GBSH Insights

Business Valuation 1: 5 Ways to Value your Business to Investors

noreply@blogger.com (GBSH Insights) — Fri, 20 Mar 2015 08:15:00 +0000

Working out the value of your business is important when selling your business, as it can help you decide on the selling price. Here are some suggested steps to help you through the process. They measure on both the intrinsic and implicit value.

1. Prepare your business information

You’ll need a range of business information to value your business properly. If you need help with preparing your documents and can’t afford a professional, consider asking friends or family with bookkeeping or business experience.

Buyers/Investors may ask if they can value your business independently, so it’s a good idea to have your business documents organised and up to date (it makes a good impression too!).

Below is a guide to the type of information you’ll need.

Finances and assets

Your financial statements (for the last 5 years if possible) – such as cash flow statements, debts, annual turnover, and profit and loss statements

Details of physical assets – such as machinery, buildings, equipment, and stock

Details of other assets – such as goodwill towards the business and intellectual property (any designs or ideas that you have protected through copyright)

Legal information

Legal documents – such as leases and insurance policies

Registration papers – such as business name certificates, registration papers, licenses, permits, and any other papers that demonstrate you comply with government requirements

Business profile, procedures and plans

Market conditions – such as details of competitors, and how your business compares to them.

Sales information – such as reports and forecasts

Business history – such as start date, ownership changes, and location changes

Business procedure documentation – such as marketing, staff roster and customer service procedures

Business plans – such as marketing, emergency management and growth plans

Other details – such as opening hours and whether the business premises are owned or leased

Staff, supplier and customer information

Employee details – such as job descriptions, skills and experience, work history, performance reviews, and pay rates

Supplier details – such as supply agreements and supply prices

Customer details – such as customer numbers, customer profiles and direct marketing activities

2. Decide whether to get professional advice

If you can afford to, consider getting professional advice on how to value your business through your accountant, a business advisor or a business broker.

These professionals can help you analyse your business finances, find trends within your industry's market, and help you work out a value for your business. They can also help you calculate the goodwill value of your business and estimate your business' future profit.

An advantage of using a professional is that they may have clients who would be interested in buying your business, saving you the cost and hassle of advertising.

3. Choose a valuation method

Below are some common methods of working out the value of a business - this list is not exhaustive. If you engage a professional, they can help you decide which method is best for your business and explain any industry specific methods relevant to your business.

Keep in mind that there is no one set method, and a combination of methods can be used to arrive at your desired sale value. You may also need to negotiate the method of valuation with the buyer or the financier.

A. Look at current marketplace value and your industry

How you value your business can depend heavily on the industry you're in, and the current marketplace value of similar businesses within that industry.

Industries usually come up with their own rules and formulas to value a business, so it's a good idea to conduct research to gain a good understanding of your industry before you sell your business.

B. Use the return on investment method to calculate value

The return on investment (ROI) method uses your business' net profit to work out the value of your business.

To get your ROI, divide the net profit (before owner's salary) by the selling price:

ROI = (net annual profit/ selling price) x 100

For example, you have a selling price of $200 000 in mind, but want to test your ROI based on that price. You calculate that your business' net profit was $50 000 for the past year.

To work out the ROI, you use the formula:

ROI = (50 000/200 000) x 100

In this case, your ROI is 25%.

If you have an ROI in mind, you can use it to calculate the price for your business:

Selling price = (net annual profit / ROI) x 100

For example, if you were looking for a ROI of at least 50% for the sale of your business, and your business' net profit for the past year was $100 000, you can work out the minimum selling price you should set.

Selling price = (100 000/50) x 100

In this case, to achieve a ROI of at least 50%, you'll need to sell your business for at least $200 000.

C. Use your business' assets to calculate value

When calculating your business' asset value, it's important to include both tangible and intangible assets of your business. Tangible assets are physical things you can touch such as tools, equipment, and property. Intangible assets are things that can't be touched but are still valuable such as intellectual property, brands and business goodwill.

After you've calculated the total asset value of your business, you can then use this value as an indication for how much you would like to sell your business for.

As assessing your business' assets value can be a complicated process, it's a good idea to talk to your business advisor or accountant for help.

What is business goodwill?

Business goodwill is an asset that is much harder to value, as it does not have a determined market price. Goodwill can include:

customer loyalty and relations
brand recognition
staff performance
customer lists
reputation & approach of your business
Business operation procedures
Access to markets
Strategy

Calculating goodwill can be a complicated process, and different methods will give different results. Using different methods of calculation can give you an indication of the price range you would like to set for your business goodwill, and ultimately the value is what the marketplace or buyer is willing to pay.

Because it's difficult to calculate goodwill, it's a good idea consult a professional such as your accountant.

Take depreciation into account

If you use your business assets to calculate value, remember to take depreciation into account. Depreciation is the loss of value for your assets over time. For example, you may have purchased a computer for your business three years ago for $1000. When calculating your business' asset value, the value of the computer will no longer be $1000 as it was when you purchased it.

Talk to your accountant if you're unsure about how to work out depreciation of your business assets.

D. Find out the cost of creating your business from scratch

The cost of creating your business from scratch can be used as a benchmark for valuing your business. This is the estimated cost to build a similar business in your industry from scratch within the current market. To calculate the cost, you'll need to include all costs related to starting from scratch, including the costs of:

buying stock
buying equipment and tools
getting licenses and permits
recruiting, training and employing staff
developing products
marketing and promotion
buying or leasing premises
Setting up an online presence etc.

E. Estimate the future profit of your business

For a buyer, the biggest value of your business will come from future profits generated. As a seller, you're more likely to sell at a higher price if you can show through your financial statements that your business is likely to be profitable in the future.

This helps give a prospective buyer an idea of the returns they may expect from your business in the future.

You can estimate the future profit of your business by looking at any trends in your business finances from past years. You can also investigate the trends of similar businesses in your industry to see how your business compares and how the market is going. This information may be useful when negotiating the final selling price of your business.

What to do...

Talk to your business advisor, solicitor, accountant or business broker for personalised assistance and advice on valuing your business.

Check out our advice & support page for links to business advice, support and counselling services.

Learn more about financial reporting in our business finances topic.

Interested in more business valuation advice? Follow us on Twitter @gbshconsult

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Strategies for Job Creation and Inclusive Growth in Africa

noreply@blogger.com (GBSH Insights) — Mon, 16 Mar 2015 12:23:00 +0000

This piece originally appeared on The CEO Zimbabwe: Back to Work Exclusive with H.E.Dr. Ambassador Edgars

Africa economies are on the move and the continent has the second fastest growing economy in the world in the past decade. The acceleration in Africa’s growth over the past ten years reflects fundamental improvements in in the overall macroeconomic landscape, country political stability, and the business environment. Africa is beginning to harness its natural wealth and sectors growing rapidly include local services such as retail, banking, transport and communications, manufacturing and agriculture.

Poverty is on the decline with around 90 million African households having joined the consuming classes by 2011. Income inequality however remains unacceptably high and although it is falling in only about half of African countries. Africa has a workforce of 382 million with 42 % of the workforce being employed outside agriculture and 28% earning a wage versus a 24% margin in the year 2000.

Africa’s growth needs to be inclusive if it is to improve human welfare and ensure increasing social and political stability. In most countries economic growth reaches most people through employment income, so the challenge is to ensure that the economic growth translates into stable wage-paying jobs. Most countries in Africa have the potential to create stable employment to absorb the growing potential labour force

Depending on the source, Zimbabwe’s unemployment rate has been estimated as low as 4% and as high as 95%. The real level of unemployment is almost impossible to gauge as countless Zimbabweans are making a living in the informal sector and outside the country. This shows that the government needs to step up processes and policies that can create more jobs and more so create a labour force that can contribute to the country’s GDP.

WHAT ARE THE BARRIERS TO JOB CREATION?

For most businesses the barriers to job creation revolve around macroeconomic or political instability conditions. Notwithstanding the improved and faster economic growth within the region, businesses still show concern about ;insufficient demand, potential threat of inflation, access to finance, shortcomings in infrastructure like electricity, transportation and internet.

There is no simple solution to boosting job growth in Africa. I believe with targeted reform programmes, governments can eliminate these barriers and unleash private sector growth.

A robust GDP is a necessary condition for accelerating the creation of jobs. National leaders on the continent need to ensure that the improved macroeconomic and political stability of the past decade is maintained. They should also pursue macroeconomic reforms that create a more attractive business environment. However focusing on GDP growth alone, will not be able to transform Africa’s employment landscape or ensure inclusive growth and wider opportunities for Africa’s people.

To harness growth for job creation, Africa’s leaders should focus on reforms to the business environment in the labour-intensive sectors that have the potential to create a large number of jobs.

A jobs strategy is very far from the broad based industrial policies that have more than often proved ineffective in countries around the world. Africa’s development needs are vast and national economic plans can often be hundreds of pages long. Many well-meant reform programmes enact numerous policy changes but have limited practical success. I believe that a more pragmatic approach is to remove all obstacles to growth end-to-end in specific industry value chains and then build more broadly on this narrow head start theorem.

Examples that have successful done this include;

Morocco which consolidated its growth in 2013 with GDP rising 4.7% compared to 2.7% in 2012. Sound macroeconomic and fiscal management has continued while a cautious monetary policy held inflation at 1.9% and the current account deficit at 7.2% of GDP, compared to 10% in 2012, while foreign exchange reserves reached 4.5 months of imports of goods and services. The new aeronautical and automobile industries represent an important source of economic growth and innovation for Morocco.

In India there has been a huge growth of IT companies which have in the first instance taken advantage of the growing Indian market and also exported there products to overseas markets. Foreign owned companies were also allowed 100% ownership to provide funding for the booming industries in the country and these companies were critical part in providing capital and know-how in the earlier days of India’s economic growth.

Mali’s integrated investment in road, rail and other transportation to facilitate mango exports and Morocco’s two free trade zones for automotive companies are examples of targeted infrastructure tailored to specific industry opportunities.

Nigeria’s telecommunications sector is estimated to have generated up to 3 million jobs in the absence of the state telecom monopoly.

In Angola, Africa’s second largest oil producer, major investment is being made to expand access to electricity, water and transport and infrastructure development, leveraging off the oil revenues in the country. To boost business, financial sector policies are being modernised with the introduction of a new foreign exchange currency law for the oil sector and a mining law.

WHAT ELEMENTS SHOULD AN END-TO-END STRATEGY HAVE?

In order to boost grow and generate jobs, end to end strategies should have these six elements:

A) Identify one or more labour intensive sub sectors in which the country has a global competitive advantage or enjoys strong domestic demand, and can create a large number of jobs.

B) Improve access to finance for businesses in those sub sectors by providing incentives for the banking sector to increase lending, educating new borrowers and opening access to foreign investors.

C) Build suitable infrastructure to support economic activity in these subsectors and in the geographic mosaic regions needed for success.

D) Cut unnecessary bottlenecks in regulation, corruption and bureaucracy, all of which raise the cost of doing business and limit growth and investment.

E) Public-Private Partnerships: Strong collaboration through the public and private sectors, to ensure a steady pool of workers with the education and skills needed in those targeted subsectors.

F) Execution.

Another country that has successfully created an enabling environment for job creation is China which has added well over 300 million jobs predating to 1980. Several factors have assisted in this development including rapid growth in manufacturing, increased urbanisation, and improving education and skills attainment that has prepared children for non-farm work. Over the past decade, close to one quarter of China’s employment growth (33 million jobs) was in the manufacturing industry. Many of the jobs were labour intensive. China migrated into the production of higher value-added and knowledge - intensive goods and have become the biggest producer, and consumer of high value technologies. The country invested heavily in primary and secondary education, including in the rural areas, preparing its children to join the modern workforce. By 2010, 60% of the workforce had at least a secondary education.

India created 67 million non-farm jobs over the past decade, just over half the tally in China. Gross exports in India amount to 22% of the GDP, compared with 30% in China.

The lesson from China is simply that to create jobs, countries should focus on labour-intensive export sectors and from India, the lesson is to create products firstly for domestic demand and then export.

For these countries and other growing economies, the SME sector has played a major role in creating jobs. Governments that have supported the Small and Medium sectors have reaped enormous rewards in terms of innovations and job creation as well as positive contributions to the GDP.

The policies to grow the SME sector must be able to create a conducive business environment for them to thrive. These are generally reflected in; Strategic support to the SME sector, Institutions supporting business development must be visible and accessible in all areas, Support for beneficiation of SME products, Simplification of labour laws for SMEs, Promotion of government SME support programmes and Integration of SME roles into strategic thinking on trade and industrial policy.

Youth unemployment is an emergent and perennial problem in many countries in Africa and the increased internationalization of labour markets and flexibility of labour relations, with the traditional cycle of school-to-work-to-retirement giving way to more varied patterns of employment provide a new context for this problem.

WHAT ARE THE STRATEGIES TO DEAL WITH YOUTH UNEMPLOYMENT?

The best approach to dealing with this challenge is to outline youth policies and programmes that address:

A) Promotion and introduction of the self-employment option,

B)Skills training

C) Business counselling

D) Mentor support

E) Financing of youth projects

F) Access to work spaces

G) Business expansion support

H) Creating support networks and

I) Multifunctional youth enterprise agencies.

In order to generate more jobs in such sectors as agriculture, tourism, mining, manufacturing, technology and retail, Africa should have clear policies that encourage ease of investment in these sectors.

In order to make agriculture more productive, there should be expansion of large scale commercial farming on uncultivated land, shifting from low-value grain production to more labour-intensive and higher-value-added horticultural and biofuel crops. Growth in agriculture should be used to develop downstream agro-processing industries.

To grow the manufacturing sector the country needs to understand the sources of potential comparative advantage it holds in the global market, identify the specific manufacturing subsectors in which it can compete, and then begin to remove the blockages that have prevented these subsectors from reaching their potential.

The main barrier to expanding wage-paying employment in retail is the prevalence of tiny informal stores and cheap imports. Another major barrier to the expansion of modern retail stores is a lack of or expensive commercial retail space. Strategy to grow this sector include moving retail and consumer good companies upstream for owners to become anchor stores or co-invest in formal retail space. A perfect example is the South African grocery store Shoprite.

Africa needs to overcome barriers to growth in the tourism industry including inadequate and costly airfares, visa requirements, and unreliable local airlines, expensive hotels compared to the region, poor surface transportation and poor uncoordinated marketing of the country.

Construction of hotels is very costly and even if the infrastructure is improved, the industry needs to explore how it can boost the length of stay and spending per stay to increase revenue and create more jobs.

To create more jobs, Africa needs an innovation-led, knowledge-based approach to improving the policy environment in the continent. Keeping in mind that there is no “quick-fix” there are areas in which concerted action can generate forward momentum, and overtime make a sizeable difference for growth and job creation. They are deeply couched in the following areas:

Encouraging Foreign Direct Investment
Accelerating privatization of loss making public entities
Targeted investment incentive schemes
Development of the SMME market
Labour market flexibility
Education and training policies need to fill the growing “skills gap”.
Targeted employment subsidies
Accelerating rural development

The continent needs to create a cross functional task force to create and execute the jobs plan and strategies. Private sector business leaders can help identify the most pressing blockages to growth in their sectors and to measure the success of overcoming them. This should also be supported by broad civic engagement.

THE BOTTOM-LINE IS WE CAN DO IT. AFRICA RISING.........

7 Red Flags that can Kill an M&A Deal

noreply@blogger.com (GBSH Insights) — Tue, 03 Jun 2014 14:31:00 +0000

If your company is looking to acquire or to be acquired, one of the most important areas to evaluate is the ability to manage money. Because of this, the accounts receivable department will be at front and centre of evaluations.

A competent team should be able to demonstrate that they can bring in clients’ money within the defined payment schedule. After all, if working capital is deficient, there will be added costs to borrow to pay to keep the company moving forward. To be certain, the acquiring firm will want to confirm whether best practices are in place, and will try to establish and update those credit practices found wanting.

Collecting accounts receivables is one portion of working capital but proactive cash flow management is vital to avoid a short-term liquidity crisis.

Smart firms get ahead by demonstrating that the business owner was not cutting special deals to his buddies or writing things off ad hoc, but rather that there were formalized systems to ensure the money is collected consistently.

Once the deal is struck, the first 90 days are the most critical. In the credit department, the acquiring firm will be vigilant for a gap between what was said on paper and the company’s actual ability to collect money within the 30 days or 60 days. The key question on the buyer’s mind is: will there be a cash flow hole?

The following are seven red flags to look out for, and although one red flag does not necessarily kill a deal’s success, several can indicate problems ahead:

1. Payment history changes. If receivables were 45 days, and are extended to 60 days to collect payment, an increase in working capital will be required.

2. Projected payments. As the M&A deal is finalized, there will be projections made about the expected time frame for collecting money from clients. DSO (Days Sales Outstanding) is the key indicator of how fast the accounts receivable is being converted to cash. If the DSO begins to slip from 30 days to 60 days, that gap will have serious consequences on the amount of cash the company has to pay for operations. If timing for actual collections begins to slip from 30 days to 60 days, that gap will have serious consequences on the amount of cash the company has to pay for operations.

3. Initial payments. Credits coming through in the early days after the acquisition will be analyzed with a fine-tooth comb. The acquiring company will want to see if the credit department is passing journal entries to clean them up. The credit history in the first 90 days after the acquisition date can reveal a great deal.

4. Employee turnover. Talent management is reviewed and employees leaving the department might indicate management issues.

5. Vacation schedules. When people do not take vacation, it could indicate fraud. If credit write-offs do not require a second approval, many problems can be hidden.

6. Performance management. How can the acquiring company give incentives to address the issue of collections? The credit department’s number one goal will be to reduce the number of days of payment. One way is to show the credit department the impact of late payments on the overall company. For example, if there’s $10-million of receivables, reducing the time to bring in that cash from 60 to 50 days means the company needs less working capital. Leaders in the credit department could even get their employees to share in part of the benefits by collecting at the 50-days target.

7. Team incentives. The biggest challenge for the credit department is to stay motivated. The best performing teams know how to reward the right behaviour and to celebrate when the big goal is met. Hopefully, with spring around the corner, an employee BBQ goes a long way towards creating a positive credit collection culture.

GBSH Consult is a company which focuses on succession advice for large, medium-sized enterprises, family businesses and closely held private companies. GBSH develops customized strategies, particularly in relation to sale of companies, M&A, financing and corporate strategy matters. Follow us on twitter @gbshconsult. Sign up for our weekly newsletter.

Want your Business to Take Off? Follow these 10 principles

noreply@blogger.com (GBSH Insights) — Tue, 03 Jun 2014 10:35:00 +0000

You’ve identified a niche and are poised to meet a need. You’re prepping to deliver a wonderful product into a market you hopefully know like the back of your hand. Feels good, doesn’t it? The tips may provide some lift to your business wings during your entrepreneurial flight and ensure sustainability along the way.

1. Warm up your wings before you leave the nest — or crash like a rock. There are thousands of risks in starting a new company. Reducing those risks as much as possible beforehand is vital. It’s an unknown road, yes, but without the unknown, we don’t really have an entrepreneurial adventure on our hands. Foresee the ups and downs of your journey; no one else will do it for you, and it will also help you feel less stressed as you navigate uncharted territory. The clever predictions you’ve forged from your upfront due diligence will serve you well

Sustainability is the operative word here. Once you get going, don’t stop. Anyone can start a company, but few can sustain one. The key is seeing every possible outcome and determining the required pivot you must make along the way. Remember, this is a journey, not a destination. What do the first two years look like? What are the major milestones? Do you have all you need to meet your goals? Validate your revenue model for roadblocks. Create a journey map for your business that highlights the first major achievements.

2. Welcome the opportunity to punch holes in your business – from everyone. Entrepreneurial wisdom can be found in the strangest of places, but be careful where you seek it. Great advice can carry the side effect of fear, so maintain your energy throughout and let nobody dampen your flame. Most times, good advice from friends or family is exuberantly given from a personal obligation to see that you don’t fall on your face. Don’t let them take the wind out of your sails.

The worthiest advice can be given from those with defeatist attitudes and the worst advice can sometimes come from those who are most qualified to give it. The least qualified can sometimes be the best for challenging your assumptions early on. They also bring an added layer of creativity, as they’re not informed on the traditional roadblocks in your industry.

Validate what you see as real threats and have a system for solving them. Punching holes in your business will serve you extremely well. Leverage all the minds around you to mitigate risk while putting your pride aside.

3. Form your board of advisors: The Specialists. Once you get past the embryonic phases of your business concept, one of the quickest and easiest ways to sidestep landmines is to form a team of advisers, ideally consisting of successful entrepreneurs who have made the journey at least once, and leverage their expertise and experiences often. Believe it or not, most entrepreneurs love helping other businesses. They miss the startup phase and like to join in the conversations. Start with one or two people that you can call at anytime for advice. Ask family members and friends to refer you to people they know. Look for ‘specialists’ with knowledge in a specific area, such as obtaining funding or taking a new product to market. You don’t need anything formal and your “board” never even has to have official meetings. In fact, my personal board of advisors has never gathered together to meet since we’ve been in business, but I know I can call on each one of them to advise within their specialty. They really enjoy it.

4. Find your tribe. Find the local, entrepreneurial tribes on the same journey as you and get involved. Attend all the events and discover the ones for you. Try entrepreneur.Meetup.com, Cofounderslab.com, LinkedIn entrepreneurial groups, and spend some time on Google searching for entrepreneur societies and small business groups in your city. If you cannot find anything, create your own. The university or college near your city will probably have an entrepreneur institute on campus. Contact the director and see how you can get involved.

Co-working facilities are my favorite places to connect locally. They cater to entrepreneurs and host mixers and business pitch nights to share ideas and contacts, and are great places to meet all types of local mavens; I met my developer at one. The most important thing is to be involved; after that, the possibilities will present themselves.

If your tribe is not present locally, find them digitally. Ask your social network to make recommendations.

5. Sell the idea that your business is great in 30 seconds. Nail down a succinct description of your business that you can communicate in 30 seconds or less. Know it by heart. Whether you’re taking to an investor, an advisor, or a random person at a football game, it’s essential that you describe your business consistently and effectively. This also helps sharpen the way you describe your company to press, video, social media, etc. You’ll use it more than you know, so really know your company and its reason to exist.

6. Create a business plan that you actually use. Unless you need capital, you don’t really have to have a formal business plan. Business plans tend to be stagnant documents that are read once and then forgotten. Instead, create a living “planning document” that is continually updated and revised as needed, with next steps and actionable line items that can be instantly assigned as tasks to be performed. Keep a good two-page executive summary on your company that you constantly update and are able to send out to those who express interest. Find a cloud solution that allows you to store your business work in a central location and assign out tasks with ease to others working with you. This makes it easily accessible to anyone on your team and more apt to evolve with your business. It’s great for instantly adding new team members to the conversation as well.

7. If you need capital, multiply whatever you think you need by two, and then assume you won’t get it. Raising capital may be the biggest challenge for businesses. It was definitely the hardest thing I’ve ever done in my business. Many entrepreneurs don’t want to ask for the amount of capital they really need because they don’t want to scare off potential investors, but then end up underfunded and unable to sustain the business. It also signals to the investor that you don’t know the industry and the operational requirements for your company. Break the real number out and try to raise it in tiers.

Make 100 per cent sure that if you miss an investment round, you can still keep your company in business. Funding is a moving target; it usually won’t happen when you think it will. It’s vital to have strong insulation by assuming you won’t raise the capital at the intended time. There is no way to put a timeframe on when investment will occur, but you do know when your own money will run out. When you estimate the month you need to secure the next round of working capital, add another 8 months to that and find a way to keep things moving until then. See where you can cut some up-front costs to add this investment padding.

Start with a short list of where you can go to raise the first round of capital you need–friends, family, bank, etc. Learn the art of crowdfunding. Learn all the platforms (Kiva.org, Kickstarter.com, indiegogo.com, Fundable.com, Peerbackers.com). The recent Jumpstart Our Business Startups (JOBS) Act encourages funding of small businesses by making it easier to raise money from many small investors instead of a few large ones. It can help you bridge the gap in funding for things like prototypes before you get to larger investors. What happens on crowdfunding sites is also valuable for validating whether or not your concept really has wings. When you’re ready to approach larger investors, divide whatever you think your business is worth by 1.3. Entrepreneurs are notorious for overvaluing their companies. This keeps you on a level with what the investors will be thinking.

Set up your business to function even if there is an economic downturn, or if you do not secure investment at the intended time. Have backup suppliers. We have Indie Peace to the point now where we don’t need investors, but when we first started out, our business model relied heavily on investment rounds being achieved. This put us in dire straits when the economy tanked a few years ago. Investors were hard to find, boutiques were going bankrupt, banks were frozen, and suppliers were in the danger zone as well. Determine what your initial needs are and then take all of them off the table and figure out how the business works on the alternatives you’ve selected.

8. Develop a multi-channel strategy. Pick the right megaphones. Take advantage of multiple online channels for promoting your business, but pick the right ones. Get to know all of them: Facebook, Twitter, LinkedIn, Google+, Tumblr, Instagram, Pinterest, Stumbleupon, etc. There are endless choices and new ones appearing every day. Find a company similar to yours on each channel and study the moves they make. There are thousands of megaphones out there–let your voice be heard, but spend time in the right places as a lot of time wasting can occur here. As with anything, measure your effectiveness. What does success look like for you on these platforms?

9. Automate you and all there is to do. Focus on the important stuff. Take advantage of the small business productivity applications available in the cloud–they’re some of the best things to happen to solo entrepreneurs. They’ll help you automate basics such as accounting, invoicing, file sharing, and tasks management. Plus, most of them have pay-as-you-go programs that grow with your business and keep costs manageable. Plus, the less time you spend on tasks, the more time you can devote to learning how to develop your business. You know all of the things you have to do. Find a comprehensive cloud solution that lets you get more of them done in less time with fewer headaches, and as your business grows you can easily plug in new team members. An all-in-one cloud solution helps you run lean, mean, and organized.

10. Do the work . Be a business even when no one is watching, because success and character are built when no one is watching. With no one breathing over your shoulder checking in for status reports, distraction is everywhere. Act like you go to work by setting your own hours and sticking to them. Dedicate work times and let no one or nothing affect them. Know each day what you are going to accomplish and actually accomplish it. Have a dedicated workspace away from your “outside work hours” spaces. As an entrepreneur, you are taking success into your own hands. Staying organized and on-task is vital. Be careful to watch your effect on the business. Sometimes the business owner is the biggest problem.

GBSH Consult’s goal is to help companies systematically and efficiently enhance their negotiation strategy and organizational and operational capabilities in order to achieve or maintain the leading position in the rapidly changing business environment. Follow us on twitter @gbshconsult.

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10 Tips For A Successful Crowdfunding Campaign

noreply@blogger.com (GBSH Insights) — Tue, 27 May 2014 08:16:00 +0000

Did you know that nearly 70% of all crowdfunding campaigns that are launched don’t actually reach their minimum funding goals? Typically, if you only reach a portion of your desired pledge amount all donated funds are then returned to investors once your campaign end date arrives. In other words, in most cases it’s all or nothing so it’s in your best interest to really do your homework and make your fundraising campaign count.

Of course there are many different ways that people try to raise money and a lot of the so called “old-fashioned” techniques still work. Before launching a campaign there’s really no way to predict the outcome but there are ways to help ensure better odds. The following is a list of 10 helpful tips to avoid failure and achieve success.

Tip #01: Plan Your Campaign Far in Advance

Like the age old saying you need to plan your work and work your plan and crowdfunding campaigns are no exception to this rule. Look at it this way, you’re attempting to convince total strangers to invest in your idea. Some of the people who fund your project may very well be friends or family members but a large portion of pledges will come from investors you've never met before. This is one of the many reasons why you really need to prepare your campaign long in advance. The last thing you want to do is go in blind and you really need to think your pitch through from all angles and from start to finish before taking that first step.

Tip #02: Have a Proper Business Plan

Not having a proper business plan is like is like having a vehicle with no wheels, sure you can sit in the driver’s seat but you won’t end up going very far. Having an innovative new idea is only one piece of the puzzle. Not only do you want your idea to come to life but you want your new startup launch to become a long lasting success. Thus the reason that realistically planning the long term goals for your small business, company or service is essential.

Obviously finances are a big part of what fuels a company and either keeps it going or not. Managing your finances is just as important as raising capital through a crowdfunding site. Have you asked yourself;

How you plan to execute certain types of spending?
Where will your revenue go once it’s generated? Those are just a couple of the many questions 9 out of 10 investors will want answers to before they whip open their wallets and you need to have these types of answers well in advance in order for your startup idea to be taken seriously. Some people get stumped at this early stage in the game but that’s why there are companies like the Funding Roadmap out there to simplify the whole process and help you get started.

Tip #03: Make Your Story Compelling

Your story could easily make or break your crowdfunding campaign so it needs to be a good one. The key here is to truthfully explain your campaign and what it’s all about in the most engaging way possible. You don’t necessarily need to be a novelist or marketing expert to achieve this, you just need to be knowledgeable and passionate about your idea and know the purpose of it inside and out. Make your story captivating and explain to people why they should consider investing in your idea over the thousands of other new ideas that are constantly out there each day. Why does your creative idea stand out above all the rest?

Tip #04: Start a Social Marketing Campaign

Everyone is using social media as a marketing tool these days, this has been the case for several years now. Having a well thought out social marketing campaign prepared in advance is a great way to create and maintain buzz around your product or idea. If you've never used this type of marketing strategy before it’s really a lot easier than you may think. For instance, it literally takes less than a minute to plug a link on Twitter, Facebook and Google+ and it’s not like you have to post an ad on trees all throughout your town or city to get the word out.

If you aren’t an expert when it comes to generating traffic or don’t have a large following there are several great resources out there to help you get started. Here’s a few that should help:

50Social Media Marketing Tips and Tactics

17Twitter Marketing Tips From the Pros

12Google+ Marketing Tips From the Pros

Writing catchy and effective text and key phrases to draw attention can require a certain level of creativity, but if this is not exactly your forte there are social media marketing services available for small business too.

Tip #05: Constantly Promote Your Fundraiser & Interact

Frequently stay on top of your campaign, check the status often and never leave people hanging when they ask you questions. No matter how simple a question may seem, it’s critical that you treat all potential investors equally and with honesty, courtesy & respect. Certain questions may sound silly to you but to someone else having the answer could determine whether or not they decide to fund you. Also, be prompt rather than tardy. Obviously you can’t be glued to your computer 24/7 but the quicker you respond, the more you promote your campaign and the more actively involved you are the higher your chances of successfully reaching your desired funding amount sooner (if at all) will be.

Tip #06: Rewards & Incentives

Explain to potential investors the types of rewards and incentives they can expect by funding your project. Let them know that their contributions are well appreciated and provide them with as many reasons as possible to invest in your idea.

TakeLowLine: An Underground Park on NYC’s Lower East Side for example, a featured listing on the popular Kickstarter website. This project exceeded the desired funding amount with 15 days left in the campaign. Check out some of the rewards offered, this is a good example of being creative and putting some good thought into rewards ahead of time.

Tip #07: Include Informative & Engaging Videos

Having an informative, educational and entertaining video is a great way to help your crowdfunding campaign go viral. Using free services such as Vimeo and YouTube for example you can leverage the power of video marketing and take your campaign to the next level. Professional and engaging videos are a great way to express what your startup company is all about in a way that plain text on a screen could never do.

Creating a stunning video beforehand is also a way to show investors that you have good initiative and well planned execution. Anything you can do to prove and convince investors that their money won’t go to waste is a good thing. If you took the time to make a quality video to promote your product this will reflect positively on your overall campaign.

Tip #08: Being Unique Really Does Count

Let’s face it, although still in their infancy, crowdfunding sites are popping up out of the woodwork left, right and center these days. It’s no longer Kickstarter alone running the show. This means that the amount of people starting new crowdfunding campaigns is rapidly increasing. In other words, to stand out above the rest the more unique and creative you are the better your chances will be of getting noticed. More exposure equals more potential pledges.

Tip #09: Pick the Right Type of Crowdfunding Site

As mentioned above, there are numerous different crowdfunding sites out there all across the globe now and the number is constantly rising. This is why it’s important to do your homework and select the right one just for you and your particular project. Some of them are simply general crowdfunding sites geared towards all types of categories while others are geared towards specific types of campaigns for things like hobbyists, artists, film makers, musicians, game developers, app developers and the list goes on.

Tip #10: Know & Understand Your Target Audience

Don’t waste your time & effort creating a good pitch or campaign unless you fully know and sincerely understand your target audience. Be sure to do good research on this subject as it really is important. Being able to relate to your target audience is not only a plus but also quite a necessity.

Conclusion

We hope these tips have been helpful and would love to hear your feedback and/or suggestions. Perhaps you have launched your own crowdfunding campaign already and if so we’d love to hear about your experience. Feel free to speak your mind and leave your comments/questions below!

Interested in more crowdfunding advice? Follow us on Twitter @gbshconsult

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23 Must Read Business Lessons from Shark Tank

noreply@blogger.com (GBSH Insights) — Fri, 23 May 2014 16:16:00 +0000

SharkTank--the prime-time feeding frenzy where successful entrepreneurs fight over promising startups, and ruthlessly chew up the unprepared--is stirring up much buzz in its third season. To date, the Sharks have invested more than $6.2 million of their own money in a number of companies. With billionaire Mark Cuban, real estate mogul Barbara Corcoran, venture capitalist Kevin O'Leary (aka Mr. Wonderful), and other business magnates sitting in as the Sharks, the show offers a glimpse of pitching sessions gone totally right--or deliciously wrong.

In all that action there are quite a few business lessons to take home.......

1) If you get what you ask for, take it. Mark Cuban offered one entrepreneur exactly what he requested. The entrepreneur then asked for more and lost the deal. No one likes to do business with someone who gets what he requests and then asks for more; it’s a sign of what’s to come in the relationship.

2) Networks matter. The Shark Tank investors bring huge value in their networks. Daymond John got the sticker guys distribution in Best Buy as well as retail distribution for Nubrella. Lori Greiner is able to help the businesses she invests in get on QVC. When you’re looking for investors understand their networks and more importantly if they’re willing to leverage them for you. Ask about this before you sign a deal. Sometimes a deal with less lucrative financial terms is better if it brings the right network to the table.

3) Do your homework. When Mark Cuban negotiates and tells you a deal is final, he means it. I’ve seen enough episodes to know this, so I cringe when an entrepreneur tries to negotiate further and loses a deal entirely. You won’t have the benefit of seeing most people you’ll negotiate with on TV in advance, but you can still do plenty of due diligence — like researching their past deals and talking to their business partners.

The most successful entrepreneurs also know enough about the Sharks to customize their pitch. They tell each one why he or she should personally be interested in the business.

4) Get an advisory board. Getting a Shark to invest in your company is one way to get partners with experience and a network, but not everyone can be on Shark Tank. Creating a strong advisory board can also increase your opportunities; for a small amount of equity you can build a great board. I have found that retired executives with extensive networks are often eager to get back in the game and make tremendous advisory board members.

5) Know your absolute bottom going into a negotiation. One entrepreneur was offered a deal and needed to think about it. By the time she decided to move forward, the Sharks had talked among themselves and reduced their offer. If she knew her absolute bottom going into the show, she could have made a decision on the spot and had a better deal.

Too many entrepreneurs are unsure of what they’d accept and their hesitancy gets them worse deals. Also, if you don’t know the lowest offer you’d accept, you could commit to something you’d regret later. Of course, there may be exceptions if unexpected elements come into play, which sometimes happens on Shark Tank.

6) Solve your own problems. The most successful founders built companies to solve problems they faced. They’re building for a market they understand and are passionate about. A couple examples are Travis Perry who developed ChordBuddy to help his daughter learn to play the guitar and Eric Corti who invented the Wine Balloon to better preserve wine after he and his wife opened a bottle.

Of course, the problem you’re solving has to address a sizable market. No Sharks wanted to invest in Ledge Pillow because they didn’t think the market was big enough.

7) Investors buy into people as much as ideas. The Sharks get most excited about a passionate, likeable entrepreneur. Be honest. If that’s not you, and you need investors, consider finding a partner who fills this role.

8) Do a deal that works for everyone. The Sharks often say they won’t invest in something because they don’t have the right background or connections to help the business. If you’re looking for investors, try to find those that can help you by serving as more than just a bank. In any deal, whether it’s related to VC or not, make sure both sides provide value. You’re probably going to do more deals in the future, and a one sided deal won’t be good for your reputation.

9) Listen. The Shark Tank investors offer great advice when they turn people down. If you’re told “no” don’t be so displeased that you can’t listen to the rationale. And, if they don’t tell you why, ask so you can leverage that advice moving forward. This is a chance for insight from experts.

10) Don’t respond to people you’re pitching with disdain or sarcasm – even if they say something nasty. The people who do, tend not to get deals. How you act in a pitch will shape what potential partners think it would be like to work with you. In fact, maybe they’re pushing you just to see how you’ll react under pressure.

11) If you can’t sell, learn to. This lesson is for everyone. Even if you’re in a large company, you need to sell your ideas and yourself to get ahead. In the case of investors, Sharks are looking for people who can sell. And, business valuations are significantly higher when someone has revenue. Do whatever you can to get sales prior to approaching investors. Mark Cuban stresses that selling is one of the most important skills for entrepreneurs in his great book, How to Win at the Sport of Business.

12) Prepare. I’ve seen entrepreneurs on the show who don’t know their financials or seem to freeze up in the middle of their pitch. When you’re going to a meeting or pitch, practice enough that you can talk about your business even in stressful circumstances and please know your financials. The most successful people are usually over prepared. This is something Barbara Corcoran mentions in her excellent book, Shark Tales: How I turned $1,000 into a Billion Dollar Business.

13) Demonstrate your commitment. Investors want to see that you’ve taken a risk – investing your money and time — showing that you believe in your business. Don’t ask for their money if you haven’t invested yours.

14) Patents are extremely valuable. A worthwhile investment if you have something unique.

15) Have options. You can almost always tell when someone believes they have no other options. Those entrepreneurs get a worse deal than they’d otherwise receive. Whether you’re selling a stake in your company or buying a car, you need alternatives to get the best deal. One alternative is knowing at what point you’ll say “no.”

16) Ask, “Are there any other offers on the table?” Some people have gotten much better offers when they ask this rather than responding to the offer that was given. Like anything, the more competition you can create for your business, the better deal you’ll get.

17) Don’t quibble over small numbers. I’ve seen deals get lost because someone is dickering over 1%. Don’t do it.

18) Ask for something valuable . . . besides money. Steve Gadlin and Mark Cuban were negotiating an investment in Steve’s business, I Want to Draw a Cat for You. When the financial terms were on the table, Steve asked Mark if he’d draw and sign every 1000th cat drawing. Mark said “yes.” It was easy for Mark to say “yes,” and it will add value to Steve’s business. Look for opportunities where the other side can provide additional value without any out of pocket expense.

19) The right partner offers more than financial terms. There are some great businesses that are giving up huge chunks of equity for a seemingly small amount of money. Kevin O’Leary bought into Talbott Tea at what seemed like a great valuation for him, but within a short period of time he had the business packaged up and sold to Jamba Juice. When you do a deal with a Shark you’re giving up more than you’d offer someone else, because they can exponentially grow your business faster.

20) Don’t tell potential investors they’re wrong. When you tell Sharks they’re wrong – especially in front of other people (like the national TV audience of Shark Tank) they will naturally stop listening to you. No one wants to be told they’re wrong in front of other people. Instead, say, “I think that . . .” or “What do you think about looking at it like. . . .” How you defend your position makes a difference.

21) If someone asks you to sell him something, ask, “Why do you want it?” Daymond John challenged an entrepreneur to sell him a pen. The guy did a good job, but I think he could have done better. Instead of jumping right into selling the pen, he could have asked Daymond what he was looking for in a pen and customized the pitch.

22) Find investors who are passionate about your business. The Sharks gravitate not only to the businesses they like but the ones that they’re passionate about. Kevin O’Leary invested in the tea company (loves tea); Daymond John in the trash can cover company (he said he had just lost his own garbage can cover); and Robert Herjavec in the guitar learning company (he has a lifelong dream to learn guitar). Those entrepreneurs were solving problems that the VCs personally experienced. Do research to find partners passionate about what you do. You’ll have a higher likelihood of making a deal.

23) More Sharks are better than one. Every investor will bring a different network and expertise to the table. Jewelry company M3 Girl Designs, founded by Maddie Bradshaw when she was 10, was offered $300K from Lori Greiner and Mark Cuban. Maddie said she’d take the deal if they’d let Robert Herjavec in as well. She got the same financial deal with one additional investor. See if you can increase the parties who have a stake in your business.

Interested in more Shark advice? Follow us on Twitter @gbshconsult.

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10 Tips to Nurturing Great Talent in your Company

noreply@blogger.com (GBSH Insights) — Mon, 19 May 2014 13:36:00 +0000

#01

Review your business needs

To understand the best way to nurture and develop your staff, look at your business's strengths and weaknesses. That way, you can develop your workforce in line with your objectives. It can be hard to pick away at traditions ingrained into day-to-day practice, but forcing yourself to be critical allows you to see how people could benefit from additional training.

#02

Map out existing gaps

Once you've analysed your current skills set and established where there are gaps in your workforce, you can figure out how best to fill them. Work with an expert in learning and development to put a plan in place to develop your staff.

#03

Involve your team

When providing training for your staff, include them from the onset so that they understand why it's happening and can feed into the plan. If training is thrust upon them, people may deem it unnecessary and be uncooperative. However, if the workforce feels involved in the development of the training programme, you'll be in a stronger position when the training kicks off, or once you bring in new apprentices.

#04

Be aware of different learning techniques

Everyone learns differently. Some prefer a practical environment, some are more engaged in group projects, and others respond well to going off by themselves. It can be very demotivating if people feel that they're failing or falling behind in their training when the answer could simply be to try a new learning technique.

#05

Get the right information

A range of funding options is available for businesses wanting to train their staff, and it can sometimes feel like a maze of information. A learning provider can offer advice in this area. For example, GBSH Consult Business Acceleration Academy has created guides for employers explaining how to employ an apprentice. Many businesses find establishing an apprenticeship scheme or training programme daunting, so use a learning provider who works closely with employers to ensure apprenticeship programmes meet specific business requirements, deliver high quality training and provide a clear progression route.

#06

Mentors matter

Assign each new starter with a personal mentor or designated 'go-to' person to ensure they have someone to turn to for guidance. Backing people from within an organisation is crucial to improving staff retention, motivation and productivity.

#07

Goals and objectives

Everyone needs goals to work towards — without them there's no way of measuring staff development or incentivising a workforce to go beyond what is expected of it. Giving staff targets mapped against the business's objectives provides an ongoing checkpoint to ensure everyone works together towards a common goal.

#08

Recognise achievement - Reward and Recognition

Understanding the nuances of how individuals respond to feedback can take a bit of practice but one thing's for sure — everyone likes to hear when they've done a good job. If you really want to develop your staff, tell them when they do well and share their success.

#09

Is it working?-Monitoring and Feedback

As part of a commitment to nurturing staff, it's important to review the processes, training and targets you've put in place and analyse whether they're working. Staff satisfaction surveys and peer reviews are crucial. Speaking to managers about staff development will also give insight into the successes of the development programme. If something isn't working, consider changing your tactics or your approach.

#10

The bigger picture

Review business objectives regularly so that you can continue to implement an effective plan to train and nurture staff. After all, training is critical to business success; it provides you with the skilled workforce you need to boost productivity and growth, whilst helping people of all ages gain hands-on experience, guidance and qualifications.

10 Steps to Effective Negotiation: From EGO-tiation to NEG-otiaton

noreply@blogger.com (GBSH Insights) — Thu, 15 May 2014 11:53:00 +0000

One of the essential skills for any entrepreneur is negotiation. How well you can negotiate a favorable agreement or deal for your business can often spell the difference between failure and success. Negotiation can occur between you and your employees, your vendors, your customers, or even your investors.

Despite the possible sense of intimidation or distaste many business owners might have around negotiating, it is a productive skill that will enable you to build your business in positive ways — and it does not have to be approached as an adversarial tactic to be endured!

What's Your Price?

One of the fundamental keys to successful negotiation is to be certain of what you want to achieve and what you are willing to settle for. In their 1981 bestseller, Getting to Yes: Negotiating Without Giving In, Roger Fisher and William Ury state,

“The reason you negotiate is to produce something better than the results you can obtain without negotiating. What are those results? What is that alternative? What is your BATNA — your Best Alternative To a Negotiated Agreement? That is the standard against which any proposed agreement should be measured”.

The other key is to know, as best you can, what the other party's true needs and objectives are.

In negotiating salary increase requests from employees, for example, it is essential to solicit the employee's perspective — and to be able to accurately assess what may not be said aloud.
With vendors or suppliers, knowing their break points — the bottom line they are willing to go to — as well as your own leveraging strengths with them, is critical to negotiating deals that are mutually acceptable.

Ten Basic Steps

Entire books and business school curriculum's have been written on negotiating and negotiation skills. While we cannot provide everything you might possibly want or need to know, here are some basic steps for effectively negotiating a favorable deal or agreement:

Decide on your starting position and your "bottom line," or lowest point you will accept in the deal.
Consider the objectives and emotional motivation of the other party.
Plan your sequence of proposals and possible counter-proposals. Open at the most you can reasonably ask for as this gives you room to negotiate.
Prepare for the meeting by determining your own motives and objectives: Why are you negotiating? What do you expect to gain and why is it important to you? What do you think you will have to offer to achieve this?
Be prepared with information, facts, comparable prices or costs, etc. Avoid going into any negotiation and coming across as either uninformed or unreasonably aggressive.
If the other party makes the first offer or proposal, this can allow you to gauge your response and set the parameters of the negotiation to your advantage. Though some experts suggest that your proposal be the first one on the table, this tactic can allow the other party to open at a point that is more favorable to you than you may have anticipated.
Start by discussing a mutually agreed upon point of the negotiation — something both parties will readily say yes to.
When you do propose a deal or an offer phrase as "I will do such-and-such for you, and you will do this for me." This establishes a position of confidence and authority.
Make your arguments and proposals incrementally and strategically. Avoid going immediately to your lowest point of acceptance, or bottom-line.
Know when it is time to close or break off discussion. If the other party is ready to close the deal, and it is acceptable to you, make it easy for them to do as little as possible by having everything ready to sign, etc.

Remember: your objective is what you want to achieve — your bottom line is what you absolutely have to achieve. These are not the same thing when you are negotiating!

Everybody Wins With Effective Negotiation

The ultimate goal of business negotiations is to produce two satisfied parties and to have paved the way for future negotiations when and where necessary. Having successfully completed negotiations it is tempting to think that it's all over once you and the other party have said, "Yes!" However, it isn't really "over" until it's over. That is, proper and effective closure is key to sealing a deal successfully.

Thomas Noble, an attorney, says this regarding the "rules of closure", as he calls them:

“Master Negotiators know how to close. They consider every element of closure: when, where, documentation, pending issues. Novices either rush the end game or delay it interminably, with equally bad results. Rushing the end game usually means slapping a contract together with little time or thought; its ambiguities and deficiencies inevitably result in disputes. Delaying the end game means failing to ‘strike when the iron is hot' if you wait long enough, something will happen to prevent closure. Time kills deals”.

As with any business leadership skill negotiation is learned in the doing. Knowing the fundamentals before going into any negotiations is essential for successfully securing your objectives while preserving strategic relationships with employees, customers or clients, vendors, or investors.

Share Your Negotiating Story

How have you developed your negotiation skills? Any tips you want to share with the GBSH community? Post a comment and tell us about it.

Funding 101- The 4 Types of Funding Available and where the money comes from

noreply@blogger.com (GBSH Insights) — Wed, 07 May 2014 12:44:00 +0000

We at GBSH Business Acceleration Academy just wrapped up our Get Your Business Investor Ready campaign and received over 300 applications.

The applications were a good indicator of how businesses were structured to grow via funding.

The applicants approach to funding was as diverse as their products and services. Most startups who applied have created value from minimal resources by learning how to bootstrap their company.

Not all entrepreneurs consider long-term funding and growth at startup stage. Mostly because projections can seem unrealistic and dependent on too many other factors and funding gets equated to profits. However, this is a pivotal process that helps entrepreneurs assess what their endgame is – keep the business trickling along nicely for many years or aim for the big bucks and massive growth.

The big bucks are usually the result of an innovative product or service that resonates very well with target audiences and good financial planning. It comes from having a vision for the business and road mapping a pathway to achieving it.

Where will your business be in five or ten year’s time?
Will it be self funded using profits or will you be seeking funding externally?
If self-funded, how much profit do you need to make to achieve that growth?
Is it feasible?
If externally funded, what do you need in place to ensure your request for funding is successful?

Businesses go through different stages of funding depending on their lifecycle. Even if you are still in your day job and thinking about starting your business, it is worthwhile understanding the different types and stage so you can:

Be aware of available options
Plan for growth and know at what stages cash injections are required
Figure out how much you want to grow by
Know your limits / boundaries

The different types of funding available are Seed or Concept, Startup, Venture Capital (Series A, B and C stages) and Harvest (IPO).

Seed or concept stage is the passionate inventor stage where there isn't a management team or prototype. This is the first injection of capital into the idea or company. The most common funding at this stage comes from: personal savings, credit cards, family and friends, grants, bank borrowing and non-bank finance.

Most banks don’t fund startups but lend against property. Depending on your product or service, you could also crowd fund your idea at this stage to raise capital. A good idea and a solid plan can raise anywhere between a few thousand to hundreds of thousands to get the business off the ground.

Startup stage is classified as when the business is underway, working with clients or customers and yielding revenues. The most popular funding options in this stage are: self-funded from profits, angel investment and grants. Angels come in with money after you have started selling. They jump aboard because you now have tangible proof of concept.

Angel funding usually scales up to $2 million. Angel investors often play a big role in mentoring the business as well. They’re likely to be after businesses with exceptional growth prospects, so you’ll need to demonstrate your potential.

Venture capital (Series A, B and C) stage has been combined as the different series are typically funded by Venture capitalists (VC’s). According to Commonwealth Bank, venture capitalists are professional investors who invest in promising businesses and help them grow, often to the point where they’re ready to be listed on the share market.

They make money by selling their share in your business, either on the share market or to someone else. A venture capitalist will typically seek to exit your business in three to five years with a return of 35 per cent p.a. or more. They’ll generally look to invest between $2m and $10m, depending on your business.

Series A funding typically comes in around the time the business has about 15 – 20 people (or more) and has decent revenue / turnover of a few million. Funding at this stage is sourced to achieve market penetration and initial sales goals, reach close to break even, increase productivity, reduce unit costs, build the sales organization and distribution systems.

There can be multiple rounds of VC funding and each round reflects different valuations.

Series A is when the business shows potential of being acquired or sold a few years down the track.
Series B (also referred to as ‘mezzanine’ or ‘bridge’ stage) is when the stock markets start noticing the company and VC’s inject more capital to maximize momentum.
Series C is when the company is close to IPO or listing stage.

Harvest or IPO stage is the big pay off after years of hard work when the company gets listed on the stock exchange or acquired by a bigger entity. What started out as a dream has become an entrepreneurial reality. The next challenge is to start all over again, but this time with a little more money.

Although it could seem overwhelming, think about your funding strategy as soon as you have your business idea. Even if you don’t plan on seeking funding, it’ll give you a picture of where you will be ten years down the track.

GBSH Consult is all about making your Deals Successful

Join our experienced acquirers in mergers and acquisitions - analysis and trends in recent M&A middle market transactions, deals and private equity investment. Follow us on twitter @gbshconsult

8 Building Blocks for Creating Value with your Business Model

noreply@blogger.com (GBSH Insights) — Mon, 28 Apr 2014 13:36:00 +0000

Reconstructing your value proposition

The business model consists of eight key building blocks that allow you to develop a strategy to deliver value to your customers.

On the right-hand side of the model, you identify your target customer segments, how you develop relationships with those customers and the channels by which you reach them, supported by the revenue streams generated from that interaction.

On the left-hand side, you think through what key partners, key activities and key resources you need to deliver your value proposition to your customers and the cost structure to do so.

Putting value in your value proposition is key to organizations differentiating themselves from the competition. According to GBSH Consult, “to survive in this experience economy, businesses must orchestrate memorable events for their customers; and that experience itself becomes the product.”

GBSH Consult has great expertise in business model generation and provides concrete descriptions and questions for each building block below.

Customer Segments – Defines the different groups of people or organizations a company aims to reach or serve. Which customer segments will you be targeting? What problem will you be solving for those customers? For whom are we creating value?

Value Proposition – Describes the bundle of products and services that create value for a specific customer segment. What value will you deliver to your targeted customers? What package of products and services will we deliver? Why will customers buy from us?

Channels – Describes how the company communicates with and reaches its customer segments to deliver the value proposition. How will you reach your customers? Through which channels do our customer want to be reached?

Customer Relationships – Describes the types of relationships a company establishes or wishes to establish with a specific customer segment. What type of relationship does each of our customer segments expect us to establish and maintain with them?

Revenue Streams – Represents the cash a company generates from each customer segment. What will customers pay for? How much will they pay? How will they pay?

Key Resources – Describes the most important assets required to make a business model work. What are the key resources required, to deliver and execute your value proposition?

Key Activities – Describes the most important things a company must do to make its business model work. What key activities does our value proposition require?

Key Partners – Describes the network of suppliers and partners that make the business model work. Who are our key partners? Who are our key suppliers?

Cost structure – Describes all of the costs incurred to operate a business model. What are the costs of your business model? Which resources and activities are the most expensive? Are your costs less than your revenue?

Assessing and possibly redefining your business model, no matter what type or organization you are, can be a powerful and enlightening part of your strategic management process. Many organizations today are redefining how they deliver value to customers yielding unprecedented success.

GBSH Consult is a top global consulting firm that delivers essential advantage to the world's top influential businesses, governments, and organizations. Follow us on Twitter @gbshconsult

3 Things Investors Look For and Questions They Ask

noreply@blogger.com (GBSH Insights) — Thu, 17 Apr 2014 11:06:00 +0000

We took the time to interview the Chairman GBSH Consult Group H.E.Dr. Ambassador Edgars who is a venture capitalist. Straight from the horses’ mouth as they say we found at the facts behind investing and the cheat sheet to it;

If pitching to investors is a frightening thought for you, you’re not alone. Many entrepreneurs are intimidated by investors, especially if they never pitched to any before. How can an entrepreneur prepare for the million possible questions the investors will ask?

All the questions investors will ask you will be to get to three things. Here are these three categories and some questions they use to get to them:

1- THE IDEA

This is where most of the questions will focus. Investors want to ensure your idea solves a problem in the world, can sell and make a profit, and can grow significantly (i.e. scale up). Here is what they want to know and questions they might ask to get it:

The product sells (i.e. solves a problem & people are willing to pay for it)

How much have you sold? This will probably be their first question
How much have your sales grown?
How many customers repurchased?
Do you have a prototype? (If you don’t have sales yet)

You make enough profit to sustain the business

How much are you selling it and how much does it cost you? Or how much profit do you make per product?
What’s your break-even point (i.e. how much do you need to sell to get to zero profits)?
How much does it cost to acquire customers? (To make sure you are making enough to keep a profit)
How/where are you making the product? (To see how efficient your operations are and if there is room for improvement)

You can scale up the company in the future

How will you grow the business?
How much are you expecting the business to make in the coming year?
What stage is your company in (idea, early-stage startup, late-stage startup, growth, expansion)? They will generally shy away from the idea and early startup stages because the companies still don’t have a chance to show if their products are viable.

You can compete effectively against new entrants, especially large players.

Do you have a patent?
What stops others from replicating this? Do you have anything unique that will prevent competitors from stealing your customers and crushing you. This is especially important if your business is one that allows large players to muscle in on you and steal your business away (e.g. undercutting your prices)

Your industry is attractive.

What’s the size of your industry?
How fast is your industry/segment growing?
Who are the big players in your industry?

You have a good business model. This is a tricky one because investors might believe in a very different business model. They might believe licensing is a better way to go than making the product yourself or vica versa.

Have you tried to license this product to a large player in the industry?
Have you looked into outsourcing manufacturing to Asia to reduce your costs?
Did you try to sell your product to distributors instead of retail?

Note: Investors might give you great advice here to adjust your business model to run better. However, take advice carefully. Take into account how much experience the investor has in your field and what vested interest s/he has in the advice (will s/he benefit if you take the advice). They might open your eyes to a better way or you might choose to stick to your path.

2- THE PEOPLE

This is where investors will put the most weight, but ask the least questions. The investors will be assessing you as you interact with them. Here is what they want to know:

You are capable of running the company

What is your background? your past experience
Did you successfully run a company before? How much do you know about the industry? What’s your educational background?

You are fully committed to make the company succeed

How much of your time and energy are you dedicating to the business?
How much money have you invested into the business? They want to see that you have your own money invested into it (“have your own skin in the game”)
How much of your time are you putting into this business? Do you have another job or business?
Why are you doing this? (are you passionate about the company, product and the future. Will you persevere when things get tough?)

You have the right team working with you.

Are you covering the important functions (marketing, finance, sales, operations, IT, etc) and that you are managing your growth well (controlling your cost effectively)

You have personality that fits: Investors will be assessing how well they will be able to work with you. They might not ask you specific questions or say anything about this explicitly, but they will be assessing you as a person for sure. There is no “right” or “wrong” personality. It’s like dating to see if you will get along. But generally, they will scare away from you if you are argumentative, too hard-headed, greedy, flaky, etc. It’s a subjective assessment, so one investor might love you while the other might not. Don’t take it personally.

3- THE INVESTOR FIT (Input / Output)

Investors will assess how well the opportunity fits with their needs. They will assess how well they can contribute and benefit from the deal.

Investors will put in some of their resources to push your business to the next level. They include:

Money: Obviously, the investor will inject money into your business to fuel its goals.

How much money do you need?
How much equity are you offering for that investment?
What will you use the money for?
Will you need follow on financing later as the company grows?

Note: Make sure you value the company fairly. As a thumb rule, the investor will value your company at around three to five times revenues. So if you sold $100k the last year, then the discussion should be around $500k valuation. So if you are looking for $200k investment, expect the investor to take around 40% in your company. A lot of things can change these numbers (e.g. how desperate you are, whether you have other investors interested, if the investor has to put other input, etc.)

Contacts: access to key partners like retailers, distributors, suppliers, customers, etc

Resources: manufacturing facilities, office space, one of their businesses might be a key customer, etc.

Time: In the form of guidance, making key sales, coordinating with suppliers. The less experienced and capable the entrepreneur is, the more time the investor needs to put in to compensate and ensure the business succeeds. Time is the most precious resource for successful people and is worth more for them than money. The less time they will need to put in, the more attractive you will be for them.

The investors will be expecting returns for their input. Make sure you think of them while formulating your offer. They will be looking for:

Money: They simply want to get more money out than they put in (i.e. Return on Investment)

Assets: Your company might have other assets they are interested in to leverage for their other businesses. These might be patents, people, key customers, you, etc.

Personal satisfaction: this is not talked about much, but many investors have soft spots. They might seem like cold hearted scavengers (some are), but they are human after all. Some are actually nice people. An investor might see her/himself in you, or believe in your cause, and choose to invest despite gaps that might stop them otherwise.

HOW TO PREPARE:

Here are some quick tips to help you get the most out of your pitch to investors:

Have a Business Plan: Prepare it yourself and write it down so you know all the details. The plan will force you to cover all the issues to help your company succeed, which is what your investors will want to know.

Know your numbers: Make sure you know your sales, profits, costs (past, present, and future projections). Not knowing your numbers one of the best ways to turn investors off.

Prepare your presentation: Make sure it’s concise and covers the most important points.

Rehearse, rehearse, rehearse! Present to someone and have them drill you with questions. It’s great if you find someone who has successfully raised funding before to guide you. Watching shows like Shark Tank and Dragon’s Den might help too.

Be yourself: Investors will be deciding if they like you and so should you. Be yourself. It’s better to identify personality clashes early on rather than later when you have a partner you don’t get along with. Be respectful, don’t get defensive, but stand your ground on what you want and don’t want.

Know the investor: do your homework on the investors to know their backgrounds (industries, prior investments, reputation, preferences, etc.

Set your boundaries: Decide what you are willing and not willing to give up before you meet investors. What is the minimum valuation you are willing to accept for your company, the maximum equity you are willing to give, are you willing to give royalties, any operational decisions (e.g. whether you are willing to change your business model), etc. The more you are prepared the better you can handle questions and the offer/negotiation stage.

Don’t be discouraged if you don’t get the first investors on board. Learn from the experience, make necessary adjustments and approach others.

Good luck.

GBSH Consult is all about making your Deals Successful

Join our experienced acquirers in mergers and acquisitions - analysis and trends in recent M&A middle market transactions, deals and private equity investment. Follow us on twitter @gbshconsult

Becoming an Investor Ready Entrepreneur

noreply@blogger.com (GBSH Insights) — Tue, 01 Apr 2014 13:06:00 +0000

Raising equity capital is challenging at best. Becoming an Investor-Ready Entrepreneur is designed to educate and prepare growth-oriented entrepreneurs to successfully engage private equity investors. Getting ready includes a wide range of activities and decisions that will help the entrepreneur with their business in a number of ways.

This program is developed with direct input from experienced entrepreneurs, angel investors, angel networks/fund executives, and venture capitalists, and provides an "insider's look" into the world of equity funding. By understanding what investors look for, entrepreneurs can reduce barriers to funding, navigate the process more easily, and increase the chances of obtaining funding for their business.

Learn about the equity funding "food chain".
Find out what investors look for and expect from the companies they fund.
Learn how to make your company "investor-ready" (and improve your business while you're at it).
Assess your own "readiness" at each step of the way.
Hear from those who've "done it". Panelist will include serial entrepreneurs and angel investors who've "been there".
Receive a comprehensive workbook, ongoing counseling support and access to additional online resources.
Save countless hours and enhance your chances of successfully raising equity capital.

What Entrepreneurs Say

"I learned more about the equity investment process, procedures, what is truly valued and expected in one day than I have in several months stumbling through the process."

"I wanted to let you know that I personally loved the course the other day. I have been to many Merger-Acquisition Courses and Forums etc. But, your guest panel was amazing and very interesting. I felt that every time [they] spoke they were giving it to us straight and not just the textbook response. You made it fun. That’s not easy, especially when everyone in the room is hoping that you are going to give them the magical key to their success."

Learn more about Becoming an Investor-Ready Entrepreneur

GBSH Consult is all about making your Deals Successful

Join our experienced acquirers in mergers and acquisitions - analysis and trends in recent M&A middle market transactions, deals and private equity investment. Follow us on twitter @gbshconsult

10 Reasons to Invest in Africa - The Next Frontier

noreply@blogger.com (GBSH Insights) — Tue, 25 Mar 2014 10:44:00 +0000

Investors and business owners are now paying more attention to Africa’s emerging markets and the continent’s future looks bright. But, surely, there is still a lot of work to be done to ensure Africa actually births its potential.

Below, are 10 things you need to know about Africa and its economic resurgence.

The role of small businesses

Small businesses now play a pivotal role in several African countries. In sub-Saharan Africa, the support for entrepreneurship is on the rise - making it easier for people to create jobs for themselves.

For example, The National Bureau of Statistics (NBS) reported that there are over 17 million SMEs in Nigeria, which is Africa’s second largest economy and most populous nation with over 160 million people. Similar stories also abound in other sub-Saharan African nations.

According to Global Entrepreneurship Monitor 2012 sub-Saharan African Report, the region is now experiencing what is called “entrepreneurial revolution” that has reinvigorated it with new opportunities, increased employment and a robust rise in Gross Domestic Product (GDP), which is acclaimed as one of the highest in the world.

Doing business in Africa is now easier

Africa is now home to more international private firms. This is due to the increasing adoption of seamless business policies, lowered corporate taxes, and strengthened regulatory and legal systems in some countries.

The World Bank’s “Doing Business 2014: Understanding Regulations for Small and Medium-Size Enterprises” released in October 2013 reported that sub-Saharan Africa continues to record a large number of reforms aimed at easing the regulatory burden on local entrepreneurs, with 66 reforms adopted in the past year (June 2, 2012 – June 1, 2013).

Of the 189 nations surveyed globally, 18 African economies made the top 50 most reformed economies. Rwanda, Côte d’Ivoire, and Burundi are among the global top 10 improvers in making the biggest improvement in business regulations.

This year, Mauritius at 20 position, Rwanda 32, South Africa 41, Tunisia 51, Botswana 56, Ghana 67, Zambia 83, Morocco 87, Namibia 98 and Cape Verde 121 are testament to the growth in ease of doing business in Africa.

The report also showed that of the 47 economies in the Sub-Saharan Africa, 31 implemented at least one business regulatory reform in 2012/13.

Africa’s rising GDP

Africa is the second-fastest-growing region in the world, according to economic experts. The continent has been reawakening with new zeal for economic growth and development, and the rate of return on investment is higher than anywhere else in the world.

From 2000 to 2008, Africa’s real GDP rose by 4.9%, more than twice its pace in the 1980s and 1990s. In 2012, six of the continent’s 10 economies (Angola, Ethiopia, Ghana, Namibia, Nigeria, and Zambia) reported GDP growth rates of 5% or higher – it was as high as 8.5% for Ethiopia.

The World Bank in its latest semi-annual report, Africa’s Pulse, forecast an average 5.3% growth in 2014 up from its 5.1% projection.

Also, the IMF estimates that GDP growth in sub-Saharan Africa will hit an average of 6.1% next year, far exceeding the expected global average rate of 4%. It also says that seven of the world’s 10 fastest-growing economies for the period 2011-2015 will be African.

The reason behind this growth surge includes government action to end armed conflicts, improve macroeconomic conditions, and undertake micro-economic reforms to create a better business climate.

Africa will have the largest workforce

Africa’s labor force is expanding. It is also endowed with the world’s youngest population. This offers the continent a chance to reap a demographic dividend by using its young workforce to boost economic growth.

According to Global consulting firm GBSH Consult Group, Africa will be home to one in five of the planet’s young people by 2040. This means that in less than 25 years, majority of its population will be youth. By then, the continent will have an average of about 1.1 billion - more than the size of China’s or India labour force.

If Africa provides its young people with the right education and skills needed, this workforce could become a significant source that will propel the continent into economic prosperity.

The rise of the African Woman

Although much still needs to be done, fair gender representation, which has been underutilized as a resource for too long, has received a boost with improvement in the number of African women holding key public offices, for example, Joyce Banda (Malawi’s president), Ngozi Okonjo-Iweala (Nigeria’s finance minister), Nkosazana Dlamini-Zuma (AU chairperson) among others.

African women have penetrated the business and political corridors in many countries and are increasingly filling roles traditionally occupied by men. Their representation in parliaments in sub-Saharan Africa is now higher than in South Asia, the Arab states or Eastern Europe.

According to the 2012 data from the Inter- Parliamentary Union, women occupy 20.2 percent of parliamentary seats in sub-Saharan Africa, which is slightly higher than the world average of 19.5%.

Also, going by the World Bank estimates that eliminating barriers which discriminate against women’s working in certain sectors could increase labor productivity by as much as 25%, sub-Saharan is already achieving this with an estimated 50 percent of the agriculture sector being women – higher than in some countries.

To achieve this third Millennium Developmental Goal, the continent has declared 2010-2020 as African Women Decade (AWD 2010-2020) the decade where African women and the girl-child are empowered to take charge of their rights in being an equal and active participant in the political and social-economic development of the continent.

More investment in agriculture, industrialization and technology

Unlike the past when most African countries depended on oil and mineral resources as the bedrock of their economies, the face of business is now changing as more African nations are now diversifying into non-oil sectors. For instance, Africa’s most developed economies like South Africa, Morocco and Egypt, have been able to grow their agriculture, manufacturing, and retail and hospitality sector to create more jobs.

The Moroccan government for example set a goal for the country to become the industrial automotive supplier for Europe. Today, the sector employs more than 60,000 people.

Also, with about 60% of the world’s uncultivated arable land embedded in the continent, African countries are now paying attention to agriculture as governments and foreign investors contribute substantial investment into farming for consumption and economic growth.

More so, in a number of countries particularly Kenya, which has seen the birth of Africa first tech incubator- the ihub, the role of technology in economic growth is of utmost importance as large multinational corporations and government agencies now pay close attention to developments in the tech sector as regards socio-economic influence, job creation and its contribution to GDP. The Kenya government also launched Konza City, reportedly said to be Africa’s silicon savannah.

Africa’s embracing the knowledge economy

Although mobile penetration is growing at an impressive rate, the continent is slowly waking up to technological opportunities as more than 80% of the African continent is still unconnected.

International Telecommunication Union (ITU) recorded that only 16% of Africa’s 1 billion people use the Internet, half the rate in Asia Pacific and below a global average of 36%.

African Development Bank (AfDB) also reported that the information and community technology sector contributed just 7% to the continent’s GDP last year, and Africa’s wealthiest still amass their fortunes through resources.

However, despite these shortcomings, technology is making an impression reducing Africa’s youth unemployment rate. It is also making social services more accessible to individuals.

In Kenya, mobile money transfer system M-Pesa, launched by the country’s largest telecoms operator Safaricom is helping to make a huge economic impact. With a total transaction of about US$1 billion per month, the technology service has enabled about 67% of Kenyan adults to access banking.

Industry Experts also believe that economic gains powered by better and cheaper Internet access and broader adoption of Smartphone can help increase technological and economic growth in Africa.

Youths are increasingly participating in leadership

With the number of the youth population sky-high, more youths are coming forward to have a say in the future Africa promises. Although youth participation maybe relatively low, depending on the country, the response from social media and technology bares evidence that youths are now more interested in making their voice heard as the economic and social pattern takes shape.

Africa’s next generation is participatory and involved in the development and growth of the continent. Scores of young, western-educated youth and new breeds on the continent have established businesses that are driving the economy, and are constantly playing a part in the continent’s socio-political renaissance. They are also at the forefront of innovations coming out of the continent.

GBSH Consult is a top global consulting firm that delivers essential advantage to the world's top influential businesses, governments, and organizations. Follow us on Twitter @gbshconsult

12 Business Lessons from the 'Wolf of Wall Street'

noreply@blogger.com (GBSH Insights) — Thu, 13 Mar 2014 11:23:00 +0000

We learned a lot from The Wolf of Wall Street before the movie even hit theaters. Now that it’s been around more than a month and has made a killing at the box office, we’re learning some more practical lessons from the instant hit. No, I’m not about to go emulate the infamous Jordan Belfort because, among other things, I have a conscience. But he still has a lot to teach about good business. Here are some of the top business lessons to take away from Belfort and The Wolf of Wall Street.

1. Know What You Want

More than setting goals, look to the future and really figure out exactly what it is you want and how you can get there. Have a vision in mind, and let that steer your decisions. Belfort didn’t get rich by accident.

2. Sell Yourself

Belfort acted powerful and wore fancy suits, and people saw him as confident and successful. Understand how others view you, decide how you want them to view you, and then present yourself in the right way.

3. Find A Specialty

Belfort’s Stratton Oakmont specialized in penny stocks. It sold cheap stocks to the public. He effectively found his niche and exploited it.

4. Adjust And Perfect Your Strategy, Then Keep At It

Belfort knew the ultra-wealthy wouldn’t go for typical Wall Street pitches. He came up with a strategy that worked for his target demographic, and he tweaked it until it worked perfectly. Belfort found a way to cater to a specific demographic in the 1990s, long before personalized ad experiences and Google Analytics were there to help out. Keep your customer base in mind and tailor your pitches for them.

5. Train People Well

Belfort was the brains behind Stratton Oakmont’s business model, but he used a large staff to implement his ideas. He was able to train otherwise clueless people to sound like knowledgeable and experienced stock brokers. He kept things simple and effective, and employees always knew what he expected from them. Instead of doing all the work yourself, hire a good staff and show them exactly what you want.

6. Try, Try Again

No one does it right the first time. Even Belfort managed to bankrupt his own small business before he went to Wall Street. But he didn’t give up on his ambitions to be filthy rich. This goes for smaller goals, too: never end a conversation when you’re trying to sell something. It’s not over until the person hangs up or closes the door.

7. Provide A Solution

Belfort’s clients were happy until the truth came out, because he made sure to provide a solution and an answer for people. As Belfort himself explained, “At a certain point, one of the questions I always ask is, ‘What is your greatest headache right now?’” Find out how you can help your customers and then do exactly that.

8. Keep Employees Happy

Belfort threw outlandish parties and gave grandiose speeches of encouragement. He celebrated victories with his team and included them in his success. Happy workers mean continued success and loyalty. That is, until the cops find out.

9. Avoid IPOs

Business lessons aren’t just for people in the business. If you’re on the other side of the story and are interested in investing, the movie teaches you to avoid initial public offerings you’re not familiar with. Most of Belfort’s scams involved fraudulent IPOs and “pump and dump” schemes.

10. Use Well-Known Brokerage Firms

Stratton Oakmont didn’t have a long history and wasn’t well-established. When it owed people money after court rulings, it simply closed up shop and didn’t pay. A well-known brokerage firm is a safer bet and, if fraud does occur, you’re likely to collect a court judgment.

11. Take Your Time

If you’re offered a deal and you’re hesitant, follow your instinct. Take some time to think about it and research the opportunity to make sure it’s legitimate.

12. There’s No Such Thing As A Sure Thing

Belfort offered his clients “sure things” and quick returns. Such promises are unrealistic and need to be investigated, if not ignored outright. Do your homework and find out what the real story is before you agree to anything.

GBSH Consult is a top global consulting firm that delivers essential advantage to the world's top influential businesses, governments, and organizations. Follow us on Twitter @gbshconsult

The NBA Crash Course: 5 Lessons Entrepreneurs Can Learn From LeBron James

noreply@blogger.com (GBSH Insights) — Tue, 04 Mar 2014 19:25:00 +0000

It is a widely understood fact that the difference between world class athletes like Lebron James and other great athletes is their ability to control their emotions and get "in the zone." However, we rarely understand or discuss this important mental side of the game.

Studying Lebron James and other great athletes provides a strong foundation for managing your psychology and winning in the marketplace.

BEING PRESENT: "I treat it like every day is my last day with a basketball." - Lebron James

Performing at a world class level requires near perfect focus. Distractions can be internal or external, and can relate to issues before, during or after the present moment. Lebron James is able to keep his mind still and be entirely present, focusing only on the next shot or defensive sequence.

In business, you conserve your finite energy resources by staying in the moment. You will always perform better by separating and focusing on what you can control, such as your products, team and strategy, versus what you can't control, such as the economy or political environment. Remember, the only decision that matters right now is the next decision.

PURE MOTIVATION: "Basketball is my passion, I love it. I just try to move forward and achieve my goals." - Lebron James

The most powerful kind of motivation is intrinsic motivation and athletes like Lebron James play for themselves only. Any other motivation -- money, family, statistics or fame -- are less powerful and sustainable motivators, and nothing is worse than playing for someone else.

In business, if you wake up everyday to do what you love and perform at the best level you possibly can, you will reap the benefits of pure motivation. Knowing why you do what you do is foundational to success.

COMMITMENT: "Commitment is a big part of what I am and what I believe. How committed are you to winning?" - Lebron James

When Lebron James looks in the mirror he knows he is committed to winning. Do you? World class athletes know that full commitment coupled with better preparation and focus, enable them to enter a zone of peak competitiveness. Anything other than full commitment to our goals will result in suboptimal results. In business, your employees, partners, customers and team members know if you are fully committed. The question is whether you know and, if you aren't, what are doing to regain that commitment?

FEAR OF FAILURE: "You can't be afraid to fail. It's the only way to succeed." - Lebron James

Lebron James is not afraid and he knows he must free himself from fear in order to perform. Although it is easier said than done, athletes and executives can train themselves to overcome fear.

Ø First, you can become desensitized by fear by making situations familiar through visualization and experience.

Ø Second, put your efforts in a broader context such as being rationale about what really matters in your life.

Ø Lastly, never underestimate the power of faith in yourself and/or a greater purpose. Success in your business is important but where does it rank relative to your health or that of your children? Context matters and can help overcome fear of failure.

MANAGE YOUR EMOTIONS: "There is a lot of pressure put on me, but I don’t put a lot of pressure on myself. I feel I play my game, it will care of itself.” - Lebron James

Lebron James could be emotionally impacted from every source imaginable -- the press, teammates, coaches, family and friends -- and undoubtedly has thoughts and feelings which are not always positive. However, he knows he is more than what he thinks or feels and is able to stay focused on playing his game.

Often times athletes create shortcuts for staying focused such as substituting curiosity in the place of frustration or visualizing the of release negative thoughts. In business, it is similarly easy to get distracted by our emotions unless you have practiced having a calm mind. When in doubt, slow your pace, breathe and play your game.

The GBSH Business Acceleration Academy helps companies systematically and efficiently enhance their strategy and organizational and operational capabilities in order to achieve or maintain the leading position in the rapidly changing business environment. For more info log onto GBSH Business Acceleration Academy or follow us on twitter @gbshconsult

8 Things that Great Brands Do: GBSH Brand Building How-To Guide

noreply@blogger.com (GBSH Insights) — Tue, 04 Mar 2014 14:01:00 +0000

A great brand is hard to find. Your brain is hardwired to notice only what is different. "They may be great products, but they're not great brands."

Whether the product is sneakers, coffee -- or a brand called You -- building a great brand depends on knowing the right principles. We asked GBSH top brand experts to identify their eight brand-building principles.

1. A GREAT BRAND IS IN IT FOR THE LONG HAUL.

For decades we had great brands based on solid value propositions -- they'd established their worth in the consumer's mind. Then in the 1980s and 1990s, a lot of companies sold out their brands. They stopped building them and started harvesting them. They focused on short-term economic returns, dressed up the bottom line, and diminished their investment in longer-term brand-building programs. As a result, there were a lot of products with very little differentiation. All the consumers saw was who had the lowest price -- which is not a profitable place for any brand to be.

Then came Marlboro Friday and the Marlboro Man fell off his horse. Today brands are back stronger than ever. In an age of accelerating product proliferation, enormous customer choice, and growing clutter and clamor in the marketplace, a GREAT BRAND IS A NECESSITY, NOT A LUXURY. If you take a long-term approach, a great brand can travel worldwide, transcend cultural barriers, speak to multiple consumer segments simultaneously, create economies of scale, and let you operate at the higher end of the positioning spectrum -- where you can earn solid margins over the long term.

2. A GREAT BRAND CAN BE ANYTHING.

Some categories may lend themselves to branding better than others, but anything is brandable. Nike, for example, is leveraging the deep emotional connection that people have with sports and fitness. With Starbucks, we see how coffee has woven itself into the fabric of people's lives, and that's our opportunity for emotional leverage. Almost any product offers an opportunity to create a frame of mind that's unique. Almost any product can transcend the boundaries of its narrow category.

Intel is a case study in branding. I doubt that most people who own a computer know what Intel processors do, how they work, or why they are superior to their competition in any substantive way. All they know is that they want to own a computer with "Intel inside." As a result, Andy Grove and his team sit today with a great product and a powerful brand.

3. A GREAT BRAND KNOWS ITSELF.

Anyone who wants to build a great brand first has to understand who they are. You don't do this by getting a bunch of executive schmucks in a room so they can reach some consensus on what they think the brand means. Because whatever they come up with is probably going to be inconsistent with the way most consumers perceive the brand. The real starting point is to go out to consumers and find out what they like or dislike about the brand and what they associate as the very core of the brand concept.

Now that's a fairly conventional formula -- and it does have a risk: if you follow that approach all the way, you'll end up with a narrowly focused brand. To keep a brand alive over the long haul, to keep it vital, you've got to do something new, something unexpected. It has to be related to the brand's core position. But every once in a while you have to strike out in a new direction, surprise the consumer, add a new dimension to the brand, and reenergize it.

Of course, the other side of the coin is true as well: a great brand that knows itself also uses that knowledge to decide what not to do. At Starbucks, for instance, they were approached by a very large company that wanted to partner with them to create coffee liquor. I'm sure Starbucks could go in and wreak havoc in that category. But they didn't feel it was right for the brand then. They didn't do a lot of research. They just reached inside and asked ourselves, "Does this feel right?" It didn't. It wasn't true to who we they were right then.

4. A GREAT BRAND INVENTS OR REINVENTS AN ENTIRE CATEGORY.

The common ground that you find among brands like Disney, Apple, Nike, and Starbucks is that these companies made it an explicit goal to be the protagonists for each of their entire categories. Disney is the protagonist for fun family entertainment and family values. Not Touchstone Pictures, but Disney. Apple wasn't just a protagonist for the computer revolution. Apple was a protagonist for the individual: anyone could be more productive, informed, and contemporary.

From our experience with Nike, we can tell you that CEO Mark Parker is the consummate protagonist for sports and the athlete. That's why Nike transcends simply building shoes or making apparel. As the protagonist for sports, Nike has an informed opinion on where sports is going, how athletes think, how we think about athletes, and how we each think about ourselves as we aim for a new personal best.

At Starbucks, their greatest opportunity is to become the protagonist for all that is good about coffee. Go to Ethiopia and you'll immediately understand that they've got a category that is 900 years old. But in the United States, they're sitting on a category that's been devoid of any real innovation for five decades.

A great brand raises the bar -- it adds a greater sense of purpose to the experience, whether it's the challenge to do your best in sports and fitness or the affirmation that the cup of coffee you're drinking really matters.

5. A GREAT BRAND TAPS INTO EMOTIONS.

It's everyone's goal to have their product be best-in-class. But product innovation has become the ante you put up just to play the game: it's table stakes.

The common ground among companies that have built great brands is not just performance. They recognize that consumers live in an emotional world. Emotions drive most, if not all, of our decisions. Not many people sit around and discuss the benefits of encapsulated gas in the mid-sole of a basketball shoe or the advantages of the dynamic-fit system. They will talk about Lebron James's winning shot against the Warriors the other night -- and they'll experience the dreams and the aspirations and the awe that go with that last-second, game-winning shot.

A brand reaches out with that kind of powerful connecting experience. It's an emotional connection point that transcends the product. And transcending the product is the brand.

6. A GREAT BRAND IS A STORY THAT'S NEVER COMPLETELY TOLD.

A brand is a metaphorical story that's evolving all the time. This connects with something very deep -- a fundamental human appreciation of mythology. People have always needed to make sense of things at a higher level. We all want to think that we're a piece of something bigger than ourselves. Companies that manifest that sensibility in their employees and consumers invoke something very powerful.

Look at Hewlett-Packard and the HP Way. That's a form of company mythology. It gives employees a way to understand that they're part of a larger mission. Every employee who comes to HP feels that he or she is part of something that's alive. It's a company with a rich history, a dynamic present, and a bright future.

Levi's has a story that goes all the way back to the Gold Rush. They have photos of miners wearing their dungarees. And every time you notice the rivets on a pair of their jeans, at some level it reminds you of the Levi's story and the rich history of the product and the company.

Ralph Lauren is trying to create history. His products all create a frame of mind and a persona. You go into his stores and there are props and stage settings -- a saddle and rope. He's not selling saddles. He's using the saddle to tell a story. Stories create connections for people. Stories create the emotional context people need to locate themselves in a larger experience.

7. A GREAT BRAND HAS DESIGN CONSISTENCY.

Look at what some of the fashion brands have built -- Ralph Lauren, Calvin Klein and Louis Vuitton, for example. They have a consistent look and feel and a high level of design integrity. And it's not only what they do in the design arena; it's what they don't do. They refuse to follow any fashion trend that doesn't fit their vision. And they're able to pull it off from one season to the next.

That's just as true for strong brands like Levi's or Gap or Disney. Most of these companies have a very focused internal design process. In the case of Nike, between its ad agency Wieden & Kennedy and Nike Design shop, probably 98% of every creative thing that could possibly be done is handled internally, from hang tags to packaging to annual reports. Today Nike has about 350 designers working for it -- more than any company in the country -- to make sure it keeps close watch over the visual expression of the brand.

They're what we like to call "impassioned environmentalists" with their brands. They don't let very many people touch them in the way of design or positioning or communication -- verbal or non-verbal. It's all done internally.

8. A GREAT BRAND IS RELEVANT.

A lot of brands are trying to position themselves as "cool." More often than not, brands that try to be cool fail. They're trying to find a way to throw off the right cues -- they know the current vernacular, they know the current music. But very quickly they find themselves in trouble. It's dangerous if your only goal is to be cool. There's not enough there to sustain a brand.

The larger idea is for a brand to be relevant. It meets what people want; it performs the way people want it to. In the last couple of decades there's been a lot of hype about brands. A lot of propositions and promises were made and broken about how brands were positioned, how they performed, what the company's real values were. Consumers are looking for something that has lasting value. There's a quest for quality, not quantity.

GBSH Consult is a top global consulting firm that delivers essential advantage to the world's top influential businesses, governments, and organizations. It has gone ahead to build and advise some of the world’s strongest brands of all time. Follow us on twitter @gbshconsult.

20 Success Tips from South Africa's Greatest Entrepreneurs

noreply@blogger.com (GBSH Insights) — Thu, 27 Feb 2014 14:04:00 +0000

Imagine coming close enough to a one-on-one session with South Africa's Entrepreneurship Hall of Fame without an appointment?

Speaking of the greats: Discovery’s Adrian Gore, Nando’s chicken king Robbie Brozin, hotel magnate Sol Kerzner or real estate empress Pam Golding. The thought process behind Anant Singh and his first film, the battles Raymon Ackerman faced building Pick n Pay; or how Carrol Boyes turned a passion for art into a lucrative business?

How did they all start out? How did they raise capital? What drove them? What were their individual recipes for success?

KEY RECIPES OF SUCCESS FROM ALL THE ABOVE;

1. Make a difference in your industry – Always believe that you can redefine the business industry that you are in. Make a ground breaking.

2. Believe in yourself – Part of being an entrepreneur is the need to get somewhere in life; to have the belief that you can get out there and make a difference.

3. Money follows ideas- If you have a great business idea, you’ll find someone to pay for it.

4. We learn more from our mistakes rather than from our victories – From success one learns only how smart they are. From failure, they learn how to improve themselves

5. Trust your gut – Even upto the last moment, just before pen meets paper, walk if you smell trouble.

6. Strike a balance between reason and passion – A good business idea is not pure emotion or pure intellect – it is a combination of a desire to do something and a sound reason to do it.

7. Use the lean times - So called bad times present a great opportunity; you cut your costs back to the bone that when the market starts to go up; you’re in a fantastic position.

8. Learn how to invest – It is not about what you earn, but about how you invest it.

9. Work with people whose skills complement your own – Businesses need to have components to succeed, logic and creativity.

10. Make sure talent bubbles up in the company but not out of the door – Open door policy where it nurtures and drives not just talent but also room to be innovative and spread that like a bad disease.

11. Become a super delegator – because there is a mutual interest to succeed, let your people run with your vision. That gives time to grow and transform more.

12. The bigger the challenge, the sweeter the reward – If you do something obvious and easier then you would be missing the opportunity to be that catalyst.

13. Partnerships are key to successful entrepreneurship – The world’s greatest entrepreneurs – the likes of Warren Buffet, Bill Gates or Steve Jobs – are presented to the world as individual success stories. The truth is that these entrepreneurs had partners who played a key role in ensuring that they realize their dreams in their chosen paths. One of the key advantages of partnerships is that those involved are better placed to analyze their dreams and develop others along the way.

14. Chase success – The money is not all-important, it’s only one of the measures of success.

15. Build depth – There is nothing like depth. It gives you gravitas.

16. Put in the hours – Success in business does not work on an 8 – 5 mentality. Be prepared to work hard and put in extra hours.

17. People make profits, businesses only report them – You realize value by turning a good business into a great business. But more fundamental than that is turning good people into great people.

18. Simplicity should be prized not despised – An entrepreneur should never be afraid of simplicity. Some believe the more complex you make something the more impressive it is and the more chance of it has of being approved. Simple is better.

19. Stay close to your customer – if you become too corporate in your approach you lose touch with what your customer’s want. Stay close to your customer and you stay close to new opportunities.

20. Find a mentor and listen – As the quote goes….I am able to see far because I sit on the shoulders of giants. Always find someone ready to be your blueprint checkmate and guide you as you navigate the entrepreneurial road.

GBSH Consult is a top go-to global consulting firm that delivers essential advantage to the world's top influential businesses, governments, individuals and organizations. GBSH Consult focuses on converting business visions and ideas into ideal revenue channels. For more info log onto www.gbshconsult.com

What Investors and Partners look for before Investing

noreply@blogger.com (GBSH Insights) — Wed, 05 Feb 2014 10:35:00 +0000

A full snapshot of your intellectual assets and a considered and strategic plan for deriving value can help attract investors. What do they look for?

The General Picture

• The broad category (e.g. ICT/ Manufacturing/ Life Sciences) of your business.

• A description of your business in one sentence.

The Product/Service

• A complete description of your business and the product or service being developed.

• The value proposition describing the gap/ problem in the market that your innovation will solve, and why customers will purchase.

• Information on any sales of the product/service.

Market Information and Access

• The market that you will be targeting and why.

• The need in the market and how the new product/service will address the need.

• The current size of the target market. How much of the market can you expect to capture.

Note that where a new market is being created, solid information might be difficult to obtain.

• Where the market is located, and how can it be accessed. For example, is a partner needed who currently has the infrastructure in place to provide the access, or can your company do this alone?

• Who is currently in the market? Whether they are direct competitors and if so, what advantages your new innovation offers over your competitors’ offering.

• Information on indirect competitors and current products/services satisfying the needs of the market. For example, prior to video being available, cinemas fulfilled the needs of the market. Introduction of home video systems created a new market that had been previously satisfied. The market needed to be convinced of the benefits of buying a new entertainment system.

• Who future competitors are, where they are likely to come from and when they would be expected to enter the market.

• The barriers to new products/services entering the market.

Competitive Advantages

• Information on the intellectual property owned by your company and how it is protected. This includes patents, trademarks, know-how, trade secrets, designs, and methods.

• The sustainable competitive advantage the company has, and how you will maintain this when competitors enter the market to address the same problem.

• Your company’s core strengths and weaknesses.

Management and R&D Teams

• Brief bios with core competencies. Business Model – How the Business will make money

• A financial forecast over 3-5 years showing projected revenues, gross margins, total expenses, EBIT.

• When you would expect the business to break even.

Financing your Company

• The ownership structure of your business. Name/equity holders(s)/% ownership/cash injected.

• How much money you are seeking. The percentage of the company investors will own.

• What the money will be used for. Include materials, equipment, people, time, dollars, and additional technology, new office locations needed to develop and market the technology / service.

This information forms part of the operational plan within the Business Plan. Each major activity should be costed and briefly explained. A 12 month cash flow forecast should also be included.

• The risks faced by the company that could prevent it achieving its goals, and how these will be managed.

• The company’s current cash balance. If relevant, the company valuation at the last funding round.

• The expected monthly “burn rate” over the next 12 months.

• Who has been approached for funding (including granting bodies).

Click here to access our business plan readiness toolkit and our investor readiness toolkit...GBSH Consult Tool kits

GBSH Consult is a global management consulting firm proven in dealing with mergers and acquisitions. GBSH Consult supports clients in making their deals successful as well providing analysis, trends and recent M&A middle market transactions, deals and private equity investment. For more information go to www.gbshconsult.com

Are You Investment Ready?

noreply@blogger.com (GBSH Insights) — Tue, 04 Feb 2014 07:59:00 +0000

A Checklist to use if you are considering an investment route for your business.

The big idea

Investment readiness means that you are in a strong position to present your business to different investors and meet their requirements. You may have a particular project to put forward or you may feel that your business is ready for rapid growth. On this basis you might consider approaching different sources of funding, such as:

· Business angels

· Venture capitalists

· Banks

· Other funders such as high net worth individuals

Purpose

Seeking external support to allow your business to grow involves both ensuring you have a credible case to present and making a series of personal decisions to make sure you are comfortable with the direction you are taking the business in. The purpose of this tool is to help you think about some of the issues that might arise during this process so you are more likely to meet the needs of the investors and to succeed.

You are unlikely to be investment ready if:

· You are unwilling to give up a stake in the business

· You have an inadequate business plan

· You are not looking for fast growth. Can you provide a growth level of eight to ten times within five years?

· You do not have a proven need for your product or services

· You lack knowledge of your market

· You lack knowledge of the investment process

· You are unable to pitch your business effectively or credibly

The Tool

This tool consists of a questionnaire that takes you through some of the key questions you need to consider to work towards investment readiness. It can be done on your own or with people who know you and your business well. It is for businesses of all scales interested in external investment. The questionnaire should take 20 minutes to complete.

Download this tool(PDF)

Join us in the upcoming series on the Business-survival Toolkit coming soon......

GBSH Consult is – an award winning, international business transformation and turnaround firm with proven success in solving complex financial, operational and people performance issues. www.gbshconsult.com

Business Plan Competition for Early Stage Entrepreneurs seeking funding

noreply@blogger.com (GBSH Insights) — Fri, 24 Jan 2014 07:03:00 +0000

“To be successful, you have to have your heart in your business, and your business in your heart. – Thomas Watson, Snr”

Do you have what it takes to represent Africa for the local and possibly global U-Start Conference Business Plan Competition In Italy in May 2014?

U-Start is a global boutique advisory firm offering services targeted at facilitating the matching and cross-border investment amongst a select group of international investors (Angels, VC funds, family offices, corporate offices and wealth management institutions mostly based in Europe) and early stage companies in Southern and Eastern Europe, Africa and Latin America.

HOW TO ENTER THE U-START CONFERENCE IN AFRICA

The local U-Start business plan competition will be held in Cape Town, South Africa on the 6th March 2014. Prominent local and international investors will be scouting and only the top 15 - 20 businesses will be allowed to pitch in front of a panel of expert judges.

From the top 15-20 pitches only 3 companies will be chosen to represent Africa in the U-Start Conference happening in Italy, 2014.

U-Start will be sending 3 Early Stage Entrepreneurs to Italy in May 2014 to meet investors, growth partners and exclusive mentorship to grow and accelerate your business.

CRITERIA TO APPLY

A Full Business Plan or Pitch Presentation

A Financial Deck

THE STAKES

- Flights and accommodation for 4 nights in Italy in May 2014

- Mentorship, incubation and a training week in Italy.

- One on One Introductions to a wide network of pan-European Investors.

- 1 year free access on U-Start

- International Media Exposure

- Exclusive networking opportunities

- Free private dest at the U-Start Conference for the winners.

TO APPLY

Submissions are already opened until February 24th. To register go here and submit your executive summary and elevator pitch.

For further information, please visit our partner website or contact us at info@gbshconsult.com

When is the Best Time to Sell your Business?

noreply@blogger.com (GBSH Insights) — Thu, 16 Jan 2014 12:32:00 +0000

WHEN IS THE BEST TIME TO SELL YOUR BUSINESS?

I have heard off-the-cuff opinions such as:

Ø Only when you get the highest Price.

Ø I will not sell unless I get all cash.

Ø Do not sell unless you know what you want to do next.

Ø Everything is for sale… for the right price.

Ø If it is a good business that makes money, then don't sell.

The above answers just address the price and terms…but there is much more in a business owner's decision to sell.

What is the Opportunity Cost of Not Selling?

We exist in a world of limited resources such as time, energy, talented people, and capital. Consequently, the true cost of not selling is the outcome one could have achieved from committing those same limited resources to a different course of action. Said in a different way, there is only so much time, energy, and capital available to a business owner at any particular point of time, and those resources invested in a business are not available for him/her to use, enjoy, or invest in other ways.

The opportunity cost of being involved in your current Company might include giving up:

Ø Another business venture or opportunity

Ø Time for rejuvenation and reflection

Ø Friends, family, and grandchildren

Ø Diversification of investments or reduced risk

Ø New challenges, intellectual stimulation, or education

Ø Health, travel, community involvement, spiritual service

Ø Or, any other opportunity that can not be pursued because of the demands of your current Company.

The opportunity cost is relevant only in terms of the life goals of the business owner. When a business owner decides that the opportunity cost of owning his/her Company is greater than the overall value (not just money) received from owning the Company, it is time to seriously consider selling. Conversely, a business owner should not sell if he/she finds the business provides the most satisfying, enjoyable, and profitable way he/she can invest his/her time, energy, and capital at the moment.

Many business owners have been involved in their companies for so many years that they have a difficult time envisioning what their life will be like after they sell. Once they sell they are free to discover other opportunities. Not having the freedom to discover alternatives is one of the opportunity costs of business ownership.

Following are three examples of what "Opportunity Cost" sounds like when spoken by a business owner who should consider selling:

· Burn Out – "My Company has been good to me. I am proud of it. I poured my life into it and for many years it was very fulfilling and financially rewarding. For a while though, I have not been having much fun and it has been boring. I know I could do more with the Company, and it has lots of potential. However, I just do not want to put any more energy into it. It is time to do something else with my life. I am not sure what that should be, but I am sure I can figure it out, once I am not preoccupied with this Company."

· Another Business Opportunity – "My Company is going well and I could keep running it forever. But, it takes lots of attention and distracts me from a different business venture, with which I believe I can have even a greater success. It may seem foolish to sell a good business, but I need to let go of this one in order to take hold of the next one."

· Owner Skills – "My Company has been successful, but based on my talents and experience; I have taken it as far as I can. The business is well positioned, but it needs a person in charge with different skills and ambitions. Both the Company and I would be better off if I sold it to a buyer that could take the Company to the next level. Then I could focus on what I do best, either working with the buyer, or moving on to a new opportunity."

Opportunity costs can be applied by Buyers also. Business buyers acquire Companies because the company presents a more attractive opportunity than the alternative uses of their resources.

How Much is Enough?

No matter how much you make, there is always someone with more. We see business owners who persist in owning their business just because they want more money. Meanwhile, 99% of the people make and have less money than they. We see their "nose-to-the-grindstone" in their particular Company because:

Ø They are in Business

Ø They want more money

Ø A few years ago the Company was worth more

Ø The market may be better in a few years.

When a business owner is passionate about his/her company, working for increased profits is an energizing goal. However, sometimes business owners lose the focus, intensity, and passion that they had when growing it. They then push ahead day after day just because they believe they should use the business to make money. They own great businesses, but as individuals they feel discouraged and trapped.

Important issues for business owners to address:

Ø Why are we making money? And why in this business?

Ø Are we making money in a way that is (still) personally and professional rewarding?

Ø Is making money with this Company the highest and best use of our resources and abilities

ØRegardless of whether you decide to sell now, answering these questions is key to tactical and strategic planning, and developing an exit plan.

When is the Best Time to Sell?

The best time to sell is when you come to a decision that it is more compelling to invest your time and capital into something other than your current Company. To make that decision, understand that businesses sell for more when the business is doing well, the economy is doing well, and financing is easy to obtain by buyers. As a Merger & Acquisition advisor, my role is not to convince business owners to sell their Companies. It is to ask owners the insight-producing questions, such as these, to help entrepreneurs clarify their thinking.

If the result of your reflections is a decision not to sell, you can focus on building your business with renewed commitment. If you decide it is time to sell, my role as a Merger & Acquisition advisor is to help you through the process so that you can move on to the next phase of your life.

If you are interested in discussing your business objectives in confidence, we welcome the chance to talk with you.

Essential Lessons Entrepreneurs Can Learn from Nelson Mandela

noreply@blogger.com (GBSH Insights) — Sat, 07 Dec 2013 13:28:00 +0000

One of the world’s most recognized and popular statesmen, Nelson Mandela (an anti-apartheid revolutionary, politician and philanthropist who served as President of South Africa from 1994 to 1999), shared indelible lessons that every entrepreneur can take to heart.

The former South African president’s plight to overturn apartheid was an inspiration to many around the world. As Mandela once explained, ““It is never my custom to use words lightly. If twenty-seven years in prison have done anything to us, it was to use the silence of solitude to make us understand how precious words are and how real speech is in its impact on the way people live and die.” (South Africa, July 14, 2000).

Here is an inspiring look at six quotes attributed to Nelson Mandela that can positively impact your life and your business.

1. “Difficulties break some men but make others.”

Starting a business is full of victories … and difficulties. But what truly distinguishes a winner is the resolution to keep going. Overcoming business challenges is par for the course of entrepreneurship. From learning how to build brand awareness and compete against established companies to building a winning company culture and hiring great talent — these difficulties, in the mind of a winner, are merely opportunities.

2. “It always seems impossible until it’s done.”

Onlookers will often say to a fledgling and hopeful entrepreneur, “That’s impossible.” But those who have built successful companies know one thing to be true: ““Impossible is just a big word thrown around by small men who find it easier to live in the world they’ve been given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion.

Impossible is not a declaration. It’s a dare. Impossible is potential. Impossible is temporary. Impossible is nothing.” (Muhammad Ali) To build a successful business, is to perfect the art of the “possible.”

3. “Everyone can rise above their circumstances and achieve success if they are dedicated to and passionate about what they do.”

Every business owner is faced with broad commonalities, and a multitude of varying circumstances. And if you are in business for any length of time you will inevitably hear someone tell you the importance of dedication and passion. Dedication equips you for the road ahead while passion inspires you to go the extra mile;when others would likely tell you to “pull over” or “turn around”. While many of us will not face the depth of struggles that many great men and women have encountered, we know that without these things success is infinitely harder to attain.

4. “I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear.”

Before you consider your latest and greatest business idea, land your first customer, pivot your business model, explore new market opportunities, and scale your success you will come face to face with fear. Not once, but many times. So, before an entrepreneur masters anything else in business, they must master their fear: the fear of failure, disappointment, the unknown.

Overcoming fear in business starts with repeated action despite challenges and perceived setbacks. Ideally, each action is strategically based on a business game plan. Remember: the next great success in business is one step away from the mastery of your fear.

5. “There is no passion to be found in playing small — in settling for a life that is less than the one you are capable of living.”

What are you truly capable of becoming? If you have the courage to build your dreams into reality then I’d venture to say that you are capable of much more than you ever believed. I once said that entrepreneurs are the new superheros because “By definition, superheroes are people that possess extraordinary powers and skills.

Doesn’t that sound like an entrepreneur to you? Small business owners certainly accomplish seemingly impossible feats, tackle enormous risks and rely on a supporting cast of invaluable characters to get the job done. While we’re not costumed crime fighters, we have an even more important role in society — to change the world.”

6. “Do not judge me by my successes, judge me by how many times I fell down and got back up again.”

Behind every great entrepreneurial success story is another story … of setbacks, challenges, defeats and failures. As you grow a successful small business, from zero to hero, you will learn that success is merely a byproduct of quality decisions that are made — day in and day out. Every entrepreneur will fall down, but those that are successful know that failure is temporary and true success rises .. and rises … again.

GBSH Consult is a global management consulting firm proven in delivering leading business results. GBSH Consult supports clients in preparing them to be investment ready as well as position them in the global business marketplace. For more information go to www.gbshconsult.com

How to Achieve Accelerated and Sustained Business Growth

noreply@blogger.com (GBSH Insights) — Mon, 11 Nov 2013 05:33:00 +0000

In this special interview during the launch of their magazine Biz Titans, GBSH Consult offers tips, insights and best practices regarding how to achieve accelerated and sustained business growth.

Q: What is the difference between a Business Incubator and a Business Accelerator?

GBSH: A Business Incubator is focusing on getting a company off the ground, typically from idea to “Something”, from zero revenues to the first couple millions in annual revenue. A Business Accelerator takes over where the incubator left off, helping the company get to the next level through a business acceleration program.

While a Business incubator helps with office space, mentorship and connections, a Business Accelerator helps a ‘started-up’, or established mid-size company with professional services, management consulting, developing a strategic focus for the company and working with the executives at a company on a daily basis to execute on that strategy and achieve accelerated and sustained growth.

Q: What are some ways that you help small- and medium-sized companies achieve a significant and sustainable impact that translates into higher profitability, sustained growth and social impact?

GBSH: The way we help them is through a structured approach. Since 1997, we have helped over 400 companies in industries as diverse as agriculture and technology to achieve, on average, a 30% revenue increase the first year after acceleration. We do this through a 5 months acceleration program, in which we do an assessment of the company against best practices and help them in terms of strategic focus, business processes, talent and finances.

For example, we helped a tech company which had reached a revenue plateau switch their strategic focus to become a customer service company and grow exponentially.

Q: What are some ways that you help your clients’ develop and strengthen the relationships with which the companies partner ?

GBSH: Once we have accelerated a company we know them well enough to know their core competencies, so we can introduce them to either other clients we are accelerating where we see there could be some synergies, as well as with large corporations in our eco-system for a potential joint venture in a new market for to develop a new product line, as well as for an eventual investment or acquisition.

Q: What advice would you give to a small company considering expanding into international markets?

GBSH: I would suggest for them not to “go it alone”. There is a better and faster chance of success for them if they partner with the right person, institution or organization that knows the playing field in the new markets and how business is done there, as well as access to the local suppliers and distribution channels. Building that from scratch is possible, but it takes much more time and resources than to partner with someone.

Q: Can you provide some tips to our readers when it comes to looking for investments?

GBSH: It is much easier to get funded if you know exactly what the money will be used over the next two to five years. No one has a crystal ball, but having reasonable assumptions on the table will help your credibility when presenting to investors. I would also recommend looking for “smart money” and not just money. What I mean by this is that the investor needs to bring more than just money, but also great contacts in either the markets you are trying to get into, or the suppliers you need to get in touch with.

Q: Can you talk a bit about your ambitious plans of stretching global offices around the world in the next couple of years? How much have you had to tailor the strategy and approach of each office to fit in with the specific business culture there?

GBSH: Very good question. We strongly believe in the value of the GBSH Consult network and we are starting to see the benefits of this. A lot of our clients in emerging markets are coming to us to help them create a presence in the global marketplace, either by soft-landing there, relocating or finding the right organization for them to partner with. Similarly, some of the companies we are accelerating in the global marketplace want to have either a production or commercial presence in the emerging markets we have a presence on, so we are helping them with those activities. The more offices we have around the world, the more valuable that network becomes and the more value we can bring to our customers in terms of cross-border trading and strategic partnerships.

GBSH Consult Business Accelerator is a program under the GBSH Consult Group that helps small- and medium-sized companies grow to become the next generation of market leaders. Their Business Acceleration Program enables accelerated and sustained growth for small and medium-sized companies seeking to reach that second level of growth.

This interview was previously published on Biz Titans.

How to Improve Your Profit Margins

noreply@blogger.com (GBSH Insights) — Tue, 05 Nov 2013 10:33:00 +0000

One of the key aspects of any business turnaround is, of course, profit improvement.

There are many methods of improving profitability, including cost reductions, increasing sale price, outsourcing and improving product mix and gross margins.

We will touch on a few of these techniques in this and future few blogs, and provide some tips on how to get started with these initiatives.

Gross Margin (as a total $ or %)

You should start by doing an analysis of you current margins and compare these to the industry average.

One area for improving gross margin is by conducting a detailed analysis of your existing customers and products to determine how much margin they actually contribute to the business and whether their current volume of purchases justifies keeping that particular customer.

If your margins are the same as your competitors, you may wish to consider culling some of your low margin customers. This will allow you to focus on increasing revenue from existing higher margin customers whilst cutting advertising costs and improving profits at the same time.

Price Increase

Pricing should be reviewed at least every 6 months and be supported with a detailed cost and competitor analysis to support any suggested price increases. The costing analysis will allow you to determine your existing break-even point and profit margins.

This review will also demonstrate how your product is positioned in the market place, industry demand, and give you an understanding of the changes in the market place.

Outsourcing

The traditional wisdom is that the major benefit of outsourcing is cost savings. However, the additional business controls gained by outsourcing (production planning, for example) make this an option worth seriously considering. Improvements can also be seen through increased reliability on operations of the company.

We have touched on only a few issues which can impede the implementation of a business turnaround strategy.

In our next blog, we will cover in further detail some of the topics covered in this blog as there are many more tips and hints to relay in relation to this phase of the turnaround. If you have your own tips that have worked for your business, please share them with us.

GBSH Consult, is one of the global leading turnaround management and profiti mprovement firms – solving complex problems for businesses experiencing major change.

The Global Concept of Business Funding

noreply@blogger.com (GBSH Insights) — Thu, 31 Oct 2013 11:04:00 +0000

Everyday entrepreneurs are growing their businesses by doing business around the globe. It is no longer business just on a local scale anymore. Operating your business for the local market is fine; however, it is now very possible to take the business regionally, nationally and even worldwide. If you are planning to expand to a larger market, is important how you scale your business growth. The ramifications of this expansion can be daunting; however, you cannot allow it to derail the opportunity to sell your goods and or services to a wider market.

With the advent of the internet, and new technology that can now facilitate global business opportunities, financing can be a nightmare. Gaining global clients requires increased cash layout in order to provide the goods or services. These additional expenses are usually appropriate and in proportion when you are taking the business from a local level to a wider audience.

Financing Solutions

Financing solutions are available to business owners based on increased sales and clientele. Where those clients are located can be important when you are in the process of securing the necessary capital for business growth or survival. Being able to deliver the goods or services is crucial to continued growth. Doing business with credit worthy clients is a critical element to any financing strategy.

Doing business on an international scale changes the game. Signing on new clients who are not good payers can decrease your capacity to gain the funding you need. The clients must also be approved by your lender depending on the financing solution being employed before a funding option can be implemented.

Here are solutions to consider before accepting clients outside your local market:

Factoring – Having outstanding accounts receivable is no fun when there is no money in your bank account. Selling your receivables is an option to consider when you need an immediate cash infusion.

Purchase Order Financing – Is appropriate when your business receives that large order and you are not financially solvent enough to facilitate the transaction.

Crowdfunding – The opportunity to finance your idea or product through this option has helped many see their dreams become reality. This solution creates an immediate customer force for testing future product ideas. Just think – ‘pre-sales’ in the 21^st Century.

Letters of Credit – LOCs give qualified entrepreneurs the ability to transact business on a larger scale. Entrepreneurs can grow their enterprises faster on a national and even global scale, with this option instead of turning business away.

Microloans – This option must never be taken lightly. It is used around the world to help start-up micro-enterprises and grow established small businesses. These businesses would not exist otherwise, and in some countries, some communities would not exist otherwise.

Finally, global enterprises are not necessarily large, multi-million dollar firms. They can be small businesses operating across borders, on a global scale, accessing much needed financing, while being the driving force in their local economies.