The margins for success and failure in the world of sport come down to hundredths of a second. This can be likened to the width of an apple and in 2002 it cost me a gold medal, this equated to just 0.02 of a second! I was world champion in the preceding years and went on to represent Great Britain at the Athens Olympics.

In business, you may or may not be accountable for business being won or lost by fractions of a second but being as fit as you can be, mentally and physically, could help you win, or stop you from losing that important contract.

I now thoroughly enjoy bringing my experience, understanding and motivation to assist others in the office or at home as a personal trainer.

Tips For Success

With a Olympic Games rapidly approaching I have been looking back at the types of questions I used to ask myself regularly in preparation for competing at world-class level. This is what our current Olympic hopefuls will be doing in the run up to the London Olympics.
They will be analysing every single bit of their performance, not just regularly but every day and maybe even, every hour.

I have adapted these questions for our business and personal lives and this month I am concentrating on getting the mental aspect right. This is a great opportunity for all to ask ourselves some important questions. Are we performing to the best of our ability in all areas, both in our personal and business life. Can we do better?

Am I mentally prepared?

After competing at the Olympics myself and training people from all walks of life there is one thing that is paramount before physical ability. If you don’t get your mindset right you will not achieve.

For me, it was the ability of self-belief, as without this I could never have stepped up to the next level. This may be the same for you, or there may be something similar that is niggling away at you and stopping you from achieving your true potential.

Emotional – Who is supporting me?

The work-life balance is so important but is so often over-looked – people are working harder and longer than ever. I am all for working hard, but making sure you get longevity within your career has to be down to consistency through balance, at home and in the office.

Emotionally, we are happier if we know where we fit into a team and have support from that team.

Personal Pride

Do you have job satisfaction and pride in your work? Are you bored or in a dead-end job? If so, instead of moaning about it, work towards a change or a target. Try to be pro-active rather than re-active, which means taking ownership rather than waiting for something to happen.

This will give you pride in doing a job to the best of your abilities.

1. Make sure every deal makes a profit

Never place or accept orders that don’t make enough profit, unless you’re gaining customers at a loss because your back-end processes generate profits to outweigh the acquisition cost. If necessary, renegotiate existing trade terms to ensure your business remains sustainable.

If your existing supplier won’t change their terms, find a new supplier. You’re always the final judge in any selling/buying conversation and you always have to choice to walk away from the wrong deal or the wrong client.

2. Only ever deal with people you like

This is my golden rule of business. Is this a hard stand to take? Yes. Is it the only stand to take? Yes! Why? Because here’s the truth of the matter. When a relationship just doesn’t work, all the minor problems become major – but when you deal with people you like and respect, all the major problems become minor.

3. Don’t sell. Allow people to buy.

True professionals will always find out a customers needs and wants before they present their solutions, because during the ‘information gathering’ stage you will find out the problems your potential customer is experiencing and the level of pain they are feeling.

Focus on offering a cure for the pain first. Then, and only then, do you start talking about features, benefits and advantages of the product or service.

4. Charge for your experience as well as the work you do.

The significant factor when pricing a service that provides advice, consultancy or coaching is your level of professional expertise. Your biggest asset is your work experience. Too many people charge only for what they do, rather than getting paid for their lifetime of working experience.

5. Do what successful people do and you’ll have what successful people have.

Mistakes can provide a valuable learning experience – but it’s crazy to make them if they can easily be avoided. The way to do that is to learn from others. Listen to an audio programme; go to a seminar. Invest in listening and consulting those who are a success at what you want to do.

6. Tell your customers ‘why’ you are doing what you’re doing.

Everyone is bombarded with sales and marketing messages on a daily basis to the point where they barely listen to the pitch. Which is why it is important, if you are offering a client discount, to tell them why you’re offering it or why the product is scarce.

For example: ‘We’re clearing out the warehouse to make room for our latest product, and so we’re offering 20% off core stock for a limited period’; or ‘I am giving away a free consultation so you can get to know how I work, and I can better understand how I can help your business grow’.

7. Always ask for referrals. It is one of the best ‘retention strategies’ you could ever use.

Asking for referrals or ‘personal introductions’ is the best way of checking your relationship with your customer. If they refuse to give you referrals you know that something is amiss and you have an ideal opportunity to find out what’s wrong and take corrective action. On the other hand, how can a customer stop buying from you when they’ve just recommended their contacts buy from you. They can’t.

Is planning Successful?

Well, it seems possibly not. When we assess long term business success and look at the top US companies in the year 1900, we find that only three of the top 10 companies still maintained their position 100 years later in the year 2000, and the rest had either failed altogether or dropped out of the top 100.

This is strange. Surely large successful companies plan don’t they? Well if they do, it doesn’t seem to help their long-term success.

But what about more recent businesses? The results there are even more disturbing. When In Search of Excellence (Peters and Waterman) was written in 1982 it identified 43 successful companies and their characteristics, which, included, of course, the ability to plan for the future of the business.

However, just two years later 14 of the 43 ‘excellent’ companies were in financial difficulty.

Now this may have been for a variety of reasons, but if these businesses were so successful at planning, why didn’t that help them survive?

Planning Needs To Be Different

There is something both necessary but futile about planning. In the past it was perfectly possible for a business to control – and plan – certain aspects of its environment.

For example, if a customer ever complained it was by letter. That letter – seen only by a handful of people, would be dealt with in the proper manner by the complaints department and a letter of reply would be written and dispatched to the customer sometime… next week.

Nowadays, if a customer has a complaint, it can be all over the world in a matter of hours. The complaint is no longer controllable of containable by a business, and therefore any planning or preparation we may complete in order to deal with customer complaints has an ‘after the horse has bolted’ feel to it.

Business Now Has No Boundaries

It is very difficult to plan such a dynamic, fast-paced, ever-changing business environment – in fact it is impossible.

Nor is it achievable for anyone person to embrace a whole business because it is too complex. The business world is now too vast and boundary-less there are no limits to trade and virtually no exchange controls. Therefore:

You can’t understand, define, control or guard a boundary – if there is NO boundary!

We Now Need To Plan For Chaos

Very little we do within our business our business can now be completely planned – so what should we plan for?

We Now need to plan for uncertainty, for the unknown and for chaos. The old adage says:

No Plan ever survived contact with the enemy…

…and no business plan completely survives contact with the customer!

So What Can We Plan?

We now know that planning for the external world is pointless, and consequently our planning has to become introverted, introspective and internal. We can plan for our people to cope, we can plan for how we react, we can plan for how we deal with the complaint – in fact what we now need to plan is how our business presents itself and how it holds up under scrutiny.

We have to plan for the personality of the business and our brand and how congruent  we all are in representing the brand and in holding true to the very core of the business and its values, principles and strategy.

What Will Happen In The Future?

In the future, large companies will struggle to survive even half as well as they have done over the last 100 years, because the world is now such a different and virtual plac. Many of the benefits of size are no longer relevant or useful and business success and business planning will be preserved for the small, focused and flexible unit.

SMEs Do This Best

It’s true to say that SMEs do this ‘internal’ planning much better than the biggies. It’s very difficult to impart the values and integrity of a company and get that congruent when there are 2,000 workers – its much easier with a handful of tight-knit team members.

Therefore, the future of our business world and economic success lies with the SMEs: they are more able to plan for this boundary-less world: they are more compact and congruent, more able to reflect and embody a brand and to be flexible in business while representing its core personality. And more importantly they are more able to survive scrutiny, to prosper and to grow.

If the external world is a dynamic place, then we must reflect that in our business personality, and become more dynamic internally – a much easier task in small organisations.

They aim to grow as fast as possible without realising that the more their business grows, the more cash they will need to put into it. For most business owners it comes as a surprise that larger contracts and high turnover are not in themselves a route to success.

In our experience at RCapital there are three key areas of weakness among business owners: a lack of understanding of the meaning of cash flow management; a tendency towards over trading; a reluctance to ask for advice from those who have had practical business experience – until it’s too late.

With this in mind here are my key tips for a successful business:

Ask For advice at an early stage

There are huge benefits in seeking expert advice before embarking on any kind of financial venture. Fortunately, it is now much easier to find business mentors from all walks of life who have been there, done it and have grey hairs to show for it.

Why wouldn’t you want to learn from others’ mistakes? If you can find out in a few weeks or months what it has taken a successful businessperson 10 or 20 years to learn the hard way, you would start out with a huge advantage.

Understand the difference between ‘cash positive’ and ‘cash negative’

Lots of people set up in business without knowing the difference between cash positive and cash negative business, yet it is possibly the most important thing to understand. Remaining cash positive is the key to business survival and longevity.

In simple terms, it means there is always more money coming into the business tham going out at any time.

For example: If you go to a restaurant and buy a meal, the company won’t pay for the food on your plate for 60 days. You will have eaten it before it has paid its supplier. (The suppliers will have similar terms with their suppliers.)

This is sound business practice and provided the cash flow is properly managed, this model has the potential to maintain a cash positive business.

In contrast, the cashflow model for a retail business that is, for example importing clothes from the Far East and then selling them in its own shop, will be quite different. The retailer will have to pay its overseas supplier in advance in order for the stock to be released for shipping.

It may then take as long as two months for the goods to arrive, clear customs, and be put on sale. There may be import duty to pay. It could take a further two or three months to sell those goods. By the time the customer pays the retailer, the business may have been carrying all of those costs for five months or more.

The danger is the more stock is bought the more cash negative the business will become and the more the owner may need to borrow – and – so it continues – until the business falls over. Therefore , understanding the difference between cash positive and cash negative it vital.

Avoid over trading

At RCapital we repeatedly find the mai reason businesses fall over is because they overtrade. As an entrepreneur you might think, how can I be overtrading? The contracts are in place, the turnover is increasing, our product is in demand. Surely we are doing well?

Overtrading results when cash is going out of the business more quickly than it is coming in. If you maintain cash positive business, you can’t overtrade.

So the main advice we always offer to entrepreneurs who are looking at a new or existing business, is to think about how the business will be financed and how they will manage their cash  flow. A cash positive business can never be a victim of over-trading. It is such a key lesson to learn.

More businesses could be saved from financial disaster if business owners sought advice early enough. The answer is not always an injection of capital from an investor. Sometimes it is enough to renegotiate terms of business, or to look at restructuring.

But the best piece of advice I can offer is to always seek expert advice as soon as you suspect your business is in trouble. Waiting until you have no other option is likely to lead to the least profitable outcome.

Charles Darwin was quoted saying:

“To change is difficult, not to change is fatal!”

Living in a world where innovation cultivates how we will live in 5- 10 years time, we must allow ourselves to be predisposed to new technologies and ideas.

Innovation is about doing things that produce an enhanced effect. If I had not listened to a passionate girl, who I backed to develop the way companies head hunt through an outsourcing process, I would have not sold that division of the business (AMS) that her idea helped grow three times the size of Alexander Mann.

Now thanks to her developing a competitive edge over rivals, the outsourcing industry is now worth billions.
However, it is not solely the “idea” that makes a success; it is the execution of that idea that is important. It can be as simple as starting a new filing system that introduces a more efficient way of working.

Or, in the case of a financial director at one of my portfolio companies who transformed a complex method of viewing financial data into a format that improved efficiencies across the business.

More often than not, you will find that most innovators come across their pioneering moment when completing a mundane task. If it had not had been for Sir Tim Berners-Lee, and his frustration for transferring information, helping one person on one computer to share data with someone on another across the office, The World Wide Web, may not have been born for another 5, 10 years, maybe more.

The web has revolutionised the way people communicate, how we obtain information and how we trade. What may be interesting to know Tim Berners-Lee is not sitting above Bill Gates on the rich list, he decided that for man-kind to evolve he would set free his idea. Yet since, many have tried to use their innovations to turn a profit.

On Dragon’s Den many a time have I heard “I have a new innovative product” but when asked, OK what is the ‘USP’, what does this product do that nothing else does, they find it hard to answer.

So when thinking about pitching a new idea, ask yourself, what will this concept do that nothing else can? Is it really solving a problem out there?

You may be thinking at a time like this where raising finance is a challenge at best, why would I commit to any development of ideas – it feels like a risk, possibly, at the expense of your company’s fall?’

But recession is a time where the best innovations can happen, it seems when there are restrictions on budget and time, people become more creative. But remember this, if you allow your business to stand still, you do so at your peril.

If you don’t take the initiative and push forward your ideas into your market, your competitors may well get there before you.