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Articles written and sourced to share knowledge with Small Businesses.

Article No. 1 - "Do We Live In a World of Semantics?" - 19th December 2016

Article No. 2 - "Have You Found Your Freedom?" - 2nd January 2017

Article No. 3 - "Do We Really Know Who We Are?" - 16th January 2017

Article No. 4 - "Does Your Business Need CPR?" - 2nd February 2017

A great 2 minute explanation of Disruptive Innovation

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Article No 1. - 19th December 2016

Small Business table

Do We Live in a World of Semantics

Sometimes I think we live in a world of semantics. You see I work in the Professional Services industry. In this Industry we often hear debate about the differences between a Business Adviser, a Business Coach or a Business Consultant. It is my personal opinion and observation that there is little difference between adviser, coach or consultant. With the aide of the Oxford Dictionary online at www.en.oxforddictionaries.com I wish to make my case.

Coach - verb is defined as: Give [someone] professional advice on how to attain their goals. We think it reasonable that Coach as a noun could be defined as: A person that gives professional advice to [someone] on how to attain their goals.

Adviser - noun is defined as: A person who gives advice in a particular field.

Consultant - noun is defined as: A person who provides expert advice professionally.

I think you will agree that there is little or no real difference between the three definitions and, in reality, a professional working in this field will be all three at various times during an engagement with a client.

Much more important than the semantics, is the freedom and value that small business can gain from engaging a Business Adviser or Business Coach or Business Consultant to help with their business. A good adviser, coach or consultant can take a helicopter view of the business and help re-align its Strategy, Vision, Mission and Goals. They can take the business to the next level.

I personally have a saying that – Freedom is in the BAG. BAG is an acronym for:

Be accountable to your daily, weekly, monthly goals and 90-day action plans.

Automate your business – create systems, policies, and procedures that become the set of instructions that run your business while you are not there, maybe off enjoying your freedom.

Get out of the “ME” mentality – delegate to your employees so that they become more engaged in the business and share more of the work load.

Think about it. An elite athlete, that does not have a coach, is not going to achieve at the highest levels of their chosen sport.

I would like to think that I practice what I preach. When I visit my doctor I think of him as my medical adviser. About 5 months ago my medical adviser advised me to go to the gym and do muscle building type exercises to lose weight and get my Diabetes type II under better control. I knew I would not stick with going to the gym three days a week so I work with a Personal Trainer who I think of as my health coach. I am always looking for the most up to date information on marketing for myself and to help my clients so I have a marketing strategy consultant who helps me with that. The same applies in Business.

Nobody, even the best of the best MBA’s, or the most experienced owner or manager, can have all the solutions for each and every problem. When I am stuck with a problem that I need help with I can turn to my Advisory Board, specialist advisers in all different fields, for help.

Large corporations can afford to hire specialist managers to advise their Board of Directors hence the titles of CEO, CFO, COO, CPO and CMO.

The best a small business can do to match this, is to engage a Business Advisor, Business Coach or Business Consultant.

Ideas are worth nothing until you take action. Take action today!

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Another short video, this time about Emotional Inteligence

Article No 2. - 2nd January 2017

Small Business Freedom

Have You Found Your Freedom

I have a vision of what a small business ought to be like. I developed my idea of a small business model whilst running a couple of small businesses between 1976 and 2010. I further developed the model when I started as an adviser to small businesses in 2010 and lately, when I joined the MAUS network of advisers and consultants, I have put the spit and polish on the model. I would like to share my thoughts on that model and it seems a good idea to me to give a definition of what I consider a small business to be.

According to the Australian Bureau of Statistics (ABS) there was a total of 2,121,235 businesses in Australian at the end of 2015 as per table 1. The small business I am referring to has between 5 and 25 employees and a turnover of between $1M and $15M. This roughly fits in with the 197,164 businesses that the ABS call Other Small.

Table 1 Small business numbers and classifications in Australia

Small Businees Figures

Source: Australian Bureau of Statistics Cat. No. 8165.0 and DIISTRE calculations

It is not that the model will not work for smaller or larger businesses, it is that this is the sector that I am most passionate about. I think it is this sector where business owners have the most potential to find their freedom.

What do I mean by found their freedom?

All businesses start with an idea, a purpose, a customer value proposition. We can supply that product or service cheaper, better, faster, or differently or we can solve that problem with a new product or service that fulfills the needs of the customer. Along with that comes the thought that we can be our own boss. We can have freedoms that employees don’t have. We can have the freedom to make our own decisions that suit us and our desired lifestyle and that are aligned with our values, the freedom to create wealth for ourselves and our family now, in the future and into retirement, we can have the freedom to have a work-life balance that allows us to spend valuable time with our family and friends, we have the freedom to pursue our dreams. All this then comes with a sense of knowing you are doing something worthwhile and providing value to society that is profitable and at some point in time can be sold for a tidy sum of money.

Does that sound like someone you know or maybe yourself?

Have they or you found their freedom? In so many cases that I observe, instead of finding their freedom they find a ball and chain. Instead of them driving the business, the business drives them. They end up simply being an employee in their own business and still have all the headaches that come with owning a small business. It is what we as advisers refer to as - Working IN the business not ON the business or having a ground zero view instead of a helicopter view.

So what is this generic business model I have adopted all about?

I call it – Freedom is in the CPR BAG. CPR BAG being an acronym for:,

Customer Value Proposition, the cheaper, faster, better or uniqueness of your product or service.

Profit Formula, the ability of your customer value proposition to make an acceptable and sustainable profit.

Resources, Human, physical and financial resources required to create value for the customer and the company.

Be accountable to your daily, weekly, monthly goals and 90-day action plans.

Automate your business – create systems, policies, and procedures that become the set of instructions that run your business while you are not there, maybe off enjoying your freedom.

Get out of the “ME” mentality – delegate to your employees so that they become more engaged in the business and share more of the work load.

Of course before you can have goals and action plans there needs to be Vision, Mission, Objectives and Strategy all of which define, create and sustain your competitive advantage, the cheaper, better, faster, or differently (customer value proposition) that was part of the original idea or purpose for going into business in the first place. I observe so many business owners who have forgotten their purpose for being and lost sight of their envisioned future. The first action to create change is to look at where the business is now, where you want to go to and look at the path to get there. The point is to take action and monitor that action until the task is completed.

Before a business can be automated it needs reliable and engaged staff to help create and most importantly document those policies and procedures with a guiding hand from the business owner. There is an enormous risk in running a business without documented WHS and HR policies and procedures in place. These days this can be done efficiently with the use of software packages that take the hard work out of developing these policies and procedures. The point here is to have a set of policies, standard procedures and operating instructions that allow the business to function without constant intervention by the owner. All facets of the business can be measured by a Balanced Scorecard system which is monitored by the owner (the helicopter view).

Possibly the hardest challenge for any business owner is to get out of the ME mentality. When a business owner feels that he must micro manage his employees, it sends the signal that he does not trust his staff. Staff become detached from the business rather than engaged, and productivity and innovation suffers. The staff are the ones who do the actual work and in most cases are quite capable of making valuable suggestions on how to improve a product or service. If not find staff who can.

To sum up my generic small business model is one where there is a Vision, a Mission, Objectives and Strategy that are the guiding paths to the success of the business by aligning all facets of the business to the sustainable competitive advantage of the business. It has a set of documented instructions that allow the staff to run the business whilst the owner maintains the helicopter view of what is going on. The owner delegates to, and listens to his staff so that they become engaged and more productive. Finally, the model creates FREEDOM for the owner to have his chosen work-life balance, to create wealth for his family now and into the future and freedom to pursue his dreams whilst dramatically reducing stress and perhaps allowing for some fun.

If you would like to find your freedom and all of this seems to be a daunting task, and it is difficult to see where and how to start the process of change, consider engaging a Business Adviser, Coach or Consultant to help.

Ideas are worth nothing until you take action. Take Action Today!

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                 Article No. 3. - 16th January 2017

Small Business Owners

Do We Really Know Who We Are?

In my personal life I have been greatly affected in later years by Dr. Russ Harris and his books The Happiness Trap, The Reality Slap and ACT with Love and the whole philosophy behind what is referred to as Acceptance and Commitment Therapy or ACT. I use ACT as both my moral compass and my directional compass. It allows me to constantly make choices, based on my values, that steer me in a direction that will best move me toward my hoped for future.

What are Values?

So to answer that question, Do We Really Know Who We Are, I think the first place I would look at is my values. Harris, R (2007, Ch. 3) sums values up as:

‘Your Values are reflections of what is most important in your heart: what sort of person you want to be, what is significant and meaningful to you, and what you want to stand for in life. Your values provide direction for your life and motivate you to make important changes’ We all have values. We developed them from our parents and those significant people in our lives that we looked up to. Our values were molded by the community we lived in and the culture of the Country, State, City and Suburb where we live and have lived.

A Vision and a Mission

Before I was able to use my values to steer me in a direction that will best move me towards my hoped for future I had to map out what I wanted that future to look like. I had to have a vision. That vision also shapes who I am and keeps me on track. We have many stages in our adult lives from being single, being married, married with children, empty nesters, grandparents etc. At each stage we tend to re-evaluate where we are in life and where we are headed and to do this we have to establish who we are, what we do and why we are here for each new stage. A bit like a mission statement don’t you think?

So in our personal lives we have values, a vision, and a series of missions for each major change in our circumstances.

So why not apply this same thinking to your business?

Thompson et.al. (2016, p24-25.) define a company’s values to mean: ‘certain designated beliefs, traits, and behavioral norms that company management has determined should guide the pursuit of its vision and mission’ and they further state that ‘a strategic vision portrays a company’s aspirations for its future (“where we are going”)’ and that ‘a company’s mission describes the scope and purpose of its present business (“who we are, what we do and why we are here”)’.

Companies can gain a great deal, maybe even competitive advantage, through having a vision that is supported by the management and the staff who are all pushing in the same known direction. Corporate values define what a company stands for and create a positive culture for all to see and follow, its moral and directional compass. A well crafted mission will establish ‘who we are, what we do and why we are here’ again so that all members of the company can move in the same direction and be engaged with the mission.

Values, Vision, and Mission are just as important for small business as they are for medium and large businesses however it is my personal observation that few small businesses have documented these essential ideas. It is an area where the services of a Business Adviser, Consultant or Coach can be of enormous value and the beginnings of taking that next step towards a High Performance Business that provides Freedom and a hoped for future. So please consider the value that can be added to a business by following some basic steps that can be undertaken with the help of someone external to the company who can adopt a helicopter view of the company.

Ideas are worth nothing until you take action. Take action today!

Harris, R 2007, The Happiness Trap: Stop Struggling, Start Living, Exisle Publishing Limited

Thompson, AA, Peteraf, MA, Gamble, JE, Strickland III, AJ 2016, Crafting and Executing Strategy: The Quest For Competitive Advantage: Concepts and Cases, 20th edn, McGraw Hill Education, New York.

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Blue Ocean Strategy explained in 2 minutes

Article 4 - 2nd February 2017

Small Business CPR

Does Your Business Need CPR?

In the world of first aid CPR is an acronym for cardiopulmonary resuscitation. In that context CPR can be a life saving first aid procedure that can increase a person’s chances of survival if started soon after the heart has stopped beating. If no CPR is performed, it only takes three to four minutes for the person to become brain dead due to lack of oxygen. In my world of creating Freedom for small businesses (between 5 and 15 employees and between $1M and $15M turnover) CPR is an acronym for:

Customer value proposition

Profit formula

Resources, processes and capabilities.

Johnson, Christensen Kagermann, (2011 p. 106) argue that the components required for a successful business model are customer value proposition, profit formula and key resources and processes and this is where my acronym hails from.

Following on, and to answer my original question, all businesses do require CPR. A healthy business will have a customer value proposition that is valued by their customers, a profit formula that allows them to provide that customer value proposition in a way that earns them a sustainable profit because they have strategic fit between the customer value proposition and their resources, processes and capabilities.

Of course in an unhealthy business a parallel could be drawn between the need for medical CPR and my definition of CPR. A business adviser can apply CPR to a business whose “heart” has stopped and as soon as possible to prevent the business from dying.

Let’s dive a little deeper here. 

What is a Customer Value Proposition? 

To be honest this can be framed in many ways. What is important is that all businesses should be able to clearly communicate why their product of service is superior and or different to that of their competitors and why that is of value to the customer in a way that is perceived by the customer as real value. Let me repeat that last part – in a way that is perceived by the customer as real value.

Thompson et. al. (2016, p19) states ‘the customer value proposition lays out the company’s approach to satisfying buyer wants and needs at a price customers will consider a good value’.

Anderson, Narus & van Rossum (2006, pp 92-94) argue that there are three levels of customer value proposition;

• ‘all benefits value proposition’ a basic level that should answer “why should our customers purchase our product or service?” and

• ‘favourable points of difference value proposition’ a more polished level that should answer “why should our customers purchase our offering instead of our competitor’s?” and

• ‘resonating focus value proposition’ the gold standard that should answer “what is most worthwhile for the customer to keep in mind about our offering?”.

A valid customer value proposition is by far the most important component of your business model and should be the starting point.

What is a Profit formula?

‘The profit formula is the blueprint that defines how the company creates value for itself while providing value to the customer’ (Johnson, Christensen & Kagermann, 2011 p. 108). 'The profit formula describes the company’s approach to determining a cost structure that will allow for acceptable profits, given the pricing tied to its customer value proposition’ (Thompson et. al. 2016, p.10). From these two quotes it is clear to see that the customer value proposition and the profit formula are tied together. Think of it this way. For each and every product or service the total value contained in that product or service must be shared between the customer and the supplier. The amount retained by the supplier has to be sufficient to satisfy fixed and variable costs so that a profit is made. The value given to the customer must be sufficient to entice initial and repeat purchases.

What are resources, processes and capabilities?

The key resources are assets such as the people, technology, products, facilities, equipment, channels, and brand required to deliver the value proposition to the targeted customer. (Johnson, Christensen & Kagermann, 2011 p. 108). Successful companies have operational and managerial processes that allow them to deliver value in a way they can successfully repeat and increase in scale (Johnson, Christensen & Kagermann, 2011 p. 109). A capability is the capacity of a firm to perform some internal activity competently (Thompson et. al. 2016, p.84). It is the resources, processes and capabilities that must create the competitive edge that will drive sustainable profitability and sustainable competitive advantage.

In conclusion it is vital that a company has CPR to be a healthy and high performance business. Companies that are constantly struggling to keep their heads above water may be in need of CPR. It is my personal opinion that the best person to administer CPR to a company is a Business Adviser, Coach or Consultant that possesses the experience and training and has access to the right tools for the job. They can provide an unbiased helicopter view and suggest corrective action. I would urge you to consider seeking such advice on such an important matter as this. Ideas are worth nothing without action. Take action today!

Anderson, JC, Narus,JA, & van Rossum, W 2006, ‘Customer Value Propositions in Business Markets’, Harvard Business Review, vol. 84, no. 3, pp. 90-99.

Johnson, MW, Christensen, CM & Kagermann, H, 2011, HBR’s 10 Must Reads on Strategy: Reinventing Your Business Model, Harvard Business Review Press, Boston.

Thompson, AA, Peteraf, MA, Gamble, JE, Strickland III, AJ 2016, Crafting and Executing Strategy: The Quest For Competitive Advantage: Concepts and Cases, 20th edn, McGraw Hill Education, New York.

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