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Many around the world and in our country are experiencing the effects of this public health crisis. Economic experts are sounding a grim warning of how this pandemic can affect all businesses.

What can we do, as a small business, to counter the impact of this crisis on the economy? In this video, I explore how we can proactively respond to the impending effects of this crisis. My goal is to encourage everyone to start having this conversation today and begin finding answers to the question: How can a small business owner respond to the effects of this crisis and support each other in these uncertain times?

As of this video’s recording, there are hundreds of thousands of reported cases of COVID-19. Many health experts are comparing this crisis to the SARS (Severe Acute Respiratory Syndrome) outbreak in 2003. At that time, Australia was not severely affected as we only had 6 reported cases and no fatalities. Many of us have not experienced a crisis of this scale in our lifetime, and we, as Australian businesses, are treading unchartered waters.

We’re feeling the impact of the coronavirus in the world economy, as many nations are closing or have closed their borders to mitigate contagion risks. Businesses have shut down by order of the government and hundreds of thousands of people are now unemployed seemingly overnight. Even if many of these businesses have shut down, quite a few of them have chosen to retain their presence online.

If your business is still trading, you still have the opportunity to adapt to the current environment. That, in turn, puts you in a position to prepare for recovery once this crisis is over. Just as it did in 2003 during the SARS crisis, this crisis will also pass. Your business just needs to be in a position to take advantage of that.

If this is the time to be proactive, what can we start doing today?

Communicate with your clients

Everyone is likely to be feeling the effects of this health crisis—some more than others. This is the best time to get in touch with your clients to see how they are faring today. Acknowledge that times are tough and empathise with their current situation.

Let them know what you are doing today to help mitigate or minimise the risks. For example, if you run a restaurant or any food-related business, show your customers how you are protecting your own staff and what new measures you’re putting in place to stop the spread of the virus. Show them how you are adapting to do home delivery and how you can assist those in isolation by preparing meals for them over the next two weeks. Give them options on how, by purchasing from you, can introduce a variety in their lives by providing food options.

Communicate to your clients if you need to limit your operations or if stock becomes low in supply. How can they get in touch with you? Did you change your operating hours? What services and products are you still offering? Reassure your customers by consistently and  constantly communicating, especially when there are changes that will affect them significantly.

Use technology, explore alternatives

They call this the age of social distancing. Social distancing means deliberately increasing the physical space between people to avoid spreading illness. A recommended space of a meter or more between individuals is recommended to stop the spread of the virus. This is the reason why, in many parts of the world, large events like concerts, conferences, and shows are being cancelled to discourage the mass gathering of people.

The current recommendation is to stay home and avoid crowds—to practice self-quarantine at home and socially distance yourself from others. This means not participating in face-to-face meetings or events.

If you need to meet with someone or work with a group of people, what can you do? It’s time to use technology and explore the alternatives. There’s always email. There’s also video conferencing applications for messaging and voice calls. If you have to call off a face-to-face meeting, you can set up a video conference call through Skype, Google Hangout, or Zoom. If in case you need to work from home, you can still track team tasks and projects virtually through productivity tools such as Monday, Asana, and Trello.

There are many apps available in the market today—some have free features, while other features are available at a fee. If you’ve always wanted to learn something new and explore these apps—now is the time to do so.

Here are some examples of what people are doing across the globe in response to the call for social distancing:

  • In some places like the United States, governments are partially shutting down restaurants to discourage people gathering in large groups in a single dining space. Restaurants are keeping their kitchens open by encouraging people to order for takeout, curbside pickup, or delivery.
  • Many international conferences have also been cancelled. Organisers are instead holding virtual conferences, where people can still participate by logging in online.
  • Many companies are encouraging staff to work from home and are using many communication and productivity apps that I have mentioned to catch up and keep track of progress.
  • The entertainment industry is one of the hardest hit by the coronavirus. Many concerts and music festivals have been called off. As an alternative, many artists have gone to social media, such as Instagram and Facebook to hold live virtual concerts.
  • Other professionals—chefs, marketing professionals—are offering free virtual workshops.

Necessity is the mother of invention. There is a need today to rethink traditional business models to fit the conditions of this crisis. Those who can adapt are in a better position to overcome the challenges. This is the time to get those creative juices going and to revisit your business plans. Who knows? Your creativity might lead you to a business model that will bring you and propel your business to growth after this crisis is over.

Explore what loans and benefits are being made available to you

The government has just announced a stimulus package for the Australian economy, which provides support for small businesses, amongst many others who will be or are already being affected by the pandemic. Contact your accountant and explore what is being made available to your company and how that would impact you directly.

  1. Prepare, prepare, prepare

As business owners, we understand risks and that we should always be prepared for what is inevitable. Now is the time to think about what you should do for your business to survive. If what other people are doing is any indication of what we can do, there is a LOT that we can do today to prepare our business for the future.

I will share with you a series of questions that will likely take some time for you to think about. The answers that you come up with may be the answer that allows your business to survive and put you in a position for growth once this crisis is over.

  • What can I do now so that I can reach my customers and touch base with them?
  • What alternatives do I have so that I can continue to offer the products and services to my customers?
  • What do my customers need now?
  • Has the crisis developed new pain points for my customers?
  • What changes can I do today to support my customers’ needs and address their new pain points?

The last question is particularly important because this is how you strengthen your relationship with your customers in this time of need. For example, some grocery and supermarket chains in Australia have come up with special shopping hours to a niche market—in this case, a Senior-Only shopping hour to help older shoppers.

These are uncharted waters. We will possibly feel the economic effects of the coronavirus in the months to come. But I urge everyone to keep calm, stay safe, and focus on the things that you can change or control.

When this crisis is over, I anticipate that more business will be more open to using video conferencing and that it will be widely accepted as the main way of doing business than ever before. How will that affect your business? Let’s focus on what changes we can make and find ways to support one another.

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[youtube]https://www.youtube.com/watch?v=9K2RNalSiJQ&feature=youtu.be[/youtube] In this video, I discuss the myth that when businesses grow faster than usual, employees tend to get overworked, which leads them to either leave the company or to experience productivity declines. Today, I will bust that myth and discuss plausible explanations of why this happens and how your business can prevent these from happening. Misconceptions about causes increased employee turnover and drop in productivity The impression that most business owners have about growing rapidly is that it usually results in high employee turnover. Employees leave because the sudden spike in the workload overburdens them. Too much work can lead to productivity—that is, employees will likely work longer hours, get tired, and become less efficient in the long run. This seems a logical argument about the downside of growing a little to quickly. However, studies have shown that this is not necessarily true—that is, that high turnover and low productivity experience is caused by too rapid growth. In fact, a specific study on the reality of work done in mid-market companies in the United States that looked into employee turnover from over 800 companies and 125,000 employees uncovered some surprising insights:

 “The faster the growth, the lower the turnover—for every additional 10 percent in headcount growth, turnover was, on average, 1.6 percent lower.”

The results of the study run counter to the common but false impression that rapid growth results in high turnover. So if it isn’t growth, what causes high turnover and low productivity? What causes high turnover and low productivity? Just imagine this scenario. Your business is experiencing rapid growth, and you find that your premises might be too small for your operations. There might not be enough space or even equipment for everyone to work efficiently. While moving to a large space or buying new equipment might be the answer, you might not have enough cash in the short term to support expansion costs. You probably think that the natural course of action would be to try and generate more income to get enough cash—but then this puts additional pressure on your employees, your equipment, and even your current space. Expanding might not be feasible for you in the short run. There may be a shortage of cash to meet expansion costs. You may resolve to take on more work—more clients, more projects—to generate more income, which places additional pressure on your premises and staff. Overworked employees can cause productivity to drop. The quality of your products or your services can decline, too. When this happens, you may lose your customers to your competitors. What then? Staff morale drops, which may cause them to leave. The problem in this scenario is that the business is operating re-actively rather than proactively, which negatively impacts resources. So what is truly causing low productivity and high employee turnover? In this particular case, it is not growth but the lack of strategic planning to respond to the changes brought about by growth! If you want to know more about what causes high employee turnover, watch my 3-part series explaining why employees leave. What can you do?
  1. Have a plan. A well-thought out plan serves as a map on how to achieve growth. An effective plan will have an action plan for possible scenarios, so you are steps ahead before problems arise. Because of this, it is important to revisit the plan as often as you can—especially if you are aiming to grow exponentially!
  2. Talk to your team. They are part of the solution! Brainstorm with them, ask them where they are having problems and where they think they can improve things. Morale usually drops when people feel that they do not have support—and when things get tough, communication becomes very important.
  3. Find help! Especially if you’re having challenges yourself or if you know that this can be done better than doing it all by yourself. You are not the first business owner who has experienced growth challenges, and there are many out there who are willing to help. Find a mentor or even a business coach who has the wisdom and experience to help you find solutions.
If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

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[youtube]https://youtube.com/watch?v=NVv_87J2LP4&feature=youtu.be[/youtube] Bunnings is a popular Do-It-Yourself (DIY) hardware store brand that is beloved for its tools and do-it-yourself solutions. However, a recent business decision made by this company resulted in a loss of over $1 billion. In this video, I discuss what this mistake is all about, what we can learn from it, and how this mistake can be avoided in your business. What made Bunnings popular in Australia? Founded in Australia in 1887, Bunnings Warehouse is a household hardware store that operates over 300 branches all over Australia and employs more than 30,000 employees. The company earned A$11.6 billion in revenue in 2016. Bunnings is considered a success here in Australia. Why? Here are three important reasons for Bunnings’s success:

  1. Bunnings made household hardware become accessible to everyone. And with that, they have done a great job of building and nurturing a market for people interested in DIY.
  2. Bunnings has a good marketing campaign that caters to the DIY market. No question fielded by any of its customers is too dumb for its well-trained staff to answer—customers come out of the store confident that they have the right information to tackle their DIY project.
  3. And more importantly, Bunnings has made sure to provide products that cater to what the market wants.
So, as with many successful businesses, Bunnings had this impression that since they were successful in one market, they could easily replicate this success in another market. With this thought process, Bunnings bought a range of stores in the UK to give them an immediate presence in the new market and replicated the Australian model in the UK, expecting the business model to work and the profits to start rolling in. What happened, however, was a series of bad decisions that led to a $1.3 billion write-down for the company. So why isn’t Bunnings’ working in the UK?
  1. Unlike Australian customers, their UK counterparts want things done for them, rather than do things themselves. Australians are into DIY, whereas in the UK, the preference is for Do-It-For-Me services. You can easily imagine that a DIY business model will not work well in a DIFM market.
  2. UK customers want to see aisles and displays that provided inspiration for home projects—and buy finished projects, rather than tools and parts that one needs to work on them. The Bunnings model provided the tools, but not the finished product.
  3. UK customers have no interest in outdoor furniture or BBQ grills—products that very popular in Australia but are not so in the UK. One factor for this taste difference is the difference in the weather in the two markets.
  4. The Bunnings brand is literally unknown in the UK. Coming into the market by merely taking over a business that was not doing well in the UK did not do Bunnings any favours either.
So, while Bunnings Australia’s business model fits the Australia market, it cannot be said the same for its UK market. It would seem that there is a mismatch between what customers in the UK wanted with what Bunnings UK had to offer: their product line, store layout, and displays didn’t entice customers to purchase. What lessons can be learned? From a business point of view, business arrogance is defined as follows:

“The side effect that one gets when the business under your charge is doing extremely well, even when your competitors may be struggling.”

Business arrogance makes one mistakenly assume that a successful business model will work elsewhere. The obvious lesson here is that one should not assume that one’s success in one market can be successfully replicated in another market by simply doing the same exact thing. Bunnings’s mistake was to use a copy and paste business strategy—they copied what was working in Australia and pasted the model into the UK market, without taking into account the different taste and preferences of the two markets. Do you suffer from business arrogance? If you do, you might not even realise it. I, sometimes, cannot even tell if I am suffering from business arrogance. But what I do have a group of people who I am accountable to—people who can call me out and who can tell me if I am being arrogant. You should have a similar group of people, too, as this will save you a lot of money. So what can we learn from Bunnings UK? Understand the market. Take some time in understanding the market you will enter, and particularly the potential customers that you want to serve. Understanding what they want (and don’t want) may save you from the headache of stocking up on unwanted inventory. Rationalise strategically. When cutting down on costs, do not take out the one thing that makes the most difference. When Bunnings entered the UK market, they promised to provide the “widest range, lowest prices, and the best service” available. But when Bunnings started realizing that the business was not doing well, they opted to cut down on their staff. They took out one of the important factors that would allow them to successfully provide what they promised— the best service. If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.    

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[youtube]https://www.youtube.com/watch?v=4Qx2ntW_MRU&feature=youtu.be[/youtube] Why do people leave the organizations they work for? Is it because of the pay? The perks? Or the lack thereof? In this three-part series, I will explore with you the common factors that cause employee turnover, the strategies you can use to counter these factors, and, finally, focus on how to deal with a common factor that many rapidly growing small business face:

A Heavy Workload.

In this first video, the first of a three-part series. I discuss the common factors found in many organizations that may be causing employees to leave at a faster pace than average. Are you finding it difficult to retain employees, even when your business is doing very well? Are you wondering why your employees leave despite best efforts? Employee turnover is costly for any organization, but more so for small businesses. Consider how much it will cost you to replace the employee—you will need to find someone with preferably the same qualifications and experience to replace that person—you also need to train the new hire, and introduce him or her on how you do things in your business. You need to do all of these at your own expense. Case study: ice cream deli in a high tourist area in Mexico Let’s consider the case of an ice cream business in Mexico. I chose this case for two reasons. Firstly, why not Mexico? Why stick to your own backyard when you can explore and learn from other businesses in other parts of the world? And secondly, this particular business was surveyed, scrutinized, analyzed, and the results of the study were published in a study that could benefit business owners like you and me. This particular case is the subject of a study published in the Journal of Business Case Studies. They wanted to know why the staff of this deli kept leaving the company even if the business was doing very well, especially during the peak tourist season. In the service industry, like any other, there are seasoned peaks and lulls. Volunteer turnover—that is, when employees decide to leave on their own—that happens during the peak seasons can pose a challenge to businesses, which can impact on their workload, stress levels and the morale of the team. The study found quite a few reasons why employees left this particular organisation. Here, I highlight the top three reasons for employee turnover. Reason 1: No clear track for career development or growth The employees complained about two things:
  1. that there were limited opportunities for career growth and
  2. that there were insufficient opportunities for training and development.
Good employees want to advance in any job in the same way that business owners want their businesses to grow. When employees don’t see themselves growing in a particular role or organisation, many of them will leave and look for better opportunities elsewhere—and at your expense. Reason 2: Bad company culture Those surveyed expressed that there were instances were supervisory and management staff showed signs of favouritism and treated some members of the team differently than the others. Many employees also felt that they were not being recognized for their hard work. Employees want to be treated reasonably. They want to see great work commended and bad work penalised. Favouritism is unfair and this can be demoralising to the members of the organisation—prompting them to leave the company. Reason 3: Demanding work schedules Work can become very demanding, particularly when the business is run by a lean team. This is the reality for many small businesses. The problem is further worsened when there are other causes for the heavy workload. Many times, this is caused by unclear workflows and processes—leading team members to be unsure of what is expected of them. When employees don’t know what to do because it was not properly explained to them or because there are no clear processes for certain conditions at work, this becomes a recipe for high employee turnover. So what should we do? The answer is to address why the employees leave in the first place.
  1. To provide career development and growth within the organisation for all employees,
  2. To develop a company culture that cultivates a safe and motivational working environment, and
  3. To develop clear workflows and processes that will alleviate the heavy workload of your team.
But how do you do that exactly? I’ll explain more in my next video! So please, watch out for the next installment of the Employee Turnover Series, as I explain how to counter the common factors that cause employees to leave. If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >

[youtube]https://www.youtube.com/watch?v=P1u8-iK9sgA&feature=youtu.be[/youtube]

Great Business Series // Moleskine on staying relevant

When your business is under threat and new technology provides an alternative to your core product, what do you do to survive, stay relevant, and still manage to grow? What is Moleskine? Moleskine is a French-designed notebook with a legendary pedigree, known to have been used by renowned artists and writers that include Vincent Van Gogh, Pablo Picasso, Ernest Hemingway. It is a company that produces a host of different paper notebook varieties, such as journals, sketchbooks, and planners. What threatens Moleskine’s business? Analogue tools, such as journals, vinyl and film photography, have recently experienced a revival of sorts thanks to the Millennial generation, the digitalisation of our age remains as Moleskine’s, or any stationery manufacturer’s, most significant threat. The threat of the paperless office began in a 1975 Business Week article, with the introduction of computers and the prediction of automation. The influx of smartphones, tablets, laptops and a host of other gadgets continues to the push towards digitalisation and connectivity. And many companies whose main product involved paper felt the threat of the world going ‘digital’ and becoming less reliant on paper. How does Moleskine address the threats? Moleskine realised this potential threat. The understood that there is no connectivity as far as analogue tools go. To digitise your notes, for example, you need to scan each page, and it becomes a static document that is challenging to edit or revise. At the core of this strategy is Moleskine’s understanding of its customers. According to Moleskine CEO, Arrigo Berni, their market are so-called "knowledge workers"; these are designers, architects, engineers, and lawyers. A Moleskine notebook provides an add-on to what smartphones or a laptop can do, which the company saw as a need, particularly after a survey of 4,000 designers which found 65 percent of them prefer a pen/notebook combination for recording ideas. After all, once these knowledge workers hash out their ideas on paper, they will need to find an efficient way to digitise their sketches and notes, which they need to develop the final documents or plans required in their respective occupations. People like the idea of writing down their thoughts, and also be able to capture the information digitally. And so Moleskine embarked on an initiative to look at how their notebooks can be used to capture ideas on paper and digitally as well. In 2012, Moleskine partnered with Evernote to create an Evernote Smart Notebook that allows users to migrate their analogue notes into the Evernote system by taking a photo of their notes using the Evernote smartphone app. In 2017, Moleskine introduced the Smart Writing Set that allows users to write down notes on special notebook paper using an infrared pen, which in turn digitize notes in real time through a companion app. The new product provides users with flexibility, and notes can be synced with other apps, such as the Google Drive, Evernote, Apple’s Notes App, email, among others. What is remarkable with Moleskine’s strategy is that it embraced its threats by innovating its existing product line. In essence, Moleskine created a new product that seamlessly integrated analogue and digital tools, and in the process, provided a flexible solution for their customers. Today, Moleskine has a value of AUD 192 Million. It continues to innovate and use its threat to its advantage. For example, in July 2017, the company launched the Moleskine Open Innovation Program, a digital crowdsourcing platform urging its customers to submit project proposals to add to its growing line of products. What can we learn from Moleskine? The advancement of the digital age may significantly reduce the need for using paper, but Moleskine will be well-positioned to capture the market with its continued integration and innovation in the analogue and digital space.

There are opportunities to grow your business in the most unanticipated areas.

The paperless office was a real threat to manufacturers of paper products at that time, but it took an ingenious innovation of integrating a paper-based product with a digital idea to help a company stay relevant to its customers. What can you do with your product? How can you modify it to better appeal to your market? How can you take your threats and embrace them to innovate your product and take advantage of these threats? If you are interested to know more about what a business has to go through when facing exponential growth, you can download the first chapter of the book, ”$20K to $20 Million in 2 Years” absolutely free here. The chapter talks about the differences between a good and a great business and puts out questions that make you consider how you can turn your business from good to great.

Read more >