Notes from Business Seminar
Despite my skepticism for "business coaches" and "business training seminars", I recently attended Business Breakthrough Seminar by Mr. Rajiv Talreja. Even though my skepticism was not entirely misplaced (I'll come back to it at end), it was still a value-adding session. The points noted down during the seminar have been shared here for reader's benefit.
7 foundational activities to build a stable & successful business - (All these activities need to happen consistently)
1. Marketing - Objective is lead generation. Entrepreneur's dependence merely on word of mouth referral is unhealthy because you are not in control of referral leads. If you're not in control of leads, you're not in control of revenue and ultimately not in control of your income. Business needs to take proactive efforts to build healthy pipeline of leads.?
Purpose of Marketing - Grab attention; Add value; Build credibility; and Generate curiosity.
2. Sales - Objective is revenue generation. Sales function nurtures lead and converts it to revenue.
Purpose of Sales - Understand customer requirements; Make a pitch; Handle customer objections; Make an offer; Negotiate and Close the sales.
People often mix-up and get confused between Marketing and Sales. In fact, both are separate functions.
Golden Rules of Marketing
a. Only sales fails - Trying to sell without establishing relationship, w/o credibility, w/o adding value will fail.
b. 80% effort needs to be on marketing - create educational content that add value (video, posters, blogs).
c. 20% efforts needs to be on selling product or service
3. Operations - Value and Happiness - Goal of operations is to deliver value for money to customer, and make sure customer is happy.
4. R&D - New products and new services - Launching new product/service once in 6 months or a year. It attracts new customers and increases revenue from existing customers.
5. Accounts - Accuracy, compliance, reporting - The goal of accounts is to record financial transactions accurately, comply with tax and other regulations, and management reporting such as profit & loss statement, cashflow statement on continuous basis.
6. Human Resource - Recruitment, People Development (involves training and mentoring systems for business owner and team), Employee Happiness (financial growth, career growth, office culture of respect).
7. Management - This is a main role of business owner. Crisis management is not same as Management.?When business owner is doing above 6, it becomes fire fighting and these activities happen inconsistently.
Management involves:
(I) Providing Clarity involves 3 areas:?
(i) Holistic goals - (a) Financial goals (for business), (b) Functional goals (for each department), (c) Individual goals (for each team member).
(ii) Profitable business model - It is business owner's responsibility to make sure your business is relevant.?If profit margins are declining because of competition, technology disruption, more choices for customers, etc. it is a sign that business model is outdated.?
(iii) Systems - Define step by step process to be followed in every department to achieve result of every department.
(II) Accelerate performance of your business. Specific tasks are:
(i) Hiring the right people - Right people are those who have attitude, skills and knowledge to do the job.
(ii) Delegating clear roles - Delegate based on people's capability and personality. Motivating, begging, abusing - none of them work if you expect fish to fly.
(iii) Developing people through feedback - Feedback should be specific, actionable and respectful.
(iv) Scientific salary appraisals - Determine parameters, assign weightage, develop clear goals and communicate them, develop review mechanism, and calculate appraisals.
(v) Firing the wrong people - Don't fire those who can't achieve goals. Fire those who are lying, stealing, manipulating, abusive. When you fire wrong people you send message as to what kind of culture you want to build.
Your team is reflection of your skill and knowledge about hiring, delegating, developing people, appraisal and firing.
(III) Focus on Strategic Growth - This involves exploring new markets, new partnerships, and new opportunities
Four truth every business owner should face
Truth 1 : Business stability requires consistency of all 7 functions
Truth 2 : Building business is a team sport.
Here, common problem for small business owner is, how do I hire team if I don't have money to hire team.
Truth 3 : Hiring is an investment, not an expense (this is mindset solution to above problem.)
Actionable solution to above problem: Hire one person at a time, one department at a time and free yourself up in that area.
Next question is, in which area do I hire first? Use exclusion method:
Management- can't hire
R&D - don't hire, you should do by yourself.
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Accounts - unless you have work of 5 hours per day, outsource it.
HR - don't hire unless you have team of more than 30 employees, outsource to HR firm.
Out of Operations, Sales and Marketing - first hire for function which is not your strength. If you are good at marketing, hire for operations. If you are good at operations, hire for marketing. Keep hiring one person at a time.
Truth 4 : People will leave and that's okay. Business owner is mainly concerned about disruption caused by people leaving.
Solution is not 'to not hire'. Solution is that your train your team on how to leave, from the day they join. Tell them to give proper notice, that they need to provide support for handover to their replacement, tell them to stay in touch and assure support if they start something of their own.
Trap of self-employment
"If you are doing everything on your own which team should be doing, they are self-employed. Self-employment is trap. Business is growth vehicle not survival vehicle."
3 reasons why business owners get stuck in trap of self-employment:
1. Business model gaps - If business model is not sound, there are money leakages. Factors?of business model gaps are:
a. Low margins - leads to low confidence to invest in business, therefore your end up doing everything by yourself, to minimize costs.?
b. Slow payments - If you have cash crunch in business, you will not get to hiring?
c. Inconsistent sales - If you are not certain about revenue, you retain money in business to pay for expenses till you get next sales, so you don't hire team.
Business owner should learn how to create financially viable scalable business model. (Business model should provide more bargaining power to you.)
2. Unclear systems -?
a. Marketing, sales and operations depends on owner's effort and intelligence. In such case owner becomes the system. It is classic cause of trap of self employment.?
b. No clear systems to get predictable results - If there are no systems and when even owner is doing trial and error, she doesn't have predictability of results. So, she doesn't know what to delegate, hence is trapped in self employment
3. Ineffective teams - you end up doing what your team is supposed to do.
a. Lack of skills to produce results - Even if your team is committed, they lack skill, so you have to get involved to produce result.
b. Lack of commitment - Team is producing result but you can't trust them due to lack of commitment, so you get involved in execution.
3 key changes to build a business which can grow without you (escape from trap of self-employment and build real business)
I. Enhance your Clarity -
a. Clarity about personal Financial Goals - It comes from understanding 5 uses of money for balanced life:
1. Spending money for necessities of my lifestyle
2. Saving money for the future
3. Investing money for growth of assets
4. Spending money on your recreation and entertainment
5. Charity and contribution
b. Business Financial Goals - in terms of revenue, clientele, profitability, etc.
c. Functional Goals - for all 7 functions - specific goals that will ultimately result in realization of business goals.
II. Enhance your Capability -?
1. Learn how to create profitable business model - Strategy
2. Learn how to design functional systems - Systems
3. Learn Hiring, Delegating, Training, Reviewing, Appraising, Firing - Teams
III. Enhance your Courage -
1. Courage to give openly and fairly to your team. Have performance parameters, communicate them to team members, if they achieve it, they know they earned it.
2. Courage to make decisions. Make decisions proactively and quickly. Make corrections as you go. Version one is better than version none.
3. Courage to invest time and money which you do not have today (i.e. take risks). If your thought process is that I will build strategy, systems and teams when I have money and time, you will reach nowhere. First sow the seeds, then you get fruits.
Taking actual action on above points requires upskilling, research, pondering and deliberation between like-minded individuals. Please feel free to reach out in case you wish to engage in productive deliberations.
Coming back to my skepticism. In last 40 mins of the session, the business coach did pitch his 3 day work workshop (fees Rs. 10k) and asked participants to register immediately because decisiveness is necessary skill for entrepreneurs. To simplify (or over-simplify) it was a 4 hour sales pitch which also delivered value to the participants.