The Power Of Words…
I have not shared this story very often, though it was about a time when I experienced one of the most profound impacts of my life. And as strange as that may sound, I was merely an observer to the events that played out in front of me.
It took place over 20 years ago, 1993 to be precise, on the island of Maui in Hawaii.
You see, I was sitting amongst thousands of people who had traveled from all over the world to attend a week long transformational event led by Tony Robbins.
I cannot remember the exact day – as if you have ever been to one of Tony’s events, days seem to merge into each other, but it was during a discussion about finding role models and mentors, that I do remember.
During the Q&A session, the microphone was passed to a gentleman who said…
“that’s all very well for you Tony, but my circumstances are unique, there is no role model for me”
By then, the camera had located this man in the crowd and from where I was sitting, I could now see him in full view, being projected on one of the big screens.
The auditorium of thousands of people fell silent as we could all see this man who asked that question, was in a wheel chair, that supported not just his legs, but his entire body.
I’m sitting there wondering how to respond to such a question if it was asked of me.
I could see visually the pain in this man’s face.
But then I witnessed something magical.
Over the course of perhaps the next hour, Tony and this man had a conversation, where Tony asked questions as to how this man came to the physical situation he was in, and what he was now doing, and what he wanted to do in the future.
This man told Tony that his injuries were the result of a skiing accident where the specific damages to his spinal cord put him in his own unique class.
Then after some time, Tony acknowledging this man’s own special circumstances said these twenty words…
“Well sir, maybe you need to be the role model, you need to go first, so that others can follow”
Now those who know me well, would say that I am a fairly tough-skinned sort of a guy, but within seconds, tears were running down my face, as the impact of those words to that man, was clearly seen by all.
His facial expression and whole demeanor suddenly changed. It was though a different person arrived on the scene. Full of purpose, mission, and humanity.
Man’s Search For Meaning
Victor Frankl, author of Man’s Search For Meaning once wrote:
“When we are no longer able to change a situation, we are challenged to change ourselves. Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom. Everything can be taken from a man but one thing: the last of the human freedoms—to choose one’s attitude in any given set of circumstances, to choose one’s own way.”
Now of course many of us are just so fortunate to not have experienced situations like that man in Maui, let alone Victor Frankl’s own circumstances as a Holocaust survivor, or other prominent figures such as Nelson Mandela surviving all those years in prison (I often think about Mandela as he was imprisoned in the same year I was born, 1962, and it was not until I turned 27 that he was released).
But still there is much we can learn from this and apply to our own unique situation. For me the biggest lesson is that no matter what challenge you may be facing, there is always an example where that challenge has been overcome – perhaps you may need to go back through history, and if still not found, then you be the leader, the role model that others can follow.
It’s Never A Lack Of Resources That Hold Businesses Back
In business, working with clients, I see this all the time. Because, it’s never a lack of resources or solutions to problems that hold businesses back. It is typically hanging on to old belief systems or identities which is the cause – and trust me on this, I had to overcome these old paradigms myself as I transitioned from a corporate role to one of running my own companies and embrace an entrepreneurial mindset.
Now to do this, requires self-awareness – but that is a challenge when it comes to business. Because we are often so caught up in the day to day, where finding that time to “work on our business” is rare. That is why seeking out business coaches or mentors is key. Mixing in environments where you would not normally participate is beneficial, and establishing things like an Advisory Council for your business, in contrast to a more formal board of directors, potentially be more practical for you in your early stages of your business journey – imagine this as your own built for purpose Think Tank!
So, the important thing in all this, it to ensure you do not get stuck on your own thinking and way of seeing the world.
What Is Your Paradigm?
I do not know what ever happened to that gentleman all those years ago from Maui. But I do believe in those few moments he had with Tony Robbins, he was able to shift to a more empowered paradigm than the one he originally had. Could this then possibly have led him on a different journey where he made better decisions because of that experience – not sure, but I think it was likely the case.
While we will all make mistakes from time to time, and have circumstances placed on us which will draw every ounce of skill and courage to overcome, it is only when we bring others in our lives will we succeed.
“Having people around us that believe in us more than we may believe in ourselves and challenge us to do things that we may not think is possible, to me is key”
Do You Want To Scale Your Business To The Next Level?
One of the most frequently asked questions I get from people wanting to start their own business is:
“how do I go about funding my business?”
Well of course the aim is to be profitable, but in those early days, funds are required to get going before any revenue, let alone profit, is achieved.
Even if you are a very small micro business or solopreneur, you will have costs such as internet charges, domain registrations, perhaps some cloud based software applications and of course you have to eat! OK, you may still be living at home with your parents, but at some stage you will need funding!
That is why it is important to understand what sorts of funding you can potentially access at each stage of your business journey.
You Have No Track Record So The Computer Says No
However, a challenge that most aspiring business owners have though, is that there is not too much to demonstrate on the viability of their specific business idea, that is, no track record and whether, they will be successful or not.
This holds true regardless of them being an inexperienced business person but investing into say a proven business model like a franchise, or an experienced business person, about to start a new venture that is completely unknown. That the red flags come up when they are an “inexperienced business person” about to launch into an “unproven business concept” – may be a tech startup of some sort, is of course obvious!
Now years ago, there were very few options when it came to seeking funding for starting a business. However today, we are in many ways, living in a golden age for entrepreneurs.
So do not be dis-heartened if at this stage you are not sure which way to go about it!
Because every day, businesses are being started and their risks are being mitigated. It’s often the case of you don’t know what you don’t know!
The Ten Funding Strategies
So, depending upon your unique circumstances, one or more of these ten funding strategies may be useful, and I have listed them in terms of complexity of magnitude of the funds being sought…
Bootstrapping is where you are putting your hand into your own pocket. This is where you may be working for somebody else, perhaps even still full time but your thoughts are 24×7 on your business dream. This is the hustle where you hone your skills in getting the best deals and is also your ticket out of working from your bedroom at your parent’s house!
Family & Friends is exactly that, so as you move out of your bedroom, think about sitting down with mum and dad, or uncle Ross for that matter! Give them a pitch, as they could be your best source of funds to start with – but make sure everyone is fully informed because no one likes buying into a pyramid scheme that is about to collapse, plus it can be awkward on those special family gatherings from time to time as well.
Banks don’t you love them? Well you should. Traditional finance from banks is of course entirely feasible. While they will look for a record of accomplishment, which will be different than what your parent’s may look for, it’s a good place to start because you can establish a relationship with them and also leverage a lot of resources and advice from them as well.
Non-Banks or non-traditional banking opportunities are increasing. The FinTech sector is being shaken up and with that, are online lenders, or expanded capabilities from companies like PayPal, which can complement existing arrangements you may have – particular when you might see the expansion in your business on the sorts of services these non-banks are really good at providing.
Grants from government and semi government agencies are available for all sorts of purposes and may include subsidised loans, tax breaks or even free money! Research & development, export development, marketing, skills training, employing other people are just some of the areas. Also, typically you will not find the grants being provided from just one source – you need to check across all levels of government and associated agencies – local, state, federal etc.
Incubators are where we start entering the grownups club! These are either set up for profit or non-profit, government or industry. They often include co-working spaces where to start with, you get a desk, but importantly the collaborative environment where you can also network. Some run “pitch” competitions in which the winner could access funding – so seriously check these out as options as well (also they are often connected to annual events and conferences which could be useful for your business promotion at some stage).
Crowd Funding is one of the areas I am really excited about and you should consider this – particularly if you have a social cause. Now depending upon the source, it is suggested that crow funding got started in 1997 when a British rock band funded their tour through online donations (fundable.com). Today there are so many great stories, with one of my favourites being the Australian startup “Flow Hive” (read their story here: https://www.honeyflow.com/about/about-flow/flow-story/p/122).
Angel Investors is Uncle Ross on steroids. Also think aspects of Shark Tank. This is where you have the benefit of both capital but potentially mentorship, and it is that second component I encourage my clients to consider just as seriously. Finding Angel Investors is not that difficult, but you have to remember they look at opportunities weekly, if not daily, so you need to bring you’re “A Game” to the table as well, because this is where they are investing in you as a person – and they are wanting to answer two simple questions…
“is there money to be made and can I work with you?”
Venture Capitalists & Investment Bankers are a long way down the path for most startups, but they are there to help you potentially raise millions of dollars and even eventually become a public company. Remember Facebook started from a university campus back in 2004!
Pitch is what you must do constantly throughout your business journey. For your parents, they just want to see the sparkle in your eye knowing that you are about to embark on a worthy cause, your Angel Investor may want a spreadsheet, while Richard Branson is happy for you to do all this on a beer coaster! The common thread is a story which has been researched and told with conviction!
The Pitch Competition
Recently I have had the opportunity to participate as a mentor and judge in several startup pitch events, and each time I have come home inspired. Like early this year in Dubai at the AIM Startup Innovation Showcase and Pitch Competition, where over 15,000 delegates from around the world where able to meet aspiring company founders as they pitched their business stories. Of course, not every one of these startups made it to the short list, but they were all there giving it their best shot to make their dreams a reality!
Have You Really Tried Everything?
Now, consider this, if you are struggling to fund your business right now, do you think you have exhausted all the possibilities? If you have received knock backs, does that mean you give up?
Perhaps you may need to take on feedback and adjust a couple of things here and there, but my view is quite simplistic…
“With a clear strategy, disciplined execution, and consistency of effort, you will overcome most things because the biggest barriers are often your own beliefs”
These ten strategies to funding your startup business are no way a complete list, however they should serve as a starting point for you to assess your needs today and what you may need to consider in the future.
Going It Alone Is No Longer The Answer In The New Economy!
Because one of the biggest changes in managing a business today in The New Economy, compared to say just five years ago, is the importance of building an “ecosystem” where you form partnerships or collaborations.
Some of these collaborations may be formal and long term. Others less formal and perhaps established only for a discreet period of time for a project. But ultimately what these collaborations do, is allow you to expand your capabilities or influence, and hence the possibility of growing your business at a faster rate, compared to just going it alone.
However, understanding what are the best collaborations for your business is not easy think.
You Have To Be Strategic
You see the traditional business model was straight forward and basically could be described as a simple supply chain. There were inputs (suppliers), then you would do some value add (employees), then outputs (clients). There were also other resources such as external accountants or legal firms (professional consultants) which together enabled the traditional business model to operate.
In the New Economy however, suppliers can be clients and clients can be suppliers. Marketing also is not straight forward as we are living in the age of affiliate marketing and influencers – it is just not as clear these days.
So, you need to be very strategic in how you go about this, not random or adhoc, if you want to expand your business’s capabilities or influence.
Meet Your Ten Tribes
That is why at The Startup Business, we work with our clients to map out their own unique “ecosystem” in to what we call the “ten tribes…
Suppliers – if you can increase your sales, then your supplier’s sales will increase. So, the things to consider is to frame opportunities along those lines and keep in mind intangible activities such as social media or events that your suppliers may be hosting where you can share your experience.
Leads, Prospects, Clients – are often only considered a source of revenue, but you need to nurture them so they become raving fans where you may be able to procure testimonials or even introductions. You may even consider establishing a program of sorts, where you provide some additional value on any leads they may introduce you to.
Industry Expert Authorities – regardless of your industry, there are experts – so make sure you know who they are, then reach out to them, offer your channels to them to share their insights and thereby allowing them to reach a greater audience through your ecosystem – then they may help you!
Associations – as with Industry Expert Authorities, there are also Associations which you will find relevant for your business – so make sure you get involved. Volunteer, present, make an impact – because this will build your presence and credibility over time.
Promotional Partners – look for individuals or groups that could serve as a promotional partner for you, that can open doors. One common way is with event organisers where they ask a range of speakers, ensuring no direct competition, but still supporting a specific theme.
Affiliate Marketing – this is where you have a formal program, where others can sell your products and services and in doing so, earn a financial benefit such as a commission. Amazon is a great example as they offer affiliate marketing to their clients and followers – but you do not have to be the size of Amazon to do have an affiliate marketing strategy for your business.
Joint Ventures & Investors – depending upon your business complexity, we may be looking at thousands if not millions of dollars plus a lot of rich lawyers as well. However small businesses should not overlook this opportunity as well because through the JV or investors, other opportunities, access to additional capability or new markets can be obtained.
Complimentary Competitors – these are the businesses that target the identical customer profile as your business does, in the same segment or geography, but have complimentary offerings as yours. Therefore, when you work together and promote each other, the complementary nature of your offerings might result in both of you doing more sales, or at minimum, leveraging each other’s capabilities such as shared events or even specific campaigns – a great win-win!
Supplementary Competitors – these are the businesses that target the identical customer profile as your business does, in a different segment or geography, and have a competing offering as yours. However, there just may be the case where it is advantageous for the both of you to collaborate in order to support your customer’s needs – generating goodwill for all parties at the same time!
Influencers – are a New Economy Business strategy. This is where through the power of social media you can become an influencer on behalf of a brand, or engage with individuals to become your market influencers. While this is generally a new area, there are expectations that full transparency occurs of the relationship between the business and the influencer, it is nevertheless an effective strategic to have individuals talk to their followers about your business!
How I Became A Global Brand Ambassador
When I set up my businesses, I decided to embrace social media on day one. However, because I spent the preceding years working as a management consultant in the corporate sector and recognised as a thought leader, it was natural for me to continue, but on a small scale… well initially!
As I started to build my presence across LinkedIn, Twitter and Facebook, as well as speaking and publishing, I started to get more and more invitations. To look back at it now it’s quite remarkable what has taken place including my relationship with Microsoft. In this case, Microsoft was seeking influencers who were typical of the client segments they were targeting. Fortunately for me, they had been observing my activity on social media for quite some time and then reached out to me.
Do You Want To Expand Your Business?
So, let me ask you a question… do you think if you start defining your ecosystem in terms of the ten tribes and start implementing some of these strategies, could this make a difference to your business? Would it be possible that you bring in more leads? Would it be possible that you tap into additional capability, skill sets or even markets? Could it be possible that your business growth is accelerated, or if you have stagnated, renewed, and revitalised?
Find Your First 100 Names
Now you might be thinking right now how to get started? Well it is as simple as drawing up ten columns on a whiteboard (I prefer it this way as it is more visual – floor to ceiling ones even better!). Then start putting names down – first aim for five for each column, then push yourself for ten. Once you have one hundred names (10×10), you need to prioritise and take action – simple! If you need help, then contact me because we want to build momentum in your business that is unstoppable!
And always remember…
“Taking Massive Action Is Hard Work – But It Gives You Massive Results”
Entrepreneur’s Must Get This!
“Businesses start from passion and the ability to solve specific problems, but rarely do they survive just on that”
In fact, if entrepreneurs, founders and startups, fail to grasp this, then their destiny is certain!
You see it is perhaps the less exciting aspects of the business which are critical but often overlooked by most entrepreneurs and founders.
For example, did you start your business (or are starting one now) because you love administration, processes, legal structures, accounting, and risk management, or was the real reason for starting your business more something like a passion, or a big dream?
Well I am sure it was for the later reason, but these commercial aspects cannot be ignored, in fact they are essential in any business.
Because Entrepreneurs Want These Three Things
When I sit down with entrepreneurs, they say to me that they want to grow their business.
When we unpack this, it typically means three things. First, they want to increase REVENUE, second maximise PROFIT and finally they want to be SUSTAINABLE.
I then explain to them that they can achieve these objectives in several ways…
- Doing more of the same – i.e. increasing the volume of current offerings [REVENUE]
- Positioning current offerings at a higher (premium) price [REVENUE & PROFIT]
- Reducing the cost base [PROFIT]
- Introducing new offerings as add-ons [REVENUE, PROFIT & SUSTAINABILITY]
- Introducing completely new unique offerings [REVENUE, PROFIT & SUSTAINABLITY]
However, I also tell them it’s not just about working harder, as what got them to where they are today is not what will take them to the next level in their business journey. Because they need to start looking at their businesses differently.
Now, you might be thinking that you know nothing about legal structures, or very little about raising funds!
No problem, because increasing your business acumen does not mean you need to go out and get an accounting degree. What it does mean however, is that you do need to educate yourself more broadly and expand your “commercial smarts” and you can start doing this in five ways…
The Five Ways To Increase Your Business Acumen
Get Organised by implementing systems to manage your information.
We live in the age where information is so accessible, however we need to be able translate that information into insights to make better decisions. At The Startup Business we help our clients by implementing The Five Imperatives Of Highly Successful Businesses™ which allows them to chunk all aspects of their business intelligence into five categories, whether this be emails, cloud storage or paper based storage archives.
Get Legal by making sure you have created the right business structures.
It is highly desirable that you do speak to a qualified source to ensure you have structured your business the right way. Of course, finding that right “source” is not always easy so the tip is to seek alignment in which they are able to provide examples of similar client businesses that you can relate to – then you know there is a greater fit, and they have experience working with businesses like yours.
Get Financial to not only raise funds for your business, but also to manage the finances ongoing.
You do not need to become the expert here, but if you feel you are not strong in the financial aspects, we do recommend you focus on building your skills here. Then when you sit down with your accountant or financial planner, or need to discuss finance to your bank, then you are more equipped to understand the commonly used concepts and practices.
Get Risk Aware by reviewing the threats to your business such as compliance and security.
This is important because when you do have an adverse event occurring in your business, it is often the case you need to act fast to prevent further impact which could range from financial to reputational. So make sure you understand your risks!
Get Talent because as you start to scale and grow your business, you want to make sure you bring on the right people at the right time.
There are several elements to this, with the basic administration of employees the most obvious. However, leadership is key and you as the entrepreneur or founder, are both responsible and accountable for this, as high performing teams do not happen by chance, you need to nurture them.
The Profitable Business That Failed
I have had the opportunity to work with thousands of businesses over many years and each have had their own unique circumstances requiring some sort of intervention. Sadly, though not all of these businesses are still around today. Some have been sold or taken over, whereas others have just closed and the original founder has moved onto other things.
However, there is one business that I never forget and that is the profitable business that failed!
The business was a technology startup in the telecommunications sector. Things were moving very fast – meaning that the typical growth of new customers and revenue each month, was averaging around 15 to 20% – in other words, 180 to 240% per year!
It was so crazy because this startup just was not equipped to handle the growth and while they were making money, they were spending like there was no tomorrow! They were also doing deals with other companies without appropriate due diligence and as they brought on more people, there was less focus on the quality of the applicant and more about just filling vacant roles.
Unfortunately, it was a ticking time bomb and finally imploded on itself in a very ugly way, impacting on many hardworking individuals and losing a lot of money for its investors.
In retrospect, there just was no focus on being organised, on the legals, on the financials, on risk management or on talent development.
Are You Up For It?
That’s why I always share this story to my clients facing a similar situation as their businesses start to grow, because I fundamentally believe as simple as these five ways are, once you start to become more commercially aware and increase your business acumen and not just focus on your passion, it is less likely for you to experience a similar fate as that tech startup.
Your Mission Possible!
So start implementing these 5 ways into your business today. Even if you are a business of just one person! Go through them step by step. Ask yourself these questions:
“Do you have a handle on your administration?”
“Are your legals in place?”
“Do you know where you are financially?”
“Have you put in place actions to minimise your risks?
“Are you developing talent for today’s needs and tomorrows growth, including your own development?”
But First, Why Do Businesses Fail?
Depending on the source, the failure rate of businesses in their first year is huge.
Bloomberg suggests that 8 out of 10 entrepreneurs or startups, fail in their first 18 months. Other sources put that number slightly lower – regardless, there is consensus across respected authorities from the USA, UK, Canada and Australia (and I am sure most countries), that failure is prevalent in the startup space.
So, you really must ask yourself why is this? What are the factors that lead to business failure and can these be avoided?
Well, of course much has been written about this topic and I am sure will continue to be written, but some of the factors that have led to business failure that I have seen over twenty-five years are things like:
- the personal reasons for starting a business were wrong
- the business concept was not well thought out (lack of market research, lack of planning)
- inability to market the business
- inability to service the business
- inability to scale the business
- inability to change the business
Now most business books or courses, address these factors as they are largely technical skills that can be learned. However, there are several aspects which are more behavioural that I see repeatedly, starting with these three at the top of my list…
Passion Does Not Guarantee Success
Firstly, entrepreneurs are passionate individuals. They want to change the world in their own distinct ways and passion is critical for this, as it keeps your focused and drives you to achieve your goals or big dream. However, it also tends to influence you to do the things you get the most pleasure from and avoid those things you frankly well, just do not like doing. If not kept in check, you can become myopic to everything else around you – you become your own worst enemy!
The second aspect is that businesses do not fail because of lack of information. In fact, there is so much information available and some of this is contradictory or not relevant for your specific circumstances! So, what this means is that it can be confusing or down right overwhelming. That’s why it is critical for you to be able to decipher what’s important and what is not important today.
The third behavioural aspect that I see frequently is the tension between striving for “perfection” versus disciplined consistent execution over time. Did you know that there are some people who will not do things until everything is perfect? Maybe you know these people very well! You see, that was my problem when I first started out and I see this all the time – analysis paralysis!
“You have to get moving, build momentum and keep at it – and I know that it is tough when in the early days, you may not be getting the results you seek”
The 5 Fail Safe Tips
That’s why when I work with my clients, we focus on these five capabilities which help in countering the negative side of these behavioural aspects, to instil a working rhythm in the core of the business – it’s operations…
First: When you are a business of one, you do everything right? Well not always – you still need to be very clear about the roles and responsibilities. Then as you start to scale and bring in new people, there is never any question as to “who has the ball?”.
Second: However, knowing who is doing it, is different to knowing “how do I do it?” and this is where things like guidelines, procedures and standards are essential as you grow. This insures people keep to their swim lanes and while there is still room to move in terms of creativity, they are not out deviating from the direction you want the business to be heading.
Third: Next, metrics, score cards, and benchmarking assist you and your business in knowing “how are we tracking?”. Not only internally with your own expectations, but also against external standards and benchmarks so that you can compare yourself for a reality check.
Fourth: Management operating systems that drive day to day performance, continuous improvement, and innovation more strategically, are key and goes to the heart of “are we moving forward?”. You see eve if you are a business of one person, things still must happen on a regular basis.
Fifth: Finally, my fifth behavioural aspect I discuss with my clients is leadership. Because at some point as your business grows, your team will ask themselves “why should I follow this person?”. Never kid yourself that just because you may pay people a higher salary or give them additional benefits, that you have established a team.
“Successful entrepreneurs must become successful leaders – so as you build your business, you need to build on your leadership”
Bill & Warren Says You Need To Focus – So Focus!
I recently read a story about Bill Gates and Warren Buffett, two of the world’s most successful and also influential business people. They were asked to write down the “one word” they felt was key to their success and perhaps on reflection, it was no surprise that they both wrote down separately the word “focus”.
Now I have never met Gates or Buffet, but I have read relatively extensively about them and viewed many interviews and presentations by them, so I feel it is safe to say their one word “focus” can also mean focusing on the right things, at the right time, by the right people, in the right way.
Passion Plus Disciplined Consistent Execution Multiplied By Time
Remember, these are behaviors and not technical skills that need to be mastered. So do not let your lack of financial numeracy influence you to not starting a business (or any other technical skill by that matter)! You have everything you need right now to setup, scale and sustain a business in The New Economy. You just have to go about it the right way, to some extent methodical, but importantly, take your passion and apply disciplined consistent execution over time!
Take Your Step Forward
So, take on board what I have said, and write down a few notes that first comes to mind. Structure this into a plan and get going. Then take another step forward, but only this time, a little more refined than your first step because you are now wiser for it. Then repeat, repeat, repeat!