This month I wanted to address the subject of investment. Not the “give your business away” type of investment required to secure external funds from business angels nor the stocks and shares/bulls and bears, hedge-fund, fat-cat banker bonus investment . That’s for your trusted independent financial advisor to guide you on and if you are one of the fortunate few that are in a position to be considering such activity then I wish you all the very best of luck.
The investment I wish to discuss is closer to home – well closer to business anyway – your business. There is no escaping the fact that these current times are tricky for the most of us. Credit is being squeezed, cash is becoming king again. I am fortunate enough to meet business people from all sectors and from companies of all sizes and the message is depressingly consistent. Longer payment terms, partial settlements, court activity etc etc just to get your fair day’s pay for your fair day’s work. So, if things are so tight, why an article on investment??
Well, simply this. If you can continue to trade, you can make a profit. If you can make a profit there are potentially excess funds and excess funds should be used for their greatest benefit; probably now more than ever. It may be that you feel the greatest benefit is for you personally; after all, you are the risk-taker, the driving force and probably where the buck stops. You no doubt deserve that skiing holiday or that new 4×4 and who am I to argue? However, if you are considering channelling some or all of these funds back into your enterprise, where should it be spent?
For the sake of simplicity, I will categorise the potential areas as follows:
But first I want to ask a couple of simple questions.
Why should your clients buy from you? What makes you different? Will they come back?
I clearly have no specific knowledge of your business, its market nor its structure so I am going to talk in general terms. I am willing to bet that whatever market you are in, you have competitors; making a similar product or providing a similar service in a similar market sector, chasing similar customers. So what makes you different? And more importantly what makes you better? In slightly “jargonise-terms”, what is your Unique Selling Proposition?
I will cut to the chase; your plant, equipment, machinery, office furniture, cars, laptops etc will be similar; certainly similar enough to produce a similar product. The Wilson Super Transfixer Mark 2 may well be better at widget-building than its predecessor – the trusted but temperamental Mark1 – and will no doubt create some form of advantage in some term but do your customers care? They just want a perfect widget at the price you stated when you said they would have it.
Your processes, IT systems and internal measurement and management may be superior to your competitors but I am willing to suggest that there are here too many similarities in operation – hands up who does not have Sage?!!!! There are quite staggering efficiency benefits to be achieved by improving all internal operations and in considering new supportive software systems and this will be the subject of another article but I would like to draw your attention to the only absolute differentiator that you actually have. The one asset that guarantees that your selling proposition is totally and completely unique because IT itself is totally and completely unique.
Your people. You and your staff. Whether you are in service, retail, manufacturing, public sector or finance. Whether you trade alone or run Global Hyper Multi-Mega Corp. the answer is the same. Your people are unique. Invest in them.
And how about this for another amazing fantastic revelation – it does not have to cost a penny!!!
It may do, of course, but that is a personal choice of your own. But it does not have to.
Invest your time.
Invest your energy.
Invest your self.
Don’t get me wrong, I completely understand that initial and ongoing investment in hardware and plant and equipment is necessary to most businesses. My point being that unless you are on the cutting edge of an absolutely unique product or process and retain full control and copyright on the research and development of the product, then sooner or later someone will come along and copy it. They will make it cheaper or quicker or flashier or more available etc etc. My point here is for an absolutely unique investment that isn’t going to depreciate over time and is absolutely impossible to be copied by any competitor is that of your human resources.
Don’t believe me? I’ll prove it.
Look at your fingerprints. To the best of my, and as far as I know anybody else’s, knowledge, what you’re looking at is totally unique. No one in the history of mankind ever had those fingerprints. As far as we know, nobody in the future of mankind will ever have those fingerprints. You are, therefore, unique. And it gets better, because the principal, by definition, does not stop there. Every one of the people working with you, for you, and around you is just as unique. Technology will be copied, software can be duplicated, processes can be improved upon, and costs can be managed. You and your people are your USP; your unique selling proposition.
At some point in your business people will operate the machinery, tap the keyboard, drive the vehicle’s, answer the phone, meet your client’s, sit in meetings, make decisions, communicate instructions. Whatever the business, whatever the market sector, whoever your clients, wherever your competitors. There will be people in their businesses, completing similar activities and operations to people in yours. Doesn’t it make sense to make that you are better. In fact, does it not make total sense to make sure that you are the absolute best? And come to that, does it not also makes sense that you are the best, most informed, best advised, best served person in your business? So what’s next? How do I exploit this difference? Who do I invest in first? On what and how do I invest?
Who to invest in first is fairly simple, not necessarily easy, but simple. You invest in yourself. There are hundreds of business books; autobiographies, business experiences, tips and advice, but a recent publication that investigated over 100 millionaires produced the following fact; over 80% of millionaires interviewed read at least 10 business-related books per year. Clearly, the investment is required here is financially minimal, but will require you committing your time. It’s very possible that the first thought in your head was that you have little time to spare as it is. Well, in my opinion, if it’s good enough for 80% of successful millionaires then it’s good enough from me. It may require “not doing” something else. It may require reordering your priorities. It may require a full review of your time management; which is another area you could immediately assess, but the importance of understanding what makes successful people successful, learning from the best, is a low cost high return investment. And the principle applies to your ongoing day-to-day activities. Make sure that you are always aware of what’s happening in your market. Read the industry bulletins, marketing releases, trade journals etc etc and make sure that you are always fully aware of the latest developments in your product and your market and your customers. Read your competitors newsletters; check out their web sites and blogs. Think like a millionaire, learn from the millionaires, act like a millionaire and who knows what could happen next?!
Next, find out what is for free. Get familiar with Google for example. Last month saw a major change in the world of marketing and advertising. It was the first month ever that online advertising spend was greater than any other category. Google provide free online training in the use of their Adwords. You may not be the specific individual responsibility for your advertising and marketing activities, but chances are you’re paying for it! Make sure you know, at least, what they’re talking about and how your money is being spent and how you can make this advertising and marketing spend most productive. Your only investment here, again, is your time and energy. And Google are far from alone. There are hundreds if not thousands of sites and forums and agencies offering some form of free advice and information. One of the best of course is here at the3rdi.co.uk. But here’s the rub; first you have to read it; second, you have to act!
One you have committed to follow the advice of the millionaires and are now managing your time more effectively and learning the most you can for free, then you will hopefully decide to continue with this best practice and take your investment a step further. There will always be a requirement to develop your knowledge and skills in any “technical” context; and by this I mean, continuing to learn about your product and market. Indeed, you should know best where your own weaknesses lie in this area. My next advice, however, is that you continue to improve and develop yourself as a person, a manager and a leader. I do not intend to get into the semantics of the differences between the leader and the manager but for the sake of the article, I will assume that you have requirements to be both. In fact, you probably need to be an element of all things to all people. This said then, I next recommend you consider investment in you as a person. Once again, there are hundreds and thousands of personal development and self-help books and pieces of literature available.
There are similar levels of information available on the Internet. In fact, the difficulty here is not so much in finding advice and information as deciding what is most relevant and appropriate you. My simple advice is if you don’t know in the first place then give yourself the opportunity to try as many varied approaches and methods as possible. I myself admit to having read hundreds. Some were far more useful and relevant than others, but I can guarantee that within each book there was something that I learned, and something I found useful. In fact, once I had committed to developing my “person-skills” I could not but to take this activity even further and booked the services of a life coach. This of course was not free, but a relatively small financial investment with a larger commitment of my time, has yielded returns on my investment that could not previously have conceived. Try it. Invest in yourself and you will see the benefits to you and your business.
Finally, and equally importantly, I recommend you invest even more of yourself and your energy. But this time into something that is absolutely not you. I wholeheartedly recommend a fulfilling external activity, totally detached and separate from your business and your work. You need a break. How many times have you said yourself “I need a holiday?” Yet how many do you actually take? How many times when you do take a break to you actually have a great idea? How many times do you come back from your break clear and more focused? I will refer back to the millionaire discussions earlier; each and virtually every of these successful people in business take regular breaks. These breaks may only be extended weekends, but when they happen these successful people completely and totally absorb themselves in the break from work. It does not even have to be a holiday. It can be a hobby. It can be charity work or volunteer activities, but nonetheless their commitment to these extra curriculum activities, if you like, is as complete as their commitment to their work is. In fact, the more selfless the activity, the more satisfying the work and the more productive the break. Once again, I recommend you try it before you dismiss it. If it works for them, and is working for me, chances are it will work for you.
I know that earlier in the article I discussed investment in people, and I realise that the only person I’ve mentioned to date, is one person; you. I fully intend to expand my discussions and advice to incorporate your colleagues and staff and how to generate the best from them in later features. But my point this month is simple. Invest in yourself. Exploit your uniqueness and develop your unique selling proposition. It starts with you; your customers, employees and partners follow you. If you are not the best you can be, setting the best example that you can, then how can you expect to get the best results?