The journey of the ambitious business owner

The following themes summarise our learning and key observations drawn from years of working with hundreds of business owners.  They look to identify what is required to create success for an ambitious business owner who is keen to create a business that builds a heritage and thrives from generation to generation.

These, and further themes, have been developed and explored in depth through our work and at our regular Compass Meetings. To view them in presentation format please click on the link (130409 ABO themes of sustainable success).

Starting the journey

What fundamental question or problem is your business trying to solve?

Curiosity might have killed the cat but it made the entrepreneur. Of all the success stories that we have seen over the years there is one thing that connects the founding moment – it was born from question rather than a dream. Meanwhile, the people we met with the dreams appear still to be dreaming.

Making it happen

Who has the problem you want to solve and how can you help them solve it – now?

Openly exploring the question with others builds the energy and momentum required to help an idea take flight. The process of solving small problem builds the confidence to take on bigger ones. Soon the magnetic attraction to the idea becomes so strong that there is no other option than to make it happen.

Maintaining a driving ambition

How driven and wise is your ambition?

It is ambition, a strong sense of dissatisfaction with the current state combined with a belief that it can and must be better, that the drives a business forward. The ability to maintain this youthful driving energy and combine it with the wisdom of experience is essential.

Building resilience to crises

How will you survive and thrive in your next crisis?

Crises are inevitable in business, they also stimulate growth. Creating personal and business resilience to these crises and learning to sail on the changing tide is critical to the achievement of continued growth.

Learning to lead

What team do you need to build, to allow you to do what only you can do?

Many business owners change the title on their business card as the business grows. Very few manage to adopt the behaviours required for their new role. Learning to act and behave as a CEO of your own business is perhaps the most fundamental and challenging aspect of achieving success.

Holding yourself to account

How will you ensure you achieve what you plan to achieve? And, do it for the long-term benefit of the business?

Owning, leading and ensuring good governance of your own business comes with a great responsibility, behaving as a good steward is critical. The act of creating formal and informal ways to build accountability for thought, action and result is an absolute necessity.

Achieve a successful exit

What will allow you to exit with a strong sense of pride?

Exit is not about selling the business – it is about creating options for the business to live out the founding principles whilst finding the right leadership and ownership for the next stage of growth. The focus must be on building a strong business and exploring how and when the transition will take place.

If you would like to discover more about our work with ambitious business owners and would like a conversation to explore the relevance of these themes to you and your business, please visit our website or contact adamcampbell@telospartners.com.

Creating your strategic roadmap

When asked, most ambitious business owners acknowledge the importance of having a clear strategic plan. And, in our experience, successful growth businesses have plans that they are busy implementing.

Yet, when we first meet them, the vast majority of ambitious business owners do not have any sort of growth plan. If they do, they have to dust it off before they pull it down off the shelf or apologise for the poor quality drawing as they pull a napkin out of their pocket. Why is this?

Well the answer is quite simple. Most ambitious business owners are too busy working in the business to work on it. Then, when they make a start, they underestimate the time and energy it takes to create a robust growth plan. And, they often have no idea what they should put in it. As a result, they frequently end up with little more than an extended to-do list.

So, what will it take you to think and act more strategically? What is this planning lark all about? What should it include? Who should be involved? How do I do it? What benefits can I expect from doing it?

At our Compass Meeting on 7 March, we will look to draw upon our experience and success in helping a wide range of clients to generate business improvements and growth and clarify their thoughts and to focus their actions by:

• gaining insight into the performance of their business through staff, customer and supplier feedback;
• renewing and nurturing their purpose and values in a way that provides a stable and guiding compass for future business decision making;
• scanning the horizon to understand future scenarios that will impact their business;
• creating a compelling and inspiring vision, with clear and tangible measures;
• establishing strategic initiatives and plans that will resource and deliver your growth and help you to keep on track.

In exploring these elements of the growth planning process, we also hope to better understand the challenges and opportunities that your business faces.

How to finance the long-term success of your business

For the last three months, we have been (re)exploring the theme of financing the growth of your business (click here). Our exploration culminated in a fascinating discussion amongst some 30 business owners, advisors and investors, at our Compass Meeting on the 29 November 2012. The themes of the discussion are the content of this blog.

The Ostrich Complex

We are all familiar with the image of an Ostrich burying its head in the sand, avoiding the inevitable and difficult situation that it faces. Well, when it comes to financing growth of a business, it seems that many business owners share this trait.

Money is, at the same time, the simplest and the most complicated form with which to record the value of a transaction. The complication increases when the future value of that money, and its associated risk, is brought into question.  The transaction appears to work best when the parties involved have parity of information and when the exchange meets the expectations of both sides. It fails when these things are not in place – someone ends up feeling screwed.

Faced with a lack of time, an overwhelming number of options, a desire to stay in control and a self-confessed lack of understanding of deeper financial matters, many business owners shy away from a full and proper investigation into how finance should work for them. Instead, they prefer to wait until someone else suggests an approach, or a significant event forces their hand.

The conversation highlighted a need for business owners to become more curious: more curious about the full range of finance options; more curious about how each option really works; more curious about the process of obtaining and managing finance; more curious about the risks and benefits of each option; and more curious about the success and failures of others who have taken a well-trodden path.

Perhaps having satisfied these curiosities, business owners can do what they do best – “trust their gut”. But the most common piece of advice was “don’t wait until you need the money before you act”.

Multiple levels of why?

The importance of purpose, in each of the themes we explore, is striking but not surprising. If you are looking for long-term success, it is a fundamental touchstone. Yet the ability of business owners to develop clarity of purpose is often hampered by the maelstrom of activity and thoughts that come with running a business.

Those who find the most appropriate of financing arrangements take the time to understand and answer the question “why?” – at multiple levels.

• Why do I really need finance?
• Why has the need for finance arisen now?
• Why are the people offering me finance the right people?
• Why must the business have a long-term future and how does the finance enable it?
• Why does the business really exist?

When you explore the answers to the first question, it becomes clear that most business owners talk about the need for working capital finance. In asking for this type of finance, one might easily accuse the business owner of thinking “I’m lazy. I can’t be bothered to manage my business properly. I don’t want to collect my debts on time. I can’t face the hassle of having conversations with my suppliers and my customers to ensure better terms.” However, business owners are certainly not lazy. There is a more fundamental issue at play.

The majority of business owners have not had the time to explore the issue at a much deeper and longer-term level. They lurch from one short-term solution to the next quick fix. There is a striking need to be clear on the purpose and long-term vision for the business, along with a strategy for delivering these.

When these things are clear, conversations about finance begin to explore growth and reducing working capital requirements simply become a good thing for business.

Are you sure you are sure?

On the surface, this seems to simply repeat the ostrich effect and the multiple levels of why. However, there is a subtle and distinct difference – absolute confidence.

A confidence that is partially derived from a real belief that it is the right thing to do for the long-term success of the business (the answers to multiple whys) and a deep understanding of the full range of finance options (obtained through curiosity). But, the main source of confidence comes from a personal belief that it can and will work – whatever it takes. Until a business owner has this confidence and belief, they will never find the right source of finance for the business.

Investors are relentless in their ability to sniff out risk. When they make an investment in an owner-managed business, they appear to attribute more than 50% of the investment decision in their belief in the business owner themselves. They have to trust this person, the information that the business owner provides and the judgement that the business owner displays. If there is the slightest doubt, they will “sniff it out”. So you must be sure that finance is what you want:

• If you had the money, would you back yourself and your business? Then, why are you not putting it in yourself?
• Why should someone else back you and your business? Then, why are you not putting it in yourself?
• How will you mitigate the risks concerned? Then, why are you not putting it in yourself?

What personality does the money have?

Money might be an inanimate object but the people with it have a personality – yes, even the bankers. Understanding the personality (the motivation and the values) is a critical element of understanding the money. Does the personality fit your business and does your business fit the personality?

When you are planning to raise finance you need to consider the personality that you want with it. When raising finance you need to tailor the pitch according to the personality of the money. When you’ve raised the money you need to manage the personality to get the best from it.

Like establishing any long-term relationship, you have to “kiss a few frogs to find a prince” (or princess depending on your preference); spend time courting to build mutual trust; make an appropriate romantic proposal; then keep investing in the relationship to ensure expectations and ambitions are continually aligned.

The only difference, but a major one, is that investors will want to guarantee their exit! And they will want to understand more about your exit too.

A curdling separation

What’s the difference between a professional investor, a serial entrepreneur and an ambitious business owner?

It sounds like a bad joke, but the answer has a massive impact on the punch line (your ability to realise the value that the initial investment was based upon). The answer relates to the degree of emotional connection that each person has with the business.

A professional investor may feel personally connected to the decision to invest but has the ability to separate themselves from the business itself. A serial entrepreneur has an emotional connection to the buzz of starting and running a business, but spreads the risk across a number of options. The ambitious business owner is “all in, boots ‘n all!”

In short, investors always want out, yet business owners often can’t see a way out.

When you bring in an investor, life is never the same. The boots are no longer just your boots. Whether you like it or not, you become accountable to your investors. Your role is different. The expectations are different. Things are just different. You’ll be forced to think about your exit. You’ll be required to make the business less dependent upon you.

Rail against it and disaster looms. Work with it and you can put in place the foundations for a long-standing business. However, the process of helping a business owner to separate their personal identity and role from the business is a difficult and challenging one. Bringing in external finance accelerates the process but doesn’t always make it easier or more effective.

If you genuinely want to build a business for the future that is less reliant upon you, bringing in external finance can be a good stepping stone. If you are looking for something to help fund your lifestyle, take out a personal loan!

In summary, having (re)explored this theme, and in light of the conversations that we have had, here are the questions we ask you to consider:

• What don’t you know about the full range of finance options available?
• How will external finance achieve your long-term goals better than going it alone?
• What future heritage do you wish to ensure?
• What are you willing to give up in order to get what you want?
• What added value do you want with the money?
• What do you really need the money for and how much do you really need?
• How do you plan to pay it back? Over what time frame?
• How do you plan to exit yourself?

The outputs from the meeting are attached (121204 Compass meeting #9 outputs).

Financing the growth of your business

At, and around, our next Compass meeting on 29 November 2012, we are exploring and developing answers to the following question:

How do you finance the growth of your business, whilst maintaining a sense of self-determination?

We are inviting you to participate in the discussion and share in the learning.

Why this question? Well, in our discussions and work with ambitious business owners over the years, there is always a point that is reached where you start to think “do we carry on or, push on”? Pushing on frequently needs some form of investment and adopting new approaches. So in the consideration of this question, we hope to explore:

• What can ambitious business owners learn from others who are on or have been through the journey?
• What insights can be gained from those who have helped find or provide the finance?

And in thinking about the stories we have heard, the experiences we have gained, together, how might we answer the following important questions?

• How can you increase efficiency within your business, thereby lowering or removing your financing requirements?
• How much do you need and what do you need it for?
• What are your full range of options for finding this finance?
• Is there a way to develop a pro-active and fruitful relationship with a bank? (a topic in it’s own right!)
• What do you need to consider when exploring external investors, whether they be a individual or a private equity/venture capital firm?
• What role does crowd funding play now and in the future?
• How might employee ownership help achieve your goals?
• What about floating your business?
• What other options might exist?
• How do you stay in control of your own destiny, whichever route you choose?

We look forward to the individual conversations, the on-line discussions and the Compass meeting that will form part of the research and we look forward to sharing with you the themes that develop from the exploration.

Attracting and retaining talent

We have been exploring the following key question:

How does an ambitious, growing SME attract and retain talent?

Why this question? Well, during our exploration of earlier themes, we asked those who have achieved their ambitions and grown their businesses “what would you do differently?” the overwhelming response was “find and employ better people sooner that I did”.

This is simple to say but hard to do and it’s taken a long time to summarise the themes of our conversations.

When do you know you need to recruit? How do you find those trusted people? How do you delegate to them? What do you do when you have delegated the work? And, when you have found a good ‘un, how do you keep hold of them?

Our exploration and conversations have helped to identify the following key learning points:

On attracting talent

• It’s ok to be fallible and mortal
• Understand your business and you understand your talent requirement
• A great story attracts great talent
• It is closer than you think
• Take your time and focus on building trust

On retaining talent

• Pay them just enough to remove it as a distraction
• Invest your time to get people up to speed
• Let go of the baton at the right time
• Develop a purposeful mind-set from within
• Set them free and praise the right behaviours
• Share the successes with them
• Work with them to improve the story

In terms of attracting talent the first point identifies the need for ambitious business owners to “let go”, easy to say, perhaps harder to do. Less than 1% of the population are business owners and your drive, passion, determination and work ethic have allowed you to create something from very little or essentially, nothing. You’ve had to do it by yourself, often with no help so letting go can be a real challenge.

However, to achieve your ambition it is vital that you find a way to do this. What got you here today, will not get you to where you want to get to tomorrow. You must recognise that there are people who can do some things better than you. And, even if you are awesome, you will not live for ever – so you had better start looking for people to take on your responsibilities and to help you to grow your business today. In doing so, make sure you take the time to understand your business, its needs, challenges and opportunities. This is the first step to identifying what talent you actually need. If you know what you are looking for, you stand a much better chance of finding it!

What brings great people towards you? A great story – a story told with real passion and purpose that engages and inspires the right talent. A start-up business can attract high potential, high flyers for a fraction of the fee because of the potential that it provides to them. You don’t have to be a start-up to have a great story, but you do need a great story to attract the right talent. People really are looking for more than just a great salary; they want to be part of something great, something that in terms of purpose, values and vision they can feel proud of being a part of.

Most people told stories of how they had known a key recruit before the appointment was made. For some, it was a supplier, a customer or a competitor. For others, it was someone who had given them great service in Debenhams. Occasionally, it was via an introduction from someone who understood the business and the business owner – at times this was a recruitment consultant. But the overwhelming insight is that those who are most accomplished at attracting talent are always on the look-out. They don’t wait for a position to become available before they start looking. They also understood that growing and nurturing talent from within can be the very best way to develop the future of the business.

The common theme within these stories is that the talent had already been attracted to the business and, at the same time, the business owner was able to develop a better sense of the person’s attitude, values, passion and beliefs – the key ingredients to selecting the right person. This ensured that there was mutual trust – vital for any relationship but especially so for the ambitious business owner. Taking time to build and explore this trust before making an appointment increases the chances of success. As an example, we know one ambitious business owner who takes final interview candidates down to the pub to mix with the team. It’s the team who have the final say in the matter!

So, if you are sat there reading this wondering how you attract talent to your business, please consider these questions first:

• What talent will your business need in 10 years’ time?
• What talent do you need in the business to free you up so that you can do what only you can do?
• Who do you know already who might be the right fit?
• How engaging and inspiring is your story to prospective talent?
• What have you done to tell your story to enough people and to let them know that you are on the lookout for talent?
• What have you done to build two-way trust with your potential new addition to the team?

Of course, once you have the right person in place doing a fantastic job, you must ensure they stay – and stay productive, motivated and, generally, happy! On the matter of retaining talent, much of what we discovered and discussed was, in line with Daniel Pink’s brilliant RSA video Drive (click here for video).

Pay needs to be good enough to remove money as a distraction, but it is far more important that your people are invested in and fully supported so that they can deliver. They need to be really clear about what’s expected of them, something you need to know to measure performance and they need to be able to understand real achievement and consequently feel pride and satisfaction.

But it is not just about goal setting, “letting go of the baton”, handing over to people and giving them autonomy and responsibility needs to be done when both they, and you, are ready. Just chucking them the baton and hoping they catch it and run with it doesn’t help. Without the investing your time to train and develop them you’re essentially covering it in butter first! Perhaps the hardest element of the handover is the relationships and specific knowledge required for the person to be successful. You will have spent years developing these, so you now need to invest some time in passing them on. For example, if you are bringing in a sales director, expect to work with them closely for the first 6 – 12 months to help set them up for success.

When your people are in place, secure in what they are doing and working to their targets and role specification that’s not only great but also something of a beginning. They need to help develop the right mind-set for the organisation, share in the success, be recognised for their efforts, be listened to for their ideas, be free to create, innovate and develop. They are now part of the story, so let them start to shape and evolve it, take pleasure in its creation and together celebrate your on-going achievements.

So, if you have your talent in place, consider:

• To what extent are you paying them ‘just enough’?
• What attention have you placed on motivating factors beyond finances?
• How clear and understood are roles, targets and factors of success?
• What are you doing, personally, to invest in their success?
• What freedom do people have to experiment, learn, make acceptable mistakes and grow with the business?
• How will you praise and reward the behaviours and results you want?
• How are you sharing success throughout the business?
• Where are you doing, collectively, to improve story?

If you would like to discuss more about this theme, other aspects of your business or simply find out more about what we do please visit our website or contact adamcampbell@telospartners.com

Creating sustainable success for ambitious business owners

At our first Beds & Herts Compass Meeting, delivered in collaboration with Thomas Cox & Co., we explored some of the sustainable success themes for ambitious business owners (click on each bullet for more information):

• starting the journey
• making it happen
• maintaining a driving ambition
• learning to lead
• building resilience to crisis
• hold yourself to account
• achieving a successful exit

The themes resonated with everyone in the room and in exploring them further the following questions came to mind:

How do I become a master of time and delegate more? But:

• who is better than me?
• how do I get rid of the bad apples?
• I must expect people to disappear, so how do I spot the talent and develop it?
• am I making sure that I am continually delegating, reviewing and letting go?
• what about trust?

How do I create the future, take charge of my destiny and create opportunity and choice? When:

• I’m not sure where I want to take things next?
• are the tough times going to change? and, are they tough for all?
• our mind-set is focused on survival only?
• we’ve increased efficiency, how do I get back on a strategic path to maximise value?

How do we continually remind ourselves why we are doing this?

• is money the big driver, or is it more about purpose?
• to build something with lasting value, or simply to sell out?
• to create something different, with impact?
• what are my personal goals in all of this?
• how do we start with the why? (Simon Sinek video)

These themes reminded us of the functions of leadership that we use when working with our clients. We use it to help them to develop and implement their strategic plans. The model is referred to within the Entrepreneur as leader theme. So perhaps, this is all about:

• Managing the present
• Nurturing identity, and
• Creating the future

Easy to say, harder to do, but I guess that’s why we are asked to do the work that we do!

Getting off to a successful start

Over the years, we (and, we are sure, you) have had hundreds of conversations with people that go something like this …

“I’m thinking of starting a business, I just need an idea”

“I’ve always dreamed of having my own health club”

“I’ve got this great product, I just need to work out how to sell it”

During these conversations you soon begin to feel that the conversation will never amount to anything more than just a conversation. Then, very occasionally someone comes along and says …

“I’ve been thinking about the idea of …… can I share it with you and see what you think”

Something draws you into the exploration of how it might work or how it might be better. Through the conversation you shape their thinking and before you realise it they are moving on to what they are going to do next to make something happen. You realise that it is these conversations that amount to something. So, what is it that distinguishes those who actually start businesses from those who do not.

If you have hundreds of conversations you start to realise that whilst curiosity killed the cat it made the ambitious business owner.

All the people that have gone on to set up a business had a belief that there was a better way to do something and the only way to get it was to do it themselves. In doing so they were starting with a question not an answer, a problem not a solution, a customer need not a product, a real issue not a dream.

The dreamers simply became disappointed the moment reality came in to view.

So if you  are thinking of starting a business here are some questions that you might want to answer.

1. What problem are you really trying to solve?
2. For who are you trying to solve it?
3. How can you solve it in a way that is better than what is already out there?
4. Who do you need to speak to next in order to develop the right question?