On the 06th of March 2020, I had the privilege to present to the members of the Diamond Chamber of Commerce based in Cullinan, Gauteng. I was asked to talk about my top 10 tips on what to do in business to ensure that it survives the current economic environment. Here is a snippet of my speech.
I am sometimes controversial. I will tell you the reality of what is happening in your business and what you need to do when things go pear-shaped. There is no time to beat around the bush or sugar coat problems.
My belief is that when you are in a street fight, you need to act quickly and decisively. Business is a street fight. It is not a well-controlled boxing match where you can be saved by the bell or where you have a time-out to take a breather.
Your competitors will not always play fair. They will not always play by the rules. They will do whatever it takes to win and to ensure that they get ahead of you and your business.
Don’t get me wrong, I am not saying you need to drop to that level. What I am saying is that you need to be aware of this and you need to be prepared for this strategy. When you know that a knife in your back is a possibility then you know how to act and react.
Tip #1: Stop allowing fear to drive your business decisions.
Let faith and willpower drive it. People make stupid decisions when they act out of fear and your business cannot afford you making decisions which will do more harm than good.
I often hear: “But my competitor just launched this new service”. So what? Stay in your lane and keep your focus.
I often hear: “But my competitor just landed this client”. So what? Stay in your lane and keep your focus.
By focusing on your business and what you can control, and not acting out of fear, you can control what your business achieves. If your focus remains on your competitor, you cannot focus on your goals and what you want to achieve.
Tip #2: Ask for help.
This mentality we have in South Africa of “I can do this on my own” is ridiculous. Even I ask for help! I have people I have coffee and lunch with where I bounce ideas off them and check where my thinking is right or wrong. These are my mentors. And sometimes, the meetings are more of a “Tiaan, what were you thinking!”
This is because we do not know all of the answers or the next steps. It’s impossible to know everything.
Do not ask everyone who is willing to listen to you for assistance. Your best friend might just want to build a business like yours. Once he knows your problems, he has an edge over you. You also cannot ask someone who has been employed for 30 years for advice on submitting VAT returns. Unless they have been the person doing it for their company for the past 30 years.
The experience simply isn’t there.
I also often hear the following: “Tiaan, I don’t know how to ask you this, but on the weekend, I had a friend over and he says that he claims his kids’ school fees through the business as an expense”. Well, please tell your friend to make sure he never gets a SARS audit. Ask the experts for advice, and not your cousin, please.
Tip #3: The moment you cannot pay your debts, phone your creditors.
They are more forgiving than you think. I don’t know why business owners wait until they receive a summons before they respond. I once had a client that explained his payment policy to suppliers to me. He said that he only paid his suppliers 60 days from receiving a summons.
This is obviously not acceptable. Talk to your suppliers especially when you have promised them payment by a specific date and you cannot meet this date. In most cases, they understand that ALL businesses in South Africa at the moment suffer from cash flow issues.
Tip #4: Gary Vee says: “Stay in your lane”.
Don’t be a jack of all trades. Focus on a niche market and double down on it. Become the expert in your geographical area, or in a service, or with a product or whatever niche it is you want to choose.
No one is or can become an expert in various areas. It’s just simply impossible. Stop trying to be a one-stop-shop.
The Vitalis Group is heavily diversified but there is an absolute champion as the head of every business unit. And it is their job to focus on their business and market only. For instance, I do not allow my head of consulting to advice anything on accounting and vice versa. Each champion is there for a specific reason and they need to execute on their niche.
Tip #5: Beware your cash flow.
I am a trained accountant (but not active anymore) and I was taught to make sure that I build a strong balance sheet in any business I operate in. Well, there is only one line-item on the balance sheet that shows your bank balance.
Then I was taught how to draft an income statement to check if I made a profit or not. Well, there is literally no place on the income statement for cash flow.
Do you want to know what is the most important financial statement to read and understand? The cash flow statement.
I have yet to see a business become successful or grow solely because they had a strong balance sheet. I have yet to see a business become successful or grow solely because they had a profitable income statement.
Go and read the financial statements and annual reports of Bidvest. Every year they brag about the fact that they were able to generate RXBillion in positive cash flow. Now that is real business!
Tip #6: You cannot do it all on your own.
You cannot build a multi-million rand business on your own. And don’t even think of building a multi-billion rand business on your own.
You cannot fight your competitors, source new sales, operate your finances, manage staff, keep the bank happy, keep your finances in check or even order coffee all on your own. You need a successful team around you. Successful employees build a successful business.
Tip #7: Just make a decision.
Do not delay a decision because you are unsure of what to do. I see it too often that management or owners do not make a decision, they just kick the can down the road.
I can understand why we do this, we do not want to make the wrong decision. Well, leave this mentality for corporate employees that are afraid to lose their jobs. This type of behaviour does not help you as an entrepreneur.
If it was the wrong decision to be made, stop, start again and do the other option. It might then be the right option. And if option B doesn’t work, guess what, there is a reason the alphabet has 26 letters.
I see too many businesses fail because the owners just couldn’t decide what to do next. Too many issues arise from indecision.
Tip #8: Know what you are working towards.
Make sure you have clear unambiguous goals. Not a vision necessarily. A nice vision and mission statement is not your goals to work towards.
You must write down your goals for every month, quarter or year and track your progress at the same intervals. Without tracking them, how would you know if you achieved your goals?
I believe in a system called OKR’s. Objectives and Key Results. Every quarter you track your progress against what it was you wanted to achieve.
Tip #9: Market, Market and Market.
Never ever stop marketing. Just when you think you are done with the exercise, market a bit more. For some or other reason, and I was also guilty of this in 2017 and 2018, we all stop marketing when our businesses are on the up. Why is that?
Never stop marketing! As accountants, we always take budget away from production as we believe they always want more equipment and do not utilise what they have. And as accountants, we always take budget away from marketing as we believe they entertain clients too much.
Well, let’s settle the age-old debate of who is more important, marketing or production? It’s actually both, but marketing is the first step. Without marketing efforts, you would not have a customer to sell to.
Tip #10: Aim for consistency, not perfection.
Tip #10: Perfection does not exist.
This is THE most important part of a business.
For years I have waited to start. Waiting for my website, waiting for my business brochure, waiting for the business cards. I waited for the ideal moment…. Waited a bit more… And then just to make sure my stuff was perfect, I wait a bit longer… By the way, the “stuff” is still not perfect. There are still spelling mistakes, incorrect prints, too few business cards and more.
In the time that you waited, you could have signed your first clients and started to make money. You could have had lunch meetings with lead sources or actual clients.
We wait way too long to just get started and do something. Whether it is a new project, phoning a new client, starting with social media marketing, writing a blog or anything you can think of.
Tip #11: Always give your clients more than they expect.
By giving your customers more than they expect, will make sure that they remain a client of yours forever.
There is this wonderfully simple concept called Order Qualifiers v Order Winners. Always make sure you have order winners built into your business by giving your customers more than what they would expect.
Make sure that when they make that purchase decision, they choose your business and not your competitor. You can actually control this process.
I wish to thank the Diamond Chamber of Commerce for allowing me the opportunity to speak at their business breakfast.