Lessons Learned From Warren Buffett

 

When it comes to business success you have to admire Warren Buffett. Whether you agree with his politics or not, you have to admit he is an extremely successful businessman. He is now entering his 47^th year as the CEO of Berkshire Hathaway, one of the most trusted and profitable conglomerate of the modern business world. When Warren Buffett speaks, people pay attention. Here are some of the valuable insights that Buffett uses in his business practices every day. Can you adapt them for your small business?

Motivate for Success

Although Buffett has made a reputation as a master of acquisition he is also seen as an enormous motivator. He understands that a corporate culture is built on the success of managers at all levels. By acknowledging their successes you can foster a strong sense of loyalty and dedication that is key for your own business’s profitability.

In a recent shareholder letter Buffet wrote: "[We] possess a cadre of truly skilled managers who have an unusual commitment to their own operations and to Berkshire. At Berkshire, managers can focus on running their businesses: They are not subjected to meetings at headquarters nor financing worries nor Wall Street harassment. They simply get a letter from me every two years and call me when they wish. Our trust is in people rather than process. A 'hire well, manage little' code suits both them and me."

Take Smart Risks

You can’t build the kind of financial empire that Buffet has built without taking risk. However, that doesn’t mean entering into a contract or decision without being informed. Don’t act on “gut checks” alone. Instead, get as much information about every vendor, contractor or company you intend to partner up in business with. Once you make that decision, stick to it and let it ride out. Following a business plan towards success is about the long game.

Build a Strong and Trusted Team

No matter how big or small your business might be you’re not in this alone. Even if you’re currently the sole operator that doesn’t mean you shouldn’t seek out advice from trusted allies outside of your company. These loyal advisors could be considered part of your management team. The key thing to take from Buffett is that you’re only as strong as the people you surround yourself with. Who is on your team?

Embrace Your Mistake, Fix It and Move On

You’re going to make mistakes in your business. There is no way to avoid that. What you can avoid is dwelling in those mistakes at the expense of growth. Here’s how Buffett explained this lesson in a shareholder’s letter:  

"When I took control of Berkshire in 1965, I didn't exploit this advantage," Buffett wrote in his shareholder letter last year. "Berkshire was then only in textiles, where it had in the previous decade lost significant money. The dumbest thing I could have done was to pursue 'opportunities' to improve and expand the existing textile operation -- so for years that's exactly what I did. And then, in a final burst of brilliance, I went out and bought another textile company. Aaaaaaargh! Eventually I came to my senses, heading first into insurance and then into other industries."

What have you learned from Warren Buffett?

 

Will a PQ Minority Government affect the Economy?

 

There’s a new Premier in Quebec and she’s ready to roll up her sleeves and get to work improving the economy with her party’s plans. The Parti-Quebecois (PQ) squeaked by with victory that landed Pauline Marois in the proverbial magnifying glass. However, that narrow victory (54 seats out of 125) isn’t enough to hold sway. In order for truly sweeping changes, the PQ will have to build a strong coalition among the centrists and right-leaning party members. In many ways, that’s good news because it means a level of stability.

McGill economics professor William Watson put the election results in context during an interview for the Huffington Post. "It's not a bad election result (for business)," Watson said. "I think the program will have to be modified somewhat. I think there will be a push towards the left, but not as far as the program threatened." That’s going to be good news for the small business community who weren’t embracing those policies in the first place.

Marois ran on a platform of promising to pay for services by creating two new income tax brackets that taxed income over $130 000 and $250 000. She also wants to boost royalties and taxes on the various mining firms operating in the region. However, the bigger issue on everyone’s mind is a referendum on breaking away from Canada and becoming a separatist country. The last time the PQ was in control (1980 and 1995) they put forth referendums on the ballot but both times they failed. While that issue might be on the dock in the future, Marois states she wants to focus on the economy.

There is a sense among economists that this PQ victory could put a damper on direct new investment but there is no reason to think that established businesses will suddenly pack up and move off. Part of the reason is that minority governments like this don’t tend to last long. That allows for a “wait and see” type approach among investors. Most experts think that the election results won’t have an impact on housing prices as they are likely to remain flat.

The same is predicted for the Canadian dollar. Thanks to Quebec’s pension fund manager, Caisse de depot and the Bank of Canada there isn’t a chance the Canadian dollar won’t be propped up if it starts to drift downwards. Hours after the election the loonie value didn’t budge from its $1.0142 US. That’s a good sign of confidence.

As the reality of a slowly recovering economy settles in for Marois, some of her platform promises might have to be adjusted or jettisoned all together. Michel Poitevin, an economics professor at the University of Montreal, also commented to the Huffington Post about Marois’ platform promises. “Higher top-tier taxes, for instance, might prompt the early retirement of some of the province's most productive workers,” he warned. “Any party that would have been elected would have had to make tough decisions. I guess for the PQ, maybe it's going to be harder internally because of all the promises that they made."

Never Stop Marketing your Small Business!

When it comes to a weak economy we’re all in this together. Yes, it’s true that some businesses manage to stay afloat when times are tough but is that because they are selling something we can’t live without or is it just good marketing? Evidence would suggest it is the latter. The knee-jerk reaction for any small business in a tight economy is to cut costs. However, you don’t have the luxury to sit on the sidelines - You should always keep up your business presence through your marketing campaigns. Here’s why:

The benefits add up

Your bookkeeping records don’t lie: You know when you had a spike in business. Can you trace that uptick to a particular event? If you sell umbrellas and a storm rages through the community then you can thank Mother Nature. Most other upticks in business can be attributed to some piece of effective marketing you engaged in whether that was a coupon, a contest or even a powerful tweet. Build on what worked in the past and embrace the idea that those benefits can be achieved again.

Your competition isn’t stopping

As mentioned, we all share in the economic burdens but that doesn’t mean you should surrender your business to the competition. Do you think they are slowing down their marketing campaigns? Even if they stop marketing, you could take advantage of the downturn to out-market them.  Beat their prices. Offer what they can’t. That’s the way to stay competitive.

Be on the lookout for growth

The best case scenario for any business is to corner-the-market. That means they’re the market leader in their industry. Even the market leader can still experience stagnation if they don’t continue to grow and innovate. Keeping up your marketing provides you with the opportunity to expand your customer base. That’s really the only way to climb out of the economic doldrums.

Think about the long game

A successful marketing campaign isn’t just about a quick infusion of cash. Although that’s going to help, you really want to think about the long game of your business success through aggressive marketing strategy. With those campaigns you’ll be building up a strong brand identity and increasing your customer base. Suppose you ran a contest and succeeded in signing up a thousand entrants? That’s a thousand names you can send email coupons three months from now. When the holidays roll around you’ll be able to send out another blast to remind those folks of what you’re offering. Now you’ve got a consistent business. That can only be achieved if you keep your marketing going. 

Using Content Marketing To Drive Credibility

Raspberries.

 

What does creating original content have to do with raspberries?

 

Nothing. But the mere fact that the word “raspberries” has been randomly dropped into this article is proof positive that this is a piece of original online content. There are plenty of computer programs available to cut corners by churning out robotic content for websites. While those articles are loaded up with facts and figures they won’t have “raspberries:” that original creative flair. That’s what you should be striving to put into your content: originality.

Search engines are getting smarter. Google has launched several algorithm upgrades – the Penguin and Panda updates - which specifically targets websites that produce “spam” content. The Google spiders can tell the difference between an original piece of online content and something that has been “spun” or pasted together with a computer program. The new algorithm updates not only the take a look at the structure of a sentence, they also analyze the relevancy of content , the number of backlinks to the website, the number of times that an article or content gets shared using social media and so many other factors.

Guess which content goes to the top of their rankings? That’s right; it’s the original content. Google wants its users to receive maximum benefit from its searches and you should want the exact same thing for your online visitors. The best way to build up your company brand is through great content that your readers want to share. Here’s what you need to consider with every piece that you write or create:

Teach and Entertain

Readers go online to do two things. Be entertained or find a solution to a problem. Once you have an understanding as to what your target audience wants to do online, you can create the right piece of content that will attract your markets’ attention.  In other words, choose whether each piece that you write or create is going to be informative or fun to consume. You can’t solve all the world’s problems but when it comes to your little corner of cyber space you should be providing solutions that meet their immediate concerns. You should also provide a reason for those users to return to your site. That will only happen if you can put a smile on their face with your content. Get cheeky with the headlines. Don’t shy away from quirky graphics. You can still maintain a professional presence but keep it human and not robotic.

Build Trust and Credibility

Thanks to those Google algorithms, internet surfers are becoming a savvy bunch of readers. They can also quickly spot a “spam” article. Loading up your site with content for the sake of content is going to turn off that visitor. You might not make a sale on that first visit but if you plan your content marketing campaign (or a drip marketing campaign), you can slowly build up trust by creating original content that your target audience will want to read.  Your audience wants to find a reason to not do business with you. So, make sure that any content that you produce specifically targets your intended audience and their needs. When you’ve built that trust they’ll be coming back again and again.

Start a Conversation

With the advent of social media, email and blogs, we get the chance to join and be part of any community. This means we all have a chance to share our experiences and opinions. Give your users that opportunity by inviting them into the discussion. Your content should end with a call to action, whether that’s a link to more articles on your site or a question inviting the reader to leave a comment. Or even sign up for a newsletter. When you engage readers to share their thoughts they’ll come back to see who is commenting on their comments. That’s how you build an online community.

Questions? Feel free to ask and we’ll do our best to answer. (See how that works?!)

 

Lessons Learned From Pitching Venture Capitalists

 

Raising money is as much a part of business as the goal of making money. As the old adage goes, “You’ve got to spend money to make money.” There’s an even older adage which posits, “Never use your own money.” One of the most popular sources of funds – especially for startups - is venture capitalists (VC), those who provide money in exchange for large ownership stakes.
 

Due to their popularity, VCs are extremely busy and hear thousands of pitches in a month. Out of that many, they invest in only in handful, hoping for a very lucrative exit in a short amount of time. To pitch a VC for financing requires the founders of a startup to not only be well versed in their own companies, but also do extremely detailed research on their potential investors. Not doing your research will make the difference in getting funded millions of dollars or being delegated to the black hole of has-beens. The following tips are some valuable lessons to learn about pitching VC’s and getting your startup funded.  

            Do Your Homework

Every venture capitalist you’ll be pitching to has their own distinct personality. You need to get as much background information on that potential investor as possible. Don’t just Google them but ask around – especially other investors. Do they have a short attention span? Would they prefer to see the bottom line numbers first and then the “sizzle?” What other successful businesses have they invested in? Why did they make those investments? In many ways, you’ll be giving the same basic pitch to every venture capitalist but if you can adjust to their investment criterias and individual personalities you’ll be ahead of the game.

Be Smart With Your PowerPoint

One of the most popular (and easy to use) skills for any business owner to have is the use of the PowerPoint presentation. This is not something you should be slapping together the night before the big pitch. Instead, it’s something you should be developing since the inception of your business plan. An effective PowerPoint presentation can’t stand alone. You’ll still need to “narrate” to fill in the gaps from your bullet points but you shouldn’t become top heavy with data. If you can make your point with a strong visual then go for it. Before building your PowerPoint, go online and view other presentations. Take note of what you like and “borrow” the idea.

Have a Thick Skin

Every entrepreneur walks into a VC pitch with dreams of walking back out with a check. That’s not going to happen. What will happen is you’ll be grilled aboutyour business. This is a good thing. The more you can engage that investor the better off you’ll be. Make sure you listen clearly to any question and think through the answer before blurting out something you think they want to hear. You’re not going to get the same reaction twice. Don’t let that throw you. Remain confident in your proposal and if they don’t bite move on to the next investor.

 Pitch the Facts

It’s great that you have conviction about your business idea but you can’t let that passion become pie-in-the-sky thinking. Over-valuing your company is the quickest way to turn off an investor. If you’ve got grand assumptions to make about business projections you better back it up with more than sweeping generalities. Just because the dog food industry is a multi-billion dollar business doesn’t mean your brand of dog food is guaranteed success. Sell your passion but back it up with the facts.

 

How To Get Good Reviews

 

Everybody is a critic. It’s amazing how much we all rely on reviews and not just professionally written pieces but the “word of mouth” from our friends. How many times have you been turned off from a movie because your friend said it wasn’t good? Thanks to the internet we have even more opportunities to share our reviews. Giant ecommerce site Amazon was first to allow customers to post their own reviews good, bad or indifferent. Now every business that sells a product has gotten into the act with this very effective and low cost method of online marketing. While it is true that administrators of sites can edit or delete reviews it might be better to be honest with your customers. The hope is that the majority of reviews will be positive.

How can you get great reviews for your product? Try these helpful tips:

Write Them Yourself

This is nothing dishonest about this. You’re selling a product you believe in why shouldn’t you share your opinion? You also have direct access to your own circle of friends and family who can help your business a great deal by writing reviews and posting them. Don’t think for a minute that other businesses aren’t doing this because they all do!

Offer Rewards for Reviews

While it’s true that every customer will have an opinion about your product, that doesn’t mean every customer will be motivated to write and post a review. Why not provide them with a little added incentive? You can offer them a discount coupon or a free product for every review they post. Just ask them to send you the link for verification. This can be an ongoing online marketing campaign to help spread the good word of your company. You might also want to encourage them about disclosing the incentive. There’s nothing wrong with a review that says, “I got a coupon to write this but I would have written it anyway!”

Make It Easy For Your Customers

If you’re an ecommerce business then a lot of your customer interactions could be through emails. You can add a signature to every email that is sent out asking for a review and inserting a link where they can post it. For instance, it always helps to have reviews on your site but if you know you can get a good posting from a customer send them over to Yelp or one of the other review sites. When you provide them with the link you’ll not only make it easy for them but also introduce them to a site which could be beneficial for their own use. It’s win/win all around.

Share Your Reviews

Once the word gets out there is nothing stopping you from sharing those positive reviews on your own site. You can copy and paste reviews from Amazon or Yelp onto your own testimonial section of your website. Don’t have a testimonial section? Get one!

How to Get More Referrals for Your Business

 

When it comes to your helping your business grow, it all boils down to who you know. And all that could be standing between your business succeeding or failing is your personal network. We’re talking about your professional network and the referrals which are the backbone of any productive small business sales force. Think of referrals as a chain between you and making a sale. The immediate referral might not be buying but that doesn’t mean it can’t lead to a referral that is in the market for what you’re selling. To increase sales you’ll need to increase referrals. Here’s how to accomplish that goal:

Ask and You Can Receive

Every satisfied customer you create is a new referral. Now you’ve got to “activate” that referral. Let that happy customer know you would appreciate their help with getting the word out about your business. Don’t assume everyone is talking about your company. Give them a little nudge and you might just be surprised with the results. You can take it a step further by asking directly for a contact of a friend or family member of that customer who would benefit from what you’re offering. The only shame would be in not asking.

Give and Take

You can get new referrals for your small business by sharing your referrals. This works best in a B2B market but it really amounts to you being proactive about expanding your customer base. If you have a supplier who is selling you a particular product for your business then you can spread the word of his company while he spreads the word of yours. Quid pro quo.

Offer Incentives

Two magic words that get everybody’s attention: finder’s fee. This is a very common practice all across the business world. When someone gives you a referral that buys from you, your referrer is rewarded in some fashion. Local cable and telephone companies use this practice. Sign up a friend and you’ll get a discount. How can you apply that to your business?

Offer Your Referrals First

Somebody has to “break the ice.” That could be you when you offer a referral to a customer or business associate for an item outside of your own company. This could get the ball rolling for a referral exchange.

Spread Your Name

If you have a storefront business then you should make sure every customer walks out with something that has your business name on it. Whether that’s a shopping bag, pen, coaster or magnet you’re spreading the name of your company. How can you do the same thing for an online business? If you post a fun video or photo make sure your web address is embedded on the image. Where ever that graphic goes is where your company name will go. You could hold a contest for the cutest puppy photo. It might have nothing to do with your business but those photos will be shared everywhere. Think outside of the box.

How Online PR Can Affect Your Ecommerce Sales

As the saying goes, the only bad publicity is no publicity. That’s a common refrain shared among PR folks and there is a grain of truth in that saying. Unless your target audience is aware of your business it will be extremely difficult to generate sales. That applies to a corner dry cleaner or an ecommerce site. Every business is dependent upon buzz and a good reputation. And the best way to generate that buzz is through positive press mentions. But you shouldn’t stop there. Good PR can come in many forms, especially through social media.

In this age, no one can ignore the fact that being online is a must for any business.   Gone are the days when your customers turn to actual yellow pages or pay attention to a TV ad to find what they need. Now most folks head to Google or ask their friends online to find just what they are looking for. What they will find could be your business ranked at the top of the search engine listings thanks to positive PR. Here are some ideas for generating that kind of proactive response:

Get involved in your target market’s community

Not every company can become an official sponsor of the Olympic Games but they can become a sponsor of the local youth hockey team or get involved with charity drives. All of those ideas can create positive a positive reputation that your business cares about the community you are targeting. Even if your market is nationwide, you can sponsor events or even athletes to build brand reputation. Start researching the interests and passions of your target market and see if you can find a way to get your brand involved in a positive way. Your involvement can often be mentioned by news organizations reporting on these causes. That’s terrific publicity.

Get to know your local TV news station

A good way to generate brand visibility is taking advantage of your local TV station. Many stations are affiliates of a larger channel so by promoting your PR angle; you have a higher chance of getting features, especially if it’s unusual. You can also re-post the news feature through YouTube and generate a lot of views. News producers need to fill up that programming with interesting features and not just the headline stories. Could you pitch an unusual segment to a local news producer? Suppose you have an ecommerce business that offers housecleaning products. You could pitch a segment about how your product can remove any stain in any home. If you can’t, then the winner will receive free cleaning services for life. Bottom line: think of how you can promote your business by providing something unusual that makes your company stand out.  

Get involved in online discussions

If your business is already attracting customers then it’s a safe bet those customers are talking about you to their friends or online. One of the most popular and largest online review sites is Yelp. Not only are they offering reviews for restaurants, but there are reviews for just about any other kind of business.

You need to plug into the various online communities to find out what is being said about your business. Set up a Google Alert for your company – this enables you to receive notifications if your company is being mentioned online. If you stumble upon a forum that your target market uses heavily, get involved. If someone has a problem with your company, go into customer service mode and try to fix their issue.

Selling your business – what to do for an easy sale

Selling your business could be one of the most important and difficult decisions you will make in your business career. When things are going well – your business is making money, you’re enjoying yourself, and the future looks great -  you’re not thinking about preparing for your retirement. 

The earlier you start planning for your company’s sale, the better you’ll be able to take advantage of a higher valuation and a quick turnaround. Here are some good reasons why you should be prepared to sell:  

·         You may fall sick unexpectedly

·         Your life goals change along the way

·         Not having a successor to replace you as you retire

·         Business partnership issues and you want to sell your shares

       ·     Lifestyle change


When you are ready to sell your successful company, you should keep these three things in mind:

·         You must make a profit from your investment in the company

·         The sale of your equity should be converted into liquid assets such as cash

·         The amount you receive should meet your needs for your professional and personal life

What is the value of your business?

Determining the value of your business is like sales – what are your potential buyers willing to pay for a business like yours? With the help of a Chartered Accountant, you can run various accounting models to come up with a number using data that comes from the economic strength of your business, your industry, how much your competitors are worth, your sales revenue and profit margins.  All these must be taken into account. Remember, the buyer is not looking at purchasing the cheapest business they can find, they are looking for a company that can potentially make them more money in the future. So you need to prove to the buyers that your business will continue to grow in the industry you’re in.  

Work with a third-party business valuator whose objectivity can help smooth the sale for both yourself and your buyer.

Are your finances in shape?

You should already have your books kept in order while you’re running your business. When it comes to a sale, nothing is more important to a buyer than your accounting.  They will be asking questions such as:

·         Are you making money?

·         Are your profit margins healthy?

·         Does the company have any unmanageable debt?

New owners want to buy businesses that are healthy and thriving.  You'll also want to be sure that you've reduced your liabilities as much as possible, doing things such as settling any lawsuits and making sure all tax payments are up to date.

Gather a professional team

Selling a business is complicated.  With a complex transaction like this, you want to make sure that all your bases are covered.  By hiring a professional team to guide you in the sales process, they can provide you with the objective advice that you need to sell your business at the best value.  In recruiting a team, make sure that you choose consultants who have experience in your industry and your type of business, be it a small business or a large multi-national corporation.

Other than a corporate lawyer who can help you with the legalese and contracts, you should also take a look at hiring a good accountant. If your business has assets such as a manufacturing plant and warehouses, you can also recruit a corporate realtor who may have contacts in your industry.

Make sure that you take the time and effort to do it right the first time. By preparing carefully and using the best resources that you can hire, you are increasing the chances of selling your business at a great price.

Tips For Success From Entrepreneurs

As an entrepreneur, you will face many challenges - it’s how you face them that will determine the success or failure of your business. It’s not an easy life, but the payoffs are tremendous if you succeed.  We’ve compiled a list of quotes from successful entrepreneurs who know what being successful is all about.  

 

 

·       Know your weaknesses:  Lee Rhodes, founder of Glassy Baby, overcame personal adversity as a motivation to start her company. She mentions that as an entrepreneur, you have to surround yourself with people who are good at things that you cannot do.  You must hire people who complement your strengths…"Remember as an entrepreneur, you're probably a big-picture person and the details aren't as important, but they will be and it'll come back to haunt you. If you're not good at something, make sure you have someone beside you that is, as you grow." 

 

 

·       Take calculated risks: As the head of a multi-billion dollar conglomerate, Richard Branson knows a few things about risk. Branson is known for taking risks in new ideas and starting businesses in areas where others fear to tread. However, before he leaps, he always bases his decisions on numbers and analysis – making sure that the idea passes due diligence.  One of his mottos has always been, “If you don’t take risks you won’t achieve anything. “

 

 

·        Be visionary: “All successful people have a vision. They have the ability the “see” clearly what they want before it exists.” Bill Gates, the billionaire founder of Microsoft has always been a driven man. He grew Microsoft from a small software company to a behemoth that became an integral part of millions of people’s lives. All because he followed his vision on what personal computing should be.

 

 

·        Recruit mentors:  Zak Kukoff, CEO of TruantToday is only 17 years old.  In spite of his age, the graduate of Techstars and the founder of Autism Ambassadors, has achieved a lot. However, he couldn’t have done it without the help of his mentors who provided some valuable advice and insight into his challenges. “…you have to ask people to be mentors. Don’t expect them to step up. Some people might, but more often than not you’ll never get what you don’t ask for. By and large, most entrepreneurs understand that helping others will help themselves at the same point. As such, most entrepreneurs are incredibly willing to step up when asked so don’t be afraid to say the words.”

The road to entrepreneurial success is littered with obstacles. The best way to overcome them is to have a long term vision on what you want and be motivated to succeed. Be patient, work consistently towards your goals and recruit people who are smarter than you.