How To Boss It Like With Claire Davenport – Kitty Knowles

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There are a handful of business leaders and industry figures who are changing the world.

We’ve previously asked CEOs, founders and thought leaders like Alex Klein (the cofounder of Kano), Clare Gilmartin (CEO at Trainline), and Justin Rosenstein (cofounder of Asana), how they get so much done in an impossibly short amount of time.

Today we find out “How To Boss It Like” Claire Davenport, CEO at HelloFresh UK, the meal-kit company based in Berlin.

Davenport cut her teeth working in banking at Goldman Sachs and JPMorganChase, before going on to work for digital leaders like Skype, FutureLearn and VoucherCodes.

Today, when she’s not heading up HelloFresh’s British division, she’s sharing her knowledge at pivotal events like this week’s Etail Europe.

What time do you get up, and what part of your morning routine sets you up for the day?

Most mornings I get up at 7 a.m. and have breakfast with my two daughters before cycling down the canal from my house to Oxford train station. I pick a quiet carriage so I can catch up on emails and news and prepare for the day on my commute into London.

Two mornings a week I have breakfast blocked for mentoring or networking. Doing everything I can to level the playing field for people from different backgrounds—to realize their full potential in their career or with their startup—is very important to me. I try to help with introductions or advice or just giving a confidence boost where needed.

Saturdays and Sundays I run on Port Meadow in Oxford with my running buddy, Alison. We run 4-5 miles to stay fit and catch up on the week.

What smartphone do you have?

iPhone 7 with 128 GB capacity (lots of photos and videos). Normal black with a HelloFresh cover.

What apps or methods do you use to be more productive?

I have tried various productivity apps over time but find having a system I stick to with my emails and trusted Moleskine notebook works best for me.

Sometimes I like to be offline or away from my phone. Okay, that’s not true.

But sometimes I happen to be offline (train or tube or once I have gone to bed or when I am trying to set a good example for my daughters) and I still have ideas and thoughts I need to get down, so a paper notebook is essential.

How many people, outside of family, do you meet in a day?

Every day is slightly different. On any given day, there are normally around 100-200 people working at our Shoreditch office or around 200 at our distribution center in Oxfordshire.

Both workspaces are sociable places, and I sit in a different seat most days so that I can really understand what all the teams are up to. I like the variety of sitting in our customer-care area and listening and speaking to customers on the phone one day to spending time with our marketing team the following day.

We keep meetings short at HelloFresh so I have in-depth conversations with 20 people a day roughly. I regularly meet customers as we like to host events at our office to learn more about their experience with HelloFresh.

A couple of evenings a week, I like to meet up with friends or people in my network.

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What book have you read, either recently or in the past, that has inspired you?

The Emotionally Intelligent Manager by David Caruso and Peter Salovey is a book I return again and again. It really changed my thinking on EQ and people management. I’ve bought copies for our offices because I think it’s a book everyone can benefit from.

I also like Act Like A Leader, Think Like A Leader by Herminia Ibarra, which is great for people thinking about their leadership style and is lovely and practical.

What advice would you give for people who are eager to get into your industry?

Go for it. It’s better to take an opportunity and get the experience it gives you rather than procrastinating and losing time. You can always pivot when you see what you enjoy about the opportunity.

When do you work until? Are you still sending emails in the night? Or do you have a wind-down routine?

Most evenings when I don’t have events, we eat a HelloFresh meal together as a family around 8 p.m.

My husband or daughters often start cooking while I am commuting home—I am guilty of emailing or reading news or Facebooking until late, but then I listen to audiobooks to wind down before I fall asleep.

I have a history of waking up with an idea at 3:30 a.m. and, at one time, I had quite a reputation for the 4 a.m. email among my colleagues.

After a while, I learned how scary it is for my team to receive a 4 a.m. email from me, and now I just save it as a draft and, if it still seems as important in the morning (about 10% of the time), I send it then instead.

If you could ask your idol one question, who would it be, and what would you ask?

I’d ask Barack Obama for his best piece of advice on leadership and his awesome public speaking.

What do you think your industry will look like in 10 years? 

I think more and more people will rely on meal kits in the future as it’s just such a convenient way to cook and enjoy nutritious food. Personalized nutrition will become a bigger trend as consumers are able to access data and food that meets their specific needs. And delivery will continue to develop, and we’re likely to see more and more automation in this area.

I believe my grandchildren will be bemused by the idea of owning a car or going to a supermarket to shop for a week’s meals in advance!

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What Employers And Employees Need To Know Today About Raises – Kathy Caprino

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During my 18-year corporate career in marketing, research and product management, I felt that raises were an important way that the leadership at my organizations demonstrated their recognition for what I contributed in my role and in the enterprise as a whole. Interestingly, the conversations that took place leading up to the actual raise or promotion were at least as impactful as the raise itself.

If I found that my manager communicated effectively both praise and constructive, thoughtful feedback and indicated an understanding of how I personally contributed to the team, those interchanges helped build trust, loyalty and commitment, often as much (if not more) than the additional money in my paycheck. But if the conversations around raises and promotions weren’t clear, honest and supportive, inevitably I’d feel less positive and engaged in my role.

Turns out, this is an extremely common experience. In working now as a career and executive coach with professionals around the world, I’ve heard from thousands of people about their deep challenges in trying to figure out how to ask for a raise, the best way to build a case for it, and how to deal with their disillusionment when they didn’t receive the raise they believed they deserved.

To learn more about how employers and employees should approach handling raises, I was excited to catch up this week with Lydia Frank, who is vice president of content strategy for PayScale, the leading compensation data and software provider, helping employees and employers understand market pay and have more open and mutually beneficial conversations about compensation.

The recent PayScale Raise Anatomy study examines which workers are asking for raises, which workers are receiving them, what is preventing certain workers from asking and how the raise conversation – whether the outcome is positive or negative – can impact employee engagement and retention.

Here’s what Frank shares:

Kathy Caprino: Why did PayScale feel it was important do this research into pay raises now?

Lydia Frank: We’re in an extremely tight job market currently in the U.S. with unemployment under 4%, and oddly, wages have not grown to the degree that we’ve seen historically when similar positive conditions have been in place in terms of the economy and labor market.

And, while 59% of employers are saying that talent retention is a major concern, according to the results of PayScale’s most recent Compensation Best Practices survey, most organizations are not addressing that concern with higher base pay increases. This places more burden on individual employees to proactively manage their own earning potential by asking for raises and making a solid business case for more than the standard 3%.

We also knew from past studies that a good portion of employees don’t proactively ask for raises. We know that wage gaps do exist for women and people of color. So, we wanted to really understand the dynamics at play and provide guidance for both employees and employers to ensure that every worker has equal opportunity to make a fair wage for the work they’re doing.

Caprino: What were the most interesting findings? Were these surprising to you?

Frank: Only 37% of workers have ever asked for a raise from their current employer, which is lower than I’d expect with it being an employee’s job market right now, but of those who did ask, 70% received some type of raise, even if it wasn’t for as much as they requested. It’s a good reminder for employees that the outcome of a raise conversation has a high likelihood of being favorable for you.

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However, not every employee has the same chance for that positive outcome. We saw no difference by gender or race in terms of who says they have asked their current employer for a raise. We did find, though, that people of color are far less likely to receive a raise when they ask for one than their white male peers (women of color are 19% less likely and men of color are 25% less likely).

There was weak evidence showing that white women may be receiving raises less often, but the findings were not statistically significant. We controlled for job title, job level, experience, geography, industry, etc. so we could really isolate the effect that the gender and race of the employee might be having on raise decisions. This runs counter to a common narrative, especially in the tech industry, around the workplace being a meritocracy. This may not feel like a surprising finding to many, but there’s a difference between suspecting something is true and knowing it for sure.

Another key finding in this report is that how the raise conversation unfolds can have a critical impact on employee engagement and retention. It really comes down to how much employees trust the organization and their managers. If an employee is denied a raise, 33% are provided no rationale for the denial.

Of those who do receive some type of rationale, only 23% of employees believe it. If they don’t believe it, their satisfaction with the employer takes a serious hit, and they are far more likely to be seeking a new job in the next six months. What was interesting, however, is that when employees did believe the rationale when denied a raise, they had similar levels of employer satisfaction as employees who received a raise.

They were also much more likely to stay with the organization than employees who received no rationale or didn’t believe the one they were given. For employers, the takeaway here is that you don’t necessarily have to grant every raise request to retain your best employees, but you do have to ensure they understand how compensation decisions are made and feel fairly treated. Treating employees fairly isn’t necessarily the same as them feeling fairly treated, so communication strategy around pay is important to get right as well.

Caprino: Why do you think people of color are more often denied a raise when they ask than white men?

Frank: With more than 160,000 survey respondents for this most recent PayScale study, we can say with certainty that there is clear bias at work in pay raise decisions in the workplace – whether unconscious or overt. Unconscious bias has been something employers have been trying to combat for a while, from hiring practices to organizational culture. I think this is just more evidence that it is difficult to eradicate bias when people are involved. We all have biases, whether we’re aware of them or not.

Caprino: I noticed that women cite being uncomfortable negotiating as a reason for not requesting a raise far more often than men. What can be done to ensure women feel more comfortable initiating pay negotiations?

Frank: Yes, 26% of women cite being uncomfortable negotiating as their reason for not asking for a raise vs. 17% of men, while men are slightly more likely than women to say they didn’t ask because they received a raise before needing to or they’ve always been happy with their compensation.

There are systemic issues at work that chip away at women’s confidence levels. For example, based on research from linguist and Textio founder and CEO Kieran Snyder, not only do women receive more criticism in their performance reviews, it’s less constructive and more personal. In Snyder’s analysis, she found that character critiques – words like “abrasive” – showed up in 71 of the 94 critical reviews received by women and was completely absent from reviews received by men.

There’s also research on unconscious bias showing that women pay a social cost in the workplace for initiating negotiations. Essentially, we as a society are conditioned to have different expectations of how women and men behave, and when our expectations are not met, it creates cognitive dissonance. We don’t like it. In many ways, I think the fact that some women feel uncomfortable initiating negotiations is a learned behavior. If you do it and don’t get a positive outcome, you’re more hesitant to try again. Unfortunately, women are more likely to be met with resistance.

Alternatively, there’s newer research from Boston Consulting Group showing that ambition levels in women are impacted significantly by how progressive their workplace is in terms of gender equity.

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The key is to fix the systemic issues. Employers can ensure they’re digging into workforce analytics to understand the obstacles to advancement women are facing within their organization, whether that applies to pay or promotion. They can also proactively address underrepresentation of women in leadership. Take a look at your board of directors, your executive team and your most senior managers. Are you demonstrating that women are valued members of the organization?

Caprino: What can employers do to ensure every employee is given equitable consideration when requesting a raise?

Frank: When compensation decisions are data driven and there is clarity around what’s required to advance within your pay range, there is less opportunity for pay inequities to emerge. I’d encourage employers to think about setting up a process for how all raise requests are treated. If there are multiple checkpoints and transparency around the process, one person’s bias is less likely to impact the final outcome of an employee’s raise request.

Caprino: Asking for a raise can be scary for most employees. What guidance do you have for anyone thinking about asking for one?

Frank: Again, I’d point to the data point that of those who ask, 70% receive some kind of raise, with 39% getting exactly what they asked for and another 31% receiving a smaller raise than requested.

The key for employees is to be data driven in your approach to the raise conversation as well. Ensure you’ve done your homework and know what the market is paying for roles like yours. PayScale has a free employee compensation survey, for example, at www.payscale.com, where you can receive a precise pay range that takes your background and skills, the talent market you’re competing in and the job role into account.

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What to do When Your Customers Ask For a Discount & Why You Shouldn’t Give Them – Steli Efti

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Everybody wants a deal. Especially your prospects. And while you probably think giving 10% or 20% off isn’t a big deal, giving discounts just to win business can cost you more than money. It can kill your company.

Sure, you probably think I’m being dramatic. You’ve been giving discounts for ages and your revenue and customers are still growing. Right?

The problem is, when your company culture is a discount culture you might win a few battles, but you’ve already lost the war.

SaaS companies today don’t win on being cheap. They win on being valuable.

Let’s start off with the obvious: The SaaS landscape today is more crowded and competitive than ever. You know that when a prospect is talking to you, they’re also talking to your competition. And somewhere in the negotiation, that prospect is going to ask you for a discount.

And so you think “If this customer is willing to offer their solution at that price, I can too, or even a little lower. Just to win the business.” The problem is, once you start down this path, it’s almost impossible to get off it.

You’ve positioned your company as being the cheapest solution, rather than the most valuable.

Want to get better at handling discount requests and other objections? Get our free objection management template!

When you offer discounts, that’s all people think about your company. We’ve seen this exact situation happen in the consumer goods space. The market gets so crowded and undifferentiated that customers will only pick either the cheapest option or the brand they know and trust.

In SaaS, the only way to win on price is to be free. And you can’t build a company like that.

Instead, I truly believe the winning SaaS companies of today and tomorrow will win on value and they’ll win on brand. And you can’t have either if you’re just trying to be the cheapest.

Discount culture creates a weak sales force (and a weak brand)

When you give discounts, you’re setting the wrong example for your team. Instead of going out and selling on your solution’s value and your brand, your salespeople will become transactional. They’ll just give the prospect information and then offer them whatever they want.

Worse than that, your sales team will start offering discounts without even being asked! I’ve seen this happen so many times at SaaS companies and it drives me crazy.

A sales rep is talking to a prospect, they qualify them, there’s a match, they can really deliver value. And when the prospect asks about pricing, the sales rep preemptively goes: “Well, this is our price. But I would give you a good discount.”

Wait a minute. Nobody asked about a discount!

This is a weak sales culture. Your sales reps will always use the easiest tools available, and when they see discounts being given they’ll start to abuse them. They’ll start to think: “Everybody thinks everything is too expensive. Every buyer wants the cheapest, so before they ask, let me just tell them I’m going to give them a discount.”

All of a sudden one of the most vocal voices of your brand—your salespeople—are weak. They’re cheap. And that’s going to reflect on your brand at the end of the day.

You can’t scale because you don’t know what a customer’s actually worth

The other huge issue with discounts is that they make your business completely unpredictable and unscalable.

Instead of a Basic, Pro, and Business plan where you know how much revenue you make for each, you’ve got Customer A with a 12% discount, Customer B with 14%, and Customer C with 2 free user accounts. Good luck trying to build models or forecast your future revenue or even figure out what’s going on with churn.

Those discounts are going to undermine your entire financial structure because you don’t know what a customer’s actually worth. If they remove or add seats, you have no idea what that means in true revenue or churn.

It’s going to cause problems for your support team, your success team, and your marketing team. Even your product people are going to get angry because they’ll have to build all these backend solutions to keep track of billing on all your different discount cases.

You’ll piss off your customers when they find out you’re charging them more than others

Let’s say a slightly larger company aggressively negotiates a big discount. A few months later, a smaller company comes are your sales rep says “this is the best discount we can give. I can’t go any lower.” I guarantee at some point your customers are going to talk to each other. And when they do, the second customer is going to be pissed.

And rightfully so. You lied to them. You betrayed them. And they have every right to get loud and aggressive and drag your brand through the dirt and tell everyone they know about how terrible you are.

This doesn’t mean you can’t give discounts. You just have to do them right.

If you’re just giving our discounts willy nilly, you’re going to get burned. You’re going to destroy your brand, piss off your customers, and create more headaches than that little bit of extra business is worth.

But this doesn’t mean you can’t give out any discounts. You just have to make sure when you do, you do these two things.

First, make sure you’re getting something in return

The problem with discounts is they create abusive customer relationships. Your customer comes in, demands a bunch of things, and you give it to them just for a bit of business. Instead, you need to ask for something in return. This creates a healthy, reciprocal relationship.

In SaaS, that means asking for:

    1. Prepayment: When a customer agrees to sign a long-term contract or prepays for an entire year, you can absolutely give them a discount. You get guaranteed income and predictable cashflow and they get a break on the monthly price. We offer customers of our inside sales CRM a 10% discount if they pay annually instead of monthly.
    2. Case Studies: Trading a bit of a discount for marketing materials is also a good deal. Feel free to offer a discount if a customer is willing to spend a few hours on the phone with your sales team to make a great case study and do some co-promotion.
    3. Referrals and reviews: You can also offer discounts for connections and leads. Ask for a positive review on a specific platform or give discounts if they connect you with other people in the industry who could be strong prospects.

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Second, make sure your discounts are standardized

If you are giving out discounts, you can’t have any flexibility or offer customization. Your sales reps can’t just give them out however they want. You need to have set, predetermined discounts for each of the deals you’re offering.

For example, you could offer 10% for a case study, 15% for prepayment, and 20% for a referral that leads to a new customer. That’s it. There’s no 12% or free seats on offer.

But Steli, what do I do if a customer says they’re not going to buy if I don’t give them a bigger discount than I want to?

There’s always going to be someone who wants more. But you have to draw a line in the sand.

If they’re not willing to work with you, they’re most likely not your ideal customer. At Close.io, we’ve told thousands of businesses “No” when they asked for bigger discounts.

And you know what’s funny? They all get angry. They all scream and yell and tell you there’s no way in Hell they’re going to buy from you at that price. But in my experience, about 50% of the time, they become customers anyways.

It’s just the way they negotiate. They’re trying to get the best deal for their business and you have to respect that. If you have a strong brand and can show the value you provide, there’s a very good chance they’ll choose you anyways.

Of course, there’s one big exception to all of this: Enterprise

As you can tell, I’m sick of seeing discount culture in SaaS companies. But there is one big exception.

If you’re selling to enterprise clients, the way you handle discounts is going to be completely different. You can’t just give them a price and say “this is what it is,” because that’s just not how they work.

Most enterprise companies have a procurement department whose entire job is to get discounts. They have a discount quota to meet, and if you won’t play ball, they’re not even going to consider you.

That’s just the way their organization is built and you’re going to have to go with it if those are your ideal customers.

If you’re trying to win with discounts, you’ve already lost

If you don’t value your solution, your customers won’t either.

So, if you feel like you absolutely have to offer some sort of discount, make sure:

  1. They’re standardized (and don’t budge!)
  2. You’re getting something equally as valuable in return

Sell your prospects on value first and make the discount an added bonus. Not only will this give you a stronger brand, but it will set you down the right path for real, sustainable growth.

If everyone who reads our articles and likes it, helps fund it, our future would be much more secure by your donations – Thank you.

 

13 Self-Defeating Mantras Successful Entrepreneurs MUST – Larry Kim

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Stop sabotaging your own best efforts with negative self-talk. It takes almost no time to find articles and stories that will tell you about the good habits or motivational mantras of people who have achieved success in their chosen field.

But, as interesting and inspirational as those articles can be, they only tell half of the story. Many people will read them and instead of being inspired, come away with a dejected and defeated feeling.

“I’ll never be like those successful people,” they say to themselves. “They’re way more committed than I am.”

That’s negative self-talk. We’re all guilty of it from time to time.

There are at least four different types of negative self-talk: filtering, personalizing, catastrophizing and polarizing.

Habits of Unsuccessful People

Here’s a sample of some of the things we may say to ourselves, created by Visme.

1. “This person is always doing this to me…”

This is two forms of negative self-talk in one sentence. It’s filtering because the speaker has filtered out anything positive about their situation and magnified only the negative. And it’s also polarizing, in that the person sees only bad or good (bad, in this case). There’s no middle ground in this sentence.

2. “Great, now my whole day is ruined…”

Catastrophizing is taking one negative situation and exaggerating its effects on the big picture. It could be something as insignificant as getting your coffee order wrong, and yet you’ll let it bring you down to the point where the expression becomes a self-fulfilling prophecy.

3. “She/he does it just to upset me…”

This is personalizing, and it means that you’re making something all about yourself (or another specific person) even when it’s really not the case. Remember, most people you encounter really don’t have the time or the desire to go out of their way to target you and make your day miserable.

4. “I totally suck at this…”

Sure, you may run into difficulty with something, but you do yourself no favors when you characterize your situation as something that you “totally suck” at, with no allowance for the possibility that you truly aren’t as bad as you tell yourself.

5. “I’m always in trouble…”

No one is ever “always” in trouble, but thinking that means you will act like it,and acting like it may actually mark you as the type of trouble that no one wants to be around. You can change that!

6. “There’s no way this will work…”

Again, a comment like this leaves room only for negativity. And, why bother to do something if you’re already convinced that it’s doomed to failure? Don’t fall into that mind trap. Whatever it is, give it a try. The outcome may pleasantly surprise you.

7. “No one bothers to tell me anything…”

When you put yourself in the middle of whatever you think is wrong, it becomes easy to identify only with negative situations. Worse, you’re also minimizing your own importance to what’s going on around you. Instead, look for ways to be part of the solution.

8. “It’s impossible…”

We’ve all used this one, right? But few things truly are impossible, unless you convince yourself otherwise, which is exactly what this remark is designed to do. Think instead of why something is or should be not only possible, but probable.

9. “I’ll never be good at anything…”

It’s likely that most of us have been here at one time or another. There’s no allowance for the potential good that can happen. The truth is, we’re all good at something, and many things. Negative self-talk keeps us from focusing on those things. Don’t let it.

10. “They don’t appreciate anything I do…”

The thing you do might well be appreciated more than you know, but for whatever reason, you’re not seeing or hearing it. Rather than convincing yourself that your efforts are for naught, you could ask someone for feedback.They’ll notice and, hopefully, appreciate your initiative.

11. “Other people can do this… I’m such a loser…”

‘If you’re struggling with a particular task, you probably have different strengths that you could focus on instead. And you should consider that other people may not find things as easy as you think. If you find yourself in the same boat with someone else, you could work together to figure out how to help each other succeed.

12. “No one is ever going to want to hire me again…”

A task or a job may not have worked out the way you wanted it to, but it doesn’t have to mean the end of the world. You can take a step back, focus on the things you do well, and start again. No one ever said the road to success was a straight line!

13. “I’m completely alone and no one is ever there for me…”

It may seem like this at times, but you don’t want this to become another self-fulfilling prophecy. A poor attitude really does seem to succeed in keeping us walled off from other people, particularly people who could help us to find a way out of our rut. If you want a friend, you have to be a friend. Reach out. Ask for help if you need it.

Negative self-talk gets in our way, gets into our heads, and distracts us from our goals. It convinces us that there’s no point in trying, because we’ll probably just fail anyway. We’ve all experienced those feelings.

But we forget that failure is an important element of success.

‘It teaches us what works and, equally important, what doesn’t work. It teaches us that nothing worth having will ever come easily.

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If everyone who reads our articles and likes it, helps fund it, our future would be much more secure by your donations – Thank you.

Here’s How to Stop Overspending When Hanging Out With Friends – Joshua Becker

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Nearly 40% of millennials overspend to keep up with friends. And two-thirds of them feel buyer’s remorse after spending more than they had planned to on a social situation.

Of course, this temptation to overspend when hanging out with friends is not unique to any one generation.

Speaking of overspending to keep up with friends, Stephanie M. Tully and Eesha Sharma, researchers and co-authors of Context-Dependent Drivers of Discretionary Debt Decisions: Explaining Willingness to Borrow for Experiential Purchasessaid, “We actually don’t see any differences across age in our data. It seems to be just as pronounced among older generations as younger generations.”

Interestingly enough, and vitally important to point out, this is also not a socioeconomic phenomenon. You cannot outearn this temptation.

According to Robert Frank in his 2007 book, Richistan, “20 percent of households with between $1 million and $10 million in assets in 2004 spent all their income—or more—in a frantic race to keep up with their newfound friends: those with more money than them.”

 Apparently, regardless of generation and/or net income, the temptation to overspend in an effort to keep up with our friends and their spending habits is common to all of us. No doubt, many of you have felt the same temptation in your own life.

How then, do we overcome this?

Nine Ways to Stop Overspending When Hanging Out With Friends

1. Set your budget. Or better yet, create a spending plan. Be specific on the amount of money you set aside for dining, experiences, and travel per month. Then, stick to it.

2. Keep in mind the big goals you have for your life. When creating your budget, remember that your budget is not restrictive. Just the opposite in fact, your budget is a roadmap to the life you desire: free from debt, financially focused on your values and most cherished pursuits.

3. Be honest with your friends. Surprisingly (or maybe not surprisingly), some of your friends feel the same way you do. According to the same survey cited above, 36% of respondents doubt they can keep up with their friends for another year without going into debt, but nearly 30% don’t feel comfortable being the one to say “no.” Break the trend in your friendship group by being the one to initiate the conversation.

4. Look for less expensive alternatives when out with friends. Of course, entirely changing your friends (or hoping to change your friends’ interests) is not the only option, nor is rejecting them altogether. The next time you are out, look for less expensive alternatives: rather than ordering an expensive meal on the menu, order something more reasonably priced; skip the snacks and drinks at your next movie; or order a cheaper drink at the club.

5. Cut costs elsewhere. If spending time with friends and having the financial margin to do so is important to you, look for other spending areas in your budget that can be cut: buy less clothing, don’t upgrade your phone, or pack your lunch for work. Minimalism is the intentional promotion of the things we most value by removing anything that distracts us from it. Applying minimalism in one area may free up more money to be spent with your friends.

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6. Be clear on your reasoning. When speaking openly and honestly with your friends, also speak in clear, reasoned terms. Share with them why you want to spend less. Is staying out of debt important to you? Are you working hard to pay off a student loan or build up an emergency savings fund? Maybe generosity is something you want to leave space for in your life? Be clear that your reasoning isn’t just “I don’t have enough money,” there is usually a deeper reason and motivation behind it.

7. Suggest less expensive ideas. Friends spend time together—this is true. But that doesn’t mean everything they do together needs to cost a lot of money. Sometimes it just takes someone to offer up some less expensive ideas: Frisbee in the park, an afternoon on the beach, a hike, or a Redbox rather than a theater.

8. If you lose them, it’s okay. I understand the fear that if you don’t keep spending the money to be with your friends, they might stop being your friends. And that may be the case. But ask yourself, if that’s true, isn’t it eventually going to happen anyway? Can you keep overspending and going into debt indefinitely just to be with them? Of course not. At some point, something will need to change—either how much money they spend or how much money you spend.  Besides, if you need to spend lots of money in order to impress your friends, you probably need new ones.

9. Remember, there will be other opportunities. One thing I know to be true of life, it goes on. Opportunities come and opportunities go. And sometimes bypassing an opportunity today means I can enjoy a different one tomorrow—when I’m in a better stage of life financially. Taking a step back from overspending to keep up with your friends doesn’t mean you’ll never be able to spend money with friends. Just the opposite. It’ll help put you in a more financially stable place, so you can do even more of it in the future.

Having friends doesn’t mean you have to go broke. You can have both friends and money. It just might take some intentional decisions to get there.

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5 Ways to Stop Wasting Valuable Time – Sheri Coburn

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If I had a penny for every time I have heard “I don’t have time”, “If only I had the time” or “I’ll have time when I’m dead,” I would be rich. This seeming lack of time has become the new politics: we are invested in complaining about it, yet feel powerless to change it. Our culture of martyrdom, perfectionism, helicopter parenting and over-scheduling has stolen from us the one thing we can’t get back.

Time.

And not just any time – our most valuable time. Because as we all know, “Time stands still”, “Time drags on” and “Can’t go by fast enough” the entire weekend our in-laws are in town for a visit.

The reality is that we have plenty of time for plenty of things. But in order to tap into this promised land of abundance, we must first be aware, and then be willing to stop or at least spend a lot less time doing the unnecessary and the unfulfilling.

Stop Saying Yes When You Want to Say No

Do an honest assessment of how much time you spend doing things you don’t want to do. Are you motivated by guilt, a misplaced sense of obligation, or fear of judgement? If yes, your time would be better spent learning to set boundaries, determining who (if anyone) you really “owe time” to, and partaking in some self reflection. Doing these things will actually save you time in the long run and free up time immediately to do the things you want with the people you enjoy.

Stop Being Resentful

When you have to say yes, own your yes. You own your time, and only you can decide when to give it away and for what price. So stop spending time being angry and resentful at the people and things that you allow to steal time from you. This includes being mad at the friend, family member or boss who “has no respect for your time.”

Time is not taken; it is given. We all have to do things sometimes that we don’t want to do. But don’t waste time on anger. You said yes: do it and move on.

Stop Trying to Prove Your Value

Know the difference between what you “want” to do and what you “need” to do to feel valuable. The things we “want” to do, we choose to make us feel good, productive, honest and responsible. The things we “need” to do, we do in hopes other people will think we are good, productive, honest and responsible. “Want” is about us taking opportunities to feed our already existing sense of value. “Need” is about seeking the approval of others to feel valued.

A tremendous loss of time happens when we don’t know our own value. Instead we rely on an endless search for the right validation from the right people, a time-sucking search that will never end if our only sense of value comes from external factors.

Stop Depriving Yourself

Live life under a new rule: short term gain, long term gain. No, I don’t mean short term pain for long term gain, unless of course you find the idea of taking care of yourself painful.

In a culture of perfectionism, people have bought the idea that taking a rest, going for a massage, packing a picnic lunch, walking the dog, practicing meditation or taking a 20 minute shower is solely for the self indulgent; that somehow running a full marathon is the only version of “self care.” I am not dissing long distance running, I am just suggesting that not everything we do has to be hard, challenge us or be about reaching our “personal best”.

Make daily brief “indulgence-driven” investments in yourself. This kind of investment takes ownership of our relationship with time and divorces us from the idea that our relationship with time must be conflictual and punishing. Learning to relax and see time as a gift, and not something that always needs to be managed and goal-driven, means that we will not always be fighting against time or looking to buy more of it.

Stop Waiting for Time

Not only does time not wait for anyone, it also doesn’t coming looking for us.

Take a look at steps 1 through 4. Where are you giving away your precious time?

  1. Do you say yes, when you really want to say no?
  2. Do you harbour resentments that take up space in your brain and time in your life?
  3. Do you spend time on exhausting efforts to solicit the validation and approval of others?
  4. Do you fail to engage in activities that remind you time is a gift not a punishment?

Make some small changes.Remember, time is of the essence.

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Entrepreneurs: Remember That Who You Spend Time With Is Who You Become – Chris Myers

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This past weekend, I had the incredible pleasure of watching my best friend, Dr. Andrew Wolf, graduate from medical school. This was a tremendous accomplishment, made even more impressive by the fact that he managed to pick up four additional degrees in the process.

Andrew and his twin brother Eric have been my constant companions for the better part of twenty years. We grew up together, facing the same challenges and navigating many of the same opportunities. Throughout all of it, he was a constant positive influence and pushed me to be my very best.

While watching him graduate, I realized just how big of an impact he has had on my life and just how vital it is to surround yourself with people who both challenge and elevate you.

This, of course, is particularly important for entrepreneurs. The old maxim that “Whom you spend time with is whom you become” holds true in business just as it does in life. We often distinguish our business and personal lives, convincing ourselves that it is okay to be one way at the office and another at home.

The truth is that there is no such separation, and to think otherwise is pure folly.  Personal consistency is all we have, and therefore must surround ourselves with people we trust, respect, and admire in every aspect of our lives. Doing so will not only make you a better person but a better leader.

Find a tribe that raises you up

Life can be lonely for entrepreneurs or leaders of organizations, as there aren’t many direct peers they can lean on for support. Interactions with other CEOs tend to become ego contests, where everyone is desperate to prove their success and brilliance.

The result is not only off-putting, but it also poses an active threat to your soul as a leader. Early on in my role as the CEO of BodeTree, I went out of my way to connect with other startup CEOs in an attempt to develop a network that I could lean on when times got tough. Unfortunately, I failed to realize at the time that startup founders can be some of the most insecure and miserable people you’ll ever find.

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The tribe I found myself part of envied each other’s successes and continuously sought validation while tearing down those around them. I’m ashamed to admit it, but after a while I found myself adopting the same behaviors. I was becoming a person I did not want to be.It was only after coming to this realization that I began to distance myself from the group and instead found mentors and friends from different walks of life.
While they rarely had to deal with the exact issues I faced, they were still able to offer insight and value, and I was able to do the same for them. Most importantly, these were people whom I trusted, respected, and admired. My interactions with them made me better, not worse.I should have realized this earlier because of the friends I grew up with and the positive impact they had on my life, but I fell victim to the fallacy that there was a separation between my personal and public experiences. Fortunately, I was able to correct the situation before it got out of hand.

Remember that attitudes are contagious

We often forget that attitudes are contagious, particularly when it comes to business. If a leader surrounds themselves with bad influences, they run the risk of picking up bad behaviors. As leaders, the implications of this extend beyond just the personal; they spread throughout your entire organization.

I’ve been a CEO on paper for about eight years, but it has only been in the last three or so that I feel I’ve earned that title. Before that, I was a CEO in name only, flying by the seat of my pants and stumbling from one crisis to the next.

Early on, one of my most damaging mistakes was thinking that my team didn’t  pick up on my moods or pay attention to my attitude. I falsely believed that my emotions started and ended with me, when in reality they set the tone for the entire team.

When I was anxious, the team was concerned. When I was mad, frustrated, or aggressive, those sentiments flooded into the team as well, coloring their interactions with each other. It took me a few years, but I eventually realized that I had a higher responsibility as a leader.

I could no longer indulge in my mood swings or even share my feelings in the same way that someone else could. I had to modulate my responses and set the right tone for my organization at all times.

As usual, this was easier said than done. Despite what I’d like to believe, I’m no superman. I fall victim to the same temptations and challenges like anyone else. To master my emotions and set a positive tone for my company, I had to have a group of people around me who strengthened me and provided both insight and accountability when I faltered.

Seek out people you want to emulate, be of value, and learn from them

In the end, I realized that I had the answers I was seeking all along. Just as my tribe of friends helped me to survive and thrive adolescence and early adulthood, I needed to have a tribe of mentors and peers who could do the same in my career.

Finding these people can be difficult. There is no secret formula for success, despite what anyone tells you. Instead, all you can do is seek out people you want to be like, offer them value, and do your best to learn from them. Building these relationships isn’t easy, and it certainly isn’t fast, but it is worth the effort.

If everyone who reads our articles and likes it, helps fund it, our future would be much more secure by your donations – Thank you.

How to Activate Employees and Harness the Power of Internal Experts – Michael Brenner

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Here’s a strategy brands such as IBM and Starbucks have been using for years to bolster their marketing reach and their revenue – employee activation.

By harnessing the potential of the people who know your brand better than even your most devoted customers, you can tap into a rich source of brand advocacy and fuel growth.At the same time, you’ll boost employee engagement.

Engaged employees have a vested interest in your organization’s success.  They are aligned with your messaging and vision. And they offer something much more important than greater productivity.

A positive employee attitude can engage your customers as well. Look at it this way. As many as 68 percent of customers abandon a brand as a direct response to poor employee attitude.

The bulk of customer brand perception – about 70 percent – doesn’t depend on the ingenuity of your video marketing strategy or the quality of your products – it’s human interaction with customer service representatives, your employees at in-person events, email and live chat responses, and the content your employees are sharing about your brand.

When your employees do share your company’s content – something that’s not likely to happen without motivation, only about 3 percent of employees share company-related content – you are looking at a healthy boost of customer engagement.

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This positive impact is exponential. When you can motivate 6 percent of your employees to share content, customer engagement increases by 60 percent. With 10 percent active employees, you’re looking at the potential for a 100 percent increase.

The bottom line is, the experiences customers have with your employees shape the impression of your brand more than anything else.

On the other hand, when you fail to activate your employees, you’ve effectively created a financial black hole for your organization. Disengaged employees cost businesses from $450 to $550 billion each year.

So, how can you activate your employees?

The key is in understanding what employee activation truly means. Hint: it’s much more than offering a carrot.

When you look at examples of excellent employee advocacy programs in action, you’ll see that it’s more than a few tweaks to your organizational processes and internal communications. It’s a shift. A transformation that’s going to take time and conscious effort, but one that you can fully achieve with the help of a few tools, tips and strategies to help you activate your internal experts.

Let’s get started.

What Does Employee Activation Involve?

Employee activation is all about motivating your employees to share content with their social networks. We already know that word-of-mouth marketing is one of the most effective techniques for generating leads and boosting sales.

Employee activation takes this one step further, tapping into your employees to expand the reach of your brand. Just how much of a difference will this make? It can potentially have a seismic effect. This is because, for the typical business, the social networks of employees are 10 times the size of the social following of the company itself.

“When you can activate your entire company to be brand ambassadors, the full effects of social selling can be felt globally.”

-Koka Sexton, Sr. Social Marketing Manager formerly of LinkedIn and Hootsuite

Being able to activate your employees offers more benefits than a wider social media net for your brand to reach out to. Way more.

Your organization will experience a cascading positive effect because as you put in the effort to activate your employees through training, supporting, mentoring, and mobilizing, you’re also aligning their work with the purpose and mission of the business. You’re making their job more meaningful.

This isn’t just a shiny ideal. Purpose is what makes getting out of bed in the morning to come to work appealing. And it’s something consistently profitable companies have been focusing on for years – take Southwest Airlines for example.

They focus on both company culture and customer service and make a point of recognizing employees regularly on their website, their brand magazine, and they have a library of videos sharing stories form real customers who appreciated the experience they’ve had with the brand.

Taken further, active employees have a lot to gain. When they share their insights, expertise and vision, they are building their own personal brand, which can support their careers in the long run.

“If you help brand your people, they will help brand your company.”

Jennifer Jones Newbill, Dell

86 percent of those who have been a part of a social media advocacy program for their job have said it has had a positive impact on their career.

You’ll have employees who are both engaged and motivated, and who can benefit themselves from their experience as an employee advocate. The more they invest into the company through sharing content and brand advocacy, the more they have to gain professionally. Win-wins tend to be good for everyone.

Here are just a few of the bonuses other companies are already seeing from a serious approach to employee activation:

  • Easier to attract top talent. Employees are trusted 3 times more than your organization’s CEO by potential recruits. When they are visible on social media as brand representatives, it’s a lot easier to attract quality hires.
  • Increased employee retention. Companies with active social engagement are 20 percent more likely to retain talent.
  • Better brand storytelling. Want more authentic content? Get it from the people who are the heart of your business by inviting them to share their voice. Neil Gunn, the Digital Strategy Advisor for the World Wildlife Fund in the UK says, “The theory is that people who have the stories to tell are on the ground. If you really are going to do social well, you need to make the connection with those who have the story to tell.”
  • Boost in sales leads. For employee sharing on LinkedIn, research shows that sales leads increase by as much as 58 percent.

3 Brands with Employee Advocate Programs

Take a look at these examples of brands who have made engaging their employees a priority.

Dell

Dell excels at activating their employees on social. What they’ve done is create a dynamic training, support and facilitation program to empower their sales employees to be active on social and to ensure social usage is as effective as possible.

Dell’s Social Media University involves over 16,000 employees in 46 different countries. This is how it works:

  • Employees who want to be a part of the program go through training.
  • Dell then gives their employees branded accounts to use (@dell).
  • There’s a Governance system in place to guide the process, approve ideas, and, in general, facilitate more worthwhile marketing and recruiting content.
  • They also have a specialist team to monitor and respond to customer service issues and branded conversations on social media.

This highly structured approach has been a big win for both employees and Dell.

Sales employees who use social media outperform nonsocial salespeople by 23 percent. For Dell, they get way more customer engagement – social content posted by employees, for Dell, is eight times more engaging than the content the brand publishes. It’s also boosted profits, by over $14 million.

Adobe

Adobe’s Social Shift Program is another forward-thinking approach to employee brand advocacy. It offers education and best practices to help employees become better brand advocates. Employees can even test their ambassador skills by practicing with simulated experiences.

Lauren Friedman, head of Global Social Business Enablement for Adobe says of their employee advocacy, “We believe that people trust people. People buy from people. Relationships fuel our overall success.” She also points out the program works through enabling and encouragement, giving employees plenty of room to be themselves, saying, “We don’t want to create an army of Adobe-bots!”

Adobe then encourages employees to share on different platforms.

  • Post on the Adobe Life blog
  • Participate in contests for social sharing with weekly recognition for top ambassadors
  • Adobe scouts out ideal spokespeople to post on LinkedIn and Glassdoor
  • Employees who really stand out are invited to special events like Adobe’s MAX conference

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Their strategy works. Over one-third of Adobe’s employees have gone through the Social Shift. Adobe is known for having the most social employees in the entire tech industry.

Starbucks

Headed by the always visionary Howard Schultz, Starbucks is another company that has been motivating employee brand advocacy for years. This hasn’t just led to active employees on social media and boosted trust in the brand, it’s also sparked their customer-based brand advocate army. Starbucks is king at inspiring user-generated content.

Starbucks encourages employees to share brand updates and stories on their social media profiles. They also use their internal team to gain feedback before releasing new products. This is an excellent technique for B2C brands who want to test out new ideas on ‘consumers’ before launching into the real-world.

“[Employees] are the true ambassadors of our brand, the real merchants of romance, and as such, the primary catalyst for delighting customers. [They] elevate the experience for each customer – something you can hardly accomplish with a billboard or a 30-second spot.”

Howard Schultz

7 Tips for Activating Your Employees

Your employees are more trusted, more social, and may be some of your brand’s best storytellers. Here are tips and strategies you can use to motivate them to be vocal about your brand.

1. Start Small with the Social Stars You Already Have

Talent consultant Lars Schmidt warns that starting an employee activation initiative with your HR department or upper management can backfire. “Employees may be skeptical if HR or leadership pushes them to act. If they see their peer participating, they’ll be more compelled to follow suit and your initiatives can grow organically and authentically.”

Identify your employees who are already advocates on social media and start small with them. Once you’ve trained them to use their social profiles or their dedicated branded profiles, you have your internal leaders who you can then use for a larger program.

2. Make It about Personal Branding

The best way to motivate brand advocacy within your organization isn’t by offering a financial or physical reward. It’s about personal incentive.

Especially for B2B brands, employees have the chance to share their own expertise and establish themselves as industry experts while they work for you when they post well-researched or thought-provoking content on LinkedIn, publish how-to videos on YouTube, or share links to content on Twitter and Facebook.

Your employee activation should be about empowering your employees to be the best professional version of themselves. This, in turn, benefits your brand as they are your organization’s social representatives. It also fosters an authentic interest in giving their best to the organization they work for.

Approach brand advocacy as advantageous for both company and employee and you’ll get sustainable interest.

3. Teach Your Employees to Fish

Have a support system in place at the beginning. You don’t have to start out with a social training academy like Dell or Adobe. But, at least have established guidelines, tips and best practices, and identify social experts within your organization for individuals to go to with questions or for some one-on-one guidance. This will set the foundation for a successful program.

An effective strategy is to create regular educational content. Webinars, a library of educational videos filled with social media pointers, training sessions, or short weekly or monthly meetings are all methods you can use to make sure your employees know what’s acceptable to share and the best ways they can be successful sharing their expert voice on various social media platforms.

4. Make Social Sharing Convenient with Curated Content

Your employees are more likely to be active when you make it easy for them. As part of your employee activation program, you can regularly supply curated content. Include relevant blog posts, videos, industry news, and case studies. Then, encourage your advocates to edit the posts so as to use their personal voice.

5. Incentivize with Contests

You won’t be able to maintain a sustainable employee advocacy program on incentives alone, but they definitely can keep people interested. Think weekly contests or giveaways. This type of motivation is more about keeping your employees engaged than it is the reward itself so make your contests fun and interesting.

6. Leverage Technology

Yes, there’s an app for employee activation. In fact, there are several, including plenty of machine learning algorithms and AI-inspired platforms. Take advantage of these tools to make motivating your employees that much more effective.

  • Elevate is a LinkedIn resource that you can use to share curated content at scale. It’s a built-in feature, making it too convenient not to use.
  • EveryoneSocial is the employee advocacy platform used by Dell and Adobe and makes it exceedingly simple for employees to share content to their social networks at scale.
  • Dynamic Signal is another useful tool for employee sharing that comes with analytics. The platform includes the ability to send out real-time notifications and personalized invites. You can also create quizzes, surveys and interactive content to keep your employees engaged.
  • Influitive is an advocacy platform that is used by companies like Quickbase and MongoDB. Their AdvocateHub motivates advocates to share content, reviews, and testimonials across the social web.
  • DrumUp lets you create custom posts and curate content. It also comes with a point system to recognize social stars and analytics to track activity. DrumUp uses machine learning and Natural Language Processing, which means you’re going to see highly relevant content with the curation function.
  • There are also solutions from social platforms like Hootsuite’s Amplify and Bambu from Sprout Social

7. Use Your Advocates Wisely

While your employees’ social profiles may have the Midas touch, you still need to be careful how much you use your employee advocates. This is true for two reasons. First, you don’t want to make your advocates feel pressured to spend too much time on social sharing. For them, it should be simple and easy, not another task. Otherwise, you’ll have less people interested in your voluntary program.

Second, and more importantly, too much social sharing will dilute the value and authenticity of employee content. The reason employee sharing is so powerful is that it is an individual sharing content rather than the brand. If your employees’ social networks are being inundated by posts, people are going to start ignoring the content and, at some point, it will start to feel like brand marketing content rather than authentic insights.

Employee activation gives your brand’s online presence and reputation a mega boost of trust and engagement. Leads that are generated from employee social sharing convert seven times more often than other leads. It can increase sales and establish your brand as a more trustworthy organization. It can even help you attract premium hires to help your business succeed more in the future.

On the other hand, overlooking the potential of your employees can be a fatal error. Not only will you miss the chance to rake in more leads and sales and to enjoy a brand reputation boost. You are also missing the opportunity to help your employees grow professionally and to experience a greater sense of value and connection with the company they spend 40 plus hours a week working for – and this will cost you big time.

If everyone who reads our articles and likes it, helps fund it, our future would be much more secure by your donations – Thank you.

 

How to Refocus Your Strategy and Reenergize Your Team – Stanley Meytin

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A person’s passion is the sincerest definition of who they are. Passion can manifest itself in a hobby, an aspiration, or if you’re really lucky, a career. Take two people, Joe and Jane, as an example. Joe has a passion outside of his career. He devotes a lot of his free time to this passion and naturally speaks about it to his peers.

When his peers think of him they probably define him as “person passionate about X.” Now take Jane, one of the lucky few who has made a career out of her passion. She devotes twice the amount of time, twice the amount of energy and twice the amount of conversation to her passion. How do you think her peers define her?

If you’ve read Simon Sinek’s bestseller Start With Why, then Jane will remind you of Herb Kelleher, co-founder of Southwest Airlines, or Steve Jobs, co-founder of Apple Inc. Joe will remind you of the Wright Brothers. Each of these individuals built empires by undyingly following their passion. Sure, you can claim that these individuals are used as examples because of winner’s bias. But they succeeded because not only were they extremely passionate. They succeeded because they were able to clearly communicate their visions.

I consider myself extremely lucky. Like Jane, I’ve built a career out of my passion. When I first launched my film production company, my team asked the same questions regarding our clients that our competition was asking:

  • What is this client doing that’s different?
  • What do they bring to the table?
  • What problems are they solving for their customers?

While these questions helped us understand our clients, we realized they weren’t getting to the core of what defined them. We were part of the same old convention of business. We were focusing on what our clients were doing and not why they were doing it in the first place. Once we realized this, we began asking ourselves different questions:

  • How can we harness the passion that defines the client’s company to create a story?
  • Are their employees inspired by that passion?
  • Does the story align with their core values?
  • How can we align the story with the company’s brand mission?
  • How is that story going to connect with their audience?
  • How are we going to make the story authentic and engaging?

The biggest takeaway, however, didn’t come in the form of one of our clients’ videos going viral. It came in-house. 2016 was the first year we set a quantitative benchmark for the number of videos we wanted to produce. Not only did we not hit the benchmark, but with all the energy we put into hitting a quota we lost focus on creating a better product. We produced more videos, but they were watered down compared to previous years. We lost our own purpose.

We got rid of all quantity benchmarks in 2017 and as a team, we held a meeting to refocus. In this meeting, we asked ourselves the same questions that we asked our clients. We ended the meeting with a mission to create a video channel to tell impactful and authentic stories that inspire others.

That channel has been a remarkably accurate reflection of the meeting where it was first conceptualized. We’re now using the same techniques that helped us define our purpose in our core business for our corporate clients. Not only has it righted our ship and produced success but it has also provided us with an entirely new set of questions to ask our clients:

  • Is their organization helping others?
  • Is their mission connecting with others?
  • Are their customers genuinely understanding their mission?
  • Are employees buying into their mission, do they believe their roles play an important part in promoting the mission?
  • Are they building a community?
  • Are they staying true to their core values and the values of their customers and employees?

The beauty of these questions is that you can propose them to your clients, to your employees and even to yourself. They’re not specific to video production or any industry for that matter. If you already have the answers, that’s incredible. If not, then use them to refocus your strategy or reenergize your team.

Just swap “their” and “they” for “your” and “you.” Connecting to people on a deeper level, nurturing a human connection, evoking emotion and inspiring are key ingredients to building loyalty and bringing the best out in people.

Note, however, that not all ingredients are created equal. Like apples grown on two separate farms, the ingredients that I listed — those that were seeded and cared for with passion — will always taste better.

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How to Position Your Business for a Strategic Acquisition – Mark Daoust

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In the past year, I’ve had multiple competitors approach me to acquire one of the businesses that I own.

Being approached by competitors — or anyone for that matter — is always flattering, but, more importantly, it opens a door for many business owners that they have not considered in the past: selling their business. If you’ve ever thought about selling your business, you likely thought about selling it to a strategic buyer — a larger company in your industry, a competitor or a business in a neighboring industry that could benefit from something you’ve buibuyers stlt.

While most acquisitions that occur are not strategic exits — most businesses are sold to financial buyers (i.e. buyers who like the financials of the business but do not necessarily gain a strategic advantage by acquiring that business) — there can be significant benefits for you if you are able to find a strategic buyer:

  1. More money. Strategic buyers often see stronger returns on their investment which allows them to pay more for your business. For example, an ecommerce business that has a large warehouse may be able to acquire a smaller, but similar ecommerce business without adding new warehouse and order fulfillment costs. Strategic acquisitions can often represent huge gains in the value you get for your business.
  2. Easier transitions. Because the buyers are already familiar with your industry, the transitions are often easier to manage — but not always.
  3. Strategic buyers can often do more with your business. Because strategic buyers know your industry, they can often build your business rapidly after the sale. If you are interested in seeing your business grow, strategic sales can be a great way to go.

But for all the benefits of strategic acquisitions, most small business owners who decide to sell their business will end up looking for a financial buyer. Why is this?

Why strategic exits are often difficult to pull off

While many business owners think that a strategic exit is the most natural or the easiest type of acquisition to complete, the truth is that it often has the lowest chance of success. Most acquisitions occur to financial buyers — acquiring companies who may not have specific industry knowledge, expertise or advantage when buying your business, but like the potential financial return on investment your business provides.

There are several reasons for this. First, if you are trying to sell your business to someone within your industry or marketplace, you often lack leverage. The reason for this is simple. Rather than having potential buyers line up to acquire your business, you are approaching potential acquirers with your business opportunity. Unless you can generate interest from multiple suitors, this approach tells potential acquirers that they have more leverage when dictating the terms of a potential deal. They know you are looking to sell, and they know that you prefer to sell to them.

Second, strategic exits often fail to materialize simply due to bad timing. Unless the company you are approaching to make a deal is a massive enterprise, most acquirers need to plan out their resources — both in capital and work requirements — in order to successfully complete a merger or acquisition. When you approach a potential strategic acquirer, even if there may be a good fit between your company and theirs, the timing might simply not be right.

Finally, the pool of strategic acquirers is usually quite small. How many companies would benefit from a strategic acquisition of your firm? Two? Five? Fifteen? The fact is, when selling any company, having a larger pool of buyers gives you better leverage and better chances of success.

Tips for planning and executing a strategic exit.Despite the obstacles above, planning a strategic exit is possible. This very publication is filled with tips on how to get your company acquired. However, too few business owners put any thought into what is actually needed in order to pull off a successful strategic exit. With that in mind, here are a few practical tips to prepare for a potential and hopeful strategic exit:

  1. Strategic exits usually start early. A strategic acquisition rarely happens as the result of picking up the phone, calling a competitor and asking if they want to buy your company. Sure, there are the rare cases where this approach succeeds, but most strategic exits happen more organically. The two companies know each other, have known each other for some time, and see that the acquisition would be good for both companies.
  2. Build your strengths to address other business’s weaknesses. If a wholesaler decides to enter into the direct to consumer market, they often do so by acquiring one of their clients. This is because they recognize that their weakness (direct to consumer) is their client’s strength. If you are hoping to be acquired by a larger competitor, get to know their relative weaknesses, and build your company to be strong in those areas. This isn’t just good acquisition advice, this will help you differentiate your business in the marketplace.
  3. Have more than one potential suitor in mind. Acquisitions work best for the selling company when they have the option to decline any particular offer. If you have multiple companies that could acquire your business, you not only increase your chances of a successful acquisition, you also set yourself up for potentially having leverage in a negotiation.
  4. Let potential acquirers know in advance that your business might be acquirable. In most strategic acquisitions that I’ve seen successfully completed, the company that is acquired had a previous relationship with the acquiring company and informed them that selling might be an option they would explore in the future. By letting your intentions be known early, you give potential acquirers the time and the ability to consider acquiring your business as a part of their strategic plans.
  5. Be patient. The strongest leverage any business owner has in an acquisition is the ability to walk away from the negotiation table. If the terms you are receiving aren’t right, walk away.

Finally, consider a non-strategic acquisition

When I started Quiet Light Brokerage, my very first client owned a business in an industry that had aggressive strategic acquisitions occurring on a weekly basis.

In this industry, valuations were mostly based on a simple monthly revenue valuation approach. Businesses in this vertical would sell for anywhere between 10-18 months worth of gross revenue. For my client, this translated into a valuation of roughly $500,000 for his business.

While we could have sold his business for that price and had a closed deal in just a few weeks, we decided to look for a financial buyer. Three months later, he closed on the sale of his business for $625,000 to a buyer who was not a part of his industry, but loved the opportunity he saw.

The fact is, while strategic acquisitions often result in higher — sometimes significantly higher — valuations, this isn’t always the case. The fact is, more deals are completed in a financial acquisition space simply due to the fact that there are so many more financial buyers looking for good investments.

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