Skip to main content

Author: pippa@aurik.com

Right team

Getting the right people to do the right thing at the right time, affordably

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

Unless you are psychic or have more time on your hands than any normal business owner would have, evaluating a potential employee with a CV in hand is a risky business.

Clouded by your unconscious biases, under pressure to get additional hands-on deck when under pressure and time scarcity make hiring the right person into your business hard to achieve.

The wrong candidate costs time, money, reputation, brand, revenue, profit, and culture.

As much as we’d want to blame a skills shortage, or maybe “millennials”, or social services, or the courts, or anything else, the reality is that we, as business owners, are to blame.

Getting the right team is essential if you want to build an Asset of Value Business. The idea that, “if you want something done properly, do it yourself” is a lazy, sloppy mindset that is destined to keep you in the engine room of your business day in and day out. It will never build your business into a growing, profitable business that can of a day be sold. Your business will remain an income generating job and for some, well, that’s okay.

But if you want an Asset of Value Business, getting your team right is vital and a critical skill. Listen to the podcast discussion of Pavlo Phitidis discussing how to do this on The Money Show or read on to get it right:

  1. Start with the end in mind

Why do you exist, as a business? Understand why you do what you do, in order for everything else in the business to align to this vision. Pavlo’s view is that you should always be building your business for the end of a successful exit – a sale.

Having the right team on board is essential to appeal to a buyer.

 

  1. Position to dominate

What makes your business special? The features of your product, the price and your service are all easily imitated. A business exists to solve a well defined problem for a well-defined group of people, with a specific, consistent experience.

This defines the purpose behind your business, and if you and your team can answer this crisply and clearly, you are positioned to build a business that can deliver this.

 

  1. Enable through a System of Delivery and empower through System Operators

A system is s series of activities, performed in a sequence, that is measurable and teachable. So if you are able to teach the system, then you can recruit system operators, rather than individuals who may, or may not be able to perform these clearly defined activities.

It makes hiring easier as you can quickly assess whether someone has the aptitude and experience to perform those activities.

 

  1. Generate employee meaning and value

Meaning comes about when you have a good match between the actcitiy and yourself as it builds your confidence, and the more confident you become, the more pleasure you take in doing it, so you want to do it more, which makes you better, which builds your confidence more.

Understanding your role in contributing to the whole further builds purpose.

 

  1. The 3rd lever of valuation achieved

When you have a system of delivery, operated by a purposeful team, you as the business owner are released from the day-to-day activities of running the business. And for a buyer – the fact that business doesn’t need the owner in it to function, is the 3rd lever of valuation.

What if Buffet were buying… is your business sellable?

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

Most business owners are so wrapped up in the many challenges of their business that when Pavlo asks them: “What lies ahead?” Their responses are very vague.

The reality is that there are only two destinations for every business: sale or closure. And globally, 94.6% of businesses started, fail to sell.

Many owners believe that because they have built a business that generates good income; that has put a roof over their heads; that creates jobs and has a productive impact in their industry, it will be sellable – this is not the case and the stats are there to prove it!

Listen to Pavlo unpack why we build unsellable businesses, and how to build with a buyer’s mindset in this podcast from The Money Show:

Pavlo’s view is that as business owners we get wrapped up in how we start our businesses – there’s generally very little capital available so all our focus is on generating cashflow to get things going and build some momentum.

In addition, there are usually demands at home that require money, and we build the business around the needs we have to service.

After years of operating like this it becomes habit, and it is very difficult to realise that you’re still doing things the way you did 5, 10 or even 20 years ago.

Businesses aren’t just sold, they need to be built to sell.

The starting point is to realise that what you need from your business, when you sell it – is not a credible valuation methodology!

Secondly, as wonderful and unique as you think your business is, there are thousands of businesses just like you.

Valuation is mathematical. The maths compares risk and return across the market. And understanding the levers that can increase or decrease the risk and return in valuation is critical.

Buyers look at our businesses differently to how we do.

Buyers have key questions in their mind when they look at a business.

The questions are designed for 2 things:

  1. To establish whether I can get a return?
  2. To evaluate how to reduce the price by picking out the flaws in the business

Understanding how the buyer thinks, today, will affect how you build the business for tomorrow.

What are the questions that buyers ask:

  1. What makes you different from the dozens or hundreds of businesses like you. If you can’t distinguish yourself, that’s a mark against you.
  2. How far into the future can this business continue. You have to be able to show growth in the past – that will continue into the future. The way to do this is to demonstrate that there are systems to continue this trajectory.
  3. Who is going to do it? In a buyer’s mind, are they buying the business to run it, in the way that you’ve run it? Will the staff stay? Will it run without you? Often, without the owners in it, there is nothing to be bought. A business has to operate without the business owner, or in effect the business owner has just built a job for themselves rather than something that has value for a buyer.
  4. How long will it take me to pay off my investment, and is there enough growth in the business to take me into profitability?

 

chassis

Build a chassis that can support your business’s growth

Written by pippa@aurik.com on . Posted in Leadership, Operational systems, Positioning, Scale & Grow.

Business growth increases complexity: More customers, more locations, more employees, more suppliers, more money, more inventory and….more risk.

Where does risk come from?

  1. You start to doubt whether you have the skills to run a complex business. That seed of doubt can fester and become self-fulfilling
  2. The business you loved becomes demanding, a nightmare, all the excitement you felt when you started it – goes away. And you think that you do not want growth as it’s too hard, But if you aren’t growing… you’re dying.

Is there an analogy we could use to understand it better? 

Listen to Pavlo discuss a couple of analogies in this episode of The Money Show:

 

 

Pavlo argues that using the idea of the chassis of a car – the framework that bears the weight of the vehicle, is a strong analogy for building the framework of your business to support increasing complexity.

In a business, the chassis is everything that is needed to consistently deliver to their customers, to solve their problems. It is all of the systems and processes that you need to fulfil your promises to customers. Your business chassis needs to be strengthened to prepare for the growth that is coming so fulfilment is not compromised as you get more and more customers and orders.

Another way to think of it is how human beings grow: When you’re born, until 20 or so, you grow in spurts. A baby is born, then it grows in height, then there’s a filling out phase, then more growth, and so on. As we grow in height, all the energy in our bodies is going into making our bones taller. Then there’s a lull but during this time the muscles and tissues are building to hold up the next spurt of bone mass. It’s preparing the body for the next phase of growth.

When we find our business in chaos, we need to pause growth to build the muscle to support the growth. Get your systems in order.

 How do you get it right to grow without the risk spoiling it all?

 Choose a sport that you want to excel in – let’s take shotputter and a long jumper.

The two will be very different to look at. The shotputter will be solid and heavy and strong. The long jumper will be lean and long and flexible.

Figuring out which sport you’re in is the same as positioning your business… it determines every decision from then on.

What they both have the same is internal organs: lungs, kidneys, liver etc. In business these are your business systems. Procurement, finance, HR, operations etc – they are consistent across all businesses.

To take these athletes to Olympic heights, you have to ensure the organs are healthy and functioning optimally. Regardless of their particular sport. And then build the muscles needed to be a shotputter.

Finally – measure that performance to check constantly what is responding well, what is working and what needs work.

This data, both in terms of what is coming down the pipe, and the capacity of the business to deliver on it, will be critical to maintain your growth rate.

 

why what how do you do what you do

Business success starts with clarity: Why, what and how do you do what you do in your business

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

As we gain hope that Covid is going to be put behind us, new thinking says it’s going to be part of us. And it’s not fair. Hope was fueled by the vaccines but not only don’t we have any sign of them, we now aren’t even sure they will work as the virus mates and mutates. So, uncertainty now seems to be the new certainty.

As a business owner, you still need to lead. Listen to Pavlo Phitidis discuss what this entails on The Money Show podcast:

 

 

Leading means maintaining a single course and direction for your business instead of pivoting every week and flip-flopping from one announcement to the next. It harms your business, your reputation, your team, your customers and your suppliers.

Business success is built over time and consistent action.

If uncertainty is the new certainty, simplifying and answering why you exist, what you do and how you do it holds the key to consistent action despite the uncertainty.

In fact, it unlocks opportunities aligned to your capabilities that, in an increasingly uncertain world, can accelerate your businesses growth beyond anything that a stable, predictable environment could offer.

Answer the following questions to simplify your focus and ensure your actions align with your purpose:

 

  1. Why do you do what you do?

There are two whys – the first is asked of the business owner – why are you doing what you do? And secondly, why does your business do what it does?

You need to be clear on both.

The answer to the 1st question should always be to build your business into an Asset that can secure your and your family’s future.

The answer to the 2nd question is NOT to sell what you have, it needs to be a problem that you solve for your customers.

 

  1. What do you do to achieve it?

This is the plan. What you’re doing in your business today determines your future. The best way to see where you’re going is to look at what you spend your time doing.
Your time is finite and how you spend it speaks to your commitment to yourself, your ambitions and predicts what your future holds for you.

 3. How do you do it to build momentum and to get it done easier, and easier?

Imagine starting from scratch and going for a 5km run… the first one will be awful. But if you do it again and again you’ll build muscles to support running, a style that makes it more comfortable and you’ll get running fit. It does get easier if you keep doing it.

If you can keep doing the things that bring you closer to your goals, and can score your progress along the way, you’ll find those activities become easier, some will become almost automatic.

To get this right you need systems, which create the framework for these repetitive actions to come together to deliver the progress that will get you to your goals.

It’s that simple…simplify!

get business to 100million

Growing your business revenues beyond 100m

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

Business growth is not a function of luck.

3 elements in play will generate growth despite your levels of luck, hope and prayer.

What are the 3 elements? Listen to this podcast where Pavlo Phitidis unpacks these on The Money Show:

 

  1. Mindset

It begins with you as the business owner. Success in a mindset has a few characteristics:

Passion – we believe in what we are doing, we see success, and this passion is fuel that keeps us going through disappointments and ups and downs. But it’s not enough.

You need purpose. And there’s only one purpose that any business owner should adopt: Building the business into an Asset. And an asset has 3 features:

1 – Generates income, and those incomes grow.

2 – Growing the capital value of your business. Some business owners work in their business for 10, 30 or 40 years and invest all of their time only to realise it doesn’t have capital value.

3 – It can operate without me, so that I can sell it when I need to exit.

 

  1. A growth system

Without a growth system to organise what we are doing, how do we know how to drive growth one day to the next? We get sucked into the operations of the business, and growth takes a back seat.

The reason is that we aren’t given a method or a system for growth. A system is a series of activities put into a sequence that is measurable. You should be able to use this system to guide your team to do what, when and how.

We have a system that has been proven to drive growth and it relies on:

1 – Positioning. What makes your business special? And product is not enough… it starts with what your customers want and need from you, what problem you solve for them.

2 – System of delivery. Get the systems right for marketing, sales, operations to deliver. As systems are repeatable. So when you’ve gotten that right, you don’t have to be involved in the repetition as your team can implement them.

 

  1. Four acts of leadership

One and two – mindset and the growth system, are the acts that get you to the point where your business is growing steadily without your direct involvement. Once you’ve gotten this right and are growing steadily, what next?

Dominate your market! And this takes you to the third stage of leadership, which deliberately focusses on ramping up that growth.

 

The final act of leadership goes back to purpose.

Every business in the world only has 2 final outcomes: Successful sale or closure. So the fourth act focusses on deepening profits, to increase your valuation, which allows you to exit successfully which secures family’s future and your legacy.

 

synthesis Reset rebuild reignite

Leading a business through a crisis: Synthesis podcast with Pavlo Phitidis & Howard Feldman

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

What are the mindsets and actions needed to lead a business through a crisis? Whether it is Covid or a partner fallout, Pavlo and Howard discussed how some businesses consistently rise above the challenges and how they get that right.

 

The conversation is based on Pavlo’s book, Reset Rebuild Reignite, which offers practical insights on building a business to be resilient to crises – and to take advantage of the opportunities that crises and change bring about. Get your copy here 

 

Asset of Value 7 steps

What is the job of a business owner and how should it change over time?

Written by pippa@aurik.com on . Posted in Aurik Business, Creating time, Leadership, Pavlo Phitidis.

Time

Time, the most precious commodity in the world. Once spent, you can never get it back.

Return on time, learning too late that its too late to undo the habits that spent your time rather than invest it.

Spending, once done is done. Investing, done once and smartly, yields ongoing returns without too much additional effort.

Given this, what is your job as a business owner? And, how and when should it change over time? Knowing and understanding this now will yield massive dividends in the future.

Most business owners spend 15-20-30 years building their businesses. The same business owners spend 30-60 hours engaged in a sale to exit their businesses, and, should they succeed, seldom get the price they want. It leaves most with a realisation that what they’ve spent their time doing over the years of building their business, could have been better invested now understanding the end game. Hindsight makes us all wiser, but what is the value of that wisdom if you have no time left to implement it?

Foresight might hold the answer to winning the insight you need today to ensure that you change your mindset, practices and habits to invest time rather than spend it.

Business Evolution

The best way to evaluate this is by understanding the natural progress that any business goes through in its development.

There are 5 stages professed by academia which include start, grow, prime, maturity and decline. Whilst interesting, they may not be that useful to understand what we should be doing and when to ensure the best investment of time available to us.

A better starting point would be to understand the end game and then build towards it. From an Aurik point of view, we believe that to be the successful creation of your business into an Asset of Value.

A business built this way offers 3 criteria including income growth, capital growth and independence from you. It is what makes a business salable and for any business owner who has invested deeply and consistently in their business, is essential to ensure a return on time, risk and effort. In fact, essential to secure a pension and legacy of wealth as the final reward.

6 stages of progression to build an Asset of Value

In relation to an Asset of Value, there are 6 stages of progression that any business goes through. Traversing these stages of development can take a business owner anywhere from 7 years to never. Many land up successfully moving from the first to either the next 2 or even 3 stages before they end their tenure in the business itself. It is for this reason that 94.6% of business started, fail to sell.

Asset of Value 7 steps

In each stage above, I have indicated the average revenue numbers that should be achieved, the time invested, the objective and the behaviour of the business owner to transit from that stage to the next.

Cycles

Completing the cycle is essential to repeat the cycle since this act is what takes a business from one level to its next. In a 30-year career as a business owner, repeating this cycle at least 5 times is both possible and necessary to secure a handsome, clean payout when you finally exit. Failing to do so always leaves money on the table for a buyer and compromises both your return on time and risk.

So, 3 questions remains in play – why do you do what you do, what are you doing now, what should you be doing tomorrow? What if you don’t get it right? Well, that question is already answered by the stat: 94.6%.

How are you spending your time, daily, weekly, monthly, annually in building your business? And in that, are you doing what you should be doing to ensure that you are building an Asset of Value? If not, why not?

FIND OUT MORE

To gain a deeper understanding of how building an Asset of Value could generate more revenue, profit and time for you, Join Pavlo Phitidis for a 60-minute session on 10 February. Register here

 

three strategies

3 Winning Strategies for 2021: an uncertain year ahead

Written by pippa@aurik.com on . Posted in Aurik Business, Exits, Leadership, Mindset, Positioning.

This is part three of Pavlo Phitidis thee-part discussion of how to set your business strategy to cope with whatever it is that 2021 is going to hold for us. Taking into account that it looks like 2021 is going to be another tough year.

In part one, Pavlo identified the five biggest issues threatening the survival and growth of established business owners.

In part two he discussed six reasons why you must “be in action” in an uncertain environment.

And in this instalment, he talks about 3 strategies or action plans to get you and your business onto a positive trajectory for growth in a stagnant, uncertain economy. Listen to the discussion from The Money Show here:

He started by stressing the importance of taking a view. Identify a plan of action, and put your head down and focus on it. He sees three strategies that should be considered, and one of these will apply to most businesses.

  1. Reset your business to be resilient because the road ahead is going to be bumpy.

Whenever we talk about resilience, we talk about mindset, which is important – it’s 50% of the solution. But we also need to be designed to be resilient – to be able to cope with a lot of uncertainty. In this environment that includes the tough decisions on cutting costs, simplify your business, don’t try to be everything to everyone but specialise in understanding who you serve so that you can be in control and guide your team to only focus on things that deliver results.

  1. Reignite your business by ramping up growth and making up lost 2020 revenues.

Once you’ve designed your business to be simpler and more specialised in serving your key customers, this places you at the edge of change of your market. This happens because the changes in your clients and customers come from them – you need to be close to them! He referred to a website he had stumbled across that said “we are chef-led innovators”. To Pavlo this reminded him of what we all tend to do. When we are under pressure, we revert to our comfort zone, in this case, a former chef, doing what he THOUGHT his customers wanted instead of listening to what they really want and need.

How to do this? It could be as simple as setting aside 2 hours a week to have a zoom coffee with 2 customers, to find out where they are at, and what they need. It is not overly complicated. Just keep asking WHY? Why won’t it work? why do you want it? Why is it too expensive? What aren’t you seeing in the value?

  1. Reset your business for an exit given what lies ahead.

There is going to be a lot of M&A activity ahead, as big corporates hunt for new revenue streams. Your business needs to be built in such a way that the value is clear, and that it runs well, independent of you.

 

 

action

Why action is critical to overcoming the anxiety caused by uncertainty

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

Pavlo identified the 5 biggest issues threatening the survival and growth of established business owner, due to Covid and the challenges of lockdown:

  1. Cannot get access to funding
  2. Struggling to find new clients
  3. Cannot pay rent/suppliers
  4. Motivating staff and ensuring performance
  5. Anxiety and fear which is largely oriented around uncertainty.

He has already shared strategies and remedies for the first 4 and now talks to the last concern – Overcoming anxiety in order to set strategy for the year ahead. Listen to these in the podcast or read on for the key takeouts:

A lot of business owners are looking for a path of action, to simply tackle that anxiety.

What lies ahead is an extended period of uncertainty around Covid. Pavlo pointed to the time it takes to vaccinate people, when the vaccine becomes available – it is as slow as 4 people per hour, which means it will take a very long time for any vaccination programme to become nationally effective. As always, he reminds us to Expect the Best but Plan for the Worst!

The reason action it is important is because it puts you in control. Taking a view and acting to build your business towards a destination, despite uncertainty offers you a number of benefits including:

  1. Time – you can never get it back.

    When the lockdown happened, many people didn’t invest in growth, they learnt to bake bread and waited for it to pass. It was crazy, because for a business owner, the way you behave now, must build toward something in the future. At all times.

  2. Lead – you are the leader!

    The word comes from lædan, which means leading from the front, If you don’t lead in your business, who are your team supposed to look to?

  3. Act – the act of acting empowers you.

    So long as it’s directed, then over time it’s no different to compound interest and investing: it builds mass, and momentum.

  4. Energy agility

    It is so important to be growth mindset oriented all the time so long as you have control over the pedal, accelerator, steering wheel and rudder of your business. If you are, it creates a cultural mindset in the organisation that the whole team orientates around, and this puts you at the front of the market.

  5. Signals – how to identify the earliest signals of change and new change.

    Pavlo used an analogy of someone wanting to cross the highway. A BUSY highway. As a pedestrian standing still, all you see is a stream of fast moving cars. Whereas if you are in motion in the traffic – you see the gaps.

  6. No one cares – the brutal truth!

    If you don’t care, no-one else will, and if you have invested everything in that business, it is fundamental that you get out of the headlights and find a strategy to act.

In the next discussion, Pavlo will speak to the three strategies that he sees as critical to adopt to get you and your business on a positive trajectory to growth.

 

 

5 impacts on smes

The 5 Biggest impacts of the Lockdowns on SMES – and what to do about them

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

Pavlo spent his holidays thinking about and consolidating the biggest impacts that the lockdown and Covid have had on SMEs with a view to then plotting out the remedy to each of these.

He identified 5 challenges, and the corresponding solutions, which he discussed on radio. You can listen to the podcast here:



1. Access to funding

We naively believed that relief funding would be available to the SME economy, as it was in the USA and UK. But less than 10% of the funding available was taken up as most businesses didn’t qualify.

The lesson here is that as private businesses in SA, we have to build reserves. So if things are looking good, we need to have about 3 months worth of operating costs. In the environment we are in, which is fraught with uncertainty, these reserves need to be built up to 6 to 9 months of operating costs.

2. Struggling to find new clients

Pavlo reads this as the business isn’t geared for growth. You started your business, you took it to market, you started to build it but you didn’t ever sit down and really analyse what makes you special in the eyes of your customer.

What you need to do is run is consistent campaigns. During a tough period, if you know who you serve you must INCREASE your marketing. And as digital marketing becomes less effective, traditional marketing is coming back to the fore, and you need to find the right ways to reach the customers you serve.

3. Cannot pay rent/suppliers

Overheads remain! All of your fixed costs need to become variables – negotiate to peg your rent, and other payments to reduced your income during lockdown.

4. Anxiety over staff – how to motivate and manage them

Are they doing what they ought to be doing, and in this new environment – what ought they be doing?

As always, Pavlo recommended very specific job descriptions based on a system – activities in a sequences that can be measured. This takes away the confusion and allows you to manage them remotely.

5. Anxiety and fear is largely oriented around uncertainty

Those who thought the lockdown was going to be a 3 week holiday were caught off-guard by the 18 to 24 month timeline that we are now sitting with. Those businesses that took the mindset to immediately reset their business to meet the needs of the changed marketplace are the ones that are now ahead of their competitors and taking advantage of the change that Covid brought.