Shirlaws Stages. Why so few entrepreneurs create advanced growth -and how to kick through brick walls to get there

Transcription

1 Shirlaws Stages Why so few entrepreneurs create advanced growth -and how to kick through brick walls to get there

2 Your Stage at a glance Invest Typical Behaviour Turning a regular income into specific investments Still a large revenue focus, now with more growth consideration. Investments can be physical or other Decisions Decisions are made deliberately with careful consideration of all issues and the impact the decision will have on the business Previous investments based on I hope this will work are now made with confidence. Feelings Relief as traction is achieved. This is a brick wall - so owners may feel stuck trying to make the big, final investment that will lead to relaxed good times Page 01

3 The Invest Entrepreneur The problem with generic business advice from books and speeches to abundant videos and internet articles is that, well, it s generic. It doesn t take into account the Stage of your specific business, and it doesn t help you determine why you would apply, modify, or ignore that advice as it applies to your business. Stages is a practical business framework. The diagram demonstrates, from left to right, the lifecycle that every business travels through from Start-up to, perhaps, Advanced Growth. Each business will move at its own speed; not all will make it through. By tracking the feelings at each Stage of your business you will more profitably experience your journey. So how does Stages apply to the invest entrepreneur? The invest business owner has reached the first brick wall, a transition state between the powerful feelings of frantic (after you start) and good times (when growth becomes easier). Feelings of traction and confidence lead to the investments that if they are the right investments will move you and your business through this brick wall. Staff Staff will feel and mirror your confidence, calming down a previously frantic business. Involve them in the options you have when investing for growth. Clients Clients begin returning, building loyalty and revenue traction. They may still expect too much ensure your profit and cash flow plans will support your investment. The Online Stages Questionnaire Based on the answers you gave, you (and by extension, most likely your business) are currently in invest, towards left hand side of the Shirlaws Stages lifecycle. This report will focus on how invest businesses can best use this information. If you want to read the full Stages journey to learn more about what the future holds for you and your business we have included it all as Appendix A. You are welcome to skip ahead to better appreciate the bigger picture. And because an online questionnaire can never compete with a trained expert, if you want to discuss Stages or your business s Stage please us at hello@shirlawsgroup.com. Page 02

4 Top 3 Invest Priorities Rapid revenue opens new markets, wins new clients, and energises client services. Congratulations on reaching invest the first brick wall. Brick Walls on the Stages framework are transition states, in this case between frantic and good times. You now have the opportunity to invest in your business, a platform that will support future growth. For some reason or compulsion you chose to begin this business, and that dream your vision is the point on Stages called payback. Most businesses never make it to payback they get stuck in this brick wall, investing without a return until eventually they run out of money or run out of energy. So what can you invest in that will ensure you are among the minority of businesses, the ones that perfect their business model and reach the relaxed growth of good times? A business model is simply a calculation the Volume of product you sell multiplied by the Margin you achieve on sales (VxM). Some investments may be physical larger offices or more staff; others are more intangible intellectual property or systems. Any investment must primarily impact VxM, and the top 3 priorities will help you: 1) Open New Markets 2) Win New Clients 3) Service Clients Page 03

5 Top 3 Invest Priorities 1) Open New Markets First of the 3 revenue priorities is Opening New Markets where you can sell your Product. (Please note that when we talk about Product we mean what you sell - so you may sell a Service, like accounting, and we would still call that your Product.) When thinking about their Product, most business owners find themselves stuck with the Content of what they sell - be it financial services, plumbing supplies, or a platform for selling ebooks. Most businesses are great at talking about their Content. In invest you have built some expertise and loyal clients. You now want a platform for future growth. But to stand out in your market, you need to shift from what you do (the Content) and into why you deliver value. What is your Architecture the elements you have in place that help you deliver your Content so well? Maybe you have a truly unique product, or piece of intellectual property. Perhaps you simply have the structure or process to deliver it in a stand out way. Investing in your Architecture, not your product Content, helps with sales and more importantly allows you to scale your product range for significant revenue. What is your Marketability? How do you create a message so that your Content cuts through a noisy marketplace? Great marketing messages disrupt, they create controversy, they make your potential clients stop and want to know more. When you have the right combination of Architecture, Content, and Marketability then aspect of sales, delivery, client service, and product extension will be easy. What to do right now: Think of your last sales meeting did you describe your Content, or the Architecture that makes you special? What is your Architecture? What is your Marketability? Is it creating cut through to your desired clients, or is the same as your competitors? Page 04

6 2) Win New Clients Top 3 Invest Priorities Sales training used to tell us it was a numbers game you shake a lot of hands, drink a lot of coffees, kiss a lot of frogs and the work will arrive. Sales training then tried to tell us that it was all about us network, build up a friendship, sell a solution. Sales training didn t work then, and it certainly doesn t work now. Why? Because sales training has always focused on you, the person making the sale. Your activity needs to focus on them your customer making a purchase. Activity is about ensuring you do the right amount of activity to be in front of the right person at the right time for them to buy. Once you are in front of them, you then need the right sales skills, and a consistent sales framework (like Shirlaws Six Steps) to ensure you covering the important points. UPS: UpSell from Product to Solution Some clients will come to you with a specific need, that your product or service can meet. This is an opportunity to Product Sell or UpSell add more value to the transaction. Some clients don t have an articulated awareness for your product they have no need. Your most profitable new clients that move you and your business through invest faster will come from having the process and skills to uncover that need and sell your Solution. What to do right now: Review your face to face sales conversations do you follow a consistent process that s flexible to the client s need or no need? Are you monitoring your activity to ensure you are achieving the greatest returns on your investment in time, money, and staff? Page 05

7 Top 3 Invest Priorities 3) Standards and Extras in Servicing Clients In the Sales conversation you are setting expectations agreeing that you will provide a product or service in a specific way for a specific amount. Too many business owners in the early Stages of their business over promise and under deliver. This failure to meet expectations is costly. It drags down the energy (and financial stability) of everyone involved, and it is a fundamental reason why most businesses never make it through invest and into good times. The Shirlaws Expectations framework shows the negative energy you create for your client, your business, and in your marketplace, when standards are not provided. Businesses running with time on their hands common during frantic, and also during a recession will often make the opposite mistake. They will over deliver to their clients. The mistake is that clients will now expect you to always give them such a high level of service. In the future, you will either have to endure extra costs to keep the standards overly high, or risk disappointing your earliest client base. In invest, you will be realising the value of loyal clients. Set the right expectations and meet them this can help build loyal clients (making Sales easier). For those clients you would like more of, seek to give Extras that turn them into advocates in your market this delivers a Volume of clients at great Margins, helping you further invest in growing your business. What to do right now: Review the Standards you deliver with every product. Are these being clearly set during the sale? When you over service a client, do you let them know you re providing an extra? This prevents scope creep and also creates positive energy that can lead to repeat and referral business. Page 06

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9 Using Shirlaws Stages to transform your business The Shirlaws Stages Framework in the entry point into the business methodology and performance systems that support entrepreneurs to create more money, more time, and less stress in their lives. We call that the Contextual Business Plan and there s a copy for you on the previous page. First Brick Wall entrepreneurs are encouraged to review all 9 Boxes that sit within their business, while focusing predominately on the centre 3 Revenue. Here are the key questions for the other 6 Boxes. If you have a large Vision, you will need to begin investing in some of these at this Stage as well the larger the investment in the first brick wall, the larger the growth you will realise coming out the other side. Capacity At what number of people are you most profitable? Least profitable? Functionlity What % of your time each month is spent in Red (Costs) Blue (Cash Flow), and Black (Equity building)? Capability Out of 100 what does your team score for strategic capability? Or is your business dependent on you? Page 08

10 Using Shirlaws Stages to transform your business Intent Can every member of your team name your values? Are you all working to a common vision, with a shared purpose? Strategy Is your business aligned behind an agreed and documented plan for growth? Valuation Are you building offbalance sheet assets to create wealth for you, your shareholders, and your family? Most business owners in invest don t have the answers to all of these questions. The entrepreneurs that move through this Stage, and into good times sooner, are those willing to learn from the experience of others not just by making their own mistakes. These are the questions that deliver more money, more time, and less stress Page 09

11 Immediate Next Steps 1. Turn insight into action at a Shirlaws event Shirlaws is the only business coaching organisation in the world that integrates your feelings from the Stages framework into diagnosing and supporting the strategic development of your organisation. Now that you know where you are on Shirlaws Stages, and what will happen next, come to a Shirlaws workshop or seminar to turn this into transformational change in your business. Our events include regular, free online webinars where you can learn more without leaving your office. They culminate in our annual Shirlaws Conference, where more than 150 business owners, CEOs, and company decision-makers share their experiences and build the specific or broad business skills they need to move their business forward, or keep it firmly based in their preferred Stage of development. 2. Discuss your business with a Shirlaws coach Every Shirlaws coach is trained in applying the Shirlaws Stages framework, and integrating it across the 9 Boxes of the Contextual Business Plan. You can easily discover how our business expert can focus your goals or engage your team by meeting with one of our team. For the investment of time it takes to drink a cup of tea, you will better understand how our frameworks, delivered through a practical coaching process, can help you. Call Shirlaws on to find a coach in your area or industry, or visit our coach profiles website yourself. All of our coaches understand entrepreneurs, and are trained to help them achieve what they really want from their businesses more money, more time, and less stress. 3. Ask a question or give us feedback Shirlaws has applied the Shirlaws Stages framework, and our many other business frameworks, to help thousands of businesses of all types and sizes since it was founded in While our web-based diagnostic has been thoroughly tested, it is no match for a thorough discussion with our trained coaches. If you have any questions or feedback, please let us know at hello@shirlawsgroup.com. Page 10

12 Appendix: The Complete Shirlaws Stages Journey In familiarising yourself with the framework, it is useful for you track your personal business journey. This will make the discussion more relevant to you and trigger powerful insights about yourself and your own business. You may not have experienced every stage in your current business, but you may have experienced or observed them in previous businesses you have run or worked in. This framework applies to a business, beginning when the current owners began. If you are an employee, then relate the experience to your career within your current business. 1. Start-Up At the start (left hand) side of the framework, you will see that the diagram begins (as your business did) on Day 1. How did you feel on the first day or week of your new venture? Excited? Yes of course or you wouldn t have got the energy to get started! So excited is the feeling written in red under the baseline at the beginning of the curve. Page 11

13 After the initial surge of excitement how else did you feel? Perhaps a little bit scared or apprehensive too? These emotions are our primary motivators and impart us with great energy. This causes a period of Frantic energy, where we were dashing around doing the many things that need to be done all at once to start a new business venture. After a while, it could be months or even a year or two, it becomes evident that the business has the potential to succeed and the feelings of anxiety begin to fade. You begin feeling Confident. You have moved into the 1st Brick Wall. Brick Walls are transition states in a business. The 1st Brick Wall is the transition between Start Up and Growth, a transition that requires Investment. The size of your business vision will influence the size of your investment. For many businesses, this investment is expanding into larger, nicer offices, the appointment of key management staff, or a strategic investment in training or equipment. For larger businesses, this may be expanding into another city or establishing franchise systems. If you don t invest at this stage, then the business will plateau or decline. You may have heard figures about the number of businesses that close in their early stages almost all of these do so in this 1st Brick Wall. Not making the right investments means a business will eventually run out of money or energy. This investment often creates another (shorter) period of franticness and anxiety immediately afterwards until you realise that the investment is going to pay off. 2. Growth Having made the right investments, your business will begin to receive a return on those investments. Again, this depends on the size of your vision and your investments, but the 1st Brick Wall investments typically create a period of steady incremental growth. The frantic feeling has gone, and the business becomes consistently profitable. This modest success creates a feeling described by most business owners as Good Times the feeling is Relaxed: you aren t overstretched but are making a reasonable living and enjoying the experience. Businesses stay in Good Times by continuing to reinvest in business growth, creating momentum and further growth in the business. While that ongoing reinvestment can be managed and forward-planned, eventually, energetically, you will want to reap the rewards of your hard work. After sustained periods of steady growth, suddenly BOOM, success! The business will have achieved its initial vision; you, as the business owner (or employee) will have achieved the outcome you sought when you first started this business. You go through Payback. Exactly what it looks like can differ depending on your initial vision. Most business owners experience a commercial payback new cars, a bigger house. Sometimes is can be a cultural reward industry recognition, a long family holiday. Whatever it looks like, the feeling during payback is Euphoria. Page 12

14 If you have reached this stage or beyond congratulations! Unfortunately the euphoria of payback doesn t last. You may be temporarily distracted (moving into that new house or touring France) but the business has built its own growth momentum, and payback can trigger a further period of accelerated growth. This usually requires a shift in the responsibilities and required skills of the business owner. You are now responsible for a big business and the skills and experience that you used to start up and grow the business need to develop as well. This leads to a feeling of Frustration you can no longer understand and control every aspect of the business as you did when you were a smaller team and your technical expertise was critically important. If those skills and the strategic priorities that become important are not addressed, the frustration will grow into Stress. And if the stress continues, you and the business will accelerate, inevitably crashing at speed head first into the 2nd Brick Wall. While the 1st Brick Wall is a confident feeling, the 2nd Brick Wall is more difficult. Only successful businesses make it this far, but by this stage the business doesn t feel successful. The stress has taken its toll and you feel exhausted. Good times are now the good old days, and you can t go back in time! The 2nd Brick Wall is a feeling of Disillusion despite the growth and success, many business owners give up at this stage, close their doors or sell the business for a bargain price. They may know that they are throwing away years of work and a successful business, but they don t know how to get out of the 2nd Brick Wall. For those that do persevere, or prioritise and reinvest accordingly, the business owners and managers enter a phase of Research in an attempt to move the business forward. Many ideas are tried, the owners and shareholders becomes Re-Energised, and eventually exits the 2nd brick Wall in one of three ways. 3. Advanced Growth (below) 4. Plateau 5. Decline Plateau Sometimes a business will stagnate to the point where Advanced Growth is no longer possible, stabilising in a plateau before eventually declining. This route is also a common choice among owners, especially professional partnerships, who are nearing retirement. Costs are reduced, only the best clients are retained, the business coasts along towards retirement. It will eventually run out of energy and decline, by which time the business has limited or no value. Page 13

15 Decline Businesses that don t properly restructure and invest during the 2nd Brick Wall, but persevere, will decline. Key clients, suppliers, and staff will leave, and the business will eventually close. Again, this can be a legitimate choice for some businesses. Investment for the future is stopped, and the various business assets are split up and sold. Advanced Growth Shirlaws works with businesses that are in or are choosing to head towards Advanced Growth. These businesses have all achieved all five of the Advanced Growth pillars pillars that have evolved with the business world: 1. Product Advanced growth always requires extension into new product areas. Part of the work to get through the second brick wall is to strengthen internal systems to productise and innovate on an on-going basis in order to adapt to changing markets and achieve a sustainable business. 2. Channels Similarly growth tends to slow or stall prior to/during the second brick wall because the marketplace that previously served the business so well has become less attractive (either saturated or new competition). The business needs to develop multiple routes to market ensuring a consistent flow of clients and revenue. 3. Functionality A functional internal structure ensures the right people are doing the right jobs at the right times. This is most critical at this stage (second brick wall) because enough capacity has to be created in the senior team to spend in strategy activity (Black) to make sure the right choices are made and assets are built to access advanced growth. 4. Capability As the business identifies new revenue strategies (products and channels) it will need to build new capability. This with functionality is the core management system building block to ensure the business is able to reinvent itself successfully. Often we find it is critical to fix the management systems before the business is able to invest productively in revenue and asset systems. 5. Asset systems When a business has developed an asset system it has gained the ability to leverage core capabilities to the level where they can be packaged into assets that underpin new businesses. This unlocks a transition from running a single P&L business prior to the 2nd brick wall, to running a portfolio of businesses which are extensions of core assets into new markets - the prerequisite for advanced growth and enhanced value. They have built a business that will now survive and thrive beyond their direct involvement how does that feel? The description we hear from businesses around the world, is Proud. It s a humble pride from having moved through the lifecycle, faced the challenges, and lived to tell the tale. While there are twenty different areas of your business you can address, these five pillars are a great starting point for choosing strategy at any stage. Page 14