Author: pippa@aurik.com

Hope is not a strategy

Written by pippa@aurik.com on August 24, 2020. Posted in Exits, Funding, Leadership, Mindset.

While hope is a central tenet of an entrepreneurial mindset, hope alone is a promise without guarantees. In this podcast from The Money Show on 702 & CapeTalk, Pavlo Phitidis puts forward his argument that you cannot rely on hope, you have to have a plan to get whatever it is you are hoping for.

You can’t become a business owner or a good entrepreneur unless you’re optimistic, and believe in your ability to deliver something better than it has been done before. It is baked into the psychology of business owners.

What Pavlo does find concerning, is the number of established, successful business owners, 20 to 30 years into their business, who are ‘hopeful’ that they will be able to sell their business in the near future. Yet statistically, 94.6% of businesses started, fail to sell. Hard work and hope alone, are not enough.

A good entrepreneur prepares for the worst and hopes for the best. And it is this preparation that makes the difference. Pavlo shared an example of a business that has gathered a highly qualified team of extremely specialised scientists. They are all mature, they all come with impressive value stacks – wisdom, connections, insights and foresights.

The have created a digestible piece of blockchain technology that stands to resolve many problems for many businesses. But they have pinned their hopes on one of the 4 giant multinational consulting clients to adopt their tech. They have been waiting 6 months for that multinational to make a decision on their business. In the meantime they have no revenue coming in and are running out of runway.

The problem is that they have pegged their hope on something outside of their control.

While we sometimes have to rely on others, and elements beyond our control, hope has to turn into a plan rather than just a wish. For example, they could have pitched their concept to 30 big multinationals but putting all of your hope in one external factor or entity is too risky.

You have to plan now, to sell your business when the time comes

Most business owners invest approximately 48 000 hours in building their business, and yet only 30 to 100 hours go into selling it. We hope there will be a buyer when we are ready to sell.

Often the business owners don’t even know what the business is objectively worth – they see the value in what it is worth to them, as they have lived through the business.

They need a plan that is actionable, measurable and achievable!

WATCH: How to thrive in a crowded e-commerce space

Written by pippa@aurik.com on August 20, 2020. Posted in Innovation, Leadership, Trends.

[vc_row][vc_column][vc_column_text]Digitising an established business to generate revenues through e-commerce needs to become a key element of your strategy today. The technology is now easier and more affordable to make it happen than ever before. What it takes is a good commercial strategy and understanding how your customers behaviour will change as a result of an e-commerce offering.

Pavlo hosted a one hour discussion with a business that needs to implement an e-commerce strategy and a panel of experts to walk through what needs to be considered, and how to get it right.

Watch the session, presented by Payfast and Business Day SME Matters:

With attention paid to B2B and B2C, the session offers practical, actionable insights to assist any business looking to establish or improve their e-commerce offering.

NEXT SESSION: DIGITAL MARKETING
Sign up for the next session, where Pavlo and a panel of digital marketing specialists will discuss how to market your brand in a noisy digital marketplace. Register here:[/vc_column_text][/vc_column][/vc_row]

Asset of Value strategy series

Written by pippa@aurik.com on August 19, 2020. Posted in Creating time, Exits, Funding, Lead generation and conversion, Operational systems, Positioning, Team.

THE ASSET OF VALUE STRATEGY SERIES

Welcome to the Asset of Value Series.

As part of the Nedbank Business Accelerator Campaign with 702 , our CEO Pavlo Phitidis, produced a podcast series to help successful, established entrepreneurs get to the next level. At Aurik we do this by giving business owners like yourself the opportunity to share your stories and insights, and in turn, we work with you as the business owner to drive key changes necessary to accelerate your business. In the Asset of value series, we explore your journey to building your business into an Asset of Value.

Episode 1: Building your business into an Asset of Value

Every business owner invests time, money and effort into building their business. Whilst passion is important in achieving this, it’s not enough. The purpose behind this investment should be clearly stated and that is to build your business into an Asset of Value. What is an Asset of Value, why is this important, how do you do it and what will you gain from it!

Episode 2: Measuring your Asset of Value

When you build your business into an Asset of Value, understanding how to measure your progress towards this goal is important. To do this, you need to understand how your business would be valued by a buyer. This could be a private buyer or corporate buyer, an investor or, if passing it onto the next generation, family or staff through a management buy-out. Understanding how valuation works, gives you control over the future value of your business. There are three levers that you can “pull” to get your business valuation right. What are these levers, how to I build them into my business and what impact will they have on building my Asset of Value.

Episode 3: Creating a customer centric business

The first lever of valuation, how far into the future will my business generate revenues, is answered by defining who the customer you serve is! How do you find these customers and more importantly, once you find them, how do figure out how to get them to buy and stay with you?

Episode 4: Building a systems-driven business

Are you building a business asset or have you simply built your business into a job for yourself? It’s easy to test. If your business cannot function without you being there, that’s a job. If it can function without you for 3 or 4 weeks, it’s likely an asset. The difference between them are business systems. The activities that enable your business to generate customers’ enquiries, win over customers and serve them in a manner that they stay are examples of systems. This is called a System of Delivery and its impact on your business valuation is profound.

Episode 5: Developing a risk managed business

Putting all your eggs into one basket is not a wise business strategy. The environment of business today is so unpredictable, one stumble and you trip and fall – all your eggs are broken. A risk managed business is one that has multiple customers, that enjoy being served by your business and are found in different sectors. Should one sector struggle, the customers in the other sectors keep you going. It’s also business that has no customer responsible for more than 10% of your revenues. Should they stop using you for whatever reason, your business continues. Imagine if they were responsible for half your revenues? With a risk managed revenue profile in play in your business, it makes you a price maker, rather than a price taker in the event of a sale and has a huge impact on your business valuation.

Episode 6: Employing the right people in your business

Once you have a clear sense of who your customers are, how to service them and a System of Delivery in place, you are ready to employ responsibly and effectively. Think about it, we mostly employ people to do a job. What is that job, what are the activities that that job should perform, can they be measured, what’s a fair salary for that job? These questions are seldom asked and answered when we, under pressure with too many things to do, reach out for help and employ someone who we hope is right. And they are often wrong. How do you employ the right people to do the right thing at the right time and at the right price when you build your business into an Asset of Value?

Episode 7: Driving your business to the next level

We hear this expression “the next level” often. What does it mean and how do you get there is often left unanswered?

Episode 8: Succession planning in your business

Wealth is cumulative and time based for most of us. We often start our businesses with very little and it takes time to grow them into valuable assets. Often, to grow them into significant assets, it can take a second generation. This could be family or staff that we pass the baton onto to get the business to its next level. How do you do this and what approach can be adopted that makes the founder and successors ensure that the business gets the best from them both, that the founders wisdom is passed on successfully and that the successors ideas are adopted to keep the business relevant and contemporary with the inevitable\ changes in the business environment.

Businesses that have taken the right actions are already starting to recover… and a book that shows you how to get this right

Written by pippa@aurik.com on August 18, 2020. Posted in Innovation, Leadership, Mindset, Trends.

While most people learnt to bake banana bread during lockdown… Pavlo Phitidis wrote a book. His second book within 9 months!

Listen to his discussion on 702 and CapeTalk about the book, and how it relates to our economic recovery:

The book, called Reset Rebuild Reignite, was born out of the hundreds of conversations that Pavlo hosted and participated in with other business owners during the early days of lockdown. Thinking about what we do as businesses in a time of crisis he realised that as South Africans we have become remarkably crisis fit and resilient.

In many other parts of the world, pre-Covid, you could quite simply and easily open shop and trade. These businesses had not suffered in a zero growth economy, with load shedding and all the political turmoil we face everyday. We take it for granted that we have an innate ability to cope with uncertainty.

In business, in effect we move from one crisis to the next and the next. Pavlo remembers burst waterpipes destroying all the stock in one business he ran. Or splits in partnerships that ruin a business, or a major customer who goes under.

Change brings opportunity

It became clear to him that there is a mindset and strategy that can be applied in any crisis. The word crisis means a change of state of health, and change means a shift in the status quo, and a shift in status quo is the crack that opens up opportunity. As business owners we need to learn how to see it, read it and engage with it.

In Reset Rebuild Reignite Pavlo’s starting point is that in crisis there is opportunity. If we look at the Economic Clock, everyone pours money back into the system during a crisis. We’ve also seen that SMEs who took the right action, stabilised and most importantly, at the end of last month, that SMEs that made the right calls, hit the bottom and are now starting to grow again.

The common threads among businesses that took the right actions include, when things change, what you did pre-crisis can’t work in a changed environment. You have to change. This is the Reset phase. Among the things you can do is codify your changed customer behaviour.

Recovery

Whether the economic recovery is a V, W, or Nike Swoosh, Pavlo’s approach has always been, and remains, that the right actions are more important than the economic circumstance.

In each industry, you have three tiers:

Early stage start ups, which are right on the edge of survival.
Mid-tier SMEs, classically between R10m and R250m
Corporate businesses

Depending on the size of your business, the shape of your recovery is going to be different. From a corporate perspective, that shape is fundamental. Corporates keep restructuring to meet the shape of economic growth, but it takes a year to change, they need economic GDP growth to stimulate their growth.

The smallest businesses are simply struggling to stay alive.

Mid-tier businesses, with the right mindsets and actions, is the tier where we are seeing greenshoots of our economic recovery. The mid-tier business that reset and rebuild now, will be at the forefront of growth next year, relevant in their market and primed to take advantage of opportunities.

If you reset and rebuild now, by next year you will have made the tough decisions and choices, resetting your team, keeping the people you could afford to keep and sadly letting go of those you could not. You will find yourself in an economy where 30% of your competitors no longer exist, you can buy stock for 30c in the Rand, plant and equipment for 40c in the Rand, acquiring smaller businesses, absorbing new staff and customers, access to new markets. Opportunities are out there.

Get the book

Find out how to Reset Rebuild and Reignite your business in the book, for details of where to buy, visit https://aurik.com/pp-books/

Read Pavlo’s new book: Reset Rebuild Reignite

Written by pippa@aurik.com on August 12, 2020. Posted in Innovation, Leadership, Mindset, Pavlo Phitidis, Trends.

Aurik co-founder and business growth expert, Pavlo Phitidis, has released his second book, Reset Rebuild Reignite. Written during the Covid-19 lockdown, Pavlo draws on extensive experience across a wide range of industries, is the founder of multiple businesses, an investor, a speaker and a respected commentator on entrepreneurial and business growth and innovation.

In Reset, Rebuild, Reignite his starting point is not how to avoid crises – because some are inevitable. Instead, he shows how readers can use any crisis to reset a business to become relevant, rebuild it to scale, and reignite it to accelerate growth by capitalising on the change and opportunities that any crisis brings with it.

Crises mean change. And for any business owner, change means opportunity.

There is nothing new about a crisis stalling or wiping out a business. The COVID-19 pandemic that has hit businesses globally does not feel any more or less devastating to the business owner than if their business was affected by the sudden loss of a dominant client, a trade war, burst water pipes halting operations, intransient employees or their product no longer being relevant to the market.

“In the moment of a crisis, we face two options. Step forward into growth and lead the inevitable change it brings or step back into safety and have its impact imposed on you.”

Stories of business owners who have successfully turned crisis to their advantage are underpinned by Pavlo’s practical, action-oriented insights, tactics and strategies that will equip your audience to tackle any crisis that affects a business.

Get your copy from your favourite bookstore. e-books are already available and physical copies will be in store towards the end of August 2020. Follow the links here.

Reset, Rebuild, Reignite as a strategy in any crisis and the evidence it works

Written by pippa@aurik.com on August 12, 2020. Posted in Leadership, Mindset, Trends.

For those businesses that reset their businesses to cope with the lockdown, are rebuilding their systems to entrench their positioning, the data says we are 3 to 6 months away from reigniting revenues.

Pavlo Phitidis drew on a random portfolio of 50 Business to Business (B2B) SME clients, and identified four data points which suggest that these businesses have hit the bottom and are now turning up….at pace.

Listen to him talk about his findings on The Money Show on 702 and CapeTalk:

What data was used

Four data points were used. Average monthly turnover, average monthly profitability, average number of jobs all over a running 3-month average. The fourth data points make up the 7 periods of measure from Nov 2019-Jan 2020 through to May 2020-July2020.

What did the data show

These seven periods of measure take us from a normal economy to level 5 lockdown and then move to level 3 lockdown.

3 Mnth Average	Turnover	Profitability	Jobs	Economy (Months)
Nov’19 – Jan’20	-6%	29%	1,601	3 open months
	Summer holiday period fall in sales, temporary jobs to cope with load
Dec-’19 – Feb’20	10%	101%	1,424	3 open months
	Jan, Feb restocking of product and service to get going, job changes
Jan’20 – Mar’20	1%	-75%	1,501	2 open, 1 lockdown level 5 month (L5 lock)
	1^st month of lockdown, profitability plummets with a 3 week anticipated lockdown not reducing costs
Feb’20 – Apr’20	-2%	-10%	1,395	1 open, 2 L5 lock
	Now evident more than 3 week lockdown, retrenchments activated
Mar’20 – May’20	-17%	-36%	1,099	2 L5 lock, 1L4 lock
	Full lockdown shock, cost reduction, RESET phase activated
Apr’20 – Jun’20	-2%	78%	1,099	1 L5 lock, 1 L4 lock, 1 L3 lock
	RESET phase complete, new business model emerging, REBUILD phase activated
May’20 – Jul’20	-8%	146%	1,263	1 L4 lock, 2 L3 lock
	REBUILD phase ongoing, readying for REIGNITIOIN, employment of new talent picks up

What does the data confirm

Every crisis should see every business owner adopt a 3-phase strategy in response.

Reset your value proposition
Rebuild your system of delivery
Reignite your growth

At Aurik we have been working with businesses throughout the lockdown to do just this, contact us to find out how we can work together to Reset Rebuild and Reignite your business.

WATCH: Build to Sell discussion

Written by pippa@aurik.com on August 12, 2020. Posted in Creating time, Exits, Leadership, Mindset.

How many hours have you worked on your business? Do a quick calculation based on hours per day, days per week and weeks in each year that you have been working on your business. The average among established business owners is around 40 000 hours.

And yet we only spend between 30 and 60 hours in total to sell our most valuable asset.

Pavlo Phitidis hosted an online discussion with business owners in which he advised that every day we spend in our business, should be spent building it to become a saleable asset.

Watch the recording and contact us to discuss your business exit strategy.

Codifying the customer value proposition

Written by pippa@aurik.com on August 4, 2020. Posted in Lead generation and conversion, Operational systems, Positioning.

Through Pavlo Phitidis’ many engagements with business owners he found a number of common issues facing all of them, as we head back into the economy. Issues of uncertainty, funding, and then one of the most complicated: What led to our success pre-lockdown is not what is working now that people are coming back into the economy.

Waiting for things to ‘settle down’ is a wasted opportunity, according to Pavlo. Things have changed, and how do we make our business relevant – how do we change our offering, service and products?

One way is to codify the problems facing your customers in this economy. Listen to the podcast of his discussion about this on 702 and CapeTalk.

Who knows what things will look like ‘after’ Covid? Pavlo says even by the middle of next year we will only be back to 70% of what it was.

What we all know is that you need revenue in the meantime. You can’t keep waiting.

Finding the opportunity in crisis:

Those at the forefront realise that crisis means change to the status quo, which makes your staff, suppliers and customers more open to change too. So it is an ideal time to implement change in your team and offering.

Codifying the change requires a very structured, data-driven methodology.

Business owners desperate for revenue will amend their business in any way to find a new customer. And this can take you down a dangerous path, where you’ll see costs increase to accommodate the strange new systems of delivery.

The better way to do it is to identify your 10 best customers and approach them to get an in-depth understanding of what they need.

Start with marketing. How do they want to be engaged with about your offer?

Then move on to the delivery of the service. How do they want it delivered or installed?

And then what are the economics that work for them in the current circumstances, what will allow them to afford and pay for your offer?

It is important the you don’t ask yes/no questions but rather open-ended ones to encourage them to give you real insights that you hadn’t already considered.

If you can get a sample of 20 customers, and you’ve asked those questions consistently, you will get a good sense of what has changed, what they need in terms of marketing, sales and fulfilment.

You have to codify the steps in each process to ensure that there is a consistency in your delivery. Or you will lose customers because they don’t know what to expect from you and can’t rely on you.

Reset, Rebuild, Reignite

This process amounts to Resetting, rebuilding and reigniting your business.

This is the time of the great Reset – resetting the way that you do everything. Take advantage of it to meet your customer where they are now, and become a leader in your field.

Then Rebuild your system of delivery to ensure you can fulfil your new offering in the way your customers want.

And then you’ll be ready to reignite your business – to let people know that you are out there and that you are doing things differently, and better than anyone else out there.

If your business could use a fresh perspective to reset, rebuild and reignite, contact us.

Three activities to create wealth through private business ownership

Written by pippa@aurik.com on August 1, 2020. Posted in Aurik Business, Leadership.

Wealth is used to describe an abundance of a desirable thing. It could be friendship, love, money, access to a foodstuff and so on.

From the context of a #businessowner, what does wealth mean and how do you create it?

Before we begin, think about money as water

You are simply the custodian of it for a period. When you make it, you either store it or use it. Stored water eventually evaporates or stagnates. Used money is either wasted or generates more value for you.

In this context, a business should be built as a perennial spring. Well designed and built, it should produce water consistently. You use of that water should be well considered. Fertilise and feed productive lands that bear fruit. Bad investment decisions see the money made lost like watering barren soil with old seed.

MAKE MONEY

Money in a business takes two forms:

Free Cash

Money in a business is used to sustain and grow a business. the money made needs to cover all your expenses. Thereafter, you pay yourself a salary to sustain yourself and your family. Any money left is profit and should come to you as dividends or be used to make investments in the business that will accelerate money making. This free cash can also be used to deepen the value of the business to generate future money. This happens by increasing the value of the business’s equity.

Equity or capital

Equity holds the promise of money. It resides in the value of the business should you decide to sell the business. Built right, a business can be sold and for a premium value to generate a capital gain. This will be the difference between the cost of your initial investment in establishing the business and the sales price achieved.

As a business owner, you can build a business to either make money or grow equity or both. To get this right, you need to build your business into an Asset of Value. This is a business that has the following criteria:

It has a good strategy that sets it apart from competitors
It generates steady, reliable sales
It has a well organised delivery capability
Its people are purposeful and motivated
Banks and funders love it
It’s saleable at a premium price on a clean transaction

Building your business into an Asset of Value will see revenue grow at a higher rate than your costs. This gap generates the free cash to make money in the business.

GROW YOUR MONEY

With money made, you need to now make it work for you by growing it.

You can grow it in your business. by making smart investment choices, you can amplify and accelerate the rate at which your business turns that money made into more money made. This might mean an investment into plant and equipment, people and software etc. Many business owners make their biggest mistakes here. Knowing how to invest in your own business is not as easy as it sounds. Alternatively, you can invest outside of your business into stocks, bonds, shares and other assets. In all cases, these investments must money for you either by generating more revenue in your business with little cost, dividends in shares that you have invested in and other capital appreciating assets.

PROTECT YOUR MONEY

Get smart with insurance and tax management. Insurance, as annoying as it can be, protects you from probable and improbable risks. There must be little worse that having, for example your fleet of trucks written off in a fire without insurance to fund the replacement fleet. It will set you back years if not permanently. Also, some investment products serve to protect money drains like tax. You can legally manage your tax rate down on a personal level by investing in retirement annuities for example.

Wealthy people did not get there in a single generation. Nor did they get there through one activity. Sure, we read about some business people who cracked it and got lucky in a single generation, but they are, by far, the exception. Strategy and habit are what builds wealth. Strategy means being clear on how to make, grow and protect your money. Habit is doing and behaving in this way over time.

Work with us to help get your business into a money making, growing asset. We call it an Asset of Value and we are expert at working with you to build your business into one!

Fighting qualities that build a business

Written by pippa@aurik.com on July 31, 2020. Posted in Leadership, Mindset.

Building a business is a fight. You have an idea, you go out there and everyone supports you with talk, but not the walk. The fight begins. At first, its deeply personal and very confusing. Because starting and building a business remains very personal, its very emotional and emotions always, if acted on, lose the fight. As you stay in the game, and that’s a fight you find more opponents. They are competitors and even customers. Once you have stayed and survived those battles, you hit the environment of business and our country. After that, it’s the rest of the world, often with curve balls like a global pandemic thrown in.

Business is built by your behavior. This is led by your attitude. The right attitude leads to the right behavior which builds the right business.

ATTITUDE IS WHAT BUILDS A BUSINESS

Fighting, embracing and agreeing to fight is the single biggest act of self-empowerment. An entrepreneur believes that they can create a better world. Optimist. Better because what’s out there is not good enough and can be done better. Already you can see, you are looking for a fight. Uber is a good example.

Professional fighters know that the act of fighting isn’t a raw spark of rage. To win, fighters have courage, strategy, tenacity and an insatiable will to succeed. Same-same for an entrepreneur.

Let’s explore a few of them…

Truth is found in action

Learn from being punched. Fear of failure, a certainty in every day actions, is a given. Embrace your fear and it goes. Fail fast, fail small, take small steps before big ones. A good fighter fights ahead of the present moment because success in building a business takes time. Getting wiped out in the first round doesn’t help. This also helps you become familiar with yourself; crucial to manage your ego. Vital to not take things personally. Central to your ability to reflect and learn.

Win with strategy.

Use your passion but have purpose. Asset of value.

Stay in the fight.

Finishing a fight quickly with a single knockout blow is no different to wining a big deal once off. Its opportunistic. A business is built over time and endurance is vital. That means passion is vital. No passion means you are in the wrong game and space OR you have whittled it away because you only had passion.

Stick to your industry. Deepen your knowledge, contacts, understanding and mistakes. Make the mistakes in your industry to develop your experience. Relevant experience. That’s what experience is, a collection of mistakes. Eventually it becomes instinct/intuition. All that is comes from the mistakes that you made, that hurt, that you have consciously forgotten.

Fight yourself.

Avoid comfort, complacency. Be truthful to yourself. Whatever standard you are performing at, raise the bar for yourself and fight for a higher standard. Excellence should be a destination and striving for it a habit. Always stay hungry: perfect your craft, learn new skills and meet new people. If your organization is good, push it to be great. Never settle for the status quo.

Obsess

Balance is an anomaly for the top fighters. Building a world class business means constant vigilance, attention and care. Its unrelenting. The better you do it, the more you’ll love it. The more you love it, the more it will grow you. You never hit plateaus in your spiritual and intellectual person.

You must obsess to stay ahead, to win and to be the best. Competition out there as well as inside of you as a fighter is relentless.

Have a bold battle plan

Set some goals. Get a plan in place to reach them. Set a big vision for the business because that’s where energy comes from. If you are fighting for tomorrow, you will be constantly investing in yourself and your business. If you are fighting for today, you will become an event. Wealth is cumulative. It takes time to build and it requires one brick placed on top of the next to create the home you envisage.

Get a good team around you

Hire experts who understand all aspects of running a successful business, and listen to their advice. Create several goals that you hope to obtain in the coming years. You know you have created a good battle plan when others think you are crazy for trying to accomplish your goals.