Articles discussing business mentoring.
The importance of measuring the business
Most new clients do not understand why up-to-date accounts are crucial to running a successful business! A significant proportion provide similar responses when I start to investigate their bookkeeping and accounting methodology. Typically, they tell me that they hand over receipts to their bookkeeper and once a year the accounts are resolved and forwarded to HMRC, usually at the last minute. Others tell me their bookkeeper has provided an excel sheet and they fill it in when they have time.
This usually means that their accounts are potentially 17 months old by the time they review their results. They are preparing their accounts for HMRC and tax purposes, and not in order to manage their company. They do not realise how useful tool accounts are when kept up-to-date, and how trends can be spotted, costs reduced, and profits increased if only they were reviewed in good time. Comparing this quarter to last, this season to the previous years’ season, can help us learn more about the business.
Instead, they will be signing accounts that contain information on what the business earned over a year ago! Most can’t tell the difference between cashflow and profit and loss. They believe that as long as there is money in the bank, they have made a profit. This simply may not be true. A business owner cannot possibly tell how profitable his/her business is, without accurate and timely accounts, because often they do not know their true costs and what they owe at any given time.
This in turn means that they are managing businesses without knowing if it is profitable or not, which parts of it are more profitable than other parts, which parts are losing money, etc. What if your business isn’t profitable? Wouldn’t you want to know that and be able to make decisions in real-time about how to proceed, and deciding what needs changing?
Do you know what parts of your business are profitable?
Many businesses comprise a number of profit-making areas. Let’s look at a chain of cafes, for example. Their lunch menu may be less profitable than their dinner menu due to their ‘business lunches’ or lunch deals.
Supermarkets make more money selling artisan products than staple goods, however, they need to stock the staples to ensure their clients do not shop elsewhere for them. Footfall is king – the more people visit the store, the more chance they have of sales.
By keeping up-to-date accounts and reviewing them periodically (daily, weekly, monthly, quarterly, annually) different patterns will emerge. For example, you may discover that certain days of the week, or times of day, are busier than others, and/or that between 2pm and 4.30pm there is very little business during the week. January may be your worst month, and the summer months may be your best. Having this information at your fingertips may well lead to changes in your marketing and promotions, targettingcertain times of day, week, month or season.
You may decide to sell a product below cost (i.e. a ‘loss-leader’), knowing that by doing so you will be able to up-sell other items.
So, do you know which parts of your business are more profitable than others? Have you noticed if there is seasonality in your business? Are there times when you are busier than others? Was it the same last year and the year before? What changes can you make to counteract the slow periods?
Do you know which types of clients are timewasters and which truly appreciate your value-add and are more profitable?
If you had this knowledge, how could you use it? Aren’t you just itching to get your accounts up-to-date??
Knowing your numbers is key to running a successful, growing business, versus limping along or even failing.
Know your costs!
Surprisingly, many clients do not know the total cost of what they are selling. This is often the case for service-led businesses. For example, I worked with a software development company for the duration of a year. During our initial sessions I noticed that the staff person who created the quotes for development work was not the project manager.
As you may expect, the project manager’s team comprised junior and senior developers, which meant that there were differences in the team members’ costs per hour.
There were no controls in place, and no-one thought to compare the quote to the actual costs during or even after the project ended. Indeed, the time invested by each staff person wasn’t measured. This meant that they didn’t know the actual costs of the project and therefore couldn’t use that information in the future, when similar projects were being quoted.
It was clear that the business could be losing money on any given project and if the project was of significant duration, the risk of costs overrunning profitability were increased.
The fact is, they didn’t know either way.
When your accounts are up to date and you have access to the software (note I wrote ‘software’ and I don’t mean excel sheets!), you will be able to generate reports at the press of a button. You’ll be able to see profit and loss by month, quarter, current year and fiscal year. You will be able to see who hasn’t paid their invoice on time, which clients habitually pay late, if at all, which clients are spending more than others. Which clients are more profible than others, etc.
You could separate clients by type if you created categories for your various revenue sources. You could see which parts of the business are more profitable than others. You may even decide, based on your figures, to close down certain parts of your business, and to invest in other, growing areas of your business.
No less importantly, you could even review your costs and this could lead to switching suppliers, renegotiating contracts, and ultimately, saving costs.
Saving costs means more profit!
I do hope I have made a case for ensuring your books are up to date and if so, how the information can be used as a managerial tool rather than for checking what you owe Her Majesty’s Revenue & Customs. There is much more to your accounts than paying tax!
Have I helped you to see that? Need help to see what your figures are telling you? Dissecting your accounts could lead to changing your business, making it more efficient, and far more profitable. If you would like advice in this area – call us! We would be delighted to help.
About the author
Lesley Anne Rubenstein-Pessok, MD of LAR Consultancy Ltd, has spent her whole career in executive roles, working with and training start-ups and SME businesses, helping them to become more efficient, increase turnover, improve profitability, cost effectiveness and create strategies that pay off. She is an approved mentor for the London and Partners’ Business Growth Programme, as well as for other public funded programmes. Her client testimonials say it all.
Well here’s some really exciting news!
NatWest Bank launched a female-only crowdfunding programme ‘Back Her Business’ for women thinking about starting-up a business in the UK. This programme has been development together with Crowdfunder, a well established crowdfunding platform. The initiative is available UK-wide through NatWest in England and Wales, Ulster Bank in Northern Ireland and Royal Bank in Scotland.
Why is this deemed to be necessary?
Well, NatWest commissioned research into the psychological challenges facing females in business and one condition in particular came to the fore – Imposter Syndrome. This syndrome is where women in particular have a feeling of self-doubt, questioning accomplishments and competency. I believe this same Imposter Syndrome is also responsible for women not reaching the higher echelons of leadership in medium to large organisations.
I myself have also witnessed a lack of confidence when working with female entrepreneurs. It is this lack of self-belief, self-esteem and self-value which impacts their ability to start-up a business. Even if they manage to overcome the start-up hurdle, they often struggle to grow the business. They also struggle with pricing, often under-pricing their services, which impacts their profitability and long-term survival.
One only has to attend women-focused networking event to observe the ratio of micro-businesses to SMEs. It is a safe bet that the micros far outweigh the SMEs and scale-ups, compared with mixed gender networking events.
This is why part of my time is typically spent on building the confidence and self-belief of the women-business-owners / directors when coaching, mentoring and/or advising their businesses. This investment provides almost immediate returns and is time well-spent. It is also rewarding to observe the rapid change in attitude as the sessions progress, and to see the result of this work reflected in the bottom line.
Well here’s some really exciting news!
This week, NatWest Bank launched a female-only crowdfunding programme ‘Back Her Business’ for women thinking about starting-up a business in the UK. This programme has been development together with Crowdfunder, a well established crowdfunding platform. The initiative is available UK-wide through NatWest in England and Wales, Ulster Bank in Northern Ireland and Royal Bank in Scotland.
Back Her Business is part of NatWest’s wider commitment to helping female entrepreneurs in any way it can. So great to see such an initiative in the market-place. Read our article for more about information about this initiative – click here.
Are you an SME manufacturer?
Are you an SME manufacturer, or planning to become a manufacturer, based in:
- West Midlands
- Yorkshire and Humber
- Parts of the East Midlands
- South East
- East of England?
If so, did you know that you may be eligible for a grant from The Manufacturing Growth Programme? These grants are available to SME manufacturers to assist with the cost of bringing in external expertise to support the business.
The MGP supports and drives growth in local economies by supporting SME manufacturers to grow their business. This, by identifying, understanding and removing barriers to growth and enabling sustainable business improvement.
The programme grant covers 35% of the cost of a project; typically, projects range between £3,000 and £6,500 (so at 35% grant, the support ranges from approximately £1,000 to £2,275).
MGP’s objectives are to provide free advice and support to manufacturing SMEs to help:
Identify opportunities and create plans for growth and improvement
Work with the best external experts to implement those plans
Cover up to 35% of the cost of implementing the plans through an improvement grant
Connect to wider support to maximise opportunities for growth
European Regional Development Funding (ERDF)
The funding is paid for by the European Regional Development Fund (ERDF) and in order to be eligible for this funding, the SME (small to medium enterprise) needs to meet the following criteria:
Under 250 staff
Under €50 million turnover
Under €43 million balance sheet assets value
Not having received more than €200,000 in State Aid (or other public/grant funding) in the previous three calendar years
Not owning, nor owned, more than 25% of/by a larger company that would take the overall size of the group over the above 3 criteria limits
If the above criteria are met, it is a relatively simple process to apply and there are no lengthy forms to complete. The Manufacturing Growth Manager for your area will need to visit the business premises with the relevant paperwork which will need to be signed by a Director of the SME.
The remaining paperwork is completed, confirmation is received from the provider of the quote, followed by a grant offer which is typically confirmed in writing, within a week.
Lesley Anne Rubenstein-Pessok, Co-Founder & Managing Director of LAR Consultancy. has just been appointed as a mentor on the London and Partners Business Growth Programme to mentor / advise / coach London companies to overcome their growth barriers. The programme is open to SMEs with 3-250 employees with a minimum viable product or service so if you think you could benefit from my help, sign up to the programme NOW! Don’t think twice! Why wait? Procrastination will get you nowhere, fast!
Over the course of a one-hour session, you’ll have the chance to work through your company’s sales challenges and work with Lesley Anne to master your sales pitch. Sessions are available on a first come, first serve basis between the hours of 10:00 until 16:00. The sessions are open exclusively to businesses in the Business Growth Programme so apply to join the programme first here!
If you don’t suit London and Partners Business Growth Programme criteria, don’t despair! You can, of course, work with her directly – just contact us and we’ll book you in for a session! Visit our services and business workshops pages for more information.
In two words: total focus! To become a great listener, there needs to be nothing, and I mean nothing, going on in your mind. That’s not so easy when the person in front of you is speaking in a monotone, and without any animation. Or maybe she’s repeating a story that you have heard before, either from that person, or from someone else, such as an old joke? Active listening skills exercises will help you to become a great listening – but only if you practise!
What makes a conversation great?
How do you feel when someone spoils your punchline or looks bored or disinterested when you’re talking? Hold on to that emotion!
Now think about when you last spoke with someone who was extremely interested in what you had to say. How great was that conversation? Do you see where I’m going with this?
I can assure you that because of that person’s intense listening skills, you were at your best, even though I wasn’t there! It’s almost as if that person’s listening skills created you into an interesting person. But you haven’t changed! You’re the same person you were before you spoke with that person.
Having great listening skills creates better interactions with people and they will start to engage with you.
What’s the secret to becoming a great listener?
How do you do that? Like I mentioned earlier – by emptying your mind and putting your full attention on the person you are interacting with. Not only with your ears, but with your whole being, hanging on to their every word, and listening not in order to retort, but in order to fully comprehend what they are describing.
Even the most boring conversation has the potential of being more interesting if you fully concentrate on it. If you change your mindset and mentally ‘switch on’ your active listening powers, you will improve your interaction and will have a better engagement with that person.
Active listening skills exercises
- Be aware that you are not listening – stop – and concentrate on the person who is doing the talking.
- Listen as if you would earn a huge amount of money if you could repeat the essence of the conversation, if required.
- Show the person that you are listening – this could be by asking clarifying questions, repeating back key points, nodding your head, saying ‘ah-ha’ type noises, but in a natural way. This will come naturally to you if you are truly listening.
How does this related to sales?
Well, imagine you are about to make a sales call and you want to discover the client’s pain points, so you can better understand how your product will benefit your client. What if you brought your new-found listening skills to the table? How would that level of listening and engagement help you, and your would-be client? How would your chances of making the sale improve?
Try your new listening skills at every opportunity, and especially when challenged. The more you engage, the more it will become second-nature.
Contact us to see how we can help you, your executive management and sales teams to improve their relationships and hence, your company’s results.
Active listening skills exercises are a practical part of several of our business workshops. Contact us to see how our business workshops can improve your company results.
Lesley Anne Rubenstein-Pessok, MD of LAR Consultancy Ltd, has spent her whole career in executive roles, working with and training start-ups and SME businesses, helping them to become more efficient, increase turnover, improve profitability, cost effectiveness and create strategies that pay off. She is an approved mentor for the London and Partners Business Growth Programme, as well as for other public funded programmes. Her client testimonials say it all.
Well, if you’re reading this journal, there is a good chance you suspect you may be disempowering your team or you know of someone else who is. And if you suspect that you are disempowering your team, then you most likely are doing so.
Hey, I’m not judging you – we’ve all been there, including yours truly!
Why do we disempower people?
Typically, we disempower people when we are under stress (yes, guilty as charged) but some of us do this more often than not – and that’s worrying. In an ideal world, it just wouldn’t happen because in such a world we would be looking to replace ourselves for when we leave our role. That entails creating leaders and looking out for emerging leaders.
What does disempowerment look like?
You delegate a task and an underling executes it, but not terribly well. The question is – how do you handle this situation? Especially if that person should be able to handle the task? Of course, it depends if the individual is consistently under-performing, or if this is a one off, or if this person used to perform well, and is only failing recently.
Let’s take the first scenario – consistent underperformance:
Is this person truly qualified for the role?
Is the task within their remit / job description (JD)?
Have they had the training required to perform this duty?
How were they interviewed / brought on board for the role?
Is there someone else in the team that has the know-how to perform the task successfully while the underperforming worker would benefit by undertaking a different role?
Would it be a good idea to examine the persons skill-sets to see if they have been set up to fail?
These questions are important because, ultimately, you are responsible and accountable for those who report to you. Pointing the finger won’t get you very far.
Let’s look at the second scenario –a one-off under-performance:
This is the easiest scenario because it probably points to a lack of training, or a misunderstanding, or the person isn’t at their best. Basically, it could be any of a number of factors.
How should you handle it? If you berate or humiliate them in front of their colleagues, they will become disengaged very quickly. If you make them feel bad about under-performing rather than discovering the underlying issue, you will not only be disempowering, you will be demotivating and indeed, in the words of the Harry Potter books, de-mentoring.
Now we come to the third scenario – used to perform well, but recently failing:
Your behaviour in all three scenarios will tell you much about your leadership style, and about your ability to empower and disempower.
In all three scenarios, you need to talk to the person having difficulties, on a one-to-one basis, away from prying eyes and attentive ears, and in ‘safe’ environment. [A safe environment means – create a space where the person you are interviewing can feel free to express themselves without recrimination.]
The worst thing you can do is step in and do the task, unless it’s mission critical or deadline sensitive. Let’s face it – sometimes things need to get done and we do not have the bandwidth to train at that point in time. But those instances aside, I am discussing a pattern that you may identify with and, if so, helping you to see and, hopefully, break that pattern.
How do you look?
Do you step in and do it yourself, because you’ll do it right, because your team member(s) haven’t got a clue?
Do you make a big song and dance about it?
Think about it! If you keep stepping in to save the day, you look great, right? (You just saved the day!).
If you look great, how does your subordinate look?
How does your subordinate feel?
What is that doing to his/her confidence levels?
What are you trying to prove?
Why are you trying to prove anything and to whom?
You’re the boss – you most likely do know how to accomplish the task – but we create teams to achieve visions that are bigger than any individual is likely to realise.
The sum of the parts is bigger than the whole, or as the Germans coined it – teams create a ‘gestalt’.
I am highlighting this topic because it is dear to my heart. I recently encountered somebody who served in a highly specialised military unit – one that only the best of the best are invited to join having first passed vigorous intelligence tests. After their army service, many who served in this elite unit set up successful, cutting-edge technology start-ups.
This particular individual led a team and, on more than one occasion, stepped in to redo a task without involving the team, demonstrating to the boss how the task should be done.
This had two consequences: The first consequence expressed how clever they are while the second showed the boss was culpable for hiring incapable team members.
This resulted in demotivating the whole team and making the boss feel threatened. The fallout? The individual is moving on to another job. I have no doubt that instead of repeatedly demonstrating intelligence to the world, the team would have been better served by sharing that intelligence and experience. This way team members would be trained, nurtured and mentored. The team would build confidence and successful task performance would become second nature.
To state the obvious, growing your team’s know-how and confidence, on an individual and team-level, will serve you, your bosses, and your organisation far better than disruptive behaviour and demonstrating whatever the chip on your shoulder is pushing you to prove.
Imagine how powerful you would be if you constantly looked at ways to ‘grow’ people, to bring out the best in individuals so they can self-actualise and achieve their goals. Now imagine if those goals could be aligned with those of the organisation?
I will leave you with that thought.
Lesley Anne Rubenstein-Pessok, MD of LAR Consultancy Ltd, has spent her whole career in executive roles, working with and training start-ups and SME businesses, helping them to become more efficient, increase turnover, improve profitability, cost effectiveness and create strategies that pay off. Her client testimonials say it all.
A mentor is a ‘must have’
Apart from hand-holding, plausibility checking and providing a shoulder to cry on when the going gets tough, a mentor will help you take ideas from concept to commercialisation, or move from start-up to scale-up, and everything in-between. Mentors draw from their vast experience to prevent you from making the same mistakes they made during their career. Why ‘reinvent the wheel’ when all you need is to discuss the issue with someone who will understand and offer sound advice. After weighing up suggestions and examining options, you will be able to action what works best for your business and fits your company ethos.
Why you need a good mentor
If you were to ask my clients why they choose to work with me as a mentor, chances are you would receive a different answer from each, because each client is distinct and unique. That is not to say I do not see similar issues occurring in completely unrelated businesses and industrial sectors, but personalities differ; and ethos, personal ambitions and visions vary from company to company. Even different sessions with the same client differ as a diverse range of issues are covered and discussed over time, new issues emerge, and key lessons are learned.
So why work with a mentor? Here are some of the things we have worked on with clients past and present, to illustrate how powerful mentoring can be and what it takes to be a good mentee:
If you were to ask my clients why they choose to work with me as a mentor, chances are you would receive a different answer from each, because each client is distinct and unique.
1. Launching a new product or service
Let’s take the example of developing and launching a new product. You may not be sure of the best strategy to get the product to market, or which partners might prove the most useful and beneficial. You have several thoughts and ideas but would prefer to run them by someone experienced who has a track record of creating partnerships.
Our client was working with a local university to develop a new platform technology and had engaged a subcontractor to develop the software platform. In this instance, the entrepreneurs were extremely savvy. All we needed to do was to listen, understand key issues, take on board their concerns and fears, discuss pros and cons, ask questions and then advise.
We suggested several strategies to overcome various issues and saved a lot of stress and sleepless nights. We also affected key introductions in the industrial sector. This is a great example of how discussing ideas and thoughts with a mentor can be extremely valuable, as well as tapping into their network to meet key movers and shakers.
This was a classic mentoring situation where the company did not know about certain key issues because no-one had asked the questions we typically ask.
2. Implementing new business systems
Companies that have been in business for several years can become vulnerable by believing they have all the right systems and controls in place when this may not be the case, and indeed it often isn’t. The problem is, you do not know what you don’t know! Think about that! You know what you know, you know there are subjects you know nothing or very little about (for example, how to pole vault), but there are areas of which you have little awareness as you have not encountered them or nobody asked a key question alerting you to your obliviousness.
To illustrate, I met with a new client for the first time. In that initial meeting, the client stated that she wanted help to launch a new product. It soon became clear, however, that variable costs were not being measured. The company was most likely making a profit on some projects, breaking-even on others, and potentially losing money on other projects, even though the company was profitable overall.
The original reason for engaging with us went on hold – there was no point in launching a new product if the company was losing money and potentially could go out of business if it became involved in several large projects.
3. Sounding board
Having your own business often means sleepless nights. Only when you leave full-time employment do you fully comprehend the risks that you have taken. There is no income unless you create it. Simple as that.
No-one pays your pension, car allowance, sick pay, holidays or even weekends! If you’re a professional, you may have many unbillable hours. Not every day counts if you’re doing your admin. or in meetings with potential clients that do not convert into business. Similarly, attending networking events when you are not on a salary is precarious if you are not networking in a network that will lead to leads that convert.
I recall sitting in a café soon after starting up LAR Consultancy, waiting for my pooch who was undergoing cancer surgery, when that realisation hit home. When I was gainfully employed, I had never worried about fuel increases, mortgage payments or going on shopping sprees, not that I was ever big on shopping, but it was nice to not think too much about it when I did!
It is very true when they say it is lonely at the top. Having someone experienced to talk to can be a great comfort. Discussing issues that are concerning you and hearing how mentors solved similar in the past, saves time, stress and often, costs. This in turn improves your bottom line. More profit means more dividends. Contacting a mentor will allow you to access advice on your concerns, issues and help you to create a long-term strategy to achieve your vision.
A couple of years ago we worked with two founding partners / directors who have very different personalities, as is often the case. If not managed carefully, companies can dissolve because the founding partners do not get on. It certainly impacts not only the day-to-day atmosphere in the office, but also the chance of raising investment. As a company grows, especially technology and innovation led firms, it will need to raise several rounds of investment. Investors are not stupid and will detect the level of engagement between key executives and will be deterred from investing if they do not like what they see.
In this case, our mentees comprised the CEO, and the ‘Brains’ – the inventor/engineer. Both were extremely well connected and networked, having worked in the industrial sector for many years. Our sessions focused mainly on being a sounding board, understanding the stress the CEO was under due to communication problems with his business partner. There was nothing ‘wrong’ with either of them, except for not being able to communicate effectively. They pushed each other’s ‘buttons’, making it hard to conserve energy to overcome the hurdles to becoming a huge success. By being a sounding board, understanding how the communication breakdowns were being caused, we improved the team work and reduced stress levels.
4. Asking ‘difficult’ questions
Mentors know what questions to ask to help you to focus on key issues. They can help you prioritize, so you do not waste time on the less important issues. The questions will provoke thought, possibly about things you may not have considered for some time, if at all, which could inspire epiphanies.
To illustrate this point, let me tell you about a company that had been in business for eight years and initially, used to work with medium to large size clients. These clients were not as price sensitive as the smaller customers and demanded top quality. This was exactly the kind of work my client loved to produce, because it forced them to be creative, and to be the best that they could possibly be. There is nothing better, when you are in business, than delivering above and beyond anything your client could have hoped for. It is gratifying. It is wholly rewarding. It’s what it’s all about!
But over the years, by running after the money, they increasingly engaged with lower end, price-sensitive work for smaller clients who argued on price and did not appreciate the talented and creative results of my client’s endeavours. This resulted in my client losing their ‘mojo’. My mentee was finding it hard to get out of bed in the morning (sound familiar?!).
At this point we were brought on board. By working with the MD on the company ethos, energy levels increased, marketing messages became strong and focused, and attracted the higher-end, less price and more quality sensitive clients – exactly the kind of customers my client wanted to work with and for, as they had in the past. Result? A very happy mentee doing extremely rewarding work, so we were buzzing too!
This is a big one! Focus! Entrepreneurs are typically a gregarious, creative and risk-taking bunch and we love them for it. Unfortunately, the flip side is they have so much energy they often find it hard to focus. ‘Grounding’ them and bringing them back to ‘planet earth’, helping them to achieve their goals without too much distraction and wasted energy, is absolutely crucial.
If the head of the company is the inventor/engineer, there is a danger s/he will become too focused on the engineering and not release a product to market until it is perfect, not understanding that the product doesn’t have to have all of the functionality to be of use to the end-user. Version 2 will improve on version 1, version 3 will improve on version 2, and so on. Getting a product to market within a time frame is crucial.
Everything in moderation… A good mentor will help the client to understand the importance of focus.
A mentor has many roles, but the key role is helping you, the client, make the right decisions at the right time. Note, you are always in the driving seat, and ultimately, you are the one who is responsible and accountable. But it is very lonely at the top. Who do you turn to when you need advice or a plausibility or feasibility check? Who do you talk to when you have difficult issues to resolve and cannot figure them out by yourself, or have several options but are not sure which is the best and wish to discuss pros and cons with someone who will understand?
There is, however, a caveat. Our clients also have a key role to play. What do you think is needed to derive the full benefits of working with a mentor? Let me answer that for you.
You need to be coachable – meaning you need to trust the mentor, have chemistry with your mentor, and above all – put your ‘active listening’ skills into gear before and during each session. That does not mean you take all the mentor’s advice on board – but you should certainly examine this guidance to see if it makes sense to you and discuss any issues in partnership with your mentor. A good mentor will help you to be more successful and reach your vision sooner, while reducing your stress levels along the way.