Insights Archives - Page 26 of 32

WATCH: How to use digital marketing to drive sales and profits

Written by pippa@aurik.com on October 9, 2020. Posted in Innovation, Lead generation and conversion, Pavlo Phitidis, Trends.

In a noisy, crowded e-commerce environment, how do you get your brand to stand out to your potential customers? Which of the platforms work, and how much do you need to invest in content versus promotion? Pavlo Phitidis hosted a lively 60 minute discussion with three digital marketing experts, each with deep experience in Facebook, Google, LinkedIn as well as marketing strategy, to explore what works where and what is a waste of time for SMEs. Watch Pavlo, Musa Kalenga, Kath Sharfman and Aidan Baigrie debate the strategies and tactics that different size businesses should consider to use digital media effectively, and respond to viewers specific questions and challenges. The webinar was presented by Business Day SME Matters in partnership with Payfast and is part of a 4-part series. Follow the links at the bottom of the article for recordings of parts 1 and 2.

Part 1: Digital readiness: How to ready your business for the challenges and opportunities of the new world

Part 2: How to succeed in a crowded e-commerce space

WATCH: Daily Maverick discuss Reset Rebuild Reignite

Written by pippa@aurik.com on October 8, 2020. Posted in Mindset, Pavlo Phitidis, Trends.

Ray Mahlaka from Business Maverick read Pavlo Phitidis’ book: Reset Rebuild Reignite with a pad of post-it notes to mark the places he wanted to discuss with Pavlo in this online book review hosted by Daily Maverick. From his reason for writing the book, to tackling specific guests’ questions, Ray and Pavlo covered a lot of ground in 60 minutes. Watch it here:

HOW TO TURN A STRUGGLING BUSINESS AROUND

Written by pippa@aurik.com on October 7, 2020. Posted in Aurik Business, Innovation, Leadership, Positioning.

Turning a struggling business around isn’t easy, but it’s not impossible. Currently, many businesses are implementing turn–around strategies to revive ailing operations, or increase their attractiveness to customers. If you’re facing a dead-end in your growing business, on The Money Show with Bruce Whitfield, we considered ways you can turn your business around:

Getting your business back to profitability can’t happen overnight, but it is possible to do when you follow a robust plan. It happens to all businesses.

Whether your company is struggling or not, however, you should undertake an annual review of your operations, to see where your operations can be improved, or new avenues for income generation uncovered. Pavlo recommends this five-step plan:

1. LOOK INSIDE YOUR BUSINESS

Start within your company and make a concerted effort to weed out any internal wrongdoings. The moment you remove anything that’s not supposed to be there, you’re ensuring that your internal systems are running effectively and efficiently, putting your business immediately ahead. With our client, our first step was to walk through the factory floor, and talk to his staff. Alarmingly, we discovered that the factory teams had never met any member of the senior management team before. As the client was looking to turn his newly purchased business around, this was key focus area for him, going forward: your team is a vital component of your company – talk to them. Just by talking to the factory floor staff, we learnt so much, and some great ideas for changing things up were shared.

2. LOOK OUTSIDE YOUR BUSINESS

Next, we headed out and visited this manufacturer’s customers. Customers really do hold the key to your business, and simply by listening, you’ll learn the most remarkable things about how your business is perceived and supported. Notably, when we implemented this step for my client, we also learnt that no member of the senior management team had ever visited their customers. Obtaining an objective perspective on your business is critical, no matter what.

3. LOOK AROUND YOUR BUSINESS

Your suppliers are another key component, who can also give you remarkable insight into your business. Interestingly, we discovered that there are two types of suppliers for our client – the more attentive, smaller, supplier who was eager to grow their relationship with us, and the more aloof, larger, supplier, who was quite comfortable in their relationship with us. As a result, when we reconfigured this clothing manufacturer’s business, we sought out dynamic suppliers who could offer us multi-purpose technologies that streamlined the business’ operations.

4. GO BACK INTO YOUR BUSINESS

Once we’d learnt everything we could from suppliers and customers, we went back to the staff, to share with them our proposed turn–around strategy. It was vital that the employees of the business could see how their ideas had been considered and adopted. After all, its they who ultimately implement the strategy. But the toughest step of all will always be: finding the money.

5. VISIT THE BANK AFTER VISITING A FUNDER

To implement a turn–around strategy, you need capital, and to get a capital investment, you’ll need a funder, or help from your bank. When you talk to your bank about implementing a turn–around strategy for your business, make sure you first have a funder – preferably, someone with an entrepreneurial leaning. That way, if your bank isn’t able, or willing, to provide the capital you need to turn your business around, you’ll still have an independent funding source to get started, and your bank may view your strategy a little more confidently.

Let Aurik help you create and implement a turn–around strategy to get your business back on track. We’ll help you build your business into an asset of value, with funding accessible through Aurik Capital.

Focusing on suppliers with an entrepreneurial mind-set pays dividends

Written by pippa@aurik.com on October 2, 2020. Posted in Aurik Business, Innovation, Mindset, Positioning.

Being entrepreneurial is a way of life. It’s not lived in moments and it’s not curated. It’s about being always ‘entrepreneurially-on’! Since a fact of life is that nothing remains as it is and change is always happening, being entrepreneurially-on allows you to be present in the change and find opportunity.
Customer Relationship Management (CRM) is a key business activity that occupies a large share of mind in any business. It leads to upselling, cross selling, inside selling and all the forward momentum that any business can hope for. Supplier Relationship Management (SRM), the yang of CRM’s ying, is seldom spoken about goes beyond quality and price. The supply-side of your business carries with it as much risk and reward as the demand-side and yet how much do we really know about our suppliers?

A case study

Pierre certainly is ‘entrepreneurially-on’. As a romantic and he loves his wife, his first love is concrete. On a trip to Paris, France a number of years ago he was photographing his wife with the Eiffel Tower in the background. Beyond the romantic sentiment of the occasion, through his camera lens, Pierre saw a shape that could innovate the retaining walls and structures for the mining, agricultural and materials handling sectors. His mind swirled with what this shape offered.
No sooner had he arrived home in South Africa, Pierre went on to develop a series of concrete retaining walls in the shape of the Eiffel Tower. Today his products stretch across all sectors and the industries within in them. From creating storage capabilities to erecting temporary material depot’s on construction sites, his products look over an abundant horizon of opportunity. With good margins offered by the uniqueness of his patented product, a solid understanding of his customer’s needs, Pierre has grown the business dramatically in the last few years. His order book continues to grow as does his cash in the bank!

A challenge or an opportunity?

A few years back, Gauteng experienced unprecedented rains. The highest rainfall in 14 years impacted many businesses. From a drop in productivity due to power outages, broken traffic lights and an inability to operate outdoors, the construction industry bore a major part of the economic drama. In particular, the materials suppliers to the construction industry forecasts dampened down in the wet weather. In a recent session with Pierre, I could sense that he was frustrated. Laying concrete structures such as materials handling cells, retaining walls, paving and the like is simply not possible in abundant rainfalls. The substrate upon which the concrete structures are laid keep on washing away. Orders were on hand and Pierre was on track to meet his first quarter forecast but sales where postponed for better weather.
To lift the cloud hanging over Pierre’s business meant that we had to look at an ‘entrepreneurially-on’ opportunity. Given the weather conditions that we had no control over, how could we turn this to our advantage? In addition, he had idle cash burning a hole in his pocket. I suggested we turn to SRM and see what was on offer.

Cement manufacturers in South Africa are large corporate businesses. Within these businesses, there are systems and procedures. With active shareholders always seeking returns, these businesses are governed by extensive revenue forecasts demanded by shareholders. Sure, one can blame an Act of God for non-achievement of a forecast but one cannot ever blame inaction and poor imagination. A deepening understanding of the challenges managers in these corporates faced the implications on production efficiencies, jobs, supplier contracts that they had in place and importantly their key-performance-indicators (KPI’s), lent a new insight on how to turn bad weather into sunshine for all.
KPI’s are made up of targets that govern performance in an organisation. Meeting them means you keep your job. Superseding them means a bonus and non-achievement of the KPI’s are frowned upon. In some cases it may mean the corporate manager losing his job! KPI’s are designed to keep any manager thinking about their performance day and night. As we unpacked our suppliers challenges further, we understood that further costs of storage were being incurred deepening the crisis on financial performance of these suppliers. Every occasion that we met with and spoke with the suppliers allowed us to develop a deeper understanding of their business processes and the individuals KPI’s. Our process of SRM was deepening.
Recently, a deal was struck with a supplier of cement. We ran our numbers. Confidence in our sales forecast, the most valuable negotiating aid in any supplier deal, allowed us to commit to big volumes for delivery in two batches. The prices agreed were unprecedented providing Pierre with a massive cost advantage that he had not enjoyed for years. The orders on hand would absorb close to 28% of the cement stockpile. The balance would be absorbed in the next 6 months. In addition, a long term supply agreement was negotiated with price increases based off the recently negotiated stockpile prices. The sun would certain shine on Pierre’s margins for a long while still.

How to apply it in your business:

Being ‘entrepreneurially-on’ and an invested understanding of suppliers through SRM placed Pierre in a position where he could secure a number of short and medium term benefits. These included:

• A smart place to invest spare cash – we learnt what drives our suppliers and through that, when and how the managers operating the supply relationship with us are performance managed. Through this we were able to have quality conversations on how we could help each other. In this instance, Pierre would invest his spare cash into stockpiling cement. His return was a splendid price point that yielded his business and invested cash a return way in excess of any other investment he could have made in the money-market, JSE or bonds. In return, the managers we worked with could move closer towards their targeted sales, reduce the pressure of costs by moving stockpiles from their warehouses and keep the production process going.

• Suppliers are people too and business is about people – even corporate suppliers. Whilst as an entrepreneur operating a business in a concentrated economy like SA where often we are abused by our large suppliers and large customers, there are people behind these functions and they have their fears and apprehensions about their responsibilities in their organisation too. Understanding these fears and apprehensions places you in a position where you can do deals like Pierre when the time is right.

• Think beyond your circumstances – SRM is a valuable tool to make sure that you buy right so that you can sell right. Whilst you may operate a business that sells to a local or regional market, large suppliers are often subject to global issues on a more profound level. Being aware the global issues impacting their business allows you the opportunity to interpret how you can help them whilst they help you.

• Turn combat into collaboration – bridging the formality of a supplier relationship with a corporate supplier means spending time to get to know the organisation, how it works, who impacts the life of your contact within the organisation and how you can make a difference to their performance in your own small way. Replacing the often combative relationship with suppliers which are price oriented into a collaborative relationship driven by understanding will pay dividends.

• Be ‘entrepreneurially-on’ – change is a given. It’s happening right now. Understanding how to capitalise on it and get the timing right is what entrepreneurship is about to a large degree. If you have idle assets in your business right now, think how to use it to secure a lasting advantage for your business.

Creating an exit roadmap

Written by Pavlo Phitidis on October 2, 2020. Posted in Aurik Business, Exits, Uncategorized.

We spend years building a business to generate economy for ourselves. Mostly, we are undercapitalized and learn to do things ourselves. It becomes a habit. Then, of a day, we decide we want out. Or circumstances change and we want out. This is brand new to us despite the 10-20-30-40 years of investment work in our businesses. All your experience is in generating an income through your business, you have no experience selling it.

Understanding your exit roadmap early will serve you well. Listen to this podcast of Pavlo Phitidis’ discussion about business exit planning with Bruce Whitfield on The Money Show on 702 and CapeTalk:

Elements of an exit roadmap:

Salable vs non-salable business

94.6% of all businesses started, fail to sell. Even the well-established ones. Think of it like a share you would buy on the stock exchange – what would you want from it?
You want to earn dividends each year hope, and when you are ready to sell it, you want to be able to sell it – for a capital gain. Your business is the same, it needs to demonstrate to a potential buyer the following:

Income growth
Capital growth
Tradability

The buyer personas

Think of your potential buyer as a customer: That buyer needs to have a problem solved and different buyers have different problems, different skills and competencies.

The private buyer – an individual who wants to buy a business. Typically they work through a business broker to find a business that fits their own abilities and resources.
Management buy-out – this is seen often in professional services, where you generate income and value by selling time – medical, legal, architectural firms etc.
Family – the first generation sells to the next generation.
A business – where a business sees value in acquiring you.
A JSE listed business – these form the majority of buyers of private businesses. They look to acquire growth in revenue, innovation, or skill and capability, which often means they want you in it.
A foreign owned business – a multinational looking to gain a foothold into Sub-Saharan Africa but these are few and far between until we welcome foreign investment.

Identify who the most likely kind of buyer would be for your business, and think about what they would want, and how you should build your business to suit their wants and needs.

The hurdles

It is very rare to get an outright cash offer for your business. Pavlo shared the story of an American business owner he worked with, who got this right. He did medical assessments for insurers and over a period of time he realized it wasn’t scalable as he had to do each patient visit. So he harnessed technology through Amazon, Instagram, Facebook, Google and used all of that data to create a risk profile for individuals, which he provided to the big insurers. When he was ready to sell he got a once-in-a-lifetime offer of $180million. But that was extremely rare. Most of us will not secure such a simple payment.

So who is buying what?

Private money – if you are selling to a private individual, how much can they put down and how much can they borrow from the bank? The need to borrow, especially in our current economic climate, caps these buyers at around R15 million for private money.
Business money – Between R12 million to around R30 million, a private business could leverage funds to buy you.
Corporate money – given the compliance, risk and legislation around transactions, one that doesn’t give them a business that generates at least R50 million plus, is not going to justify the pain of acquiring you.

This leaves a no-mans land between around R25 million and R50 million where there is no-one who wants to or can buy your business. And it’s important to know that, as you grow your business towards an exit

What is the job of a business owner?

Written by Pavlo Phitidis on September 26, 2020. Posted in Aurik Business, Creating time, Leadership, Team.

If the purpose of the entrepreneur is to create an Asset of Value, how do we get from where we are to the Asset of Value? What is it that the entrepreneur actually does? What is the “job” of the business owner?

Let’s break down the business. No matter what sector you are in, every business works utilizing the same basic functions: marketing, sales, supply, operations, human resources, money management and general management.

If you look at any one of these functions, you’ll see that it is made up of many activities that are performed on a daily, weekly and monthly business.

Take marketing. The intention is to generate leads. To that end you do hundreds of different activities, from analyzing customer data, to briefing an ad agency, to updating your company website. The sales function has to convert these leads into sustainable customers. Again, many different activities are performed every day, week and month, in order to do that.

And so it goes, for each of the core business functions mentioned above. That’s one heck of a lot of activities! The job of the entrepreneur is to organize these activities and functions into coherent business systems and then find the right people to run the systems with you managing the results.

Here’s an example of what happens when you don’t organize those activities into a manageable system. I’ve been working with a client, Kevin, who has fantastic technology to sell. It’s really better and smarter and cheaper than anything you’ll see internationally. His business should be growing in leaps and bounds, but it’s not. Why? Because Kevin can’t let go of the idea that his job is not to sell the technology, but rather to organize all the activities of each function into business systems that point him towards his ultimate destination – building an asset of value. Kevin is absolutely consumed by the daily, weekly, monthly activities. He’s over-involved in the minutia. His staff finds his nit-nitpicking infuriating and so his staff turnover is high. You would think that his obsession with his technology would be an asset in the sales arena, but in reality it’s not. He’s scornful of the customers who don’t understand how brilliant his products are, and he lets them know it. He even manages to alienate his suppliers with his interfering and correcting.

When business owners don’t create systems which allow them to take a step back from the hundreds of activities that every business performs every day, month and year, they eventually hit a ceiling. They can only do so much, no more. They get exhausted. Their entrepreneurial energy is depleted, and with it, their passion, their love for the business and their joy in what they are doing. They lose sight of the vision. They doubt themselves. They alienate staff and customers.

Only through realizing that your job as a business owner involves organizing the building the activities of your business functions (marketing, sales, HR, supply etc) into organized systems, and then delegating the management of systems to your staff with you managing the results of the systems, will you progress! This is a vital change needed in any business that is going to grow and non-negotiable if you are building an asset of value. This will allow you to spend less time working in the business, and more time working on the business. Get out of the engine room and up onto the bridge of your ship to sail it in the direction you want it to go.

If you are not consumed by the day-to-day activities of your business, you have a better perspective. You have more time. And what do you do with that time? You lead the creation of value by introducing new products or by finding new customer groups that your system of delivery can deliver products and services to.

Kevin is someone with a great idea, a brilliant product – and a not so brilliant business. Why? Because Kevin has not got his head around the fact that the job of the entrepreneur is to niche the business, build systems of delivery for the product or service, and lead the creation of value. Don’t let that happen to you!

EVENT: Build your business into an Asset of Value

Written by pippa@aurik.com on September 21, 2020. Posted in Asset of Value, Aurik Business, Innovation, Leadership, Mindset.

Join business growth specialist and Aurik CEO, Pavlo Phitidis for a 60 minute interactive discussion around a framework for established business owners to build your business into your greatest wealth-generating asset.

This online session will leave you with practical insights into how you can:

Re-shape your products and services for a changed economic environment
Re-build dependable marketing, sales and operational systems
Focus and empower your teams to ensure performance
Spend more time leading rather than doing
Reignite your business to grow both revenue AND profitability
Exit your business successfully when you are ready

Date: 30 September 2020

Time: 08h00 to 09h00

Shining a light on the business blind spots

Written by Pavlo Phitidis on September 19, 2020. Posted in Exits, Leadership.

Smart and successful businessmen have faith in their vision for their companies, but they need to be aware of their limitations and see themselves and their situations in the proper light.

A failure to do this leads to the business blind spot, a place where we can’t see what is going on around us. It’s also a place where we see things not for what they are, but what we perceive them to be. It grows from a history of how things have always been done in the business and a narrow view of what the business needs going forward. On The Money Show with Bruce Whitfield this week, we discussed business blind spots, how they develop, what they cost your business and how to prevent them.

Recently, I met two business owners in their late 60s. Both started their businesses from the ground up, work hard and earn their success. But what perplexed me was that even with their wealth of experience, both were plagued by glaring blind spots preventing them from putting succession plans in place.

In fact, the global status of successful succession is bleak – 28% of businesses survive it and only 3.4% make it there.

Keeping it in the family

However, blind spots are extreme in the family context. Founders in their late 60s and early 70s don’t admit to their fallibility easily. They can’t tolerate change, but argue that they don’t want the next generation to change the way they’re running the family business because it’s too risky. The successors can’t see that the founders are fearful of risk simply because time is running out and change means risk. This cycle places both in a deep, dark circle of despair – and both generations know it, but feel helpless to change it .

We all suffer from them

Many successful businessmen overestimate their capabilities and have an infallible view of themselves. They surround themselves with a team that seldom disagrees and mostly offers opinions that support the boss’s views. They listen to reply, not to hear and they talk to an outcome but don’t back it up with a plan to act. They seem convinced that what and how they are doing things is the best course of action to grow their businesses even though the numbers don’t agree.

Luckily, there are some blind spot antidotes that we can embrace such as:

Have a big vision for the business and one you believe in. The vision then becomes more important than your ego, your being right rather than effective and it will require you to surround yourself with co-creators rather than subservient implementers. The different views on getting things done will shine lights on blind spots for the business.
Annually, do the turnaround steps to keep fresh, in the present and relevant.
Don’t surround yourself with yes-men. A few contrarian people whose views differ from yours is a good thing. Diversity in a team will bring on contrarian views for certain. Create a safe environment for people to intelligently contribute opinions. That means listen to hear when they are offered and be sure your team knows why the business exists and what its goals are.
Increase your self-awareness – understand that the way you project yourself might be viewed by your staff as bullying behaviour in your efforts to retain the status quo. A message will go out that even though you ask for an opinion, you never really engage with it.

As a business builds over time and as growth comes in, the complexity of the operation increases and your ability to change your way of working is crucial. Don’t allow your business to be sabotaged by blind spots. They can lead to a misplaced commitment to a selected course of action that can cloud your vision and stunt the growth of your business. If the destination is clear and there is a clear vision, you can get past the problem and deliver on the promise.

Aurik Business Accelerator will work with you to build, implement and manage a family business succession plan.

WATCH: Business Day TV interview with Pavlo Phitidis about Reset Rebuild Reignite

Written by pippa@aurik.com on September 19, 2020. Posted in Innovation, Leadership, Mindset, Pavlo Phitidis, Trends.

Michael Avery from Business Day TV took 30 minutes to speak to author and business growth specialist, Pavlo Phitidis about his recently launched book, Reset Rebuild Reignite.

Watch on to learn why and how Pavlo wrote his second book within 9 months of the first, and why he believes any business can be built to thrive in a crisis.

https://www.businesslive.co.za/bd/business-and-economy/2020-08-28-watch-building-your-business-to-thrive-in-a-crisis/

How to rebuild a team after retrenchments

Written by pippa@aurik.com on September 18, 2020. Posted in Leadership, Team.

Covid 19 forced many companies to cut costs but cutting their payroll. For many it started by cutting salaries, and then for some, they had to cut the workforce. This was not always managed well and in many instances it has undermined the trust of the employees towards their employer.

People power a business, says Pavlo Phitidis. The building blocks of a business can be very simple. It’s similar to building a bridge – you can mechanically put each in place build the structure. He sees three critical building blocks in a business:

You need to stand for something: what does your business do, for whom, what problem do you solve for them and why do you matter?
Build the functions of the business into systems: marketing, sales, operations and administration. These systems deliver the promise you make to your customers and clients.
Unless you power 1 and 2 with people, they don’t work

Listen to the podcast of the discussion that Pavlo had with Bruce Whitfield on The Money Show on 702 & CapeTalk about this

Business leaders in the SME space in South Africa have been through the wringer for the last 5 years: Working in a regressive economy, with a government who doesn’t seem to like business or know how to engage us. And then we have been under assault with the unreliable power supply due to Eskom.

When Covid came, SMEs already had thin balance sheets, it felt like the final straw. For many who have been running their own business for 5 or more years, they have become virtually unemployable, and have no option but to make that business work. Covid pushed people into a place of concern and panic, and many behaved towards their teams in a way they may now regret. It wasn’t necessarily deliberate, it was the shock of how Covid disrupted their environment.

There were a number of variations from cutting salaries to advising staff of no pay raises, to trying to make staff look to the upside of not travelling in traffic due to working from home… in all instances, the subtext was that if you don’t toe the line of the new policy you can find another job, knowing there are very few out there.

Pavlo witnessed many instances where the labour act was not followed. Paycuts were done for some but not all, with no transparency, which breaks the most precious ingredient between the business owner and their team. That needs to be rebuilt now.

While remote working via Zoom and other online platforms enabled work to continue, in many cases it has further broken the connection of culture that evolves in a workplace through daily interactions.

Pavlo hopes that most businesses have reset themselves by now to be relevant to the changed lives of their customers.

There are number of things to do to now to rebuild the people part of the business.

Recognise that you are a leader

When you run your own business, that is what you are: a leader! No-one else is going to lead it whether you employ 3 or 300 people. So you are the one that has to rebuild that trust with your people.

Communicate

If remote working is the new normal, you have to develop policies and systems that allow for effective communication. Pavlo’s advice is NOT to turn camera’s off in meetings – you miss body language and have no idea what people are doing on the other side. It takes all of the human engagement out of the discussion. Use all the tools at your disposal to increase engagement on screen if that is how you are working now.

Start an engagement

Don’t leap into the issue. Start an engagement that will elicit some level of emotion. Pavlo does this often by asking a business owner ‘what inspired you to get into the business’ which removes it from a fix-it type of conversation, to an expressive one. So now ask: What did you do during lockdown? What caught you offguard most? And follow that genuine conversation with: So where are we now?

Set a strategy

While acknowledging that things will change and evolve as we are in uncertain times, the team needs to know there is a game plan, and understand WHY not just how it works and the role that they play in it.

All in it together

Everyone has everything to gain, and everything to lose in the business’s survival and success. Unemployment is going to become even worse in the coming months, Covid is still around, and so people are going to be very apprehensive about employing new staff. If the strategy makes sense, and is consultative with the team, and people get to contribute, which makes them co-creators, this makes them take accountability and responsibility for it.

If you are struggling with a people problem in your business, contact Aurik to get the building blocks right for growth.