3 steps for sustainable business growth

Every business worth its salt is very concerned about growth. Unfortunately specifically SME’s cant pay the big bucks required to afford world-class sales staff. Good news: you don’t have to, if you already have existing customers. You just have to follow up with them, and grow your business through referrals.

When people think about sales, they think about new prospects, referrals, new leads, marketing etc. Too often one of the most likely potential leads is forgotten: your existing customers. Existing customers have already bought from you. They are already familiar with your sales process, your products and services. And they had been convinced enough to sign on the dotted line and give you the order. Hence your barrier to sell additional products to them is significantly lower than selling to new prospects. Why not just go back to you existing customer base and sell to them?

Unless you have a very unique one-time use only product (like an undertaker) you will most likely be able to continuously sell products to an existing customer. For example, if you sell dog food, you can be assured that every single customer who bought dog food from you before will have to buy dog food again. Why not make a real effort to stay in touch with those customers, update them about promotions, give them the equivalent of frequent flier miles, special deals, etc.? You already know that they need dog food, all you have to do is to make sure they buy it from you instead of the competition.

If you sell websites or any other IT solutions, try to find a way to provide ongoing maintenance. This way you not only have continuous revenue, but you are also always up-to-date on potential changing requirements of your existing customers, and you can provide additional solutions as and when required. And because you have a better knowledge of the customer as a new entrant, you should be able to continuously sell into your existing customer base.

The same is true for almost any other business. Customers will continue to buy TV’s, phones, DVD’s. Even if you have a hardware shop, you will have repeat customers.

No matter what your business is, it pays huge dividends to simply stay in touch with your existing customers. Follow up with them: are they happy? Do they need anything else that you might be able to provide? Do they know of anyone else that could use your product / service?

The solution to building a sustainable, growing business is simple:

  1. Have a great product / service.
  2. Ensure you have a satisfied customer.
  3. Follow up with that customer to get additional business and referrals for new customers.

Most businesses stop at point 2. Sadly, many businesses even stop at point 1: they have a great product or service, but they fail to follow through with the customer until the customer is 100% satisfied. Really happy customers are your best sales people, and make the easiest prospects for follow-up sales. All you need to do is to continuously follow up with your existing customers, and don’t just ignore them once the initial sale is over.

Pole Position

Whatever the product or service is that you offer – you will have competition. If you don’t have competition you need to be worried that you may not have a market. For you to succeed in your business, you need to convince the customer to buy from you instead of the competition. And that is easier if you are the market leader.

Market leaders not only have a significant advantage in terms of credibility over the other competitors in a specific segment, but there is also a positive correlation between profit margin and market leadership. Simply put, if you are the market leader in your segment, you will be able to have higher profit margins, everything else being equal. So how do you become the market leader, specifically if you are just a small and growing enterprise? The answer is surprisingly simple: Define the market that you want to serve in such a way that your specific offering makes you the leader in your chosen market segment.

In order for you to be the market leader, you have to be very clear and concise about exactly what it is that you offer to your customers. For example: You have decided to create a new type of soap based on all-natural materials. If you now choose to define your target market as “everybody who needs soap”, you will find that your growing enterprise has a market share that is so insignificantly small it’s not even worth mentioning. And it will be extremely difficult to stand out of the competition for people to choose your product over all the other soap manufacturing companies.

So you might take the next step and limit your service offering to only those people that choose soap made of natural raw materials over chemically produced soap.

Even with this limited market definition you may find that you are still just one of many other companies competing for the same business. By further limiting your market to only customers that support “Made in Malaysia” or “proudly homegrown by a women entrepreneur” you will eventually find a market in which you have the biggest share. That market by itself may be small, but you are the market leader nonetheless.

From here you may want to pursue two strategies: Firstly, defend your chosen market so that you remain the market leader in this segment. Secondly, expand your market definition slightly so that you operate in a market where you are not the market leader any longer, but you are number two or even three. Be careful not to widen the market definition too much, as your goal should be to become market leader in this expanded segment. Once you have achieved that, this new widened segment should become the market that you will have to defend for you to stay in leading position.

Using this strategy, you will continuously grow the markets that you serve, while remaining market leader in your chosen segment all the time – and over time this chosen segment will become big enough for you to have a very sizeable business.

Run an Ironman to succeed in Business – Part 6: Passion

(here is the link to Part 1: Run an Ironman to succeed in Business)

Finish - Source: Wiki Commons

Finish – Source: Wiki Commons

In order to finish an ironman race, an average person will have to continuously train every week between 10 to 20 hours, for a period of at least 1 year. It will be very difficult to see this through if you are not passionate about achieving this objective. You must really want it. Badly. Passionately.

When your friends ask you out for drinks, and once again you decline because you have to get up early in the morning for a long run, you need to have a reason for doing so. You started to train for an ironman for a reason, and you need to hold on to that reason throughout your training. When times get tough –and they will – this reason will allow you to make the decisions required to “do the right thing” up and to continue on your quest. You need to be able to answer that one critical question over and over again: “Why am I doing this?”

So question your motive when you start your business. If you start your own company just because you want to earn more money, you will be in for a surprise and a rude wake-up call in time to come. You need to have an overall goal for your business, a reason for its existence, a desire to build something that you really feel passionate about. Only then will you be able to get yourself through the tough times, and have the answer to the question “Why do I not just give up?”

IM Langkawi 2010 - Finish

IM Langkawi 2010 – Finish

Those 5 attributes are defining attributes for any entrepreneur. They are by no means exhaustive, as starting and growing a company is not the same as completing an ironman race. For starters, once you have completed your first ironman within the allocated time, you have achieved your objective, whilst there is no such clearly defined target for a company. In addition, training for or running an ironman doesn’t necessarily require you to be a team-player. You don’t need other people to succeed, and you can achieve great results while only relying on yourself – try this in business, and you won’t get far.

But if you have those five attributes, you stand a good chance at succeeding in your business.
Best of luck!

Run an Ironman to succeed in Business – Part 5: Flexibility

(here is the link to Part 1: Run an Ironman to succeed in Business)

Natya Yoga - Source: Wiki Commons

Natya Yoga – Source: Wiki Commons

There will be setbacks in training for an ironman and in growing your business. You may have an important business trip on the weekend that you have planned your 200 km cycle, or you got the flu and can not exercise for one full week. Those things happen, and it is important to be flexible and adjust your plan accordingly. In such instances where a change of plan is forced upon you, you need to be able to reschedule certain activities.

A detailed task-oriented plan that you have created initially to support your overall strategy needs to be adjusted as and when required, without changing the overall strategy or framework put in place. Preparing for an ironman is a set of smaller goals and milestones. The task and individual exercises that you plan are there to enable you to meet those interim goals and milestones, but as long as you hit your milestones, you’ll be just fine.

So you need the flexibility to adjust your detailed plans when circumstances demand, combined with the determination to achieve your interim goals and milestones no matter what.

The same is true in your growing business. The business plan that you have created at the beginning of the year is just a plan, and as you start executing the tasks required to achieve the milestones on the way to your overall goal, you will hit obstacles. Your senior engineer suddenly quits, your most important customer cancels his contract, your product has bugs that require a re-call or major modifications. Shift happens.

Look at your overall goal, and see how you can adjust your detailed plan to still meet your interim goals and milestones. Be flexible to adjust what can be adjusted, and have the determination to continue on your journey towards your next milestone, no matter what obstacles are thrown in your way.

(Click here for Part 6: Passion)

Run an Ironman to succeed in Business – Part 4: Perseverance

(here is the link to Part 1: Run an Ironman to succeed in Business)

Desaru 116 - Swim

Desaru 116 – Swim

Giving up is easy. And just taking the short-cut home on a cycle tour or a long run is very tempting – after all you already ran 2 hours. Do you really have to run 2.5? Is that another half hour going to make a difference? Can I just swim 70 laps instead of the planned 80 as stated in today’s plan?

Preparing for an ironman is a set of small steps and small successes over a long period of time – just as starting and growing a building. Every day you need to run just a little bit longer, cycle just those few kilometers more, swim just another couple of laps. You need to have the determination to not give up, and to continue just that little bit more.

Desaru 116 Swim Finish

Desaru 116 Swim Finish

And in business it is exactly the same . If you have planned to make 5 appointments for next week, call as many people as you need to secure those 5 appointments. And unless you have reached your goal for today, don’t stop. Just continue until you have reached your planned objective for the day.

Rome was not built on one day, to train for an ironman takes at least a year, and to build a business does take even longer. But only if you work on your long-term goal every day, and every day put another brick onto the wall, make that one more phone call or e-mail, and take another step forward, only then you have a realistic chance to eventually succeed and achieve your goal.

(Click here for Part 5: Flexibility)

Run an Ironman to succeed in Business – Part 3: Discipline

(here is the link to Part 1: Run an Ironman to succeed in Business)

IM CyclingThere will be days in your training for an ironman, where you just don’t feel like getting up at 5 am to run 20km, or to get into the pool at 7 am to swim 80 laps. It is so much easier to just ignore the alarm clock and give yourself another one or two hours of sleep.

After all, you did train yesterday, right? And one day won’t make much of a difference after all, correct? And you may have many other valid excuses and reasons NOT to train. But that is exactly what they are: excuses and cop-outs, unless you are at risk of an injury through overtraining.

So you must have the discipline to train no matter how much you’d like to sleep in or do something else, as well as the discipline to stop before you get injured – and the wisdom to know the difference between “don’t want to train” and “should not train”.

This discipline is critical in your growing business as well. You have to get up early every morning, work harder than before throughout the day, and continue with business related activities in the evening. You have to have the discipline to “get up and go to work” every day, and do whatever is required and needs to be done. If you golfing buddies ask you for a game, do you give in and come along (after all, nobody will miss you at work)? Or do you politely decline and write that other letter, make that next phone call and just continue to work on your business?

If you want your business to succeed, you must have the self-discipline required to put in the daily amount of work required to achieve your goals, irrespective if somebody is looking over your shoulder or not.

(Click here for Part 4: Perseverance)

Run an Ironman to succeed in Business – Part 2: Commitment

(here is the link to Part 1: Run an Ironman to succeed in Business)

Phuket Pros

Phuket 70.1 2011 – Swimstart

In order to run an ironman you first need to register at an ironman event. Those registrations usually open between 9 – 12 months prior to the event and are usually sold out within a very short time.

The 2013 Ironman Competition in Melbourne takes place in March. The registration for this event was in March 2012, and the event was sold out in 4 minutes.

 

While this may be an extreme case, you need to register for an ironman event (and pay about 800 USD) at least 9 months prior to the event.

So you need to commit to participating in an ironman race between 9 to 12 months prior to the event. In addition, if you want to succeed in finishing an ironman event in under 17 hours you will need at least one full year of  training and a detailed training plan at least for the last 6 months to get there (unless you are already have finished a couple of marathons in under 4 hours, and are used to cycling 5 hours non-stop)

That is one year of training, suffering and putting your social life pretty much on hold. One year is not much to be able to brag for life, and to belong to the very small percentage of people that have finished an Ironman, but that is what it takes. If you are not prepared to make this commitment, chances are you will not finish the race in the 17 hours allocated.

Starting a new business will require at least the same level of commitment.  You will need to put in at least 3 – 6 months of your time on a full-time basis in order for your business to have a chance of success, and most businesses take significantly longer to get off the ground. You most probably will have to work around the clock during this time, unless you have the financial means to outsource or hire enough employees to take care of the various tasks that need to be done when starting and growing your business.

Your social life will suffer (unless your friends are in the same line of business), and you will have to get used to rejection and criticism. You will also have to spend more money on the business than you planned.

Take all that into consideration before you take the plunge.

(Click here for Part 3 : Discipline)

Run an Ironman to succeed in Business

Ironman Langkawi 2010 - Swimstart

Ironman Langkawi 2010 – Swimstart

On the first glance, the connection between running an ironman and running a successful business may not be that obvious. After all, what does spending up to 17 hours swimming, cycling and running have to do with managing employees, increasing sales and identifying new market opportunities?

The short answer to this question is: Commitment, Discipline, Perseverance, Flexibility, and Passion. Those are the critical attributes to success in business as well as in completing an ironman event. But first let’s have a look at what exactly an ironman competition entails.

The ironman event was started during the awards ceremony for the 1977 Oahu Perimeter Relay, as the members of the Mid-Pacific Road Runners and the Waikiki Swim Club wanted to decide who was fitter: runners or swimmers.  So U.S. Navy Commander John Collins suggested to combine the already existing three long-distance competitions on the island: the Waikiki Roughwater Swim (2.4 mi./3.86 km), the Around-Oahu Bike Race (115 mi./185.07 km; originally a two-day event) and the Honolulu Marathon (26.219 mi./42.195 km) into one event (source: Wikipedia).

Harald Weinbrecht - Business Coach, Entrepreneur, Triathlete

Ironman Hawaii Swimstart. Source: Wiki Commons

Collins supposedly said: “Whoever finishes first, we’ll call him the Iron Man.” Of the fifteen men to start off in the early morning on February 18, 1978, twelve completed the race. Today thousands of people compete in ironman events worldwide, and the record currently stands at below 8 hours for the complete distance.

Participating and finishing an ironman race within the allocated time is far from impossible, no matter your current fitness level, as long as you embrace the 5 critical attributes, which also apply to running a successful business.

  1. Commitment
  2. Discipline
  3. Perseverance
  4. Flexibility
  5. Passion

Customer Service and Feedback Forms

Every company should strive to get feedback from his customers. Listening to your customers about your service or your product is invaluable to improving your business. However, a famous local coffee shop chain has put forward a very good example on how NOT TO do it.

We shall not name the coffee shop. Suffice to say that it is one of the large local coffee shop chains that has been around for a while. Currently they run a promotion – a “Service Excellence Campaign”: Provide feedback about your coffee shop experience and get a free white coffee. Sound great – doesn’t’ it? Everybody loves to give feedback, specifically if the experience has been less than pleasant.

If we are not satisfied with our customer experience, there are 2 options:

  • We don’t say anything and just never come back. The business lost a customer and will never know why. OR
  • We complain about our experience to the manager. Now the business has a chance to rectify the situation, to improve, and to potentially even win the customer back

Hence we should reward customers that provide feedback, as this allows us to know our shortfalls and improve our business.  And a free white coffee sounds great.

Now this is where the problem is: In order to get your free coffee, you have to fill out the feedback form and provide your details, such as name, e-mail and telephone number. You then pass this information to the manager of the specific store. Apparently (based on the terms and conditions indicated on the feedback form) you will then receive an e-voucher for your white coffee.

However: this voucher for the “free” white coffee is

–       only valid in the store that you provided the feedback for

–       only valid for one month

–       and can only  be redeemed with a minimum purchase (excluding drinking water!).

Now why in the world would I tell the manager that I had a bad customer experience, give him my explicit contact details, then wait for an e-mail with a voucher, be forced to go back to the same store and spend some more money, just so that I can get a free coffee?

In my opinion, this just doesn’t make any sense.

Hence I didn’t even bother to provide any feedback at all.  In this instance it would have been much better for this specific kopi tiam place to just provide an anonymous feedback form without the free drink – at least then I would have told them what’s wrong.

Ideally what they should have done is to give the free coffee straight away at the time when they receive the feedback form – as a real appreciation to those customers providing valuable information to the business, which can then be used to improve the customer experience.

My advice to this coffee shop (and to others planning similar campaigns): Think through the whole process of collecting customer feedback from the point of the customer, before implementing such feedback processes.

Points to consider before registering a company

You have thought long and hard over whether you want to leave the safety of a corporate environment and start your own business. You have counted your savings and decided that you have enough cash in the bank to give it a fair shot. You have spoken to your peers and potential customers about your idea, and the feedback has been encouraging. Now it’s time to take the next step.

Before you start putting your idea into reality, you first need to make a few decisions, and you need to understand the implications of those decisions. So what are two of the critical decisions you have to make before starting off?

  1. Get the right legal framework

As an entrepreneur in Malaysia, you have in principle two options:

–       Sole proprietorship

–       A company limited by shares (Sdn Bhd)

If you are a foreigner, the choice has been made for you already: only Malaysians and permanent residence are eligible to register for a sole proprietorship.

Advantages of a sole proprietorship:

  • All profits generated by the business are your own personal property. You will only have to pay personal income tax, not business tax
  • No reports of accounts are required

Disadvantage:

  • you are liable for all business debts, and you will be personally responsible for all risks and failures in the business

Another difference is that, unlike a sole proprietorship, a Sdn Bhd can have more than one owner. In addition a Sdn Bhd creates a significant bigger impression when you meet potential clients – and that could mean the difference between getting that sale and coming in second.

For those reasons (growth possibilities in issuing new shares, limitation of person liability, and image) a Sdn Bhd is most probably the preferred option if you start a business with the idea of growing it big.

      2. Choose your name wisely

Before you can register your company, you need a name for your business venture. This name needs to fulfill the following criteria:

  • you must really like the name (personal preference), and it should be a name that you will still like 5 years from now
  • the name should ideally reflect what the business is all about
  • the name is original and ideally sticks in the mind of our target audience
  • the name is available and acceptable to SSM for registration.

Example: we have decided to call our business INCUBE8. It does fulfill all the above criteria:

  • we really like the name – it’s kind of funky with the pay of letters and the number 8. (well, that’s a personal preference)
  • the company helps to grow companies. We are like an incubator with a host of added services, hence incube8 (spoken: “incubate”) reflects exactly what we do
  • Incube8 sticks. People like “8”, as this a lucky number. And it takes people a bit to figure out exactly what “Incube8” means. During that time they thnk about our name. People remember us.
  • Due to the use of the number 8 in our company name our name is unique (at least in Malaysia), and not part of the list of words requiring approval by the ministry.

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