Gold Medal Philospophy

 

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By any measure London 2012 was a successful Olympics.  The GB cycling team was a key contributor to this achieving medals and world records in abundance and the secret of that success was down to the smallest of details.

‘The Aggregation of Marginal Gains’ is a philosophy devised by team GB cycling boss Sir Dave Brailsford. Dave believes that by breaking down and identifying every tiny aspect of an athlete’s performance and then making just a 1% improvement in each area the athlete’s overall performance can be significantly enhanced. None of us can argue with the results.

 

So how does this effect business?

 

Well ever since 2008 we have all been trying to do business in extremely difficult economic conditions. All of us have introduced our own austerity measures and cut our business resources back to the bone. Making major cost savings or efficiencies now in 2014 seems, if not impossible, highly unlikely.  Yet we still are looking for any improvements we can make.

 

This is where team GB’s philosophy may help.  By looking for the small savings across a wide range of costs rather than focus on one big saving, major improvements can be achieved. To do this you will need good quality management information, quality analysis of that information and someone who will objectively question the business.

 

At Baldwins we have been helping our clients achieve these marginal gains by assisting them get the highest quality of management information, paying particular attention to how that information is presented, which in turn helps the information becomes easier to analyse. Here again Baldwins can bring a wealth of experience to the analysis process and then we can help by asking those no nonsense objective questions –Why –How-When etc. that ensure those marginal gains available are not over looked.

 

 

 

 

 

Focus on Action

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In my last article I talked about the importance of understanding your target client base as a key part of building a sales plan. This time I want to consider goals and processes that lead to a defined action plan.

When building a sales plan we are all taught that the most important element is to set a goal, and this is very true. There are numerous books articles and seminars available on goal setting which will be of help if goal setting is new to you and I would recommend you research the goal setting process and ensure your goal is based on sound principles.

As important as goal setting is however, it is only a part of the process of building a successful sales plan. Having a goal, even a well-defined goal, will not generate any revenue. In fact your goals can sometimes stand in the way of your success. What I mean by that is, if you start to fall behind the pace necessary to achieve your goal, focusing only on the ultimate goal can prove de-motivating rather than motivating.

So what is the alternative?

Well it’s not really an alternative, it’s an as well. Success is achieved when goals are supplemented by a process that leads to action. If your goal is to generate £500,000 in revenue over the next 12 months you firstly need to believe you can achieve this goal. However belief itself is not enough, you need a process of defined actions that are capable of returning the required £500,000 in revenue. It is the focus on the process that is more likely to keep you motivated during the difficult times than the goal itself.

Let me explain

The process is the way we break down the goal into an action plan that we can use to guide us over the next 12 months. Here is a simple example;

Goal                                                                      £500,000 new sales

Average sale                                                       £20,000

Number of sales required                               25

Conversion rate from proposal                      1:2

Proposals required                                          50

Conversion rate meeting to proposal          1:3

Meetings required                                          150

Meetings per months                                    12 (rounded down)

Meetings per week                                         3

So what has this process done for us? Well it has taken a £500,000 goal and broken it down into an achievable weekly none revenue objective that leads us to the achievement of our £500,000 goal. It has also given us a range of metrics by which we can measure and adapt our on-going sales performance.

Focusing on achieving £500,000 at the start of the year when the sales board shows a big fat 0 is difficult. The key to succeeding is to break it down into smaller chunks that can be achieved and monitored on a weekly basis. In the above example its simple – this week I need 3 new sales meetings, and next week…I need another 3 new sales meetings. Get the idea?

It is easier to focus on achieving an objective of 3 sales meetings per week than getting too caught up with a £500,000 annual sales goal.

In your sales plan now you need to focus your planning on a series of actions that will generate 3 meetings a week, rather than focussing on the big monster of £500,000.

An example of things to consider

  •  Define the sources of your new leads
  1.  Referrals
  2.  Professional introductions
  3.  Networking
  4.  On-line & social media
  5.  Cold calling
  • Set an action plan for each source
  • Diarise your actions in advance

Focussing on the actions rather than the goal is the way you will stay motivated to succeed.

Sales need not be complicated.

Building a Sales Plan

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As discussed in my previous post, the most important element of success for a new start up, or indeed an established business is sales. Sales drive all other activities you undertake in business. The problem is that a lot of owner managed businesses do not have a clear sales plan. Over the next few posts I would like to share a few ideas that may help lay the foundation for creating your own individual sales plan.

The first point I would like to make about sales is that it is a very individual process and your style of selling will be influenced by your personality, experience, your product or service plus an assortment of other variables. So don’t attack sales in a formulaic fashion, be prepared to let your personality shine through the process and don’t get caught blindly following a list of do’s and don’ts laid down by some selling super star. Your potential customers want the real you. People buy people is a cliché I know but still very true and you can only get so far by pretending you are who you are not and copying someone else’s approach. Advice point 1 – Develop your own style. It’s risky and you will have to confront some failure along the way but it will be the thing that serves you best in the long run.

However success in sales is not complete anarchy, there are some fundamental ground rules and things you can learn from people with experience. It is some of these ground rules I would like to discuss in this and some following articles.

Rule 1 Collate and Analyse Data

Don’t rely on gut feel. The secret to success in sales is to know that the actions you take will lead to profitable sales. Guesswork is for amateurs. Below are three areas of analysis it is wise to explore as the initial phase of your sales planning exercise.

Identify the right customers

It’s clear not everyone is going to buy your product or service and a lot of time, money and effort can be saved by avoiding the trap of marketing or selling to the wrong people. Oscar Wilde once said ‘The play was a great success but the audience was a total failure.’ Choosing the right customers to focus your sales efforts on will save money, time and a lot of disenchantment.

Getting the demographics right is critical to the efficient running of a sales plan. There are some 85 year olds who run half marathons but are they the right demographic to market running shoes to? Understanding the correct demographic will take some thought and research and you must be prepared to test your assumptions. You don’t have to spend thousands on market research; you could ask people you know or run a simple survey on social media, anything that will help identify your ideal customer. One final point, don’t think just about the end user; think about the purchaser they may not always be the same. Why is it that you find men’s underwear advertised in women’s magazines?

Think Value

Customer Lifetime Value is a very important metric which tells you how much business you can expect to gain from a customer over their life with your product or service. This will help determine how much you can afford to spend on acquiring the customer. CLV can be calculated on an estimated basis for a new business venture or on an actual basis if you have built up good customer data. It is calculated as follows:

Value of sale X Number of expected sales X Average period of client retention = CLV

Example

If a Gym offers membership at £40 per month and members on average members stay for 3 years

CLV would be 40 x 12 x 3= £1,440

Use this figure to give you an objective benchmark to use when considering your marketing and sales costs in relation to acquiring new customers. You now are able to cost all offers, discounts etc against the CLV to understand their real effect on long term profitability.

Understand the sales cycle

Not all products and services will have the same sales cycles. Understanding the process of selling your product or service is of major importance to your sales plan. Long sales processes particularly around complex products or services may involve multiple proposals, many meetings and a lot of resource before the sale is secured. This adds cost and will put a bigger strain on the businesses cashflow; this must be factored into your planning.

The sales cycle may also affect the type of customer you target. Selling your product or service to Tesco, Virgin or any other major company may have a huge impact upon the volumes you can sell but the process can be long and very costly. Starting with local smaller companies could be the most appropriate avenue for a new business to establish a positive revenue stream before tackling one of the giants.

These are three of the core areas that you should spend time analysing to as you begin to put your sales plan together but add to these anything that is specific to your product, service, local market etc. Collating and analysing your data takes the guesswork out of your planning and ensures your sales plan is built upon a solid foundation.

Sales first- The key to start-up success

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I have recently had the opportunity to meet with a number of aspiring young entrepreneurs who have been brave enough to make the leap and start their own business. It has been quite an eye opening experience. On the positive side I have seen that amongst the young people in the Midlands region of the UK we have some outstanding talent. I have however also seen that without proper advice and mentoring that talent on its own will not be enough to secure success.

My main concern is that I have seen some businesses who have not quite grasped the first and most important fact about being in business – you have to make sales. They have spent all of their start-up capital, often acquired by loans, on overly expensive websites, unnecessary software programs, piles of stationary, office premises etc. etc. without securing any revenue streams.

It is imperative that if we are going to help these young people in the pursuit of their entrepreneurial dreams we must start with the first and most important priority being advice around how they sell.

Whatever the product, whatever the route to market for these businesses to survive they must FIRST establish a revenue stream and worry about their accounting software and highly stylised logo’s somewhere further down the line.

And as they move forward and become more established businesses sales must be the primary concern in any business advice program. It is no accident that sales turnover is the first line on your profit and loss account. New clients and customers are the blood that delivers oxygen to the rest of the business, cut this supply and the business will quickly begin to fail.

People go into business for all sorts of reasons, mostly because they have a passion for the product or service they offer, rarely because they want to be salespeople. The best advice we can give to any young entrepreneur is first and most important priority in business is and always will be sales.

The Peter Pan Principle

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I had the distinct pleasure last week of working with a group of sixth form students on a youth enterprise day at a college in Birmingham. To be honest, I was really unsure what to expect from the day but the reality was totally inspiring and revitalising. To create the context these were sixteen to eighteen years old students spending the day looking to acquire a greater level of employability skills and it was a delight to see the way they threw themselves into the tasks of the day with real conviction and enthusiasm.

These young people have yet to develop any real business skills, knowledge or experience. Their understanding of strategies, models and all we learn as we craft our business skill is almost non-existent. What they did have though in bucket loads was enthusiasm and this manifested itself in genuine creative flair.

It set me to thinking about how easy it is to lose this enthusiasm as we become older and wiser. I remember as a young man in sales being told by an older, wiser and more respected salesperson that I suffered from an overdose of enthusiasm; it was a comment that crippled me at the time. Enthusiasm was a major part of who I was and to this day it still is. I tried reigning myself in and controlling my raging enthusiasm, only to see my sales figures plummet through the floor and me with no option but to leave the company for a new role. Fortunately in the new role enthusiasm and creativity were not only encouraged but celebrated and my career received a new lease of life.

This was well over 20 years ago but it is something I have always remembered. Indeed it was something that came quite strongly to my mind whilst watching the way the various groups we were mentoring worked through the difficulties of their tasks.

Now I am not saying that enthusiasm on its own is a more powerful force than knowledge and experience, but what I am saying, and what I saw demonstrated last week, is that knowledge and experience coupled with that vibrant brand of youthful enthusiasm is a most potent force.

There is no question that as we lose the innocence of youth and take on the experience of being so grown-up we can also lose the magic of that youthful enthusiasm. Our responsibility and need to be more serious coupled with the pressures of living in a fast paced competitive world all but suffocates our childlike enthusiasm. And I suppose what I am saying is, I know we cannot live our lives with the freedom and carefree spirit of a Peter Pan. We have to grow up but is it possible as we do that we can keep a little corner of ourselves young, free and uninhibited to culture that special breed of creativity and enthusiasm the young enjoy?

So let’s set a challenge, every once in a while let free the child within and throw a good dose of childlike enthusiasm into our difficult and trying world and see what happens.

You never know…

Big Bang Your Business

 

Niccolo Machiavelli the 16th century Italian philosopher stated that “Whoever wishes to foresee the future must consult the past,” and even in a world that changes with incredible speed there are lots of lessons to be learned by casting a backward glance. I want to spend a few minutes looking at how something from our rather distant past may be help us in growing our business today.

To do this let’s take a journey back in time some 13.8 billion years, to a time of – well we are not really sure – perhaps nothing. However around this time 13.7 to 13.8 billion years ago the universe as we now know it came into existence with a burst of energy so large and temperatures so unimaginably high that the remnants of it can still be detected by scientists today. This was the start of the universe, energy; nothing solid and physical that we would associate with our real, material universe we interact with every day.

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So what happened to take us from a massive burst of energy to the physical reality that allows me to feel the keys of the laptop under my fingers?  The answer lies with Albert Einstein and his E=MC2 equation that turned the world of science on its head early last century.

Einstein’s theory states that Energy and Mass are interchangeable. One of the most dramatic examples of this was the Hiroshima atomic bomb that converted a mass of uranium into energy unleashing energy in the most devastating proportions. However Einstein’s equation also suggests that Energy can create Matter (mass) and that’s what we see at the big bang.

The initial burst of energy that was released at the beginning of the universe created matter, particles of energy that eventually formed protons, neutrons and electrons that became atoms the basis of our physical reality. This soup of particles created from pure energy began an amazing journey that has led to the spectacular cosmos we inhabit.

A great story but how does this help our business growth. The answer is ENERGY. The universe was created out of energy, everything we see around us comes from energy and if we want to Big Bang our business growth the foremost thing we are going to need to do is input a source of energy.

I understand that we will need a vision, a plan, strategies, objectives, KPI’s, management philosophies, measurement tools, CRM software, a new website – and the list goes on and on. A lot of these things will have an important part to play in the building of a successful business. BUT, they are tools that assist with rather than the originators of growth.

Energy is the beginning of everything and whilst I am a firm believer that energy in business needs to be directed, focussed and managed into areas where it will bring the best results. Without that initial energy you will not have to worry too much about management as you will have little to manage.

As entrepreneurs, business leaders and managers we are the people responsible for leading our businesses forward. People look to us and mirror our persona and behaviour. If we exhibit low energy attitudes in the workplace how can we expect to inspire the people around us into making a real difference.

I have had the pleasure of recent times to engage with a number of young entrepreneurs who have achieved fantastic growth within their businesses. They all have different personalities, different skill sets, education and experience but they all exhibit one common trait – high levels of energy.

The truth is we have a choice every day as to how much energy we will bring to that day’s proceedings. My experience is that energy is contagious, if you mix with energetic people you feel a boost in your own energy levels and you too can be an energy radiator within your business.

Think back through your business or your career.  I guarantee the highest moments of achievement correspond to the highest levels of energy imparted into the business. Einstein predicted that energy and mass are interchangeable. If you want to increase the mass of your business you need to input energy.

Machiavelli exhorts us to learn from the past, the big bang shows us what can be created from nothing but energy.  Give it a go and BIG BANG your business.

 

Want a good performance – then get a good nights sleep

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“You can sleep when you’re dead.”

We have all heard the saying attributed to Thomas Edison and it has been used in various formats in songs, movies and by lots of us hungry, ambitious, hard working corporate climbers over the years. And why not? There is nothing wrong with hard work and dedication. But as the years have progressed I have begun to understand the importance of a good night’s sleep in terms of performance in the workplace.

It was back in 1924 that two psychologists John Jenkins and Karl Dallenbach first experimented on the effects of sleep on the memory. They had two students at Cornell University learn nonsense syllables then tested their memory, what they found was that the students remembered more of the syllables when they had been to sleep between the learning session and test session than if they had stayed awake.

There have been experiments over more recent years showing that new memories stick better after sleep, as the neural activity in the brain during sleep is actually rehearsing the day’s events and memories leading to a strengthening of the neural networks. Scientists have even gone as far as understanding how the different phases of sleep REM or NREM (rapid eye movement or non-rapid eye movement) will reinforce differing memories with REM sleep aiding the more emotional memories and NREM the more factual.

In 2000 a study by the University of Southern California using MRI technology showed that regions of the brains prefrontal cortex, an area that supports mental faculties such as working memory and logical and practical reasoning, displayed more activity in sleepier subjects. Researchers interpreted this result as indicating that the brain of the average sleep-deprived subject had to work harder than that of the average non-sleep-deprived subject to accomplish a given task, and from this indication they inferred the conclusion that the brains of sleep-deprived subjects were attempting to compensate for adverse effects caused by sleep deprivation.

At the end of the day sleep is something that is a universal need of all animals, even though being in a state of unconsciousness is not a good idea when you may end up as someone else’s dinner.

So when you are next contemplating pulling an all- nighter or cramming some study way past midnight – stop and consider if maybe a good night’s sleep and fresh approach in the morning may be more beneficial.