NZ Entrepreneur – March 2017 Vol 4 by Espire Media

NEW ZEALAND’S E-MAG FOR ENTREPRENEURS AND BUSINESS OWNERS

MARCH 2017 VOL 4

Five Tips for the Reluctant Salesperson Six Steps to a Good Content Marketing Story Startup Watch: RAWE: Organic Smoothie Bar

TOUGH CHOICES:

WHO GETS PAID WHEN YOU’RE HEMORRHAGING CASH? www.nzentrepreneur.co.nz

CONTENTS 4 Tough Choices

Five Tips for the Reluctant Salesperson

14 Six Steps to a Good Content Marketing Story

16 Startup Watch: RAWE. Organic Smoothie Bar

20 Quick Fix

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ABOUT / Short and sharp, New Zealand Entrepreneur is a free e-magazine delivering thought provoking and enlightening articles, industry news and information to forwardthinking entrepreneurs.

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EDITOR / Richard Liew ART DIRECTOR / Jodi Olsson GROUP EDITOR / Colin Kennedy CHIEF FINANCIAL OFFICER / Alastair Noble

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CONTENT ENQUIRIES / Phone Richard on 021 994 136 or email richardl@espiremedia.com ADVERTISING ENQUIRIES / Jennifer on 0274 398 100 or email jenniferl@espiremedia.com WEBSITE / nzentrepreneur.co.nz

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Vist:LeadingEdgeGroup.conz

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Entrepreneurship

TOUGH CHOICES Who Gets Paid When You’re Hemorrhaging Cash? BY Bob Shoyhet

hen things are going well, your cash grows, payments to creditors don’t miss a beat, plus they are thrilled to get regular payments on time. Also, your customers pay on time, and there is an equilibrium that keeps everyone happy. But as we know all too well, things don’t always go the way we want. What happens when your cash flow slows, and the bills, as they ever will do, keep coming? In this article, we look at who will get paid and who won’t. Not a pretty choice, but one that is vital to surviving when cash flow becomes a trickle, or worse still, stops altogether.

HAPPY DAYS Business is booming; cash flows are smooth. The hardest thing to accept at times is that it will not always be like this. This is not negative thinking, but business sense. Most businesses are cyclical, meaning that at some point there will be a downturn, and perhaps the best way to deal with this is to do so before it happens. Accept reality, have a plan, and ensure that you stick to it. You must pay your creditors on time to ensure continuity of business. Also, you need to make certain that there is no slippage in the payments received from your customers. Maintaining this good practice now will make it much easier in the future. If you give anybody the chance to take advantage of you, then in today’s tight market they will likely seize the opportunity to do so. Make sure that your actions are exactly as your intentions – consistency is vital. To avoid issues developing, remember that communication is essential. Be prepared to discuss, but moreover be willing to listen. A good business lesson is that we are born with two ears and one mouth, so you learn a lot more by listening than you do talking. What are your customers trying to tell you? Are things going to get tough for them, and if so how do you act now? Extending credit that will never be met is not a good answer, but a dynamic flexibility to business is. Your partners will welcome this open and honest approach when dealing with you.

HAPPY DAYS ARE NOT FOREVER Times will get hard, and cash is the first thing to run out. Since you are reliant on this flow, your business will suffer. Wouldn’t it be useful if, during the good times, you had built up a contingency reserve for this very moment? Of course, it would so make sure you have done so or start now. But as cash flow decreases, those bills won’t. They’ll arrive on time every month without question, and your creditors may be suffering themselves and thus may lean a little heavier on you than they might have done before. Could you preempt this by renegotiating with vendors before trouble begins? If you’re going to delay payments, be open about it, and if necessary, dip into the newly established contingency fund. That’s why you created it in the first place. www.nzentrepreneur.co.nz

Entrepreneurship

The ‘Pay Them Later’

REMEMBER, NOT ALL CREDITORS ARE CREATED EQUAL The simple truth that you must ascertain is who is at the top of a crucial list of creditors, and who might be happy to be the last person getting paid. By happy, perhaps less upset would be more appropriate. One approach is to apply a simple rule of three – Now, Later, and Whenever – to your creditors, in determining who gets paid when. The ‘Pay Them Now’ This would include employees, who depending on the severity of the situation may need further selection. For example, sales reps would be a priority since no sales equals no cash flow. The website team if online is a major part of the business; key creditors that have liens on your receivables or other assets without whom the business cannot continue; debts that you have personally guaranteed; and legal settlement payments. www.nzentrepreneur.co.nz

Believe it or not, there will be some that have always waited longer for payment on the basis that they get paid in the end, and that pushing for quicker payment may, well, result in no payment at all. Those include creditors with a strong business model, significant cash reserves, and established, larger companies who can handle small hiccups to a payment schedule. The exact opposite are those that will demand payment right away at the top of their voice and will continue to do so until they get it. Not unlike a bully, if you give in to them you will undoubtedly see them revert to this type of behaviour time and again. So set a precedent now to enjoy some peace later on, and make it an ongoing business rule not to do business with bullies. Finally, there are some businesses that forget who owes them anything at all, and if they can’t remember, don’t go out of your way to remind them. Don’t forget that only once they make a formal request can they then take further action, if required. Rather than wake a sleeping giant, let them stay quiet, but don’t forget they will still be there once they have a wake-up call.

The ‘Pay Them Whenever’ In short, anyone else not listed in the ‘later’ and ‘whenever’ piles, and those who did the work without a contract or written agreement (that’s just bad business), or those who performed a service for you without expectation of payment (they do exist). In business, if you are not able to learn to say no, and moreover back it up by your actions, then you are truly going to struggle when things get tough. Keep contacts that add something to your business and remove all those that offer no value. It is the adage of radiators and drains. Keep close to you those that radiate sound business and provide value, lose quickly those who drain you of the will (or cash flow) to carry on.

Like in life, running a business can be easier if you put in the time and create plans for inevitable downturns. Like in life, running a business can be easier if you put in the time and create plans for inevitable downturns. Run what-if scenarios for possible major events before they arise, ensure you recognise your staff and vital creditors, keep communications open with your vendors, and when you can do so, create a contingency fund for those bad times. Hopefully, you never need these, but it’s certain that those who failed never had them to fall back on in the first place.•

Bob Shoyhet is CFO at Melillo Consulting, and has been helping build businesses from startup through to $100m+ multi-national operations for over 25 years. www.melillo.com/Executive-Team L: Bob Shoyhet T: @bobshoyhet

Sales

FIVE TIPS FOR THE RELUCTANT SALESPERSON BY Bill James

aybe you’re new at sales, you topped the training class – but just cannot make the sales stick.

Or you could be a veteran of many sales conquests, but more recently you simply cannot get the deals across the line. Or perhaps you spent a small fortune acquiring a franchise and it looked great on paper. You have big plans, high hopes and you are putting in the hours to make it happen. But somehow the results aren’t coming, and the money’s not flowing. What’s wrong? Unfortunately, the answer could be you. Especially for franchisees, there are lots of promises about fantastic marketing packages and potential clients coming through the door, but the simple truth is that you are now selfemployed. No more sick days. No one else to delegate to. It’s you that has to make that sale and secure your own money.

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Stop thinking of yourself as a ‘Salesperson’ Think about it. The word ‘salesperson’ does not engender confidence and is not respected, even by you. Ask yourself, do you like being ‘sold to’? Guess what – your clients feel the same way. There is an enormous amount of negative connotation around this wording, and it brings up an image of someone you may not want to be. There is every chance when you were a child your parents told you that salespeople were pushy and not to be trusted, and now you have to become one. This naturally causes a real internal conflict and is, in my opinion, the number one reason why you could find yourself sabotaging your own efforts. Don’t believe me? Ask yourself these questions:

These issues are even more acute if you’re very technical in nature, and you like • Do you approach every sales opportunity performing the task but not producing the in the belief it will be a sale? sale. Why not rename yourself, so you’re • Are you secretly dreading ‘that’ question comfortable in saying that word when you from your client – the one you find so hard represent yourself to a potential client? What to answer? could you call yourself that sits comfortably with you? Remember, your role is to help • Do you find lots of little jobs to do that keep you so busy that you have little time people make the right decision – it’s not to sell them something. for new business calls?

Sales

Be yourself

So many people put on a persona they think is needed to create a successful sales outcome. This is simply not the case and could, in fact, be what is costing you business.

If you went through all the psychological and personality testing when you applied for the job or franchise opportunity, these assessments will have shown the real you and indicated that you should be successful in your business. So why are you hiding this real you now?

Again we put on this persona of ‘professionalism’, which means we often deliver a very dry presentation. What was the passion that got you involved in the first place? If it was that you simply thought you’d make a lot of money, you may have made an error.

Clients look for faults and are suspicious when you knock on the door because you are promoting a product. If they sense falseness about you, it will raise their alarms and give them a good reason not to buy from you.

Clients enjoy your enthusiasm and passion for your product. It will take you through the tough times, but you’ll also need to show it to your clients, so they know that you’re passionate about what you are doing.

Will your natural personality be what everyone is looking for every time? Probably not. You will get on with some people better than others. But the reality is, especially if you are less experienced, you were probably never going to sell to those people anyway. Most people will be put off by a fake overlay, so be yourself. The best results are obtained within 24 hours when returning incoming phone calls. And leave a good message. www.nzentrepreneur.co.nz

Show some passion for your subject

This isn’t easy in cultures where showing emotion is not the norm, but the old saying ‘enthusiasm sells’ is as true now as it ever was. Let your passion and enthusiasm for your subject show, and you’ll take your potential client along with you for the ride. The big problem is that if you don’t show some passion and hide in facts and figures, your customers will allocate an emotion and motivation to you; and there’s a big chance that it won’t be a positive one.

Jargon kills sales

Occasionally you’ll find someone who’s caught up in the technical aspects of what you do. But usually, they are initially more interested in knowing you understand and care about their needs. If you are technically orientated, it’s easy to hide in the features of your product, but this will stop you actually addressing the need of the client. Quite often, some products appear to be very similar and have similar pricing, so the difference is your ability to uncover their real concerns and needs and address those. In this way, you’ll make a connection at a very personal level, which is the key to gaining that commitment from your potential client. Loading them up with jargon will simply occupy their head space and will actually be counterproductive. Using everyday language that your customer can understand and addressing their real needs will result in you making real progress.

Using everyday language that your customer can understand and addressing their real needs will result in you making real progress.

Sales

So be yourself, cut the jargon, and let your passion for the product speak for itself. Approach other people the way you like to be approached, and you might well find that your sales increase hugely

Use a low logic approach with your If I can’t, then it’s only fair that I should potential client head for the door. But if I can make all that happen, then your company is definitely at an ‘Low logic’ is language that is simple to advantage. I’d like to simply sit down with you understand. It’s almost like approaching and run through these different ideas and see your client underneath the radar. Simply approach them in a very matter of fact way where we go from there, is that fair enough?”

(with a certain amount of emotion) and give them the option to decline your services if they want. In this way, you don’t raise any alarm bells and make them feel trapped. They are much more likely to come along for the ride this way. For example: “Mr Prospect, the simple reality is businesses like yours can use this product and it has X effect. For you to be interested it obviously has to meet X, Y, Z needs and also fit within your budget, and I have to be able to show you the real benefits of working with our company. www.nzentrepreneur.co.nz

So be yourself, cut the jargon, and let your passion for the product speak for itself. Approach other people the way you like to be approached, and you might well find that your sales increase hugely.•

Bill James is an internationally recognised sales speaker and trainer, who specialises in referral and relationship marketing. www.BillJamesSpeaker.com L: Bill James

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Get in touch with Jennifer now to discuss our options. +64 3 443 6316 (NZT) | jenniferl@espiremedia.com | www.espiremedia.com

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Marketing

SIX STEPS TO A GOOD CONTENT MARKETING STORY BY Colin Kennedy

www.nzentrepreneur.co.nz

ccording to the Content Marketing Institute’s 2016 Benchmarks, Budgets, and Trends – North America, more than half of B2B marketers were planning to increase their content marketing budget. Even 57% of those who are least effective at content marketing planned to increase their budget. From the talk around New Zealand, it’s conceivable that many local companies are contemplating doing the same thing. With content marketing on the rise, it is important to understand what it is, and how to do it. Definition: “Content marketing combines the skills of marketing and journalism to create brand influenced editorial content that meets the information needs of your customers. It educates, informs and entertains – just like mainstream media would.” In this age of search behaviour and internet-influenced buying decisions, content marketing is about using your intellectual property – experience and expertise – to help people with good advice, in an interesting and informative manner. But how do you write a good value-added story that grabs attention? Problems sell. Newspapers understand that. Journalists and copywriters understand that people are more likely to be motivated by the prospect of pain than they are by pleasure.

The neuroscience book, How We Decide by Jonah Lehrer, tells us that a person who has damage to the emotional centre of their brain will be unable to make decisions, because their rational brain will repeatedly debate the pros

and cons of even insignificant decisions, such as a choice between white and brown bread. Findings from research conducted by Antonio and Hannah Damasio (reported in part in A. Damasio’s Descartes’ Error, Grossett/Putnam, 1994) “suggest we are unable to make decisions having personal relevance unless we have been motivated by our emotions. Reason, they say, plays an analytical role, not a decision-making role, and emotion is needed to motivate somebody to act” (as reported by Jim Gilmartin). It’s pretty clear that motivating an emotional response in your target market and or customer is a very powerful way to call them to action. Here are six steps to prompting an emotional response in your audience – steps you can use to put together a presentation or promotion: 1. Acknowledge their emotion, e.g. frustration, anxiety

them why they are feeling like 22. Tell that, i.e. what the problem is them why they will continue to feel 33. Tell that way, e.g. why the problem persists why your product or 44. Explain service alleviates their problem 5. Paint a picture of how good life will be after applying your solution

it up with proof to appeal 66. Back to our logical brain.•

Colin Kennedy is a New Zealand based content marketer and thought leader. L: Strategic PR www.nzentrepreneur.co.nz

NEW ZEALAND IS A HOTBED OF ENTREPRENEURIAL GOODNESS EACH WEEK WE PROFILE A STARTUP WEâ&#x20AC;&#x2122;RE WATCHING ACROSS A RANGE OF INDUSTRIES

RAWE. Organic Smoothie Bar FOUNDERS: Maggie & Lee Gray HQ: Auckland

www.nzentrepreneur.co.nz

Tell us about your business. I (and my husband Lee) own and operate a mobile organic smoothie bar in Auckland City and the North Shore. Every element to my smoothies is organic and I sell at public and private events. There is a very limited supply of healthy food vendors in Auckland, no other vendors sell organic smoothies that are dairy free. Who and where are your target customers? My target customers are health conscious individuals who look for healthier choices at events in Auckland. In addition to this, young children. My smoothies are all taste tested by my toddler and are very appealing to children â&#x20AC;&#x201C; all just natural goodness!

Who, how and when did you first come up with the idea for your business? I first thought of the idea shortly after having my son, when I became frustrated at seeing Mr Whippy at childrenâ&#x20AC;&#x2122;s public parks and beaches. I saw a gap in the market for a mobile vendor to supply healthy and nutritious foods to both adults and children at public events and markets. www.nzentrepreneur.co.nz

What are your three biggest unique selling points? 1. Healthy food alternative (sugar free, dairy free and vegan) 2. Locally sourced organic produce using New Zealand suppliers 3. We’re a mobile business

What is the biggest entrepreneur lesson you would like to share with other Kiwis thinking of starting their own business? Do your homework first – don’t jump in without a sound business plan. Ensure there is a demand for your product. •

What are three things about your business that you are proud of? 1. Our products. Simple and wholesome goodness. 2. Our branding. Memorable and classic. 3. Our business ethics and environmental consciousness.

www.rawe.co.nz F: www.facebook.com/raweliving I: @raweliving

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Quick Fix

QUICK FIX Keeping the door open when ‘your competitor is cheaper’

ou will have been in the situation where a prospective client says that your offer is not competitive, or that they have lower bids on the table. How you respond to this will either keep the door open, or you will be closing the door on your way out. Here’s two approaches you can take: 1. Acknowledge that there is usually price variation in the market, and for good reason. Revalidate the decision criteria and explore how you rate against these criteria. Look for opportunity to illustrate how you have performed against these criteria in the past. 2. Ask the prospect for any reasons why they have not yet awarded the contract to the supplier with the ‘lower bid’. The decision may be made and the order being written up, but if not, this may just keep the door open for you to justify and maintain your higher price.•

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“We must look past the surface and be confronted with the truth that none of us are what you can see. There’s more to us than that, and we’re all dealing with things that you cannot see.” Michele L. Sullivan, Ted Talk WATCH IT HERE: ‘Asking for Help is a Strength, Not a Weakness’