THE MONEY ACADEMY
How to apply the “Summer
Vacation” effect in your Business
By Osnat Peled, General director - Mentor Finance (Private equity) & BWFR president.
„I was looking at the cash flow forecast for the next 3 months to come. The numbers were similar to what it was 3 months ago and 2 years ago…” nothing is changing” I thought, maybe its good, I have stability, but probably it is because the market is too hard and I can’t really get new projects. I was wondering, is this really the best I can do? Is there a way to get better than what I am doing now? How can I find some answers that will help me change the path I have been taking in the last 2 years and perhaps increase my revenues, or maybe I should say I’ve reached the maximum I can do? “(Alina, Independent Interior designer, 36 years old)
During the years, I have met & worked with thousands of entrepreneurs of all types and ages, coming from various industries and domains. Many of them have practiced for years to pretend they are doing fine, actually, they are doing so great that they believe it’s the best …but many of them also shared with me their feelings. I actually learned from many of them that it is Ok to say “I’m not ok, and I am sure I can do better than I am doing now”.
Acknowledging that you or your business is stuck, is actually 50% of the deal. Meaning, most of us don’t want to admit we can do better, but when we do admit that (to ourselves at first), only then can we be open enough to identify potential solutions, paths for growth or simply sources for inspiration.”
However, throughout the years, I’ve met also Entrepreneurs who want to grow, but have a list of excuses. These people don’t create solutions for their problems, but they create a problem for every solution…
Feel free to check if any of the excuses on the list are also in your daily routine.
Putting the finger…
The first step is to go back to our business targets and evaluate our “long-run” business activities,
where we aspire to reach. Our unachieved goals – immediate ones and long terms ones.
I can assume with most certainty that every “problem” Or unachieved goal you brought up in your shortlist, will be defined by 2 different factors that are integrated together -
1. The need for more investment/liquidity that enables you to grow
2. Doing the right & professional steps to grow with no room for mistakes.
The “summer vacation” effect
Think about the elements that exist in your summer vacation - what is actually happening to you when the sky is blue, the sun is bright, you are carefree, you can eat & rest whenever you want and have no time limitations to walk on the seaside, when you meet new people you just chat over a glass of wine, seeing new places….now let’s try to use the same effect in our business as it was in “a vacation” by using exactly the same elements you are using in your vacation.
On the philosophical level, The “summer vacation effect”, may bring two potential paths that can assist you to grow and they are based on extreme changes you shall apply in your business and yourself exactly as you are doing in your vacation (without any fear !):
1. Going to a new place you have never visited before = Going on a new path, one you have never thought about before
2. Open up to new Culture and expand your view = Open up to new partners in your business and expand your vision.
Perhaps now is the right time to move from philosophy to practice, while bringing these unique elements to life.
How to do it in your business - Going on a new path
In many of the cases, entrepreneurs are used to doing the same actions and repeat them, as long as they see the results are good. It is hard to admit you can actually do better because this requires a change that, in many of the cases, you don’t really know how to do or even what to do to achieve a change.
The solution for that may be simpler than you thought - hiring a business advisor.
So why is it so hard for many of us? Why so many feel as it is like being a personal failure?
If it is a common practice for multi-billion-euro companies, hiring business advisors to have an “out of the box” view of the organization and bringing a fresh and professional point of view into the game, it can be a perfect solution for any business, including yours.
Hiring a business advisor doesn’t mean you failed, it means you have won the ability to know how to support your business and make money!
The momentum, or as we call it “wake up time” is very important as well.
Entrepreneurs occasionally tend to ask for help when they are already in huge debts and the business needs a closure strategy and not a development one. It is better to hire an advisor when you are in growth or when you are static and seeking for growth and not when you are down. However, I must state, that also if you are in a negative balance period and feel stuck, it’s always good to find out what can be done, you don’t have anything to lose, only to gain.
Finding the right business consultant is a VERY difficult task and mostly based on recommendations. There are several types of business consultants and you should keep in mind that you do not need an accounting consultant (you probably have one) or legal consultant (you probably have one as well) you actually need a strategic expert.
Finding these types of advisors is not an easy task. The market is inflated with thousands of mentors and consultants; each one of them claims to save your soul. I can recommend an important milestone when allocating a business advisor – you shall search for the combination of an experienced business person with a wide market overview that can support your business growth and overcome the obstacles.
Such advisors must have a proven background not only in the advisory business but also have an actual business, management & entrepreneurial background. This is a key element in choosing the right experienced business advisor.
How to do it in your business - Open us to new partners in your business
Being a sole owner of a firm is not an easy status and not an easy task. It might inspire you to find out that checking the global statistics and comparing between successful firms which are based on sole ownership vs. firms which are based on partnerships, show a definitive result: the majority of the worldwide leading companies (SME - small & medium) are based on partnerships! Sharing the burden of the business activity has a direct effect on the business capacities to achieve growth and success.
Unfortunately, the business culture in Romania is based on majority of sole owners firms. It is not surprising, that, according to this international statistics, many of the Romanian firms do not reach to their full potential of growth exactly because of that.
In many of the cases, the only option to grow your business, especially if it has great potential and shows already good results and growth, is to bring in partners to boost more the growth of your business.
Such partners described in terms of growth strategy know-how and financial capabilities can be proposed by private equity companies and Angel’s investor.
Most of the investors will be able to bring the liquidity needed and in some cases will also support you in growth strategies which are needed to boost your activities.
How to combine both?
Actually, the correct thing to do in such a scenario will be to allocate investors, which can bring the investment needed, but ALSO an added value to your business growth and act as business advisors as well. There are many benefits in joining up with such an entity as you can receive broad market options that you were not even aware they exist, such as:
Setting your business targets to a different level
Having professional business tools and skills to promote the business activity
Developing your entire operation and activity process.
Usage of the investor’s market business connections for new clientele.
New financial strategies emerged – opening an option for you to future exit / partial exit
Financial Investment / Credit lines in various options
And many more…
After analyzing all the positive effects, the only question left is whether you are capable, at the psychological level, to develop your business and follow the steps mentioned above. Accepting your business responsibility and acknowledging the situation is already 50% of the solution.
Now it’s up to you to lead the path…
Wishing you a great and productive summer !
Osnat Peled is an angel investor & General Director of Mentor Finance (from Mentor group Holdings consortium) has relocated to Romania from Israel. Having 19 years of business experience she has been working with banks, governments and leading companies in assisting them to achieve their business goals and recruit financing.
Mentor Finance provides financing solutions to companies, developers, entrepreneurs and NGOs in all types of domains. www.mentor-finance.com
English version editing – Roxana Popa
Foto: Sebastian Moise Make-up: Monica Panait Şedinta foto a avut loc la Hotel Prince Park Residences Bucureşti *Articol apărut în Business Woman Magazine, ediţia 71
You might be interested to read the following articles