only way from there is down. How can you avoid this trap?

Many S curve books focus on large corporates, getting to the plateau when they reach market saturation, but the slowdown can occur in businesses with less than ten employees, and in as little as two years from start-up. This is often attributed to running out of the friends and family the business relied on as customers in the early stages, or running out of working capital.

Running out of time

In my experience a frequent reason for getting to the top of the S curve is the management style of you, the entrepreneur. You often run everything, and do it very well. You learned this when the company launched and you had to manage everything – from sales to logistics. As the business grew you got better at them than anyone else, so there was no sense in delegating to others. One day you run out of capacity to do more work and the business stalls, limited by your available time. Continue reading

Quality checks for your business plan

image_thumb2This article was published as the Sanlam Business Market, Business Tips: December 2013 newsletter. The Sanlam Business Tips is an incredibly useful and free resource for entrepreneurs. If you have not yet subscribed you should.

 

Many business plans lead businesses into disastrous situations

 

We all know we should check our cars before travelling. Equally important is the need to check your business plan for faults and potential failures before making it the core of your business, or using it to ask for finance. Here is a 6 point check:

  • Can YOU execute? Failure to convince financiers of this aspect is probably the number one reason for rejection. More critically, it is probably the number one reason for early start up failure. Points to check: Do you have enough knowledge to run the business? The entrepreneur of a business which markets services needs to understand marketing as well as the service. Do you have any experience in this field? Hobbies are often a help in this regard, for instance enthusiastic cooks setting up catering companies. Do you have the time to execute the planned actions, and will your family support that? Entrepreneurship is not for the faint hearted, there will be many late nights and early mornings. Can you take risk? If you are uncomfortable with being daring at times you should plan for safer businesses. Can you lead? You will need to tell people what to do and learn to make uncomfortable, even agonising decisions.

Continue reading

Lessons from the beginning

2014_OctoberThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in October 2013 and is posted here by their kind permission

 

 

Remember how fanatical you were when you opened your doors?

 

 

 

The plateau phase can happen when a business stabilises after the initial survival struggle, and growth becomes static. The company may be at break even or making a small profit; it falls short of its sales forecast and cash is tight. The entrepreneur is frustrated, customers pay late and suppliers are demanding. All of this has a bad effect on the staff.

If you are in this position or have been there you will know about searching for ways to solve the problem. How-to books, mentors, motivating speakers and training will be considered. Salespeople will come under pressure and some will succumb and leave. Some entrepreneurs will blame the economy, the government, the banks, trade unions or suppliers, and become helpless.

Simple answer

There is a simple answer to the problem. Cast your mind back to when the business launched, when making the next sale was a life and death issue for the business. You would have walked on hot coals to satisfy a potential customer, you would have tried desperately to anticipate their needs. Carelessness or laziness affecting a prospective customer would see the perpetrator in real trouble. A mistake in an order or a telephone that was not answered promptly would have been cause for a tantrum. You would celebrate with the entire company when you got orders that today seem trivial, and the enthusiasm would have spread. Continue reading

Which business should I open?

13 August CoverThis article was written by Ed Hatton, the Start Up Coach for Entrepreneur Magazine (South African edition), as the My Mentor column published in August 2013 and is posted here by their kind permission

 

 

What is the right type of a new business for young people?

 

 

A young relative asked me: “If you were 23 what sort of business would you open?” I realised what an interesting question this is. Imagine being 23, with the experience to know what to consider and where the opportunities lie. Thanks for the great question entrepreneur-to-be Jean!

The first answer is that if you want to be business owner you should become one. Starting a business is nowhere near as difficult as people suggest. Even desperately poor and illiterate people open sustainable businesses all over the world without business advice, bank loans or advertising. It is more difficult to launch and develop a business that can grow out of the survival phase to provide employment and value or wealth to the entrepreneur, and if that is your dream choose a business that can grow, as opposed to lifestyle entrepreneur businesses like a photographer.

Be capable of running it

You should be capable of operating the business. At 23 you may lack business experience but business owners need to be able to handle finances, marketing, sales, HR and administration. Don’t choose a very complicated business or one in a highly regulated sector, like food or medical supplies. Choose an area you know or have a passion about. Continue reading

The subject expert entrepreneur

13 April coverThis article was written by Ed Hatton for the column the Start up Coach and published by the South African edition of Entrepreneur magazine in April 2013 and is posted here by their kind permission.

 

You have the expertise but where are the customers?

 

 

Challenge
This entrepreneur had 26 years experience in the security industry when he started his own security company. For several years he has been unable to secure guarding contracts, and asks for help
Response
Every start up entrepreneur believes that a sustainable and profitable enterprise can be built and this belief is reinforced by expertise in the product or service that the company will deliver. An expert in the chosen field has big advantages; he or she does not need to climb the product learning curve that affects so many start-up entrepreneurs. However as our questioner has discovered to his cost, expertise in the chosen field alone does not guarantee success.
A successful business must provide customers with services which they perceive to be more desirable and valuable than the services available from competitors. This perception is not just about the product or service; it covers the supplying company, people, styles, and brand association – the whole package on offer. The challenge for start up entrepreneurs is to create a business that provides the package which will attract customers away from alternatives – and then communicate the package to them. Continue reading

Talents and weaknesses

13 Feb coverThis article was written by Ed Hatton for the column the Start up Coach and published by the South African edition of Entrepreneur magazine in February 2013 and is posted here by their kind permission.

 

 

Capitalising on strengths and overcoming problems are essential entrepreneurial abilities

 

 

Challenge

This entrepreneur asks if it is advisable to start a clothing business without the ability to sketch or draw designs. She has a good eye for trends and understands the clothing manufacturing process.

Response

This entrepreneur-to-be has identified her major strengths and weaknesses. She then asks for advice about a significant weakness. This is smart thinking. All too often would-be entrepreneurs simply dive into their dreams without evaluating their talents and skills and then become frustrated when they cannot get start up finance, or attract customers because they lack a vital skill or simply do not understand the complexities of the business they wish to enter.

In this case her strengths of having an eye for trends and understanding the manufacturing process are significant advantages  in a business where being the first with a trend is a huge competitive advantage. She worries about her inability to get her ideas on paper, and correctly so. If she cannot overcome this weakness then all the talent for spotting trends cannot be turned into saleable garments. Continue reading