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Author: pippa@aurik.com

unit economics

Understanding your businesses unit economics

Written by pippa@aurik.com on . Posted in Exits.

In any business, understanding your data and knowing which data is valuable, helps manage risk, performance and value.

Understanding your unit economics begins this process. Unit economics simply evaluates how much profit you make from selling one unit of service or product. It’s easier to calculate in a very early-stage business but much harder in a growing, established business.

Listen to this podcast from The Money Show where Pavlo Phitidis outlines how to calculate your business’s unit economics:

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What is business experience and how can you value it?

Written by pippa@aurik.com on . Posted in Featured, Leadership, Team.

Experience holds much promise. When you want to grow, experience can accelerate it. When you are facing challenges that overwhelm you, experience can solve it.

What does experience look like?

Grey hair, time in the game, a fancy car, connections and networks, a string of degrees, Harvard, titles and the list goes on. Is that the experience you want?

Onboarding experience into your business to grow or solve problems is valuable only if you get it right. It will otherwise be a costly mistake.

Listen to this podcast from The Money Show where Pavlo Phitidis breaks down what elements of experience you need to look for, to achieve clear outcomes.

How do you evaluate experience?

Time – Does someone who’s been in business for 20 years have more relevant experience than someone who has been in business for 5 years? Think of driving to understand the value of time.  When you first learn to drive, there’s a massive, steep learning curve and within a few months, you quickly get the hang of it! Since then, how much have you improved your driving? Sometimes we don’t even remember driving to the shop – it’s automatic. And would you like to be driven to the shops by your 95 year old grandpa? No, even though he has 80 years of driving experience, it doesn’t make him a better driver.

But think of Lewis Hamilton, who spends every single day working on his driving. He’s got far fewer years in the driving seat but his constant attention to it sees him improve every day.

Context – Does the experience come from government, corporate, university or the school of hard knocks and is that relevant to your business?

Position – Chairman, CEO, CMO and everything else, what does their experience actually look like, what do you need them to achieve.

Function – Strategy, sales, ops or admin – where is your biggest need?

Activity – Were they alone, in a team, led by the team or leading the team, saying or doing?

Outcome – How is success and failure communicated, evidenced and truthfully expressed

How do you value it?

Onboarding experience should be preceded by need.

A need to grow – remember if you are not growing you are dying.

A need to solve challenges – some come from complacency, others come from growth.

Define what the problem or opportunity is. This means give it context, description, shape, and form and ultimately a measured outcome. Hire the right experience to deliver on that, and value it at the resolution of opportunity or solution to the problem.

If you are not seeking the outcome of experience in your business, it might be time to question your ambitions or purpose. Nobody knows it all and wisdom, the sum of insight and foresight, will never leave a growth mindset comfortable or complacent on status quo. It can always be better. You can always be better. If that’s the case, why not be better. Experience, well placed, can constantly close that never closed gap at being the best you can be!

By Pavlo Phitidis

job vs asset

When the business you’ve built is just a job

Written by pippa@aurik.com on . Posted in Exits, Grow & Exit, Leadership.

Don’t look where you fell, look where you slipped is a favourite African Proverb.

Listen to this podcast from The Money Show where Pavlo Phitidis unpacks why this resonates with him in regard to many business owners he works with:


It came to life after 2 consultations with 2 different business owners today.

The first business owner, in his 50’s has built a remarkable business in a commoditised market. With a $30m annual revenue, he has generated a solid income for himself and the partners. They now want to monetise their 32 years of investment and risk through a sale. This would allow them to enjoy the capital gain that would be their greatest wealth generating instance. But the market does not see their value. After a due diligence from a prospective acquiror, it was evident that the partners hold and own relationships that are responsible for 56% of annual revenue. The uncertainty that these relationships would remain in play after they sold, led to the acquiror discounting their asking price by a hefty 60%.

The second business owner in the security sector is in his late 30’s. Over the last 5 years he has built a very smart, tech-based solution for the eventing industry. Specifically, it is suited to big entertainment, sports, and political events. Recently, his business took off. But his clients, on the back of big, medium-term contracts, insist on his presence at the events, even though he needn’t be there for the service to function and perform. He wants to work with Aurik to resolve this problem. We’ve agreed to help. It’s a problem we have solved many times before. Today was the third postponement of our first session. But the news, like last time, is all good. He is overwhelmed. Having just signed on 3 new stadia and bidding with a high likelihood of success for the Olympics, he urgently has to deal with client needs. Urgent, but how important? This path will lead to the same problem faced by the first business owner – is the business an asset or is it a job?

Starting and building a business needs you at its core. It’s you that needs to learn what works and what doesn’t and through that, find a path to establishment and growth. Transiting from your daily direct leadership to a team then becomes essential. This is where many fail and 5,10,20 years on, still remain front and centre of the businesses sustainability or growth. So how do you get it right? And when should you act to get it right?

How do you get it done?

  1. Simplify – narrow the scope of your business both in terms of who your customers and clients are as well as the extent of the services you provide to solve their problems. A simple business is scalable and a scalable business is a growth business.
  2. Systematise – translating and articulating the activities you perform in how you market, sell and service your clients into teachable activities, organised into a sequence with measured outcomes is next. Once done, linking and stitching them into a single system or experience from the view of your customer is vital.
  3. Delegate – with your business organised into a single system, made up of the many activities, you can now empower your team to perform the activities. Remember, the activities generate the experience, not your personality. If you cannot get it done, discard that element of the experience and make do with what you can get done.
  4. Grow – with a scalable platform for growth in place, growing beyond where you currently are needs to be led by you. Setting a framework for growth that maintains the scalable service platform you have now built is essential. Failing to do so unwinds all the effort and will see you again, front and centre of the business, or put differently, the job you have built.

When should you start?

Once you have traversed the first 3-5 years of start-up, the time to transfer relationships, processes and responsibilities becomes essential. Should you opt not to or fail to do so successfully, you are building a job, not an asset. You limit the scope of your business’s potential, limit the opportunities to attract driven team members and fail your own future wealth creating instance.

Urgent and important are different. Urgent mostly means that you are being led by other people’s agendas. A client must be responded to. But you have full control over which clients you have, the promises that are made and how you build your business to operate without you. That’s the important, strategic, structural stuff of turning a job into an asset. Put differently, building a business that can be successfully sold in the future to become your greatest wealth generating instance.

funding for growth

Growth funding – debt, equity, or both?

Written by pippa@aurik.com on . Posted in Featured, Funding, Leadership.

Not all business growth needs funding.

There are two types of growth: organic growth and next-level growth. Listen to this podcast from The Money Show where Pavlo Phitidis unpacks both, and what the funding options are for each. 

 

 

Organic growth sees your growth emerge along with the business’s ability to support it. Your organic growth rates will be governed by your working capital cycle, team, and equipment capacity and then outside influences like the country’s growth rates and economic cycles. See this as a marathon that requires a consistent, predictable pace to finish the race. 

Next-level growth relies on you going beyond your weekly, monthly activities and requires trailblazing and a very deliberate, focused effort. Think of entering a new market, acquiring new assets or teams, developing new products or innovations, or even acquiring a competitor or aligned business. See this as a sprint within the marathon to get ahead quicker and faster than the rest of your former best time. 

As you put more effort into growth, you need more oxygen or fuel to feed the increased activity. Accessing this funding is vital and failing to do so fails your effort of next-level growth. 

 

Where do I go first for funding? 

Depending on your life stage and stage of business. The further you are from retirement, the more risks you can take. A more mature and established business means your funding will be cheaper.  

A younger business and owner may start by looking to banks for debt and likely fail. Next will be an external funder called an angel funder, who will look to take equity against a loan provided, or a pure equity stake as an early-stage investor. This means they become a shareholder and earn a seat in your future and direction. It is a marriage of sorts.  

At a later stage, business owner and business can turn to banks for debt funding and likely succeed. A loan is granted and requires capital and interest payments to be made until it is settled and repaid in full. It will mostly be granted against the security of an asset. 

 

When is debt best and how do I get the deal done right? 

Debt is best and cheapest in all cases of organic growth. If you tick up the growth rates in your business, debt is still best. The reason is that you remain in full control of your business – this might be a good or bad thing! Nonetheless, it’s an easier source of funding to understand, evaluate and calculate, keeping things simpler for you.  

But, it is unlikely to be granted in any meaningful amount unless underpinned by an asset.  

Your business assets – plant, equipment, debtors, stock, investments – all act to cover the risk of the debt being provided by the funder. Earlier stage businesses will require higher risk cover than later stage businesses because they face a less predictable future. If you need funding to support your businesses growth and uptick using non-material assets like salaries, technology, marketing, and so on, you might get some through overdraft (costly), but it’s unlikely since there is no security against that spend. You can look elsewhere to get that funded, but it’s messy and complicated.  

When raising debt, be sure to understand the cash flow implications. The next month you’ll be required to pay back the debt! Payments include principal capital amounts as well as interest on the debt.  

Suppose your funding is an investment that will take time to yield an increase in revenue or profit to settle that debt. In that case, you need to negotiate a moratorium on capital or interest or both. This acts as a holiday on the payments you owe for a specified period but increases the debt’s accumulated value, which still accrues interest. 

 

When is equity best, and how do I get the deal done right? 

If you are ready to sprint, you need growth funding. Again, your first option should be from your coffers, followed on by debt if the amount is not too big, and you can manage the payments you’d need to make to the debt provider.  

Alternatively, and most likely, if it’s a big sprint, you’d need to raise equity. The process begins with finding the right funder. More than money to invest, they should bring skills, relationships, understanding, and other benefits to help you attain your next-level growth ambitions. This would make them a strategic funder. If all they offer is money, they are simply a funding provider. This matters because the pricing of the equity will differ between the two options.  

A strategic funder can get you where you want to be faster, safer, more reliably, and more efficiently. They can probably also get you there bigger. They will price it all into the cost of the equity. In addition, equity funders will also want a clear, obvious exit strategy.  

Their business is about investing an amount of money with the intention to get out of your business in the future with more than they invested. How they extricate themselves from your business will be a key concern for them and you need to be able to convince them accordingly.  

Equity is good to fund your business once you have exhausted your debt options and it stretches across all your growth assets, tangible, or intangible. It’s hard to raise, takes a massive amount of time and tests your intention behind why you do what you do. Seldom do we have time to think ahead into the future – equity. 

The way we build businesses, and the way companies must be built to secure the right funding at the right time differs. Often, we bemoan the funders, blame others, and claim there is no funding in the market when we fail at securing it.  

There is more money to fund business growth than there are businesses worthy of funding. Knowing that and adopting an Asset of Value™ growth approach will locate you in the heart of a deep oxygen pool to fuel your greatest ambitions.  

invest your time

How you spend your time forecasts your future

Written by pippa@aurik.com on . Posted in Creating time, Mindset.

To soothsay your future, look at how and where you spend your time today.

Listen to Pavlo Phitidis discuss the impact that the way we spend our time has on the future of our business in this podcast from The Money Show:

 

 

We have a choice on how we spend our time. Maybe the best way to highlight this is to use an athlete.

Think of a Mixed Martial Arts, tennis or football pro. They know that their peak income generating lifecycle is around 10 years. Smart athletes ensure that they spend their time maximising their earnings over that period. They focus all their time on maximising their performance during gameplay. They adjust their lifestyles to maximise that time and spend none on anything that they can outsource or have offered to them at a level of expertise greater than theirs. So, they hire a nutritionist and a cook to maximise their fuel intake to perform at peak. Without their help, they’d spend time understanding nutrition, shopping for food and preparing meals. Over 10 years this might well consume 16,400 to 17,300 hours. Time that could be spent improving gameplay, performance, and earnings.

This week, we had a session with a business owner growing fast. It was so refreshing to hear his concerns about how he spends his time to ensure the best application of it to maintain his growth rates. A brief analysis suggested that there were better options, most of which he was not even aware of.

All businesses traverse a development lifecycle. How you spend your time over that lifecycle matters and it must change.

  1. In start-up – spend it chasing deals and cash flow

  2. In early stage – confirming your vision and identity

  3. In build stage – creating a system of delivery

  4. In empowering stage – securing a team

  5. This gets you to a place where you can enjoy organic growth. Changing from doing to leading is now imperative.

  6. In grow stage – finding that next level

  7. In value stage – migrating your business to exit

The problem we all face is that habits develop, conventions entrench and perspective wanes. An inability to see the wood for the trees compounded by not recognising that time runs out carries a regrettable cost that can never be recovered.

fishing lures

Why your website is not enough to win new customers and grow your business

Written by pippa@aurik.com on . Posted in Featured, Lead generation and conversion.

A website is essential, so you invest time, care, and money into building one. Then you wait. You wait for something to happen. And nothing does. What now?

Listen to Pavlo Phitidis share a story about fishing, to make his point about reaching your target market, in this podcast from The Money Show

To get fishing right, you need to know what species of fish you want to catch.

Each species behaves differently and eats differently to almost every other species. Let’s fish for carp – a big, mud sucking, freshwater fish species. You fish for them using patience, rods, reels, line and bait. You fish for them in muddy water. Building a website is like carp fishing. You find a spot by the dam, set up your rod, reel and line. Add a big hook with bait and cast it into the water. Nothing bites.

It doesn’t bite because it does not know you are there. To let the carp know you are there, anglers mix special bait preparations. They add flavors, spices and condiments. They also cast 4 or 5 lines in all with more flavored baits. The carp smells it in the water and presto – you catch a fish.

Your website is like the hook in the worldwide ocean.

To catch a fish, you need to decide on your species, understand how it behaves, create a bait that it loves and let it know that you are there, baited hook and all.

In your business, this means that you need to build campaigns to reach, entice, draw in and hook your future customers.

Campaigns are your bait and are used to attract fish to your website to see if what you do and how you do it is valuable enough to them to become your customers.

Campaigns have several elements.

  1. Promotion

    A message that you communicate that will get a response from your customers. It might establish and build your brand to create credibility and confidence in your customers. Or it might be a promotion with an offer to secure a transaction.

  2. Format

    Your campaign needs to be formatted to a suitable medium. Is it a flyer, a social post, a billboard or advert? The format will affect the messaging and creative design.

  3. Communicated

    Your campaign needs to be actioned. Email campaigns need to be sent to your audiences, radio campaigns need to be flighted in the appropriate shows and flyers dispensed at the relevant locations.

  4. Measured

    Your campaigns should be measured. See what works, what doesn’t, adjust learn, perfect.

  5. Repeated

    Establish a campaign calendar and make the adjustments needed to suit the buying behavior of your customers. In hot summer months you might use flyers, in cold rainy months you might use radio.

  6. Multiple

    More rods in the water create more attraction and familiarity. Campaigns are no different. Run multiple campaigns when you have the money. Do radio and flyers because done together, the chances of your fish seeing your bait increases exponentially.

Business is a dynamic system of activities. It never stands still. Bringing your website to life means letting customers know that it exists amongst the 480bn other websites clouding the Word Wide Web and about 10,000 or more competing for your fish’s attention.

 

 

organic next level growth

Two types of growth every business owner should have in play.

Written by pippa@aurik.com on . Posted in Innovation, Leadership, Scale & Grow.

Growth carries great weight! The weight of winning it, the weight of servicing it and the weight…of understanding and leading it! Without it your business is on a death curve. It will harm your income growth, customer acquisition and retention, team and supplier relationships and your opportunity to one day exit your business. Think of it like a President who has lost favour with the party and population – nobody wants to stick around a lost cause!

Listen to the Money Show podcast of the discussion Pavlo Phitidis had about the 2 types of business growth:

  1. Growth is a System.

Business growth is a system of activities, integrated to create an outcome. It doesn’t come from the product or service your business offers. It comes from the organizing the functional, commercial activities of your business into a single system. Marketing generates new leads, sales convert them, operations fulfil and service them and administration coordinates them – all work as a single system to create a great experience that customers than promote. The product or service you offer is what solves the customers problem; the growth system is what creates a good experience in having that problem solved for the customer.

  1. Growth is designed.

You can build a ship to sail fast or slow. You can build a building to be small or tall. It all comes down to design. Being clear on what you want to achieve in your business lets you design the right system to achieve it. When building an Asset of Value™, design is premised on your companies positioning in the market. Once clear, a System of Delivery (the commercial functions optimized and integrated into a single system of coordinated activities) enables your positioning. With these two layers in play, you can then direct and organize your team to power and lead the system implementation. This generates two outcomes. Organic growth and time; time to lead next level growth.

  1. Organic Growth

This is growth that sees your business grow revenues on a consistent, reliable basis, largely without you. The rate of growth depends on several elements including country GDP growth, sector and industry growth, life stage of your business amongst others. For example, if your country growth rate is 3%, your sector and industry is forecast at 5% and you are a 7-year-old business, you should look to secure an organic growth rate around 15-18%. If you are a 30-year-old business, you might adjust it to around 12-15%. Remember, this is growth that occurs largely with out you. It is driven by the System of Delivery and your team and is premised on your positioning.

  1. Next Level Growth

With organic growth in play, and most valuably, your time released from daily operational activities, you need to turn to next-level growth. As the term suggests, next level growth sees a significant increase in revenue coupled by a moderate increase in costs. The level up is felt in profit as the “yawn” between revenues and costs widen.

The “yawn” is an essential indicator of next level growth. Ramped up revenues that are tracked by ramped up costs grows your business. It also grows complexity, points to a failure to scale effectively and increases your risk.

In an Asset of Value, next level growth that yields the “yawn” is gotten by finding opportunities that maintain the positioning of the business, require little adjustment to the System of Delivery and don’t stretch your team way beyond current levels of comfort and capability. These opportunities can be in new product development, new market entry or acquisition, new investment in plant, equipment, space, digitization, marketing, and talent.

Essential, vital, critical to the choice we make as business owners (and the single biggest investors in our business) is not to stall or disrupt organic growth. Landing a next level growth opportunity that stalls organics growth simply pulls you back into daily operations and takes your eye off the opportunity, further exposing and risking your business to harm.

  1. Valuation

Growth, the history of growth and the future promise of growth are one of the biggest factors impacting your business valuation. A buyer or investor into your business does so either because they see growth potential unrealized in your business and will offer you a few dollars, or because the growth in the business makes it worth man, many more dollars. My first few business I bought were priced at a dollar each. They had served their founders well over the years and time had made them complacent. The complacency was fatigue which came about because of 30-40 years of running a business that centered around their everyday involvement in daily/weekly operations. Without them there, there was no growth. That was obvious to me and the bargain price of dollar had liabilities attached to it plus no growth. A fair price…. right?

  1. Virtuous Cycle

Business growth suggests opportunity to talent. Everybody wants to attach to a winner. Is also suggests value to customers, growth to suppliers. It holds the promise of growth in turn to funders. All are roll players in further driving your growth.

Your business growth is never yours alone! It also attracts unwanted attention from competitors if you become complacent because of it. Complacency, a sense of “having arrived” reduces vigilance and the relentless attention to growth that sustaining it requires. Competitors entering your domain, when vigilant, provide opportunities to invest in sustaining innovations and further can educate and grow a market of customers that your incumbent leadership can access too.

If you are not growing, you are dying. Pursuing growth without having built or designed your business to sustain itself risks everything. The goose that lays the golden egg (organic growth) needs to be solid and secure before you charge ahead into the market looking to become bigger for the sake of it.

 

 

 

covid zombie

What’s holding back business? Covid Zombies, supply chain disruption & engine room entrepreneurship

Written by pippa@aurik.com on . Posted in Featured, Leadership, Mindset, Trends.

Pavlo Phitidis identified 4 issue plaguing business owners and spoke to The Money Show about what to do about them. Listen to the podcast or read on

Rail to Road

On a recent journey along South Africa’s roads, particularly in the Eastern Cape, between Craddock and Port Elizabeth, Pavlo was struck by the incredible number of trucks trundling along, many transporting manganese, from north of Kimberly!

The roads are being destroyed, as they lie parallel to a railway line that is almost entirely empty.

 

Broken Supply Chains

Commodoties are booming right now, mining is booming, and the extensive net of industrial service businesses that supply and support these mines are struggling – to find steel, a key raw material to support mining activity.

Pavlo spoke of a large fencing business owner who he spoke to, who was desperately trying to find steel, to preserve his business.

This business owner had a strong sales team visiting customers, leaving them with R80 – 90million of business that they couldn’t service! And he was terrified that his clients would find someone else who could find steel somehow.

Pavlo’s advise to him was to put the customer at the centre of the decision. This business owner insisted that he needed the raw material to manufacture the fencing in South Africa, because to import the completed fencing material eroded all his profit on the deal.

Pavlo’s point is that at times like these, when you risk losing customers, and demand for you service could dry up, rather take the hit and do whatever it takes to fulfil the promise that you made to your customers.

When steel does become available again, at least you will have a customer base to work with, to build up your profits again.

Rather make no profits for the next 6 months, and hold on to your customers. It will also keep your sales team busy and motivated.

 

COVID Zombies

In the first 6 months of lockdown, staff went home and all of a sudden found themselves incompetent.

They had moved out of a workplace environment where staff would interact with their colleagues, bouncing ideas and problem solving together. When they were out of their context, they couldn’t do it.

For managers it showed up that they had been measuring performance on activity – being on site, attending meetings etc, rather than output.

Many companies needed to digitize their HR – communications and productivity software, which created great apprehension among many staff who weren’t sure whether they were being spied on, or micro-managed, or misunderstood why they were being monitored in a new way.

 

Engine Room Entrepreneurship

The shock of the lockdown brought leadership from the ‘bridge’ down to the ‘engine room’ where they were back into day-to-day matters, putting out fires and managing their apprehensive staff far more directly.

The crisis here is that new opportunities – and there are many that have come with the changes that Covid brought – are hard to see from below the decks.

How to prevent being ghosted after a positive initial sales meeting

Written by pippa@aurik.com on . Posted in Featured, Lead generation and conversion.

How often are you ghosted after a positive, warm sales call? You were on fire; the client was positive and responding and it was clear that your offer was right on point. And then, nothing. You can’t get hold of the client. You’ve tried email, phone, social media even and nothing.

Getting this sales challenge sorted needs you to get a couple of things right. Listen to Pavlo Phitidis discuss this on The Money Show:

  1. Why does your business exist?

Whilst your purpose might be to make money, create wealth, support the economy, generate employment, or make a difference to the world, your businesses doesn’t care. Its only purpose is to solve defined problems through a great experience for its customers.

 

  1. Become expert at serving customer segments.

You hope that it is enough to have an excellent product or great service offering, with all the right features to solve defined problems. The problem is that your competitors have equally good offerings. Let me be clear, without a good product or service offering you wont even exist. But on its own, it’s not enough.

 

  1. Develop a sales engagement system.

Whilst your product or service offering can fix a customer’s problem, how you engage with the customer creates the experience. This includes how you market to them, engage them in the fist meeting and should they select you, how you deliver on your service thereafter. All these activities stack up to create the overall experience. Your sales engagement process is an essential element of the experience.

 

  1. Master your sales discovery meeting.

Often when selling, you spend most of your time talking to your product or service offering. This product-centric selling was valuable in the 1700’s to early 1900’s. It simply is not good enough today. A smiling, nodding customer (seemingly hanging on to your every word) does not mean that they are engaged at all. Polite yes, but not engaged.

 

  1. Understand the “why” behind the problem at an emotional level.

Problem-solving selling has 3 layers of sophistication behind it. The first is to engage with the customer in such a way that they tell you the problem that they have. This is where many sales techniques go wrong. Mostly, you jump in with how your product or service offering can solve it and…. deal done! A fatal mistake.

 

Once the problem is stated, you should transition your line of questioning to understanding how and why and when the problem comes about. Spend time on this conversation. Get into the detail. Let your customer really drill down into the detail. At this point, your customers would almost be living the cause of the problem, and then you transition into a line of questions to understand how it makes them feel. That is the gold in selling. The emotional outcome of not having the problem solved, creates the opportunity for you to solve it and remove that personal, emotional pain.

 

  1. Solve the problem and resolve the “why”!

Now talk to how your product or offering can resolve the problem. Be sure also to ask how, with that problem resolved, the customer would feel. Be sure that in your engagement, that feeling, attributed to you and your product, confirms the emotional outcome of relief and certainty.

 

We all buy emotionally and justify logically. Fitting your product or service features to a stated problem is a lost opportunity and matches you to any other competitor in the market. Turning the stated problem into an emotive need matched to a personal problem is what sets you apart and ensures that “yes” is very highly likely a real yes.

business purpose

Why do you, and your businesses, do what you do?

Written by pippa@aurik.com on . Posted in Leadership, Mindset.

It’s easy to forget why you do what you do as a business owner.

Listen to the podcast from The Money Show where Pavlo Phitidis unpacks this big important question:


The vision we have for the business when we start is informed by many false premises. We think it will be easier than it is, we think we will get ahead faster than we do, and we think we will be standing on the bridge of our ship, leading and guiding our crew as we sail into growth and profit.

And 10 years on, or 20 years on, we struggle to remember why we do what we do. It mostly feels like a slog, stuck in the engine room of the ship we built, hauling coals into the furnaces that drive the engines that turn the propellors. At the same time, the seas we sail in change, constantly, relentlessly. The ship we thought we’d build is perhaps not the right ship today or for tomorrow. It’s equally relentless staying ahead of the change and it too, wears you down. Inspiration, when lost, means it’s time to get out. Staying in will erode the value you have built so far. Keeping your inspiration means keeping clear on why you do what you do.

And there are two “why’s”. Yours and your businesses. They differ and they should and clarity on both feeds the passion, energy and inspiration you need to maintain a clear head, hold perspective and lead your ship to its destination, profitably and on time.

 

  1. Why do you do what you do?

 

Passion is vital. It is the fuel that drives your engine, that keeps you going, rejection after rejection and disappointment after disappointment. These ‘nay saying’ forces do eventually lessen over time. Holding your head and persisting needs more than passion. It also needs purpose.

Passion drives your idealism, but purpose must guide your pragmatism. Why you do what you do for each means different things. Passion is deeply personal and reaches back into the depths of your psychology and culture as an individual. Purpose is easier to define, and it must be so for when passion wanes, purpose leads that next level of commitment to get and keep you on track.

We believe that there would only be one purpose – to build your business into an Asset of Value. This is a business positioned to win in a changing, competitive world, enabled by reliable operating procedures and systems, and empowered by a high-performance team to generate consistent organic growth. This releases your time to focus on next-level growth and innovation.

The outcome is a business that grows revenue and profit, operating largely independent of you, enabling it to be one day sold for a premium value in a clean exit.

This matters because 94.6% of businesses started, fail to sell. Despite being well-run, income generating businesses, they close at great cost to the business owner, their family, and employees.

 

  1. Why does your business do what it does?

 

Tying your business’s purpose to yours feels intuitive but it’s wrong. Your business doesn’t care about your purpose. It is inert and needs to be separate from you. Too much emotion around your business creates confusion as to why it exists. So, what then is your businesses “why?”.

 

It’s not about creating jobs, paying taxes to build a nation, making you rich or giving you meaning and a sense of purpose. Whilst you hope that all these features are in play, your business exists for one reason only – to solve a problem for your customer through a great experience. Understanding your business this way lets you build your business to serve and through that have its why answered by those whom it serves.

Do you know what the problem is, how it comes about, the cost of it not being solved and how you get it solved? Equally, do you know what experience your customer wants in getting this done, and do you know what makes up that experience? Have you built a business that can do this every day, all day, reliably and consistently and adapt to the changing world around you? Do you know who your customers even are?

Building a business is tough. It gets tougher and tougher over time as your why and that of your businesses too become vaguer and vaguer. A crisp, clear and simple purpose behind why you do what you do and why your business exists is no different to being clear on what your destination is and how you plan to get there fast, simply and reliably. It’s an imperative!