Why I invested $24,000 per annum in external advice in my second year of business… and how it paid off.

May 20, 2013 By Laura Humphreys Leave a Comment

money-treeBusiness owners listen up.  I’m going to make a point I believe PASSIONATELY in.  I’m going to share with you the one decision I made early on in business that ensured my success.

The business was my advertising agency, Red Rocks. The decision was to hire two external Directors.  One was a retired advertising guy who added both experience and credibility to my fledgling agency.  The other was a smart and logical businessman who I knew would challenge me.   I had my Yoda and my Dr Spock… both complimentary to my creative, slightly wild approach to business. We agreed I would pay them each $1,000 per month each – not much really compared to standard Director’s Fees.  But for me it was $24,000 off my bottom line in my second year of business.  It was a terrifying decision.  I was barely making that much in profit!  I knew I’d have to seriously up my game in order to afford them.  I was scared, but I was sure with the right action plan and these two men to challenge and support me I could get there.

I can now say with complete certainty that it was the best business decision I ever made.  Business ownership can be a lonely business.  I couldn’t afford to hire senior people to bounce ideas off, to give me feedback on my strategies.  I was naïve when it came to business and needed guidance around the financial goals I set.  I was headstrong and had regular love affairs with my own sense of brilliance (always followed swiftly by equally strong feelings of inadequacy).  My lack of business experience and fleeting spells of over-confidence made me a dangerous force.  But with my two Directors meeting me every month, I had to get my act together.  I had to have a solid business plan, with convincing strategies.  I had to set targets and run a budget.  I had to grow up and learn not to be a solo operator.  With my two Directors guiding, challenging, supporting and motivating me I grew my business rapidly year on year.  My profits grew alongside my sales, thanks to aggressive new business targets and tight control on expenses.  I stopped looking at their fees as an expense and viewed them as an investment.

Now I strongly advise all small business owners to invest in an external advisor of some sort.   You can look for an independent Director like I did, or you can get an Advisory Board.  Or you can bring in a mentor or coach to work alongside you.  A piece of cautionary advise whichever way you go, is to be sure the people you invite into this critical role have earned the right to be there.  They MUST be experienced business people, who have successfully built their own businesses and understand what it’s like first hand to be in your position.  Please DO NOT hire a business coach who has never owned a business or engage a Director who has no experience with governance.

Having been on the receiving end of good external advisors, I know how important it is.  I have a couple of spaces coming up and am looking for a committed, ambitious and dedicated business owner to work with me.  You can be sure I’ll challenge not only you but your business model too. My aim is to see good businesses become exceptional businesses.  If you’d like to talk to me about my mentoring programme click here:

http://www.liber8me.com/one-on-one-mentoring-programme/

  From the desk of Liber8me.  Business mentors and publisher of Liber8 Your Business – The revolutionary business planning technique that will set every business owner free.

Filed Under: All articles, Business success, Daily small business mentoring tips Tagged With: Branding, business, Business advice, Business blogs, Business book, business coach, business coaching, business mentor, Business mentoring, business owners, business planning, business planning tools, small business mentor, success

What’s the one question every business owner should ask to decrease owner dependency and increase value?

May 13, 2013 By Laura Humphreys Leave a Comment

question markWhen I interviewed 2012 Young Entrepreneur of the Year Sam Hazledene, I asked him about his strategy for growth.  This is the guy who built the largest medical recruitment company in Australasia from scratch in a few short years.  He told me that he’d grown organically, starting out with just himself and his wife travelling the country trying to convince hospitals to use their recruitment service.  With a great point of difference and a lot of passion they rallied customers remarkably quickly.

The business expanded and Sam needed to grow his team.  He hired from the bottom up – firstly filling the more logistical roles until he could afford more specialised senior people.  This was exactly the same approach I had to growth with my first business.  When you are funding growth out of cash flow this can an effective way to do it.

At first, Sam told me, he was reluctant to let go of things, not believing anyone could do a job as well as he could (sound familiar?).  But he began to ask himself a question, which enabled him to get his ego out of the way.   It’s a question I now share with my mentoring clients and once asked, you just can’t forget it.

The question is this:

“What can I and only I do?”

Start asking yourself this question on a regular basis. Make a list of everything that you do.  Then go through the list and highlight the things that only you can possibly do.  Check the list and then sleep on it.  In the morning go through the list again and make sure you are being honest.  There will be things still on that list that others could do if you let go, trained them well and trusted them.  So ask yourself again:

“What can I and only I do?”

Be willing to let go of all the things you could hire others to do as well as, if not better than you.  These should include pretty much all administration, book keeping, project management, HR, legal and other operational roles.  And as quickly as you can afford it, replace yourself with people who have the skills and experience for all of the other roles within your organisation too.

Ultimately you want to get yourself to the point where the answer to the question is vision, strategy, business development and culture – in other words being the leader of a great team.

This is what Sam did to grow his business.  It’s what I have done with my businesses.  And it is the key to creating true value in your business.  A potential buyer will find your business far more attractive if you are leading a team rather than doing all the work.  So the next time you find yourself in overwhelm and wondering how on earth you can decrease your business’ dependence on you… remember the question and start letting go!

From the desk of Liber8me.  Business mentors and publisher of the book Liber8 Your Business – pre-order your copy by emailing laura@liber8me.com

Filed Under: All articles, Business success, Daily small business mentoring tips, Entrepreneurship Tagged With: business, Business blogs, Business book, business coach, business coaching, business mentor, business owners, Business partnerships, business planning, business planning tools, Business systems, Small business, small business mentor, success

If life is a game of soccer, which half are you in and how well are you playing?

May 7, 2013 By Laura Humphreys Leave a Comment

Soccer-BallHere is another extract from Liber8 Your Business, the soon to be released must have hand book for every small business owner.  In this chapter I talk about the importance of being a visionary, starting with a concept called ‘The soccer game of life”…

“Earlier in the book I talked about successful people having an ability to see their success ahead of them – and to know deep within that they are capable of creating it. For some, creating a vision for their lives comes easy. Some people can naturally think about the future and see how they want it to look. They then spend the rest of their life merrily heading there. Many don’t think about it all. And most struggle to see more than a few years ahead. For me, now, being a visionary comes naturally. I can see a clear picture of what outcomes I want, and then I can plot a clear course towards that vision. It wasn’t always like this. I spent most of my twenties feeling very lost, not having a clear picture of tomorrow, let alone any further than that. I’ve had to learn how to set goals and build plans to make them happen. These are skills that can be taught, thank goodness.

The soccer game of life

Someone once told me that life is like a game of soccer. It’s a game of two halves. You have the first half, up to age 40, where you are becoming an adult and you’re full of energy. You’re also a bit stupid and you have all your learning experiences and make all your mistakes. And then you have the second half of your life where you accept you are going to die one day and the quality of life becomes important. Your priorities change and the focus of where you put your energy changes.

Where are you right now in the soccer game of life?

Are you less than age 40? Are you still living in the first half? If you are, this is a critical time. The decisions you make in the first half influence how you get to live the second half. If you look at it like a game of soccer and you play your guts out in the first half, score all the goals you can and go into the half time break on top with the other team in defence, then the second half can be much easier. But if you don’t score any goals and you laze around the pitch for the first half, you have to play really, really hard in the second half. If you are less than 40 and still playing the first half of your soccer game, you can make choices now to play a game that sets you up well for the second half. This is a critical and blessed time for you.

If you’re in your forties, there’s still time to ask key questions: ‘What do I want to do now? How can I make sure what I do in the next 10 years sets me up for the rest of my life – so I can really enjoy life and make a difference with that second half of my life?’

If you are already well into the second half, you will be looking for ways to get on top while there’s still time. Smart thinking, clear forecasting and strategic planning should be at the forefront of your game plan. If you haven’t already created your financial freedom, if you are still working hard in your business, NOW is the time to engineer your exit. Smart and fast will be your tactics.

With my Liber8me programmes, I see the role of mentoring as similar to that of the soccer coach. We can’t play the game for you but we can help you plan a winning strategy”.

 

So where are you at in the game?  Does this concept unsettle you or motivate you?  How do you feel about the game you are playing? My book Liber8 Your Business is full of strategies to help you play a winning game, no matter which half you are in. To pre-order a copy email me at laura@liber8me.com

 

From the desk of Liber8me, business mentors and publisher of the book Liber8 Your Business.

 

 

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Business tip # 86 – Go boldly into the unknown… and make mistakes, they’re good for you!

April 25, 2013 By Laura Humphreys 3 Comments

shane bradleyRecently I interviewed Shane Bradley – former owner of GrabOne and founder of new online retailer pet.co.nz.  Shane’s top tip for small business owners was this: “if you’re not making mistakes, you’re not trying hard enough”.  He told me about his first business, which went under due to bad debts.  It was humiliating and humbling he said.  To go from being a big shot to a big nobody virtually overnight… not a nice feeling!  But he vowed to get back in business again… and boy did he keep his promise to himself.  His business career is full of bold decisions, where he jumped in the deep end and learned to swim very quickly.

I’m sure every successful business owner has horror stories to tell of the things they did badly.  Many of my mistakes happened when I tried to hire people.  I pretty much did everything wrong.  In my first business I wrote my own employment contract.  It was a personal grievance where even my own lawyer laughed at me that taught me this was not a good idea.  Later on, not following due process in a genuine re-structure cost me $40,000.  I learned the hard way to bring an expert HR person in to sort out my recruitment and management processes.

I also started off doing all my own data entry into MYOB… a copy writer doing accounts… mmm… big mistake right there.  Imagine the nightmare my accountant faced when it came to year end accounts!

The lesson is, to quote a famous brand, just do it.  Leap in, do the best you can and learn on the job. Like Shane I’m a believer in going for it, giving it your all and being willing to make the odd mistake.  I can tell you from experience, you only ever make the same mistake once.

Love to hear your mistake stories… when did you stuff up and what did you learn from it?

Laura

PS.  For more of the interview with Shane Bradley, buy this month’s copy of NZ Business Magazine and look for my column, The Exit Factor

From the desk Liber8me.  Business mentor and author of soon to be released book, Liber8 Your Business.

 

Filed Under: All articles, Daily small business mentoring tips, Top Tips Tagged With: business, Business advice, Business blogs, business coach, business coaching, business mentor, Business mentoring, business owners, Business partnerships, business planning, business planning tools, entrepreneur, motivation
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