MARKETING - Realistic Belief

MARKETING

REALISTIC BELIEF

By Nikki Viljoen – Viljoen Consulting October 2008.

I know that on many levels, it is really sad if you can’t dream – hell, I do! That said, I also know how dangerous it can become if your dreams are out of the ball park. Think about it for a minute – most evenings, sitting watching some of the ads that they present on TV, I actually have to ‘suspend belief’ in order for me to even try and understand the message that they are trying to get across. As an Internal Auditor, that for me is incredibly difficult – remember I live, deal and work in an environment that is based, strictly on fact!

Take for example the host of motor vehicle ads that are doing the rounds at the moment. Cars that morph into spiders, and snakes and the like, in order for them to travel where no other car goes. Firstly the idea of me actually believing that a car could change shape like that is an insult to my ‘logical’ brain and intelligence and secondly, I have no doubt that there are other brands of vehicles that can not only do the same kind of terrain, but probably a whole lot more than just that, seems to me to be a whole lot more reasonable.

Or how about the one where the driver, tired of listening to his girlfriend yapping away, opens the cubbyhole (or glove compartment – for the foreigners amongst us), and she gets ‘sucked’ into the compartment, never to be heard of again – well not until the next time that the ad is aired, you understand. Now I understand that they are trying to ‘sell’ the concept of ‘more space’ or spaciousness, but the idea of getting a whole body into that space for me is just ludicrous!

To be sure, that could be very well what they are trying to do to get me to remember the ad and therefore that will become my car of choice – but quite honestly, I don’t remember the make of the car or anything other than what a ridiculous ad that is!

Now if the car manufacturers have to go to these lengths to try and increase the level of sales, on branded products – why is it that so many of the small business owners or SMME’s as they are called, seem to think that because they have produced an ‘incredible’ product and/or service, that said product and/or service will automatically sell itself!

That for me is also where I have to ‘suspend belief’. Why would brands such as ‘Coca-Cola’ who are internationally branded and are known by just about every person on the planet, believe they need to advertise and yet someone who knows exactly 100 people on the planet, feel that they don’t need to advertise because the product will sell itself?

Clearly you need to market yourself. I, as an Internal Auditor – really do not know much about advertising and marketing – it’s not what I do. What I do know however, is that if people don’t know about you or your product, you are not going to sell any of your product and that is the bottom line.

Marketing can be as expensive or as inexpensive as the amount of money that you have to spend, and for me it’s got to be believable too.

When I started, I certainly did not have a huge budget (and to be quite honest – I still don’t), but I did know that I had to get myself out there. I had to tell people about who I am and what it is that I do and believe me, telling them once just doesn’t cut it! You have to go back and tell them time and time again, at some point a light bulb will go off in their heads and they will understand that they need either your service or your product, but until that time – you have to keep telling them.

As an Internal Auditor, I always tell people, that it is not about making money – that’s easy! It’s about making a profit! To make a profit, you have to sell and in order to sell, you have to market yourself and/or your product.

It does not matter how incredible your product and/or service is, people still have to know about it in order for it to ‘sell itself’, so the job of marketing must still be done.

To make your marketing easier, you need to ascertain who your customers would be and those are the clients that you need to be make aware of what you have to offer. I am sure you’ve heard the saying ‘as difficult as selling ice to an Eskimo in the middle of winter’? Well that’s exactly what it is. Selling to the right target market at the right time.

So remember, tell people who you are and what it is that you do and don’t forget to tell them why your product is different to all the others out there, and/or why your services are different.

Marketing, in it’s most basic form is about making people aware of what you have. Good marketing is making the right people aware of what you have, at the right time, and making them understand that your product/service is the best value for money.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

THE POWER OF NETWORKING - PART 84

THE POWER OF NETWORKING

PART 84

By Nikki Viljoen of N Viljoen Consulting CC

Dr. Renate Volpe, in her nugget cards entitled “Networking Tips” says:

“Inherent in successfully networking, is the philosophy of mutual support and interdependence.”

This is so cool, I was wondering when it was going to come up and I am so pleased that it has finally arrived.

Let’s just get the terminology right! There is a huge difference between ‘interdependence’ and ‘co-dependence’! The one is really healthy, the other is quite destructive – so make sure that you know which one it is that you are attached to.

Co-dependence – well, lets just say it is not a good thing – it means pretty much that you cannot function on your own.

Interdependence on the other hand is about the joining of forces. It’s about collaboration and joint ventures. It’s about the joining of synergies and strategic alliances. It’s about doing what you are really, really good at and having an even greater value add by having someone who is really, really good at the things you aren’t so good at – in a partnership of sorts. It’s about teamwork!

For me, on both a personal and professional level, it’s about making us SMME’s, you know – us little guys and gals, far more powerful than any of the big Corporate companies, because when we stand united and together, we can give any client far better service than any Corporate.

That’s a helleva statement to make, I am sure that you would agree, but it is actually the truth.

You see, each one of us individually are incredibly passionate about what we do and we are specialists in our own fields, but when we get together we are a huge force to be reckoned with.

Each one of us, passionate, committed, specialized – there is not one Corporate on the planet that can say that about each and every one of their staff. In my book that makes us far more powerful and far more lethal.

So how about it folks – let’s all get interdependent upon one another and make the difference that we know we can!

For more information on Renate, please visit her website at http://www.hirs.co.za

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

PREPARE YOUR BUSINESS FOR SALE - PE By Mark Corke

PREPARE YOUR BUSINESS FOR SALE

And the PE – by Mark Corke

When pricing a product or service you provide to your customers, the process you follow in arriving at a price probably runs along the lines of: Take the cost of the product, add the transport cost, import duties and any other costs associated with getting the product to your shop. For a factory, you might look at the cost of raw product, the electricity, gas, water, labour, and possibly costs of holding stock, depending on your accountant. Once you have your cost of sales or cost of production, you multiply by a markup percentage to get your selling price. At this point several variables come into play, such as comparing your price to your competitors' prices or judging how desperately you need to make sales this month in order to cover your overheads. In this instance you may offer a special on some lines, hoping to drag customers in who might expand their shopping list while they're there.

Burned Offerings

As we all (should) know, the pricing exercise is fundamental to the success of a business. Priced too high, sales may be difficult to come by, while pricing too low may result in a gross profit margin unable to sustain the fixed expenses in the business. And so, experienced and usually successful business people talk about the complications involved in setting prices. They show me spreadsheets justifying their decisions, and often they have copies of their competitors' price lists or advertising brochures. And yet when they want to sell this cash cow they rely on a drunken boast over a braai, and the improbable results.

At a recent seminar I presented, there was a long discussion on valuation principles in small and medium businesses. At the end of the seminar, on checking back on the feedback forms, I came across a comment from one delegate "No mention of PE ratios". He or she was quite right; there had been no discussion on an element in valuing businesses which is the source of huge losses for seller of businesses and buyers, alike.

The idea that a business can be valued simply by applying a multiple to the net profit (or even turnover) comes about as a result of those braai and beer discussions. Typically, one of the meat tossers has recently sold his business and has decided to take a year off to work on his golf swing. His admiring buddies question him at some length as to what the secret to his success has been.

He talks of his selling price and his turnover or profits, amongst other things. It is the profit or turnover relationship that gets everyone's attention.

You see, all those boys and girls huddled around the fire have a burning desire to make a killing out the sale of their own businesses. Let's face it; there are only two types of profitable businesses - those that have been sold, and those that will be sold. And as long as yours is profitable, you will fall into one or other category.

Anyway, back to the conversation:

The would-be sellers are all quietly doing their own sums, based on the golfer's experience. What they do not take into account is that the golfer's former business is in a young, highly lucrative industry, becoming more and more sought after every year, with enormous barriers to entry.

Consequently the value could be calculated as having high multiples or price to earning (PE) ratios. These are ratios which cannot be used in comparing businesses in other industries or sectors.

However, our braaimeisters get in their cars at the end of day, turn to their spouses, and announce: "You know, we could get at least R5M for our business." And so they take an ill prepared, badly valued business to the market. Priced too high or priced too low? Who knows?

Probably the former, although more and more often the latter. Attempting to sell too high results in unsold, dangerously exposed businesses. While pricing too low means that the seller can only play golf for six months instead of twelve! Frighteningly, pricing too low can also result in buyers being suspicious of the business - avoiding them, with the result that the seller lowers his price even further. Hardly the stuff of a winning strategy.

2009 is almost upon us. In the next two months South Africa will grind to a halt, and we will all start to contemplate the successes or otherwise of the year past. Inevitably, we will consider our businesses and what we intend to do with them in the coming year. Perhaps it is time to take a look at the current value of your business so that at least you know what you are driving, and where you are driving it. It is always a good idea to know well in advance what the value of your business is, so that you don't find yourself drinking soup in your old age when you thought you'd be traveling the world!

Cheers

Mark Corke

MOTIVATION - DEFECTS & STRENGHTS

MOTIVATION – DEFECTS & STRENGTHS


By Nikki Viljoen of N Viljoen Consulting CC

The quote today comes from Johan Wolfgang von Goethe, who says”

“By nature we have no defect that could not become a strength, no strength that could not become a defect.”

Wow, what an incredible statement to make and it really connects with me! That’s for sure.

The first part of the quote for me is a ‘no brainer’. You see I am on a mission at the moment to change people’s mind sets. I am looking at the way we see things, issues such as the ‘VAT man’ or how we look at policies and procedures for example and how when we change our mind sets and we look at these in a more positive light, they actually become beneficial to us and to our businesses – so that one I don’t have a problem with.

It’s the second part of the quote that becomes a bit of a challenge! Actually now that I think about it – it’s not that difficult. I think that on some level, we as humans become somewhat ‘arrogant’ about our strengths and when that happens they can become our greatest weaknesses.

I recently saw a movie where the young lawyer had something like a 97% win ratio and this resulted in him being head hunted by some of the most prestigious law firms around. He ended up prosecuting a case that should have been a ‘slam dunk’ and which very nearly became the ‘undoing’ of him, when he lost it. His arrogance about his strength became his biggest weakness.

So no matter how excellent we are at something, it is in our own best interests to always do out best, take the time to ensure that we have all the facts and that we pay as much attention to something that we are good at as we pay to something that we are not so good at.

It’s about giving 100% all of the time irrespective of what the task is. It’s about taking pride in what we do and being committed performing the task to the best of our ability at all times.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za.

WHAT TO DO WHEN . . . . You Are Not Sure About Workmen's Compensation?

ARTICLE 14

WHAT TO DO WHEN . . . . You Are Not Sure About Workmen’s Compensation? – Part 1

By Nikki Viljoen – N Viljoen Consulting CC.

There seems to be a great deal of confusion about who must register, where to register, how to register and when to register, so I thought it would be a good idea to try and demystify it.

So here are the important factors to consider as a Business Owner.

Who Must Register With The Workman’s Compensation Fund and How Does One Register:

As a Business Owner in South Africa, if you employ a staff member (and that includes you – so if the only staff member is you) then you need to be registered. The Compensation for Occupational Injuries and Diseases Act of 130 of 1993 defines and employer as:

“Any person, including the state, who employs an employee and includes:

- Any person controlling the business of the employer;
- If the services of an employee are lent or temporarily made available to some other person by the employer, such employer for such period as the employee works for that employee;
- A Labour Broker who against payment provides a person to a client for the rendering of a service or the performance of work and for which service or work such person is paid by the Labour Broker.”

Well that is pretty straight forward – so for example, I as Viljoen Consulting CC do not have any staff members on the one hand, but ‘pay’ myself a salary on the other hand (to get the best tax benefits), so I will now need to Register for Workman’s Compensation.

The form that is required to be completed is the prescribed (Form WA52 – which can be downloaded from the Department of Labour site or requested from myself) and the employer is required to submit a separate form for each business he/she has.

What Records Are To Be Kept By The Employer

The Act says that the employer has to keep a register or some form of record of the earnings and particulars of employment. This record must be kept for a period of 4 (four) years.

The Act also says that this record must be kept open for inspection, not only for a representative of the Health & Safety fraternity but also for the Health & Safety Representative who must be elected in terms of the Act or also in terms of the Mine & Health Safety Act 29 of 1996 or for any of the shop stewards or similar Union officials.

Next week we will have a look at when to submit the return of earnings, what an assessment is and who may be exempt from being assessed.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

MARKETING - Is Your Business Idea Built on Market Research Or A Hunch?

MARKETING

Is Your Business Idea Built On Market Research Or a Hunch?

By Nikki Viljoen – Viljoen Consulting January 2008.

I know that when I started thinking about ‘going on my own’ so to speak, the initial idea was born out of absolute frustration and boredom.

I had been working in the same Group for over 10 years and for the last 4 of those years, I had been doing exactly the same thing, day after day. Seeing the same people day after day, and finding the same mistakes and theft and fraud and . . yip, I was doing exactly what I do now (being an Internal Auditor), but my work life had reached a plateau. There was no longer a challenge, I was as high up in the Company as I would ever be able to go and quite honestly I felt really burnt out.

There were two options available to me, to find another position at another Company or ‘go on my own’.

Moving to another Company
When I sat down and really thought about this option, it took all of about 30 seconds to dismiss it. It wasn’t that I was unhappy with my current employers. I was well paid, highly respected and highly regarded – it was, well quite honestly it was the lack of challenge. How long would it take for me to reach this same “space”, if I took a job at another Company – I really didn’t think it would take too long at all. So this option fell right off the table.

Going on my own
The first time I even dared to look at this option, I thought I was going to have a heart attack! I mean for goodness sake, what on earth did I know about starting and running a business. Sure as an Internal Auditor, I knew how to put the processes and procedures in place, but put them in place of ‘what kind of business’? As head of the Department, I knew how to manage staff and I was also acutely aware of all the pitfalls associated with HR and the Labour Relations Act – I had certainly Chaired enough disciplinary hearings and dismissed enough staff over the years to understand the implications. But even if I did have staff, what good would they be to me if I didn’t even know what kind of business I wanted. So that idea also got shelved – for a while anyway, but it came ‘a-knocking’ from time to time.

The more I thought about what I wanted to do, the more frustrated I became. I was literally ‘clueless’! Time went by and slowly but surely this little idea started to germinate. Why couldn’t I do exactly what I was doing now – but out there in the big wild world. Why couldn’t I do “Internal Auditing” for little companies?

Now at this point, had I resigned and just done it, I can assure you that nothing would have come of it and this brilliant idea of mine would have gotten me nowhere. Why, you may ask? Simple really, I had no idea if there was a ‘need’ for my kind of service. Just because I thought that it was a good idea, didn’t mean it was so! I had a vague idea of who my target market should be, but because I thought that they may need my services, didn’t mean that my potential clients would need my services.

So I did what I knew best how to do – I started investigating (also known as market research). I spent many hours trawling the internet, looking to see if there was anyone else out there who was doing what I do – there wasn’t. Now that could mean one of two things, either it was because there was no need for the service, or alternatively it was because no-one had thought of the idea before.

It was time to check my target market - fortunately I have a great number of friends who are Entrepreneurs and as SMME’s they fall into exactly the market that I wanted to test. The internet also provided me with a huge amount of material and information as to exactly what was available and what wasn’t. The result was that there was a huge need of what I could provide and either no-one else had thought about it, or alternatively no-one else had the skills with which to do it. All of this research and ‘investigating’ took over three years to accomplish and the result of this is that I have now been ‘on my own’ for almost 6 years.

So what is the point of this story – it’s really quite simple, if your business idea is built solely upon a ‘hunch’ or ‘an idea’, in all probability you will fail. This is because no matter how ‘in love’ you are with your product or service and no matter how passionate you feel about it, it doesn’t necessarily mean that the ‘real’ market out there will share your enthusiasm.

Look at what the statistics prove – hundreds of businesses start up every day – that’s not a bad thing at all, but hundreds of businesses close their doors and go out of business each day too and that is not a good thing. Yes not all of them go out of business because they failed to do their market related research, but a great number of them never even get off the ground and huge amounts of money, blood, sweat and tears result in everything being lost.

You have to put in the research and also test the market. I had 3 clients before I even resigned from my job. Without the research being done, you will have no idea if your service, product or idea has any chance of being sustainable.

Rather start out as you mean to continue – slowly, steadily and sustainable.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

THE POWER OF NETWORKING - PART 83

THE POWER OF NETWORKING

PART 83

By Nikki Viljoen of N Viljoen Consulting CC

The term ‘win/win’ is being bandied about quite a bit of late, but what does it really mean and is there such a thing, in reality?

I know that I use the term quite often, and it certainly makes sense to me, but that is my perception and my expectation. What about the other person? What if they do not see it as a ‘win’ on their side? What if they do not see whatever it is that I am ‘putting on the table’ as a win – is it still a ‘win/win’ or is the reality that there is a loss somewhere?

If I had to be brutally honest, I would have to say “Yes”, absolutely yes, there would be a loss! How could there not be?

I guess that this is where the saying ‘it takes two to tango’ is really profound! You see at a Networking event, if someone cannot see the benefit of his/her being there, they will not work at it, and no matter how many meetings I set up and no matter how excited I get on their behalf, if they don’t work at it from their side – nothing will happen.

The majority of people who go to networking events, go there specifically to ‘sell’ their service and/or their widget. They are usually the most disillusioned of them all because the reality of Networking is that they are highly unlikely to ever make a sale.

Occasionally someone will go there because they are looking for a service and/or widget supplier, however that is the exception rather than the rule. These people usually have a bit more luck, because there might just be the kind of service and/or widget that they are looking for. But what happens if there is no-one there offering the specific service and/or widget that they are looking for and they too go home empty handed? Well they also become very disillusioned to.

The person who is the most successful of them all at Networking, is the person who goes there to meet people and build relationships. Believe me the sale of the widget and/or service will follow, but the relationship has to be built first.

So where is the ‘win/win’ situation in any of this. Well it’s really quite simple and I can’t for the life of me understand why others just don’t get it. If you and I are in the process of ‘building a relationship’ (or already in one for that matter), every time I (or you) speak to a prospective client, we will listen carefully, not only to what that prospective clients wants from us, but also what that prospective client needs. One of those ‘needs’ might just be something that you can provide.

The ‘win/win’ (which is you and I looking out for business opportunities for each other – not just ourselves) has just become a ‘win/win/win’ because - I have secured work and/or given value to the prospective client, you have been given work by the prospective client, and the prospective client has had all of his/her needs fulfilled. How cool is that and more importantly, how easy was that.

So what is your interpretation or perception of a ‘win/win’ situation in Networking or are you one of those folk whose expectation is all about ‘what’s in it for you’?

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

PREPARE YOUR BUSINESS FOR SALE - The Real Facts - Part 2

PREPARING YOUR BUSINESS FOR SALE

The Real Facts (Part 2) by Mark Corke

Good Morning Bloggers
For a while, with his permission, I will be posting articles from Mark Corke of Suitegum.Mark is a Business Broker, who writes articles on, and runs seminars on “Preparing you Business for Sale”.

Should you wish to register for some of Mark’s free articles and tips, Here is the link.

Both Mark and I are of the opinion that ensuring that your Business is Prepared for Sale at all times will ensure that your business always commands the highest value. It actually increases the value of your Business quite considerably.

We all complain about the dreadful driving on our roads, and yet never consider that we may become victims, at the expense of our businesses and our families

Now consider this

Whenever I meet with another seller of a business I am asked the same questions:
How long will it take to find a buyer?
How will you avoid letting my customers, staff and / or suppliers finding out that the business is for sale?
What will happen if the buyer doesn't pay me?
How much will it cost me?
How do I stop the competition from finding out I am for sale?
What risk am I running with respect to SARS?
What do I do if I don't trust the buyer
How do I cancel my sureties?

Straight forward important questions; right? Well of course they are, and they all have good easy answers. But when I start asking the questions, and looking for essential documents always needed to Prepare your business for sale, there is almost always an embarrassed shuffle as the excuses are wheeled out. Sometimes it takes months to get the stuff. And all this while the owner is available to talk to any buyer who may be interested.

I cannot tell you how many times I have been asked to sell a business in a hurry.
"I will take any reasonable offer."
"I don't know how to run my wife's business, and I don't have the time."
"I'm getting divorced, and my wife wants the business."
"We've had enough, and we're going to emigrate. I need my money by December."

Why condemn yourself to this unhappiness? There is an easy solution, you know. What's more, it is so easy if you are already running your business in a slightly better than basic fashion.Whenever I meet with buyers of businesses, they ask me the same questions: ·

How will the seller prove his turnover?
How does he arrive at that selling price?
What will happen if he loses his biggest customer?
Where is the value?
What are the opportunities?
How do I know that he's not a con artist?
Why is he really selling?
How do I determine the real fixed costs?
How do I deal with his staff?
How am I going to learn to run the business?
I'm not sure I trust the seller. How do I deal with this?
What other information can you give me besides all these numbers?
Why do I have to take so much stock?
The vehicles are all shot – do I need to take them?

What you really need to do in order to pump up your shareholders' life raft is start inflating it with tools you already have. Your raft will have all the answers any potential purchaser of your business is looking for.And this is exactly what "Prepare your business for sale" will show you. Not only will it give you the tools to pump, but it will stock the raft with all the life surviving necessities, plus a few humble luxuries.There is no substitute for building a relationship. Selling a business is not akin to selling second hand cars. We are changing people's lives here. Let's do it with some empathy and understanding. We are the experts, we do it every day. It is our duty to look after both seller and purchaser.

"From the signing and acceptance of the offer, until the final payment, Mark was constantly involved, and did not take the attitude that he had received his commission, and it was no longer his problem. Mark I salute you for the work that you did, and the friendship that we established." Len Birger

You know, sellers give us their all in order to make these sales work. We must give everything we have to make the deal go through as efficiently as possible, so that's what we do.

"I wish to express my gratitude to you for the for the efficient, honest and professional manner in which you brokered the sale of Jardine Foods. I will be recommending your services to friends and associates" Doug Jardine

I've been doing this for 17 years. I've made a point of learning more each year, so that we have 17 individual years of experience, and not the same year 17 times.

"If you are looking for a professional, Mark Corke from Suitegum is your man" Renier Richter

By following our techniques, nobody need ever know that your business is being sold, or in fact that you have prepared your business for sale, if this is an issue for you.


Great news for business owners who think their businesses will never be sold: Not only will your business be sold, but you will use the proceeds from that sale to improve your life and leapfrog your dreams to a higher level.


Join me for some good advice and solid pointers as to how you will create a life raft of opportunity in your business, ready to be launched at short notice.


"He is focused on the interests of both seller and buyer and is not hesitant to voice his opinion and offer sound advice. He is approachable and patient and it has been a pleasure dealing with him" Zoë Cohen

A while back a lady called me because she needed to sell her husband's business in a hurry. "Well then I need to talk to your husband", I told her.

Unfortunately, that wasn't going to be possible because he was lying in intensive care, having suffered a stroke, I was informed by a tearful and panicky wife.

It transpired that she did not know where the financial records were kept, had no idea of the contracts that were in place, and that was just the beginning of the nightmare.

Another business ended up, itself in intensive care, when the new owners eventually took it over because of the way it suffered after the old owner was diagnosed with cancer.

The shock and horror at the diagnosis, the mounting medical bills and the quickly deteriorating health of the owner had all conspired to leave his widow with a business worth little more than the auction value of the tools and equipment.

Sadly, less than six months before this calamitous event, the business would have been worth R3,000,000 to a buyer. But because the business was not ready for sale when the diagnosis was made, the owner had no choice but to place an ill prepared business on the market.

By the time the chemo and radiation treatment had taken its toll, there was nothing he could do, and when he died, there was nothing his wife could do.

Contrast these two events to the following: Last year a widow came to see me with her son. Her husband had died unexpectedly, leaving her with a flourishing business in a niche market. The business had been running for only eight years, but had always been kept in a state of readiness for sale.

The management team, although loyal, hard working and honest found themselves with a possible windfall at the expense of the widow, and offered her a price of R2M for the business. This would have solved many of her day to day problems of keeping tabs on a business which she did not really understand. Together with the life insurance settlement she would have been able to survive.

She came to see me to get some clarity on the deal. I went through some pointers on the business, and showed her how she could get R7,000,000 on the open market for her business, so well prepared had her husband kept the sale readiness file.

She settled on R6,000,000 with the management team who had a good empowerment element to their ranks, and are subsequently taking the business to even greater heights. Everyone has won, and she will never have to worry about her future.

Which scenario would you rather be part of? By subscribing to "Prepare your business for sale" you will be set to have a life raft able to give your family the same or better results in the case of your untimely demise.

A business we sold a few years ago had been on the market for a year. The owners and several brokers had been marketing it at R1,7M for a 50% share in the business. Using the techniques I am going to show you in "Prepare your business for sale" we made some small changes to the business, introduced an entirely new bracket of interested investor, and sold the whole business for R10,5M, only three months later.

The emigrating partner who had been relying on the proceeds of the sale to finance his emigration, found that he could leave some of his money behind in South Arica!It is surprising how few businesses are prepared for sale, and it is sad to report that as a result, so many businesses are sold below par.

Do you feel under threat from the BEE revolution? Perhaps you're one of the rare breed of South African entrepreneurs who sees great potential for your business in BEE. Like most business owners, you don't know where to start, vacillating between two extremes: fear and optimism. You may have been able to avoid the issue up to now, but suddenly find your business has grown into the next bracket. Suddenly you have survival issues at stake. How do you grow and survive? I'll show you.

The BEE revolution is driving the values of most businesses down at a steady rate. In the face of this destruction of small business value, however, there are businesses being sold successfully at premium prices, either in part or in their entirety. Why does such a difference exist often between businesses of very similar characteristics, profitability, and prospects?

The answer lies in the way in which these businesses are prepared and presented for sale. And just as any product on a store shelf can be promoted better with some professional help, so can a business be well or badly prepared.

The fault lies in the hands of business owners, most of whom never consider selling their businesses until a few months before the event. In some instances business owners or their surviving spouses are forced to sell totally unprepared businesses in an environment of grief and total ignorance of the business itself because the late owner has failed to keep the business disposal preparation up to date.

All businesses should be in a constant state of readiness for sale. We live and work in an uncertain environment with new challenges being thrown our way constantly.

MOTIVATION - Help From Unexpected Quarters

MOTIVATION – HELP FROM UNEXPECTED QUARTERS


By Nikki Viljoen of N Viljoen Consulting CC

It is said that sometimes the people you think might kick you when you’re down, will be the very ones to help you get back up!

For me this is all about judgment and perception. You see, I think that people have perceptions about other people based on things like, the way they dress. So someone is judged by what they are wearing and the perception is that they would never assist or have the empathy and/or compassion to help a fellow human being! How bizarre!

I believe that perception is how facts are interpreted and that if those facts are not looked at in their entirety then they are often distorted and that that is why perceptions are often skewered.

I am often amused at the way that others see me, for example. As an Internal Auditor, there seems to be an expectation of how I should behave, how I should dress and on some levels, even how I should think. That expectation is never met when they actually meet me and dare I say it, get to know me and that can cause a huge amount of confusion.

You see, often people think that I should be a quiet, shy introvert who dresses very conservatively and who thinks inside the box. The reality of the situation is that although I am an introvert, I am really not the shy or quiet – I say what I feel and tell it ‘like it is’. I am a jeans and t-shirt kind of girl and for me thinking in or out of the box is not an option – there is no box! I mean think about it for the moment – logically speaking, would you expect every single Internal Auditor on the planet to look, behave and think in exactly the same manner? If you really had to stop and think about it, I really don’t think that anyone would actually think like that and yet the expectation persists.

I think that we as individuals have to change our mindsets and our judgments and drop the blinkers, allowing ourselves to really look and see a person for who and what they are, instead of just making a judgment call before all the facts are in. I have no doubt that if we allowed this to happen, we would no longer be amazed to receive help and assistance from people who we ‘thought’ would kick us when we were down.

Give people the benefit of the doubt and allow them to be who they actually are, rather than who you perceive them to be.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za.

WHAT TO DO WHEN . . . . Your Staff Member Resigns Before a Disciplinary Hearing?

ARTICLE 13

WHAT TO DO WHEN . . . . Your Staff Member Resigns Before a Disciplinary Hearing?

By Nikki Viljoen – N Viljoen Consulting CC.

So you caught the staff member ‘red handed’ with his fingers in the till! You’ve (for once) followed all the procedures and you have issued him with a notice to attend a disciplinary hearing and you can’t wait for this to happen so that justice can be served, in your favour for once, and then . . . . he hands in his resignation! Talk about frustration! Been there? Yes of course you have. Then to add insult to injury you are sent a notification by the CCMA stating that the employee has laid a ‘constructive dismissal’ charge against you . . now what?

Ok, let’s take a step back and have a look at this one step at a time.

Firstly, it is the absolute right of the employee to tender their resignation at any time, except if that resignation is in breach of a contract – in that instance the employer will obviously have recourse.

There will always be those employees that would rather resign than face a disciplinary hearing, then there are those who will resign during the hearing and even those who will resign once the verdict has been delivered.

The problem arises, not when the resignation is handed in (although I must admit that that can be pretty frustrating) but rather when the employee then goes to the CCMA.

Let’s bring in the protagonists!

Mike owns a retail outlet in a Mall. George is the Manager of said retail outlet. George has been caught ‘red handed’ stealing stock out of the store and selling it on the side, and of course pocketing the money. Mike has suspended George, pending a disciplinary hearing and given George notice to attend a disciplinary hearing, with the obligatory 48 hours notice. The day of the hearing arrives, so does George, with his letter of resignation. Mike accepts the resignation, with immediate effect and George is paid out his leave pay etc and off he goes. End of story – well not quite, you see George goes to the CCMA and alleges that it was a constructive dismissal.

In this particular instance the CCMA found that since George had resigned and that Mike had accepted his resignation, this had in fact amounted to a settlement between the two.

You see, George had resigned rather than wait to be dismissed. This would mean that George’s record would not indicate that he had been ‘dismissed’ and would therefore appear to be unblemished. This was an informed choice, made by George, therefore George now was not entitled to ‘seek relief by way of reinstatement or compensation’ – talk about having your cake and eating it!

On the one hand George did not want to face a disciplinary hearing, which he knew would result in the termination of his employment, because of his dishonesty, because he did not the ‘dismissal’ on his employment record and on the other he wanted compensation from Mike because he now no longer had a job. Having made his choice to have the unblemished record, George could not claim to be entitled to both the unblemished record and compensation.

What George has not taken into account though, is that although he “resigned”, this does not necessarily ‘look better’ on his record, because Mike has followed the correct procedures. All the details of the alleged offence (in this case theft) and the details of what occurred will still be on file.

Although Mike did not get the satisfaction of having George dismissed at a disciplinary hearing, Mike still has the right to proceed with criminal charges, even though George has resigned and is no longer employed by Mike. Obviously, whether Mike wants to go this route or not is entirely up to him.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

CUSTOMER SERVICE - Sick of Poor Service

CUSTOMER SERVICE

Sick of Poor Service


By Nikki Viljoen of N Viljoen Consulting CC

So why is it that many customers do not complain? Well one theory is that it is because of the physical reactions to their own bodies that make people reluctant to make the complaint in the first place.

According to Harris Interactive, 85% of the respondents in a survey said that they had “customer experiences so appalling that they have:
· Used foul language (29%)
· Developed a headache (21%)
· Felt chest pain (6%) and
· Cried (5%)

The most common frustrations being:
· Not being able to understand a customer service agent (44%)
· Being put on hold, listening to bad music or repetitive messages (45%)
· Spending a great deal of time on a Web site or automated phone system searching for important information and not finding it (39%).”

Actually my pet hate is not even mentioned in this lot, although I am sure that I cannot be the only one to experience it. It’s the customer service call centre person who will not put you through to a supervisor or a manager or anyone for that matter, despite the fact that he/she cannot or will not or does not have the grey matter to assist you.
Clearly the reality of the situation in South Africa is that good customer service doesn’t seem to be on the agenda at all.

Part of the problem I suppose is that many customers, who want to complain often don’t know how to complain, where to go to complain or even what to complain about, strange as that may sound. On the other hand there are many companies who don’t have the necessary infrastructure in place to handle queries and complaints and the result is that you get passed on from one person to the next, obviously explaining the whole story each time you get passed onto another poor soul who has no clue how to help and so just passes you on again!

Talk about frustration!

The onus, I am afraid is on us, the consumer. In order for Companies to actually do something about bad service, it is up to us to get the message through to them that things are wrong and that we want change to take place.

We, as consumers have the power to ensure that businesses give us better service, but we have to speak up, take action and get the ball rolling.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

THE POWER OF NETWORKING - PART 82

THE POWER OF NETWORKING

PART 82

By Nikki Viljoen of N Viljoen Consulting CC

Dr. Renate Volpe, in her nugget cards entitled “Networking Tips” says:

“Flirtation and warmth are different energies. Identify these within yourself and use them appropriately.”

There are several networking meetings that I attend, and at many of them there is a guy who is in his 60’s and the first people that he targets are the ‘young’ ladies.

It is quite embarrassing for us seasoned Networkers, who have invited people along to a meeting, with the sole intention of doing business and most of the time we just try and make a joke of it, but the bottom line is that he is losing a lot of sales because of it, and the sales he is losing is from the very women that he is targeting.

You see, sadly he sees himself as being really charming, but the majority of the girls see him as being a bit of a ‘pervert’! In fact that is the exact word that someone used to describe him the other night.

How well do you think that that is working for him?

It’s now gotten to the stage that he pressures them into a one on one meeting with him, at the Networking event and then they cancel afterwards. This is just not good business acumen.

The reality of the situation is that because he cannot differentiate between being ‘charming’ and being a ‘bit of a pervert’, he is losing business hand over foot.

So believe me – understand the difference between being warm and friendly and flirtation.

The one will bring you heaps of business, the other will ensure that you don’t get any.

For more information on Renate, please visit her website at http://www.hirs.co.za

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

PREPARE YOUR BUSINESS FOR SALE - The Real Facts - Part 1

PREPARING YOUR BUSINESS FOR SALE

The Real Facts by Mark Corke

Good Morning Bloggers

For a while, with his permission, I will be posting articles from Mark Corke of Suitegum.

Mark is a Business Broker, who writes articles on, and runs seminars on “Preparing you Business for Sale”. Should you wish to register for some of Mark’s free articles and tips, Here is the link.

Both Mark and I are of the opinion that ensuring that your Business is Prepared for Sale at all times will ensure that your business always commands the highest value. It actually increases the value of your Business quite considerably.


Most businesses don't sell for anything close to the value they should, and frankly, that's just wrong.


Particularly when the owner isn't around to defend the value.


If you were to sell your business today, would you get what you want for it? And if you were not around, would your spouse and kids be able to sell it for what it's worth? Do you really think they could? Do you even know what the real value of your business is?


The simple truth:

Businesses are usually sold unprepared under unplanned circumstances.


"Unplanned" here, would mean death, illness, accident, fraud, severe theft and other crimes. These drive small and medium sizes into trouble every day in South Africa.


As if that wasn't bad enough, I am stunned at how many business owners give away so much for so little, because they feel Broad Based Black Economic Empowerment (BBBEE) is a threat. Are you one of them?


The truth is businesses much worse than yours are selling for much better prices. Why?
Of course, not all businesses are sold for empowerment reasons, and most often the owner of the business does not die, and is in complete control of the sale of his business. So why do so many businesses get sold below their true value?


Simple: Most business owners don't think about prepping their businesses for sale before an enthusiastic buyer asks them for financial statements, management accounts and VAT returns. No sooner are these supplied, than the prospect asks about the customer mix and debtor analysis.


On his next visit the interested party will ask about future prospects, and how the seller arrived at his price. And that is pretty much how it happens; the "purchaser" rapidly slipping down the ranks to the status of "interested party" and eventually "that bloody waste of time" as he rapidly loses interest when he can't get the answers he wants quickly and believably, and as another better prepared business grabs his interest.


Prepare your business for sale!


Now you can learn to prepare your business for sale so that at the drop of a hat you are ready to sell for 209% more than you believe it is worth today.


"Having tried to sell the business ourselves for several months,… He demonstrated to us how a few simple changes in the structuring of the sale would make the deal more attractive to buyers, and so after almost a year of being on the market, privately and through various other brokers…From the sole mandate to the initial memorandum of understanding took less than three months…..I have no hesitation in recommending Suitegum to any business seller as a professional and competent outfit" Tony Head.


You can use all the standard business tools and reports available to you right now to prove to buyers that your business is worth your asking price, and that it is not a flash in the pan or some sort of elaborate business opportunity scam.


"The professionalism and expertise provided by Mark and his team far surpassed any previous experience we had encountered through business brokers. Mark's attention to detail and valuable inputs in dealing with sensitive and complex aspects on behalf of sellers and us as buyers, made a lasting impression." Chris de Wet


I will debunk prejudiced views on a business's value through a proper and well defined preparation for sale prospectus in Prepare your business for sale; you could be able to double initial thoughts of sales proceeds. This is also valid where you have been convinced that the only buyer for your business is a BEE candidate.


"Mark handed me an offer from a prospective purchaser the terms and conditions of the sale were most acceptable to me" Len Birger.


How a client opened my eyes to the necessity of proper preparation


Some years back I sat with a client as he handed me his financial statements and his management accounts. I tentatively asked him for his VAT returns for the last year. A call to his wife, and she bustled in with the VAT returns. He reached into a file and handed me a list of debtors as he proudly proclaimed that 90% of his debtors paid within 30 days, and so it went on and on.


The seller had just signed a mandate for me to sell his business, and was now determined to prove the value of his business, a value I at first thought was perhaps a bit high.


I sat that night and looked at the 2 inch file I had collected that afternoon from the seller, and started to compile my report. Then a thought came to mind; what if I was to write such a comprehensive report that no buyer would need to ask any questions? I had certainly been given enough information to get close to this lofty ideal, and the seller was enthusiastic enough to give me every bit of help I would need.


And so, for the next 2 weeks we worked together to compile a report to answer all questions. Of course not all the information was readily at hand, and some things took some preparation.
As work progressed I became more and more convinced that the business asking price was incorrect; in fact it was too low. I discussed my feelings with the seller, and we agreed to raise the price when it went to the market.


Initially prospective buyers raised an eyebrow when told of the asking price, but looked impressed as they were handed the substantial prospectus. The aim of getting "no questions" never materialized, partly because buyers hardly ever read everything that is given to them, but also because it is only reasonable that a buyer will want to talk to the seller to get a feel for the business and its owner's motivation in selling. But the mere setting of the goal, led to a great impression being made on the buyers, and first impressions do count.


As it happened, all questions asked, were answerable from the information provided in the prospectus, and I felt a bit glib referring each question to the relevant section of the prospectus.
At the end of the sales process I was able to take two offers to the seller, signed and accompanied by deposits. This was the culmination of a race between four hopeful buyers, all tendering at a price higher than the originally mandated value we had been instructed to obtain.
The technique of full reporting and proper presentations has been used many times since then, and has always been proven worthwhile.


Why don't we prepare our businesses for sale?


Most sellers simply don't know where to begin. They know they need to present a profit figure, and they know that VAT returns will be used to prove the turnover. They hastily sketch out some cash flow forecasts based on improving "this" and implementing "that".


Sellers are scared that their staff will up and go if they discover the business is for sale. They don't want their suppliers and customers to find out.


And so they do nothing until the buyer is sitting in the office asking awkward questions. At that point, of course, it becomes a bit of a mess, as the bookkeeper is called in, sworn to secrecy, and has all the pressure transferred to his shoulders. By the next morning even the drivers know there is something afoot.


If I can show you how to pre-empt this entire debacle, and add value to your business, would you be interested in "Preparing your business for sale"? Well, of course you would. You will be empowered to prepare a complete prospectus on your business, to be easily updated every month in less than an hour.


The dangerous myth that you will never get so sick that you cannot work


Somehow we believe that we're infallible. "That will never happen to me" is a very popular refrain. In 2004 one of my best friends was cycling in the Hyper to Hyper cycle race, a distance of 100km over a relatively easy course, and considered to be one of the fastest races in South Africa.


At 70km into the race, Frank woke up on the side of the road, confused. He could not remember falling off the bike, and the road at that point was not so technically difficult as to have presented any problems. Feeling terrible, he mounted his bicycle again, and finished the race. A medical investigation later proved that he had suffered a heart attack. He lay in hospital for days, followed by weeks at home in bed, and then the balance of a full year struggling to get to his business and clients back on track, all the while feeling depressed, angry and incredibly tired.


He later bought a business in the less hectic environment of Port Elizabeth. Unable to sell his business in Johannesburg, he commutes between the two businesses! Income from the Johannesburg business supports him and his family as they grow the PE business organically. Imagine the difference the proceeds of the sale of the Johannesburg could make in giving them the option to acquire another similar business, instantly obtaining the critical mass.


Frank has always been a keen sportsman, has run marathons, has cycled in many events, and spends more time in the gym than the rest of us, and yet he suffered a heart attack. I certainly don't believe that I will ever have a heart attack, but what about a serious motor accident? What do you think your chances are?


Had his business been properly prepared for sale he would have been in a better position to sell it, recuperate properly, and then buy the business in Port Elizabeth under less stressful circumstances.


The assumption that we will all live into our 70's, 80's or beyond


As any deity you care to choose is my witness, as I originally wrote the text for this web page, I was called by a fellow Business Warrior who asked what I could do for a friend of his who had lost her husband a year ago. She had continued to run the business, which she did not really understand, and in desperation at the start of 2006, had placed a "Business For Sale" sign in the window of the business!


With landlord and supplier pressures mounting, she was now willing to accept any offer. Wow, things could have been so different. I called her, but was told it was her day off, and when I tried her mobile, it was off. Who can blame her for disappearing for a while?


Lindsay Weight, a fit 44 year old, won The Comrades Marathon in 1998. While working at her computer, she collapsed and died. Philip Tucker could not sleep, and his TV seemed to be playing up. He climbed a ladder to fix the aerial. They found him face down in the pool with a bang to the back of his head. Both had their own businesses, both have young families, both were fit and active at the time of their deaths!


I bravely stated, a few paragraphs up: "I certainly don't believe that I will ever have a heart attack". You see we all believe in the same impossible myth.


Without preparing our businesses for sale, and having these "life raft" documents available, and updated, we doom ourselves, our families, our staff, customers and suppliers to the same sudden loss in an unanticipated moment of crisis.

More next week!

MOTIVATION - The Will

MOTIVATION – THE WILL


By Nikki Viljoen of N Viljoen Consulting CC

Today’s quote comes from Muhammad Ali who said “The will, must always be stronger than the skill.”

Now this one gave me huge opportunity to dig down deep, to understand what exactly this means to me.

You see, I have always believed that in order for a person to hone the skill, they must have the will to practice and get it right.

I really don’t believe that there is a creature on the planet who can say that they got their skill or their gift, if you like, without putting hours of work and effort into getting it just quite right. None of that would have happened if they did not have the will to make it happen.

Look around for a minute and really think about it, we often hear of an “overnight sensation”, and we take that to mean that this person went from absolute obscurity to being famous – overnight! Yeah right! Perhaps the recognition has come “overnight”, but you can rest assured that that person has worked their absolute butt’s off to get where they are. The “recognition” comes after the will to succeed has driven them far beyond and above anything that they ever thought it would take to achieve that ‘recognition’.

Yes, some people have been blessed with a natural talent for something, but that talent would lie dormant, without life until such time as the will or the desire to use that talent became so strong that that person did something about it. I don’t believe that there is any skill in the world that would manifest itself into being without the ‘will’ of the person to put it in place. That ‘will’ then becomes an action, and believe me it is a repetitive action, to perfect that skill and in doing that, they eventually succeed and if they are really lucky, they will get the recognition.

So remember that the next time you make a mistake or fall over! It is a repetitive action, but you have to have the will to get yourself up, dust yourself off and get back in the game – not once, or twice, but time and time again. Each time you get back up, and perform the task again, you will do – just that little bit better, until before you know it, your skill will become effortless and second nature. And when that happens, you too – will be that ‘overnight sensation’.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za.

WHAT TO DO WHEN. . . . You Want to Suspend an employee

ARTICLE 12

WHAT TO DO WHEN . . . . You Want To Suspend an Employee?

By Nikki Viljoen – N Viljoen Consulting CC.

Firstly, let us understand when and employee can be suspended.

Usually (but not always, so be careful here) and employee is suspended during pre-disciplinary investigations and/or pending the outcome of a disciplinary action. I would like to make it quite clear here thought that the reason(s) for suspension should be documented and controlled by the terms and conditions of the Employment Contract and/or Letter of Appointment and/or the Company’s Disciplinary Procedures and/or The Company’s detailed suspension policies.

Suspensions can, and often do cause a huge amount of problems, so you really need to make sure that you are suspending the employee for the right reasons.

Issues that need to be taken into account when suspending an employee are, but not limited to:
- the need for the suspension
- the duration of the suspension
- prejudice suffered by the employee
- demands for disclosure of information
- constructive dismissal claims lodged due to resignation during lengthy suspensions etc.

Let’s go to my favorite protagonists for the type of situation that can arise.

Mike is our Business Owner. He has a retail store that sells cell phones and accessories. George is the Manager of the store in question and as such he is the sole key holder. Stock has been, steadily but surely going missing on a monthly basis. There are 4 staff members in the store and since clients do not have direct access to stock, it can only be one of the employees.

Mike has requested and received a printout of ‘activity’ from the security company. This evidences when the store ‘opens’ and ‘closes’ and also if the store has been entered after hours. Mike notices that at least once a week, the store is ‘opened at’ around 10pm and then ‘closed’ again at around 10.10pm. Since George was the only one with store keys and the alarm codes, it was a reasonable assumption for George to be considered the ‘guilty’ party.

This hearing was scheduled to last for five days.

George insisted that he wanted his attorney Alex to represent him.

Alex could only be available for the 5 days over a 3 month period. This of course, was not practical and unacceptable and George was given various options in order for the hearing to be expedited. George was offered, (amongst other things) a 4 day postponement in order for him to find an alternative attorney and he was also offered the option to have the hearing held over the 3 month period on the condition that the suspension would be unpaid. George declined all the alternative offers and the hearing proceeded without him being represented by an attorney.

In this instance it would have been ‘unfair’ to expect Mike to pay for 3 months suspension because it was George’s insistence to have a particular attorney represent him and also because George declined all other offers made by Mike

Be careful though as an employer, not to insist on non-payment for all postponements requested by an accused employee. Not all instances will be regarded as procedurally fair. Each case must be judged on its own merits.


Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

CUSTOMER SERVICE - Power to the People

CUSTOMER SERVICE

POWER TO THE PEOPLE


By Nikki Viljoen of N Viljoen Consulting CC

It is said that collectively, we as consumers are incredibly powerful! Strong words - I am sure that you will agree with!

You see, we vote for a company either with our wallets, our words or in fact our feet. Every time we make a purchase for a service and/or a product, we are voting with our wallets and telling that particular company that we approve of their service and/or product. On the other hand, every time we choose not to make a purchase or we use one of the competitors we are voting with our feet and in doing so we are actually telling that company that we no longer are choosing to purchase their products. Then of course when we complain about a service and/or product we are voting with our words.

It is those words that can cause the most damage. You see when we vote with our feet – it definitely has a negative impact on the bottom line, but when we vote with our words the negative impact on the bottom line is far greater because not only has that company lost our sale, but in all probability it has also lost the sale of all the people that we have spoken to.

Fortunately or unfortunately, depending upon which way you look at the problem, statistics show that only 10% of the people who are not satisfied with a product or a particular service actually initiate any kind of action. This, in real terms gives the companies somewhat of a false sense of security in terms of the level of service and actually does us consumers an injustice. Why you may ask – well if the truth be told, the perception is that the service is not as bad as it actually is.

It is for this very reason, that every single complaint should be viewed in the most serious of light. Action must be taken as soon as the complaint is received and Companies should take all complaints as extremely serious.

As a service provider you should be continuously trying to find ways in which to ‘up’ the level of your service.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

THE POWER OF NETWORKING - PART 81

THE POWER OF NETWORKING

PART 81

By Nikki Viljoen of N Viljoen Consulting CC

It is said that ‘sales come purely from people’.

As true that that may be, we still have to ‘trust’ people and there is a whole lot of ‘personal touch’ that would need to enter the equation too. How about ‘value add’ or being ‘unique’ and offering something that no-one else does? Then of course there are things like pricing, quality and delivery, and I suspect that I have only just begun to scratch the surface!

So why am I talking about all of these in a Networking Tip? Well it’s really quite simple – you see none of the above would happen if a relationship had not been built or a referral not been made.

Think about it for a moment – we have built relationships with all of our suppliers (although I suspect some, like banks, cell phone providers and the post office were out of necessity rather than choice) in both our personal capacity and our business capacity. Even the big ones like Woolworths or Pick ‘n Pay, we go to because our parents went there to do the grocery shop, or someone told us about a special that they had on or they give good value for money. Whatever the reason is and whether it is with a specific person there, or just the brand name – the relationship is built.

Networking for me is about meeting people, quickly and effortlessly so that I can start building relationships with those people. The more people I meet, the more relationships I can start, the more business walks in through my front door.

So if sales ‘comes purely from people’ doesn’t it stand to reason that the more people I have in my circle of influence the more sales I am going to generate?

It works for me!

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

PREPARE YOUR BUSINESS FOR SALE - FORMER EMPLOYEES

Good Morning bloggers - don't forget, if you would like to sign up for Mark's 'free' seminar tips please sign up. Here is the link.

PREPARE YOUR BUSINESS FOR SALE - By Mark Corke
Former employees
Popular business thought has it, that once a business is disposed of, it has been expunged from the previous owner’s list of assets and liabilities; reduced to an asset in the form of money, and available to be turned into a holiday home, fast car or new business.


This is not necessarily so, and South African business owners, who would be sellers, are well advised to look to the quality of the eventual purchaser of their business if they themselves are to stay out of the proverbial poor house, possibly three years after the deal has been finalised.

Staff: Your greatest asset or a retirement - sinking liability?

In time gone by, it was not unusual for a business owner to dispose of the staff "thorn in his side" by simply selling the business. In the process, he would retrench all staff. The new owner, usually in discussion with the seller, would rehire those he was advised would work hard, and give him no trouble. This resulted in a sword being held over the heads of workers in any business: “If you bunch of idiots are not careful, I will retrench the lot of you, and sell the business”.


With a revision of section 197 of the Labour Relations Act in 2002, this was all changed. It may sound terribly complicated - all those numbers and “sections” and “acts”. But it really is very simple, and you should download the Act, and read it. You will find it on Suitegum’s web site here, if you don’t have a copy. Look out for “197” down the left hand side, and read the section.


Here’s the good news: It is only about 3 pages long, and if you read it slowly, and with a pencil, it will all make perfect sense, no matter how thick you may think you are! But that having been said, the nexus of this section of the Act is the protection of workers in the transfer of a business from one business owner to another. And the point is, in brief, that your employees cannot be compromised through the change of ownership, unless of course you get their agreement to be hard done by.


We all know that this isn’t about to happen, don't we? But, as they say in those very long advertisements: That’s not all! Once you have sold your business, the transfer has gone through, and the employees are all ecstatic in their knowledge that life goes on as usual; you, the seller, will be held jointly and severally liable, with the purchaser, for the next twelve months, should any retrenchments or actions to the detriment of the employees, take place in your old business (which is no longer under your control!) And practically, here is the reality: Your buyer has just hocked himself to the hilt, given his life to the banks, and has no means of raising more money. He is as closely allied to technically insolvent as he is allowed to be, without becoming criminally liable. You, on the other hand have the, not unsubstantial, proceeds of the sale of your business languishing in your various investments.


So who’s going to be paying when your purchaser feels that he simply has to get rid of some workers so that he can pay himself enough to survive the Christmas downturn? Of course this can be dealt with in your agreement of sale tailored for your particular business. This is one of the best reasons to use an agreement drawn up specifically for your business transaction.


My advice is to avoid those standard documents which may be tweaked slightly by an unqualified broker. Decent intermediaries will employ the services of a commercial attorney to ensure that the deal stays stuck and the seller is protected against the possible ravages of post deal ineptitude of buyers. Hell, you're paying them enough!


In an agreement of sale of your business, these are some of the things that you should make sure are included in a clause to ensure that the new owner agrees not to sink you for at least the first twelve months of his ownership of the business. These would include at least the agreement to not retrench, nor change the conditions of employment, without the written agreement of the workers. In addition to this, it may be prudent to retrench dead wood yourself, in the run up to the sale of your business. But make sure that you can justify this operationally.


You cannot retrench to make your business more attractive to a buyer.

Cheers
Mark Corke

MOTIVATION - HEROES

MOTIVATION – Heros


By Nikki Viljoen of N Viljoen Consulting CC

It is said that “heroes are the people who do what has to be done, when it needs to be done, regardless of the consequences.”

Well ain’t that the truth! That’s probably why heroes are usually leaders too, I am sure! They get things done and not only do they get them done, but they also take responsibility for the consequences of their actions.

For me it is just easier to get the thing done, than it is to sit around, looking at everybody, waiting . . . Life is far to busy for me to mess around with that nonsense!

I recently had a situation, where doing some work for one of my clients necessitated that I contact one of their clients – let’s call her Sally. Now Sally is in her mid 30’s. She and her husband have recently split and she has gone back to Durban to be with her family. So far so good. The problem now is that she owes my client a heap of money for a service that was performed almost a year ago. Sally is now unemployed and she is living off her family, and has been doing this for the past 3 months. Now that just does sit right with me - she should really get up off her rear end and find something to do. That is not where the story ends though – her soon to be ex husband has promised to send her some money to sort out her debts, so now she is just sitting and waiting, waiting for money that may never arrive, waiting for her life to begin, waiting for who knows what!

Sally is the type of person who will spend the rest of her life waiting for something to happen! She is the person who constantly says “if I did . . . “ or “if only . . . “! Her whole life is one big IF and one big wait.

If you don’t ‘step up to the plate’ and do what needs to be done, life will pass you by. Life is for living, for doing, for achieving – not for waiting.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za.

WHAT TO DO WHEN . . . . You Want to Retire Staff

ARTICLE 11

WHAT TO DO WHEN . . . . You Want To Retire Staff?

By Nikki Viljoen – N Viljoen Consulting CC.

The Basic Conditions of Employment Act (BCEA) stipulates that each employment contract should stipulate the age of retirement.

The problem of course arises when employers have not given employees Letters of Employment, or worse – they have issued Letters of Employment, but the letter does not stipulate the retirement age.

This of course is where things usually go pear shaped! You see the generally accepted age is 60 or 65 years and if nothing is stipulated in the Letter of Appointment you cannot suddenly retire someone at, say aged 55.

Once your Letters of Appointment have gone out to staff (with or without the relevant retirement age), you now cannot all of a sudden decide that you want to make the retirement age 57.

This now has to become a negotiation or at the very least, a consultation with your staff in order to reach a consensus .

Should you decide on your own, what age you wish for them to retire, this will be considered a ‘unilateral amendment of employment conditions’ and your employees then would have the right to refuse the age or comply with forced retirement at the age that you have decided upon.

That said, as an employer you do have the right to enforce a formal retirement age, at a certain stage, even if this has not been done consistently in the past, as long as you go the necessary consultation or negotiation course with your staff.

If, for example the employer has not indicated the retirement age at say 60, then after a negotiation process the retirement age is fixed at 60, the employer now cannot go and ‘retire’ all of those employees who are already 60 and over. This would be seen as ‘unfair’ dismissal. What would need to occur is that the retirement age of 60 would need to be phased in over a period of say two years. This would give the affected employees time to sort their lives out and plan for their retirement.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

CUSTOMER SERVICE - Word of Mouth

CUSTOMER SERVICE

Word of Mouth


By Nikki Viljoen of N Viljoen Consulting CC

“Word of Mouth” is the most powerful form of advertising known to man. That said with the internet, e-mail, blogs, twitters and the like – the world has become a very small place and the hint of something wrong using one of these mediums could break a company before it has even started to think about growing.

Think about it – Facebook and MySpace have a readership of millions of people throughout the whole world. Irrespective of what the problem is, mention of it on either of these mediums, will ensure that at the very least an investigation takes place.

This means that the average consumer has more power than ever before and it would be foolish indeed for a Company not to take it’s customer complaints very seriously. Poor service is no longer something that should be tolerated and every complaint should be investigated and resolved as a matter of urgency.

Good ‘Word of Mouth’ is just as important as the bad kind, again because of the power of the internet. Talk about a great product or service can spread just as fast – although I am told that statistics indicated, not as often as bad service. Humans tend to lean to the ‘dark’ side I’m afraid and that means that bad service or a bad product is spoken about much more often than good service or a good product.

So in the interests of your own company, your service and your product – make sure that all complaints are dealt with as soon as they come to your attention. Make sure that the customer knows this and is given reasonable feedback regarding the kind of experience they can expect the next time they come to your company to purchase a product or a service.

Remember though, if you lift their perception, you will have to deliver that much more.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

THE POWER OF NETWORKING - PART 80

THE POWER OF NETWORKING

PART 80

By Nikki Viljoen of N Viljoen Consulting CC

Dr. Renate Volpe, in her nugget cards entitled “Networking Tips” says:

“Tell people what it is that you are good at or have done well. Don’t confuse the communication of factual business information with false modesty.”

Oh I am absolutely for this one! Look, I understand that no-one wants to go around telling everyone how fantastic they are and the list of their achievements. It’s not the best thing to do, if you are socializing – however, if you are networking it is essential.

People need to know what you have achieved. It all goes to who you are and what you have done. It goes to your credibility. It goes to your deliverables. It tells people that you do deliver, that you do achieve and that you can be trusted. It lets people know that others have used your services or bought your products and they have been well please with what you did for them.

In short it tells them that you are trustworthy and they will be more willing to part with their hard earned moola.

So don’t hide your achievements under the blankets as if you are ashamed of them. Tell everyone what you have done with your life and tell it proudly. I am sure you worked very hard to achieve it, be proud that you have and show it.

For more information on Renate, please visit her website at http://www.hirs.co.za

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

PREPARE YOUR BUSINESS FOR SALE - the Wonky ROA

Good Morning Bloggers

Here is another great article from Mark Corke of Suitegum. Remember if you would like to sign up for his free 'tips' and parts of his seminar, Here is the link.


PREPARE YOUR BUSINESS FOR SALE

Mark Corke & The Wonky ROA

21 February 2008

Your business' value is the sum of all the decisions you have made - the good and the bad ones. Add to that the consequences of decisions and attitudes related to the payers and non payers, the excellent products and the dogs, the attention given to and the ignoring of customers, the opportunities taken and the opportunities squandered, good luck & bad luck...

Calculating the value in your business revolves around many variables; income statement, balance sheet, history, future prospects and staffing issues immediately spring to mind. Of course there are many other less quantifiable elements, one of which is the redundancy built into a business - you know, the ability of a business to recover when a system fails.

In my seminars, I use the example of the griller in a restaurant not pitching for work. Somehow, somewhere the restaurant needs to have a backup for this very important, talented guy.For me the question of redundancy became particularly relevant in the last week when my laptop suffered a fairly fatal hard disk crash. Never have I been so grateful for a backup system that (mostly) works.


Knee Jerk Retail Therapy

More pertinent to the rest of us right now is the question of energy supply in South Africa, and there cannot be many of us who do not know the cost of an appropriate generator or UPS to keep things cruising when Eskom grinds to a halt.

Around braais, at clubs, in the office, on various online forums, and for us around the negotiating table, the discussion has centred on that new status symbol - the diesel generator. "Protect your Business" is the new buzz.

You know the scenario: You and your staff are working away on a project, closing in on the deadline; or you're about to start the final print run on that tender which closes in 3 hours time; or you have a shop full of customers; or the melted plastic has just been forced into the extruder; or the dough has just finished proving; or... Well you get the idea - we all have our instances - when the electricity delivery for which we have paid a basic service fee, at least, fails.

"Get a generator" they'll yell at you. At the very least that tight feeling in your chest suggests that you should be more than a casual reader of the Yellow Pages, or clicker on Google. But is that really the solution, when it comes to defending the value of your business? It may be, but I would suggest that perhaps you should take a moment to do some sums. Bear with me for a while, as there are so many permutations to the problem, and as a relatively inexperienced and scared business community enters the generator market, it is in danger of becoming a bit of a pissing contest to see who has the biggest generator. The largest I have come across so far is in a business which is awaiting delivery of a 650kVA monster to run the factory, and which the directors believe will be cheaper to run than using Eskom power. I find that hard to believe, but then I am no electrical engineer.

For sake of this illustration, we shall limit ourselves to a fairly humble 25kVA generator which will cost in the region of R65,000, or R2,500 per month on a suitable finance option. This generator will give you about 4kWh of power per litre of diesel, which works out to about R2 per kWh. Given that Eskom power is costing us about 40c per kWh, we can easily understand where this article is headed, but let's refine it some more.

How much are you going to use this generator each month? Truth is, we don't really know at this point. In the recent failures of January, some areas were suffering up to 3 hours per day, five days a week, while others were down for very short periods, and only a few times. I know of some industrial areas which have yet to suffer a failure in 2008.

I think though, that it would be fair to suggest that this humble generator of ours, with capital costs and running costs included will be in the region of R4,500 per month.

The only place you will be able to get this money, is from your bottom line. You cannot justify it by suggesting that it will generate you extra income, because the best it will do is preserve your income. So getting a generator will result in preserved income, at a higher cost, resulting in a lower profit. And that is the best case scenario, apart from the one man operator who simply takes out a book, puts his feet up, and then catches up when the power comes back on.

What is the alternative to the generator or other energy source? To not get a generator in some business may result in upset customers going elsewhere, where your competitor does have one. On the other hand your business may be such that your customers don't physically shop or wait for service, and you're able to work in the hours to get the work done. In this instance your expenses will go up, while your income remains stable, resulting in a lower profit.

The point here really is that unless you are in the generator business, if we have protracted energy delivery failures, you are almost certainly going to have a lower profit in the years ahead. Lower profits lead to lower values of businesses, and these values might suffer even more if you buy a generator.

How so? The best business buyers in town - the guys who are successful at what they do, and who pay the price, do more than just look at your income statement. For them key asset management ratios are important.

Return on assets is (Net Income) divided by (Total Assets) So, if you have a generator, you may have preserved your income, but your asset level has gone up, and so this ratio suffers. On the other hand, if you did not get your generator, your income suffers, but your asset list remains the same, and so your ROA ratio suffers again!

Is there no winner? Well, of course there is. The business owner who does his sums carefully before making the decision to buy a particular generator, if he does so at all, will retreat the least. He will optimise his decision around calculated consequences. His ROA ratio will suffer less than that of his competitor who blundered in without a moment's thought in an effort to pee further than the big lad down the road.

So while it may feel good and comfortable to be able to push the starter and gloat at your neighbours while they complain about the gentle chug-chug of your diesel, perhaps they are better off in their long term financial planning.

Cheers

Mark Corke

MOTIVATION - LET LIFE BEGIN

MOTIVATION – LET LIFE BEGIN


By Nikki Viljoen of N Viljoen Consulting CC

Today’s quote comes from Grace Hansen, who says “Don’t be afraid your life will end; be afraid that it will never begin.”

That surely brought a smile to my face, when I think about all the millions and billions of currency that have been spent to keep us young, take away the wrinkles and stop the ageing process. Imagine if you will, if that money had been spent on ensuring that life was lived?

I am often amused at the idle conversation at a dinner party – where the discussion is usually centered around who has had what work done. Quite frankly I can’t see the attraction, but then I guess I have more important things to think about, like the content of the next article or how I am going to assist a client with getting BEE compliant or assist them with getting the most benefit out of being a VAT vendor.

Perhaps that is because I have gotten to that place in my life where it’s not the “what I look like” that is important, but rather “who I have become” and what I want to achieve that takes precedence.

I have made peace with my bulging midriff, and my breasts that have lost the battle to gravity, and my ‘crock’ knee that was abused during my youth when I played a lot of sport. So what if I can’t (or perhaps won’t even attempt) to run the four minute mile, or that I have grey streaks in my hair or that I have laughter lines around my eyes – they are all earned and deserved!

Rather think about the battles that I have fought and won! Things like making a difference in the lives of individuals, playing it forward and giving back. Think about the journey that I have taken where I have grown as an individual and a person (yes and around the midriff too). Think about the person who has challenged the universe and come out the other end – positive and with a purpose in life.

So before life passes you by, and believe me it will – think about doing something worthwhile with it rather than running around frenetically looking for ways to prolong it. No matter how much you stretch it, if you do nothing with it, nothing will have been gained.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za.

WHAT TO DO WHEN. . . . You Want to Dismiss Staff - Part 9

ARTICLE 10

WHAT TO DO WHEN . . . . You Want To Dismiss Staff?

Part 9


By Nikki Viljoen – N Viljoen Consulting CC.

So the final piece in this particular saga is that of dismissal due to incapacity, ill health or injury.

The first thing that we need to understand is that the employer is not obliged to keep someone on because they are ill or have been injured. The employer also has rights and as long as the proper procedures are followed, these employees can be dismissed.

The employer would need to ascertain whether or not the incapacity of the employee on the grounds of ill health or injury is temporary or permanent.

If the employee is unable to work for a while, which would make it temporary, the employer would have to investigate all the different possibilities before considering dismissal.

When checking out what other measures may be taken into consideration, it would be a good idea to have a look at factors such as, but not limited to:
a. the nature of the job;
b. the period of absence;
c. the seriousness of the illness and/or injury; and
d. the possibility of getting a temporary replacement to take the place of the ill and/or injured staff member.

When the disability or injury is of a permanent nature, the employer would need to decide if there was any possibility of securing alternative employment within the company or if the work could be adapted to fit the capabilities of the employee.

Remember that in all instances the employee must be allowed to state their case or respond to any suggestions put forward or be assisted by a colleague or a union member. The employee also has the right to request assistance from the HR department.

The extent of the injury and/or nature of the illness also needs to be taken into account and this to must be taken into consideration when deciding on whether the dismissal is fair or not.

Injuries that are sustained in the workplace are more difficult to process in terms of being fair and/or unfair as the courts appear to have more sympathy with the employee in these circumstances.

The guidelines for dismissal for incapacity due to ill health and/or injury are:

As usual there is always a recommended process or procedure to follow.

In order for the dismissal not to be considered unfair, the employer needs to decide whether or not the employee is capable of doing the work. If the employee is not capable, the following needs to ascertained;
i) The extent to which the employee is able to perform the work – for example, John works in the warehouse. His job is to pack stock onto the pallets. Some of the bags or boxes weigh in excess of 40 kilos. John lost his leg in an accident that occurred in the warehouse, when a number of pallets were not correctly stacked and they fell over, pinning him underneath and severing his leg. There is an opening in the administration department for a filing clerk. If John is dismissed in this instance you will be inviting trouble in through the door.
ii) The extend to which the employee’s work circumstances might be adapted to accommodate disability, or where this is not possible, the extent to which the employee’s duties might be adapted – for example Jane is the tea lady, who has suffered a stroke and as a result she is semi paralyzed down her right side. She is no longer able to carry trays of tea and/or refreshments and the company refused to buy a trolley that she can push around. If Jane is dismissed in this instance you will be inviting trouble in through the door.
iii) The availability of suitable work – for example, Alex is an Accounts Manager and he has had a heart attack and can no longer work under stressful circumstances. There is an opening for an accounts researcher. The hours are fixed, there are no deadlines and no interaction with clients, however, it is a junior position. Alex is willing to take a reasonable cut in pay but the employer feels that he is far too qualified for the position and even with a reasonable cut in pay it will be more that they wanted to pay. If Alex is dismissed in this instance you will be inviting trouble in through the door.

This concludes the series on Fair Dismissals. Next week we will be starting a new topic.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za

THE POWER OF NETWORKING - PART 79

THE POWER OF NETWORKING

PART 79

By Nikki Viljoen of N Viljoen Consulting CC

It is said that you should ‘start with the end in mind’. Whilst I agree with this statement in terms of “Networking” I am not sure that it is true of either life or business (however that would be another discussion for another time).

Going to a networking meeting or attempting to do any kind of networking without having the end in mind, would be going there to achieve absolutely – nothing!

Your objective, or end, in networking is clearly to do business – whether that business is to buy (or find suppliers) or to sell (either your product and/or services) or perhaps it is to do a combination of the two. The bottom line is that it is to do the business.

In order to do the business, I am of the opinion, that a relationship needs to be built. If people don’t know you or don’t know what it is that you do, you cannot start building the relationship so you need to tell them who you are and what it is that you do.

Some networking events allow only a very short time for you to explain what it is that you do and who you are. So it is imperative that you have a really good “elevator speech”.

You need to have your elevator speech written and rehearsed. Practice on your friends and /or relatives – make sure that it illustrates clearly what it is that you do.

If possible your elevator speech should highlight what it is that makes your different to and/or better than all of your competitors. Think about what it is that you are saying – if you are a “hairdresser” for example, why should people come to you rather than any other hairdresser? Remember that you know what it is that you do better than anyone else, so it stands to reason that you need to tell them and explain it to them. They cannot read your mind, so they will not know if you don’t tell them.

Then of course you also need ‘to listen’. It’s no good giving people what you think they want or need. You have to give them what they want and in order to find out what that is you need to listen to what they say. Many people don’t actually know how to say the words about what it is that they want, so you need to listen carefully to the words that they are saying in order to determine what they want.

You love to get referrals I am sure. I know that I do. I also know that there is no way that I am going to refer anyone because they were at the same meeting, venue, pub, party (insert where you met them here) as I was, so I make an appointment with them in order to set up a meeting for a one-on-one discussion, to find out what is that they do, to ascertain if there are any synergies and find out if there is any mutually beneficial way that we can add value to each others businesses. This is how the relationship can start to develop. Once the relationship is in this stage it is easier for me to refer or collaborate with or form strategic alliances with these individuals.

This is the end that I always have in mind when I network. Do you really know why it is that you network?

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za