I’ve had a lot of my business friends ask me how to survive a financial crisis. It’s a trying period and something that we need to stand united on, and be creative, and we can get out of this together, stronger.
I’ve put together a list of tips that can help you spark ideas on how to survive the financial crisis. Hopefully this helps, and feel free to ask more questions through the comments section.
1. Reduce Costs NOW
Review all expenses right away. You should kill low-utility subscriptions. Now is the time to either do it yourself or find alternative ways. If it is something that you absolutely need, you can try emailing in to ask for a discount for your services.
2. Offer EXISTING customers NEW services
Explore new, complementary services that add value to your existing core services/products. For example, restaurants can offer beverages, or frozen meal-prep sets that people can heat up on their own, or even DIY meals where people can get all the ingredients necessary from you and cook it up themselves.
Similarly, if you are a bar, you can sell ready-mixed beverages instead and have them delivered to your customers.
3. Make The Tough Decisions
It is a crisis, and you cannot save everyone. Make retrenchments if you have to, in order to save the rest. The alternative is that your company goes down and everyone fails.
4. Embrace Digital
Go online. Embrace delivery through the Internet if you were a purely brick & mortar business before. This doesn’t just apply to things like food delivery. It works for service-based businesses too. For example, gyms and personal trainers can offer online classes.
5. Front-load Revenue
Cash is king, especially if you’re trying to figure out how to survive a financial crisis. One way to generate revenue up-front is to sell discounted gift cards or annual subscriptions or packages so that you can collect revenue up-front from your customers.
6. Explore Different Channels
If you were purely on SEO before, start exploring PPC. If you were purely D2C, start exploring distributors. Experiment, don’t assume what works.
Throughout my entrepreneurial journey, I’ve learnt that whatever you read online and get advice about is from the perspective of ONE person/company. Everyone is unique, and that means sometimes we have to try things out ourselves to see if it really works for us.
7. Improve Customer Service
Customer service is an integral part of any business. A consumer will choose a company with better service anytime over a company with poor customer service.
8. Collaborate With Other Businesses
Partner with complementary businesses to offer packages to both your customer bases. For example, if you were a business coach, you can partner with a marketing agency to offer business packages to each of your customer bases. Or if you are a bar, you can work with restaurants to do a meal package.
9. Focus On Profitable Areas
Now is the time to be prudent and highly-focused. No one knows how long a financial crisis can and will last for. If you have areas in your business that aren’t profitable, you need to cut them out now, more than ever. For example, if you run multiple restaurants, now is the time to cut outlets that aren’t profitable and explore new channels such as going online instead and operating from a central kitchen.
How To Survive A Financial Crisis
These are just some short, actionable tips that you can adopt or use to spark ideas if you are trying to figure out how to survive a financial crisis.
If you have more tips or if you have questions, feel free to leave a comment below. Stay safe everyone!
Learn how to scale a business fast: It just requires a mindset shift where you start looking at only 3 pillars to concentrate on.
Here’s a story of Ben, the owner of a printing business. Ben was struggling with ways to grow his business. He wanted to learn how to scale a business fast, but he felt stuck. He had started the business 3 years ago and had grown to 12 staff. However, it was getting harder and harder to get the growth that he wanted.
There were too many things that Ben had to focus on. Payroll, his staff’s career progression, marketing, accounting, and even coming up with new products.
It didn’t help that there were more and more competitors coming onto the market. Some of them were priced at least 25% cheaper than his prices, and Ben felt the pressure.
How to scale a business fast is to do it in a structured, logical manner, through the 3 fundamentals: Strategy, Execution, Team.
These are the three pillars of the fundamentals needed for any successful business to scale up fast. Each pillar is as equally important as the others, and all three depend on each other for success.
As a business owner, founder, or entrepreneur, your responsibility is to develop each and every pillar for your business.
How to scale a business fast: Strategy
A strategy is your game plan, which is necessary when trying to get your team to move in a certain direction. A strategy encompasses your vision, as well as the goals needed to get you there.
A strategy answers the question of “why does your business exist”, and aligns everyone in the team so that everyone knows why they’re doing the things that they’re doing.
Businesses exists because of what customers want. If your business is unable to provide a clear solution to your customers, you don’t have a good strategy.
How to scale a business fast: Execution
Execution is critical to any business owner looking at how to scale a business fast.
Execution depends on the other two pillars of Team and Strategy. We need to come up with an execution plan that has the right team and right strategy, but with accountability so that everyone knows exactly what to do by when.
When you’re executing properly, you’ll also be refining and adjusting constantly as well so that you’re always on track. Just like firing a pistol, you’ll adjust after every shot to make sure you get closer to the bullseye.
How to scale a business fast: Team
I view employees as being the business owner’s team members, because everyone should be on the same team, working towards the same goals and vision.
Any significant venture will require a team because no one person encompasses all the skillsets needed to build a successful company, nor is it possible for one person to have the time and attention necessary to scale up a business.
As a leader, you need to know what kind of people you need on your team, put them in the right roles, and develop them properly.
In addition, you need to know the values, attitudes, and skillsets that you need and want to see in your team members.
How to scale a business fast
These are the three pillars that are critical to scaling up a business. Even without one of these three pillars, businesses will fail.
For example, if you have a great team but with a poor strategy, your business might get some results. However, with a poor strategy, it introduces a lot of friction for your team. That might result in your people being burnt out easily and leaving.
Look at properly developing all three pillars so that you can scale up your business fast. After that, you can explore the 12 ways to scale up a business further.
It took me a while to learn how to write mission and vision statements in a way that’d be useful. The whole point of a mission and vision statement isn’t to feel good about yourself. It’s a way to communicate your purpose to your stakeholders, and this includes your team members, employees, customers, vendors, and investors.
Believe it or not, the reason that your business exists is an important reason. It’s the reason why people buy from you and why people choose to work in your company. When you have this clarity, you’ll find that it’s so much smoother to grow your company.
A mission statement is a brief summary of an organization’s core purpose. This usually includes a brief description of what the organization does and its key focus and aim. Simply put, it’s the “what” and “how” of a business.
What is a Vision Statement?
A vision statement is a brief summary of an organization’s reason of being. Simply put, it’s the “why” of a business.
What Is the Difference Between a Mission and a Vision?
The mission is the “what” and the “how,” and the vision is the “why.”
In the mission statement, the reader will know what your organization does. The vision statement, however, will tell the reader why your organization exists and define its direction.
Most people get caught up with the specifics of how to write mission and vision statements, but the thing to note is that a mission statement and vision statement can exist separately or even be combined together. There is no right or wrong way to do this. At the end of the day, does what you come up with provide clarity to your organization’s purpose? If it does, then you have done your job.
How To Write Mission And Vision Statements
A good way to test if you have a good mission and vision statement is to ask the question: “Can this vision and mission be used to describe another business?”. You’ll know you have a good mission and vision statement when you have something that doesn’t apply to another business.
A common structure and best practices for successful mission and vision statements have these traits:
Be Focused: Concentrate on only 1-2 primary goals. Don’t list every single goal and idea down because that only confuses everyone, including yourself.
Be Concise: Cut out the fluff and focus on the essentials. The shorter you can get your mission and vision statements, the better.
Be Ambitious: Don’t just list what your company already is, or very easily about to achieve. Think bigger, because this mission and vision should guide you not just now, but for many years in the future.
Be Broad: You don’t want to be too specific in crafting your mission and vision statements. Have it a little broad so that you have leeway to grow.
Be Inspiring: You want your employees to be motivated and your customers to believe in your cause. Don’t be boring.
6 Examples On How To Write Mission And Vision Statements
The following are some mission and vision statements from actual companies.
IKEA: To create a better everyday life for the many people.
Tesla: To accelerate the world’s transition to sustainable energy.
Google: To organize the world’s information and make it universally accessible and useful.
Microsoft: To empower every person and organization on the planet to achieve more.
Shopify: Making commerce better for everyone.
ASICS: To contribute to a healthful and sustainable society and to bring joy to the people of the world through sports.
Mission and vision statements are powerful and should be done well. With them, you can unite your entire organization’s efforts and have everyone focused on the things that will grow your company.
Remember, a mission statement is the “what” and the “how” and the vision statement is the “why“. The key is to be as concise and clear as possible.
Is this a useful guide? What are your business’s mission and vision statements? Leave a comment down below.
How to find a business idea is a challenge that a lot of people face, but it’s not necessarily as hard as people make it out to be, especially with the 5P Framework.
This is a pretty common question, so I’ve included a section about it in my free guide that I’ve created for you. For those of you who haven’t gotten it, pop over and check out my free guide on how to start your business. Let’s start with today’s topic and find out how to find a business idea.
When wanting to start a business, a lot of people get mesmerised by creating the next unicorn. It’s very enticing to want to be a ground-breaking startup such as Uber, AirBnB, SnapChat, Instagram, WhatsApp, and so on. However, that might not be the best way to start a successful business.
There are 2 main reasons why I say this. One, these are businesses that require huge amounts of resources to grow and scale. Just starting a business alone is a complete mindset and lifestyle change, especially if you’ve been working at a regular 9-6 job. For someone new to entrepreneurship, this might be way too much of a change to handle.
Two, these businesses have a hockey stick-shaped growth trajectory, but typically don’t see profits until much later (or if at all). Profits to a business are like air to a human. When you have a ready supply of air, you are able to function a lot clearer and better.
Hyper-growth is a whole new level that sacrifices near-term profits for fast growth. It’s a business model, but not something that I’d recommend, especially if you’re new to entrepreneurship and are still looking to build up your confidence and experience.
What Does A Business Mean?
A business is just a for-profit enterprise that’s all about the creation and provision of value to consumers.
Let’s look at a simple definition of what business means. A business is just a for-profit enterprise that’s all about the creation and provision of value to consumers. That’s it. Let’s break it down. You’re creating something for-profit, so you’re not doing charity, and you’re actually getting paid for creating value for people. It’s an important distinction because you’re not trying to scam people or rip them off. You’re looking at creating a product or service that people are actually happy to pay for because they perceive and obtain value.
There are many kinds of other businesses there are out there that create products and services that you’d be happy to pay for. These aren’t businesses that are typically headlining the news but are very successful in their own right. Some examples of businesses that offer products and services that we pay for in our daily lives include: barbers, gyms, watch repair services, food, computer repair services, website design services, and so on.
This was the way that I started my business, and it was incredibly simple. It’s not rocket science at all. Here’s how I did it, in 2 sentences:
I found a market need, which I knew because I was an actual customer and so I understood the industry. Then, I figured out a way to fill the market need using very logical steps to do so.
The business was profitable, almost from day one. Of course, it wasn’t a huge profit at the start, but it slowly grew. This is in huge contrast to a startup like Uber. As of October 2019, Uber is still losing money. A lot of money. However, with a startup like Uber, you might have the opportunity to create something that will revolutionise and maybe even completely change the way people live. For a lot of people though, that’s not what they are looking for. What most people want is to just create something that can add value to others, and allow people to enjoy a more fulfilling life.
I’m a huge proponent for people to start what I call as “realistic businesses” because it teaches entrepreneurship and shows you what’s possible. Your second business can be something much bigger. Elon Musk didn’t create Tesla as his first business. He programmed a simple game that he sold when he was 12, and later also ventured into organising parties to fund his university tuition. These are hardly close to the vision and resources that making space rockets would require. They are really good ways to learn entrepreneurship and getting income though.
3 Guidelines On How To Find a Business Idea
The question that you might ask is: how do I find a business idea? It’s not rocket science, and even the best entrepreneurs and venture capitalists don’t know for certain if an idea would work. However, there are three guidelines that you can follow.
First, avoid picking a shitty idea. What’s a shitty idea? If there’s no foreseeable monetisation strategy, or if there’s a very small total addressable market, or if there are a tonne of competitors and you have no or very low differentiation, then your business is likely to head into an early grave. I’ve got videos on entrepreneurship that talk about this, so check them out.
Second, having your business become a massive success should not be your main goal. I’m a proponent of picking a business idea that has got to do with your passion or rather is something that’s very well-suited to your skill-sets. The idea behind this is that you will be happy doing the work that your business requires so that even if it doesn’t become a huge success, it still becomes a win. This is covered in detail in the next section.
Third, when you do start on a business idea, you will find that it will always involve uncertainty. Sometimes, you might even pivot to do something else after working on your initial idea for a while. That’s all right because all businesses require continuous work in terms of refinement and reinvention. In fact, the only certain thing is that your business will never stay the same, so don’t be discouraged if you feel that you need to change things.
How To Find a Business Idea Using The 5P Framework
I’ve had many people ask me how to find a business idea, and I’ve come up with a framework to help people with this process. There are only 5Ps that need to be considered when you think of coming up with a business idea.
People face pain all the time, and they are always looking for solutions to prevent or avoid that pain. There are examples of pain everywhere. It can be physical pain, like a blister on your foot — in which case, maybe you know a home remedy that works really well. It can also be emotional pain, and maybe you’re really good with people and emotions and can provide a service there.
This is one of the widest areas that you can find a business idea. People have things that they’re interested in. I remember that I fell in love with snowboarding, and even went to become a certified snowboard instructor because of my passion for the sport. I also wanted to share that passion with others, so becoming a certified snowboard instructor was a great idea. If you have a passion, and it could be in anything from video games to knitting to playing the guitar, you can think of ways to form a business around that. The most straightforward is to teach that passion of yours to others.
Everyone has their phobias or fears. It can be a straightforward fear of insects or maybe it’s a fear of public speaking. Perhaps you’ve been through it and you’ve found a way to overcome that fear. Teach that and show that to others, because that’s a very valuable service.
There are problems all around us. Hailing a taxi, especially in a foreign country, can be quite a bother. Uber was created as a solution to that. Your business idea doesn’t need to be that big though. Maybe you have a problem at work that you always face — maybe it’s better presentation methods or a better project management software. These are problems that are great business ideas.
On top of passions, people develop proficiencies in skillsets over time. If you’re a professional, then you’re already in the business of service providing. You could be an accountant, consultant, lawyer. You could also have a vocation like a plumber, painter, or mechanic. Take your proficiencies and look at how you can start a side-hustle with it. Do it well and before long, you’ll be able to scale up your business.
How to Find A Business Idea
These can give you a broad idea of how you can find a business idea. Remember to check out my free guide for you that talks about how you can start a successful business. Let’s continue to have discussions through the comment section down below. I’d love to hear your thoughts and answer any questions that you might have.
Solo travel? And on top of that, getting lessons from solo travelling? That was something that I had never dreamt of before. When I exited my business in 2017/18, I didn’t know where my life would lead. In fact, I didn’t even know that I would still be continuing to learn about business, despite no longer running a business. The business lessons learnt were different and impacted me a lot more than when I was running my business though. Here’s how it all started.
The first thing that I had to face when I exited my business was that I suddenly found myself with a huge void in my life, especially since I spent almost every day working on my business in the past. With my release from my work responsibilities, I decided that I would go travel and see the world properly, which was something that I never had the time to do in the past.
Strangely enough, however, even after making the decision, I still felt encumbered. It was a very strange stifling feeling. I knew that I was definitely able to take the time to travel but yet felt like I had all these ties and commitments still.
I figured that I needed to reset my life, and so I had the sudden decision to go on a purge. The idea struck me one moment, and I decided to embrace it fully. In my mind, purging was a great concept because it could allow me to start from absolutely nothing again – a blank slate. That was the best way that I felt I could make any future decisions without any feelings of existing responsibility or commitment.
In the next few weeks, I sold and got rid of everything that I owned, which included my car, apartment, and most of my possessions. It was scary at first to let go of all these items but it slowly turned into a sense of liberation. It felt good because with every item I let go of, it was one item less of what I thought defined me. It freed me and I felt like I could start on a new slate. I had become a minimalist, and with my greatly reduced possessions, I finally felt ready to go on to travel the world.
Planning A Solo Travel Itinerary
Figuring out where to go was difficult, especially since this was the first time that I was travelling solo. I was hit with decision paralysis because of the sheer options that were available to me. I decided to break down the problem and look at it with just a few simple goals: to travel to where I wanted to do activities such as snowboarding and to visit my friends. This made the problem much easier to work on, and I found that I could more easily work a solo travel itinerary around this.
By piecing together all these trips, this became my schedule:
2018 Nov 08 to Nov 18 Ulaanbaatar Nov 18 to Nov 20 Hong Kong Nov 21 to Nov 23 Macau Nov 23 to Nov 25 Shenzhen Nov 25 to Nov 27 Huizhou Nov 27 to Nov 28 Hangzhou Nov 28 to Dec 01 Shanghai Dec 01 to Dec 17 Singapore Dec 18 to Jan 23 California
2019 Jan 24 to Mar 02 Niseko Mar 03 to Mar 13 Singapore Mar 15 to Apr 09 New York City Apr 09 to Apr 21 Los Angeles Apr 21 to Apr 30 Edinburgh Apr 30 to May 16 Wroclaw May 16 to May 19 Oslo May 19 to May 28 Wroclaw May 28 to Jun 02 Lisbon Jun 02 to Jun 07 Barcelona Jun 07 to Jun 08 Frankfurt Jun 08 to Jun 09 Cologne Jun 09 to Jun 10 Mainz Jun 10 to Jun 12 Frankfurt Jun 12 to Jun 17 Leiden Jun 18 to Jun 24 Taipei Jun 24 to Jul 06 Singapore Jul 07 to Jul 09 Penang Jul 09 to Jul 10 Singapore Jul 11 to Jul 15 Canggu Jul 15 to Jul 17 Singapore Jul 18 to Jul 20 Adelaide Jul 20 to Jul 27 Melbourne Jul 27 to Sep 21 Queenstown Sep 21 to Sep 25 Auckland Sep 26 to Sep 30 Singapore Oct 01 to Oct 03 Kuala Lumpur Oct 03 to Oct 25 Singapore Oct 25 to Oct 31 Canggu Nov 01 to Nov 16 Singapore Nov 16 to Nov 19 Beijing Nov 19 to Nov 22 Foshan Nov 22 to Nov 25 Phan Rang Nov 26 to Nov 27 Ho Chi Minh Nov 27 to Dec 05 Singapore Dec 05 to Dec 10 Bangkok Dec 21 to Dec 25 Danang Dec 24 to Dec 25 Hoi An
2020 Jan 06 to Jan 10 Kuala Lumpur Jan 10 to Jan 13 Bangkok Jan 16 to Jan 18 Tokyo Jan 18 to Feb 29 Hakuba
I still considered Singapore my home. I’d travel for months at a time before I returned to Singapore though, typically to tend to bills and errands and get items that I needed for the next part of my trip.
What Did I Do When I Was Travelling Solo?
Depending on where I was, I had different things that I focused on. When I was in California, I spent time with a buddy of mine and his family whom I hadn’t seen in years because of the distance and the lack of time.
When I wasn’t spending time with them, I had rented a car and so I drove around to different parks and mountains. I loved the views and being in nature, especially since Singapore was such a concrete jungle. The rest of the time I would be going around to different cafes, where I’d read or write articles for my blog.
When I went to Japan in winter, I spent everyday snowboarding. Life then took on a much different focus. The day would be spent on the slopes, and in the evenings it would be a simple dinner and the days would repeat. Almost every day had new friends that I met and could hang out with. I thought time would pass slowly, but the 5 weeks that I spent in Japan disappeared in a blink of an eye.
I also wanted to do a road trip, and so decided on Scotland, especially since I had a friend there. My friend and I rented a little compact Toyota and spent 2 weeks exploring northern Scotland. It was amazing being right in the midst of the awe-inspiring castles, mountains, and rivers of Scotland.
I also did other things, such as pursue my snowboard instructor certification, tried fine dining at a top-ranked restaurant, drive on the autobahn, did a road trip in a camper van, lived out of a farm, and spent a week living with Mongolian nomads. These were both experiences that I cherished and the journey also provided me with several business lessons learnt, which I’ll cover below.
After a while though, I started appreciating slow travel a lot more. One of the best times of my travelling experiment was when I was in Wroclaw, Poland. I stayed in an AirBnB apartment, and spent my days going to the gym, shopping at the local supermarket, cooking most of my meals, hanging out with friends in the evenings, and working on myself. The fact that I was in a location for a month gave me the time needed to think and reflect, and I discovered a lot of things about myself then, especially with the lessons from solo travelling that I had.
Where Did I Stay When I Was Travelling?
While travelling, I stayed in all kinds of accommodations. I stayed in:
Hostels (mixed dormitory)
Hostels (private room, ensuite bathroom and toilet)
One of the lessons from solo travelling that I had was the change in my accommodation preference. When I was doing business and having holidays in the past, I preferred hotels and luxury. After travelling solo, I learnt that my favourite kind of accommodation were hostel dormitories. Because of the communal aspect, they allow me to meet new friends and it was incredibly social, which was great when I was by myself and had a few days in a new country.
I found everyone at hostels to be extremely friendly and welcoming. If you could smile and say hi, you could make new friends.
Lessons From Solo Travelling
Being able to travel this way is a great gift, and I had several business lessons from solo travelling.
Business Lessons Learnt: Simplification Is Key
One of my greatest business lessons from solo travelling around the world that I learnt was that you don’t need a lot. When you’re halfway around the world, you don’t want an apartment lease in your home country because that means you’re paying for 2 places every day. You also don’t want to be lugging big suitcases around the cobblestone streets of Edinburgh or the congested roads of Bali. That means you have to really focus on bringing only what’s essential.
When you are forced to remove what you previously thought was necessary, and then still thrive after that, it becomes a sobering wake-up call. I was actually unnecessarily burdening myself with additional stress and cognitive load without actually becoming better as a result of it. In fact, I was actually encumbered.
That was the greatest reason why I identified with and became a minimalist. It reminds me of when I started and scaled up my business and how one of the things that we absolutely prioritised was to be lean and nimble. That allowed us to run circles around the incumbents and gain market share. You can’t win against a 400-pound gorilla in a head-on fight if you’re a newborn gorilla. However, if you’re lean and nimble, you can gain experience and get the food that you need without alarming the 400-pound gorilla, and suddenly, you’d grow to be bigger and stronger than he was.
Business Lessons From Solo Travelling: Ruthlessly trim the fat. Keep things simple. Be lean and hungry. Simplify, not complicate. That’s how you really grow.
Business Lessons Learnt: Sacrifices Are Needed For Your Vision
All this travelling spanned about a year, and it’s very possible that I could also spend 5 years or even a lifetime doing this in perpetuity. It all boiled down on what I felt was more important to me, and what I was prepared to sacrifice and compromise on. Like almost anything in life, everything happens on a sliding scale and ultimately the choice that we make also incorporates the sacrifices that are built into those choices.
In the case of travelling, I found that the time that I spent travelling gave me great perspective and experience, but it took away the ability for me to set down roots. Friendships and relationships become very transient because I was only around physically for a certain amount of time. I missed events such as birthdays and weddings. While I expanded my ability to meet many people, it is much harder for me to get the chance to develop something deeper.
It reminded me of when I chose to be an entrepreneur in 2002. It was a choice that required sacrifices. I had to give up most of my social events, spend less time on my relationships with friends and family, and pare down on my hobbies and entertainment. In return, I could dedicate most of my time and attention to my business.
Business Lessons From Solo Travelling: Not only do you need to know what your vision and dream are, but you also have to be prepared for the sacrifices necessary to bring it to fruition.
Business Lessons Learnt: Your Focus Can Change Your Behaviour
When I was in my home country of Singapore, I realised that I was living with certain assumptions and perspectives. Without being aware of it, I also let society and people’s expectations affect and mold the way I thought. This meant that I always had a certain way of behaving that stemmed from what was acceptable by society and from people who knew me.
The peculiar thing was that when I left my home country, I had none of these binding me anymore. These lessons from solo travelling showed me that what I had thought was truth was just an assumption, and that I could be free to express myself.
In fact, when I realised this, I slowly became aware that it was even possible to experiment with new personality traits that I had not thought of displaying before. For instance, I was typically more reserved in Singapore, but while travelling and living a life outside of Singapore, I could experiment with being much more out-going and expressive.
It made me realise that if this is true, then we are completely able to shape who we are if we spend time and effort into developing the traits that we want to see from ourselves. With deliberate and progressive practice, these traits would slowly become ingrained and natural to our identities.
If you have thought that you needed to be more outspoken or less judgemental or more empathetic or less shy — the good news is that you can. One way to do it is to force yourself to do the things that you would otherwise not have done, but in a progressive manner because it’s unnatural and absolutely scary. Start with really simple and basic steps to test and see how it feels, and then build the desired behaviour from there.
Business Lessons From Solo Travelling: You can be who you want to be if you deliberately commit to practising the traits that you want to see from yourself.
Business Lessons Learnt: Understanding Your Target Market
I remember waking up in Manhattan on a Sunday with the whole day ahead of me, with nothing planned. I was thinking about activities to fill my day with and the first thing I thought about was to visit an attraction. There were tonnes in Manhattan: the Statue of Liberty, MOMA, Chelsea Market, etc.
Then I caught myself because I realised that I wasn’t feeling particularly excited at all, so I asked myself why I was even wanting to visit an attraction. That was when I realised I was only planning to visit an attraction because they were popular places to visit, and not because I actually wanted to visit them.
In fact, I had a much happier time when I went to a craft beer taproom, hung out there and started having conversations with people I met there.
Of all the lessons from solo travelling that I learnt, this was the greatest lesson and revelation for me: It turns out that doing what is popular isn’t what you have to subscribe to. And what is popular isn’t necessarily what you would want. And that’s something that I found to be true in many cases. In fact, when I travelled and heard the perspectives that others had, I realised that there are so many different groups of people who were passionate about so many different things.
When I was behind a computer, it was hard to imagine my target market or target demographic. I had forgotten it, but while we’re all different, we’re all human beings with pains, fears, dreams, problems, likes, and dislikes. When you truly understand your target market, your message to them can become so much more clear and specific.
Business Lessons From Solo Travelling: Understand your target market and target demographic really well. If you can speak to this market authentically, you can form a real connection with them when you’re growing your business.
How to sell your business is a question that has crossed the minds of most entrepreneurs and business owners. When people find out that I exited my previous company, Vodien, for $30 million, they would invariably ask me about how to sell their business. When we were running Vodien, one of the things that we wanted to do was to keep financial transactions above board and to have everything equitable and fair. As such, Vodien was designed very efficiently as a proper business, which made a company acquisition very straightforward. In fact, when we had decided to go ahead with our exit, the entire process from due diligence to completion took less than 2 months.
Unless you’re a hot startup, you’ll find that nobody is going to eagerly chase you down with a premium offer. Instead, you’ll find that you’ll need to design your company to be as attractive as possible to your potential buyers, and on top of that, you’ll need to be the one reaching out and building relationships with your potential buyers.
How To Sell Your Business By Preparing For An Exit
One of the things that founders have a common misconception of is that a buyer is going to come to you, agree on a price, take your whole company, and you can leave for St. Tropez on the next flight out.
Unfortunately, that’s never going to happen. Buyers are human, and buying a business is like any other purchase that we make in our lives. When we buy an iPhone, we expect it to work right out of the box. We don’t want to have to call up the factory to ask where the screen is or be happy with only being able to make phone calls successfully 75% of the time. That’s just like what happens when someone buys a business – it should run smoothly even after the acquisition.
The first thing that business owners need to do when preparing their businesses for an exit is to clean up their businesses and ensure that they are spotless. That means that there are no convenient cash loans to the owners, purchases of forged rims for the owner’s BMW, nor unjustified “entertainment” expenses at fancy restaurants.
While growing and scaling up your business in the initial years of your business, you will not be thinking of an exit or how to sell your business. However, when your business is of a certain size, it’s prudent to start looking ahead with a 1-2 year window. If you expect to exit in that window, then you should seriously start considering expenses and investments that you’ll be making. For example, expanding your office, or hiring wantonly, or increasing advertising and marketing spend. These costs affect your burn rate and consequently your EBITDA, which is used when determining your acquisition value.
The Two Different Types of Business Buyers
When figuring out how to sell your business to someone, the good news is that there are generally only two different types of buyers: financial, and strategic. The financial buyers are typically your private equity firms, funds, or anyone who’s looking at your financial performance much more than anything else.
The strategic buyers are much more interesting because they would be the ones who value your company for much more than it’s merely financially worth. The following are just some examples of what can be of strategic value:
Human resource: specific skillsets and experience in your team
Geography: presence/leadership in certain regions
I find that strategic buyers are the ones who would value your company higher, especially on assets that might not necessarily translate into direct financial value. As such, I highly recommend focusing on an exit to a strategic buyer if you’re able to.
Identify Potential Buyers For Your Business
To find a strategic buyer, it was a process that took us many months. Firstly, we had to identify who could be potential strategic buyers. I found that strategic buyers typically fell into 3 categories.
Direct competitors: These are the most straightforward. You’ll be looking at the companies who are your direct competitors, but bigger. These could be companies in your country who’d gain market share after acquiring you, or companies in other countries that might be interested in expanding into yours. When I was running Vodien, we had many discussions with other hosting companies from not just within Singapore, but from all over the world. Any one of these companies would immediately see strategic value in acquiring us.
Complementary business types: These are businesses that aren’t selling the products and services that you’re selling, but are serving the same market. With a strategic acquisition, these buyers can expand their value chain horizontally with your business. In the example of web hosting, it could be web design companies, because anyone who designs and builds a website will need web hosting.
New business divisions: These are businesses who are in a slightly different industry or segment but can still get value from acquiring you. Vodien was a web hosting company which served 40,000 SMEs or SMBs. This was a target market for many businesses — some examples would be corporate secretarial firms, Internet service providers and telcos, and SaaS businesses targeting small businesses (payroll SaaS, accounting SaaS, and so on).
Develop a Dossier Of Potential Buyers
If you haven’t realised by now, everything that you do in business should be systemised. This process of identifying and connecting with potential buyers should be systemised too. I recommend creating a spreadsheet with all the companies that you’ve identified, and put in all the information that you find on them. This includes points of contact, projects that they’re working on, news that they’ve announced, and so on.
A good way to keep track of what everyone is up to is to use services such as Google Alerts or LinkedIn. You’ll want to be alerted whenever your potential buyer is mentioned in the news or tagged in a post. When you get alerted, you can either send a congratulatory message or a message about something related that your company can provide value on. This keeps you on top of mind in your potential buyers and ensures that they don’t forget you.
Build Relationships With Your Potential Buyers
Fun Question Of the Day: how to sell your business to someone? Well, we very quickly realised that no one was approaching us and that we had to start building up relationships with potential buyers. Unless you are the market leader, or your buyers are specifically looking for a company of your profile, you shouldn’t assume that buyers will approach you. Instead, you’ll need to be the ones who build up relationships with your potential buyers.
This step isn’t as difficult as you think. You already have a list of companies that you have identified as potential buyers. Now you’ll need to contact them. CEOs of smaller companies are more accessible. CEOs of larger companies typically aren’t very accessible, and you might have to approach one of their lieutenants. You’ll need to pass through several gatekeepers, but it’s not impossible.
It’s also not very productive to think that the first meeting with a company will be a fruitful discussion about them acquiring you. A much better approach is to have them realise the value that your business has. The best way to demonstrate this is to actually work with the company together on a partnership or joint venture. That’s also a great way to get into a company; once someone in the company knows you, it’s so much easier to get an introduction to someone else you might want to connect with.
How To Sell Your Business
At the end of the day, learning how to sell your business is an art form. Since exiting your company is a transaction, both the buyer and seller are looking at gaining something. When you can find and position yourself to be something that your buyer absolutely must get, you’ll be having the upper hand. The thing that you can do to boost your chances of an exit and your company’s valuation is to increase the pool of interested buyers.
You won’t start off knowing how to scale up your business. I sure didn’t, but at its largest, the company that I was running, Vodien, had 150 employees spread over 4 countries. I didn’t learn about organisational behaviour or organisational management in school, but I quickly realised I needed structure and systems to grow the company smoothly and not have everything implode.
Here’s what I learnt are the best practices to scale up when I was running my business.
How To Scale Up Your Business #1: Vision
As a founder, you know what your company’s vision is (hopefully – otherwise, please discover it ASAP). However, I’ve since learnt that people are unable to read minds, so it’s really important that everyone in the company be clearly and repeatedly told about what the company’s vision is.
How To Scale Up Your Business #2: Communications
One of the most important things of anything that involves more than one human is communications. When you have business partners or an entire team of employees, this becomes absolutely paramount. In my company, the upper and middle management meet every single week to understand what each department is working on, and the projects that the company is developing, and updates/progress/challenges on projects. This is particularly important, especially since customer service might not know the new products or policies that the engineering department plans/needs to introduce.
On top of that, there’s a company-wide town hall every month. In my company, we use this primarily as an opportunity to:
Make company announcements, such as news, products, policies
Introduce people and what they are doing to other departments in the company
Celebrations for achieving company milestones
Reiterate the company’s vision, goals, values, and strategy
Discuss any company-wide events that occurred, such as customer feedback or industry shifts
Get general feedback from the entire company
How To Scale Up Your Business #3: Managers
Managers are needed because they should work towards maximising the productivity of every employee in your company. Therefore, the role of a manager is that of responsibility. The manager must know what his reports are working on, what their progress is, and what obstacles they’re facing. The manager’s role is then to remove the obstacles any way that he knows how to, and ensure progress in the right direction. All this must be communicated at least once weekly, and in some departments/teams, once or more daily. Notice that I didn’t say that it’s a physical face-to-face meeting. This can be done through digital means or even a phone/conference call.
How To Scale Up Your Business #4: Organisational Chart
Once you have employees, you need to have an organisational chart. It doesn’t have to be printed but should be readily available to all people in your company. The organisational chart shows your employee what your company’s hierarchy is, what the roles are, and who is handling what responsibilities. A person can fill multiple roles, especially at new companies and startups.
How To Scale Up Your Business #5: Job Descriptions
Spend time working on job descriptions. It will most definitely change and the actual job scope will deviate from the job description, but still, you should aim to have your job descriptions 75% accurate. This ensures that you hire the right people for the role and that your employees know exactly what they should be focused on doing.
How To Scale Up Your Business #6: Hiring
Have a structured interview process. Play with multiple interview rounds, and have consistent questions for all your candidates so that you can assign scores and remarks that make sense. It is always better to hire someone who has a great attitude and values, but is lacking in skills, especially when your company is young. Skills can always be trained, not so much for attitude and values.
If you have specific problems that the employee will face in their job, have that as part of the interview process. For example, Vodien hires a lot of customer support agents, and as part of their interview process, the candidates have to answer how they’d handle an actual customer support question. For this particular question, I’m looking out for things such as tone of their answer, logic, and empathy. I personally hired our first 50 hires, and after that, personally interviewed all the candidates up to 2 levels down.
How To Scale Up Your Business #7: Firing
Terminating employees is never easy, but do it quick. Do it like a plaster – rip it off quickly, and get it over with. I’ve found that the more I dragged it out, the worse the situation becomes. However, make sure that you follow your country’s employment laws. For fairness, ensure that everyone who you fire receives a written warning and time to make a change. The exception is for non-performance-related issues. Once a termination occurs, I’ve found that it is better to be open and transparent and inform your team about it, letting them know that they can approach you or HR for clarifications about the matter.
How To Scale Up Your Business #8: Training
Have your employees document the work and processes that they are working on. These can be just brief bullet points but contain the necessary information that a new person can read the documentation and take over the basics of the role. Not everything will be easily documented, and employees will rather work on their job than on documentation, so you will have to ensure that this happens. Everyone is busy and will only get busier. You will find that the documentation is going to be extremely helpful when you hire and grow your teams in future.
How To Scale Up Your Business #9: On-boarding
Ensure that your new hires are minimally introduced to everyone on the team. Ideally, you also provide an orientation handbook that states essential information that your new hires should know, such as processes to apply for leave days, or login information to company tools, or email/communication information, and anything that they need to know as a newcomer to your organisation. I found that a digital copy is best, since the policies and information may change from time to time.
How To Scale Up Your Business #10: Salaries
I’ve found that it’s better to not be transparent with our salaries. Everyone will end up getting different salaries, even if they’re doing the same role and job. Factors such as age, experience, qualifications, competence, all matter. Have a company policy of salary adjustments, be it promotions or salaries, at regular intervals. Vodien had all promotions happen in June, and all salary increments happen in December. This prevents people from asking for raises on an ad-hoc basis, allows you to spread out your increments in order to smoothen out your company’s cash-flow, and gives your employees something to look forward to in the year.
How To Scale Up Your Business #11: KPIs
While it seems like everyone preaches about the necessity of KPIs, we didn’t have KPIs for some roles in Vodien. I’ve found that it actually depends very much on the department and the type of work necessary.The accounts, finance, billing, customer support, sales departments all had clear KPIs, but the engineering department only had baseline KPIs for hygiene, and instead had more goals to work towards. Engineering’s role was to ensure availability, security, and stability of current systems, while also continually making improvements. We found that implementing KPIs for engineering seemed forced, resulted in additional work and overhead to implement and monitor, and ended up backfiring instead.
How To Scale Up Your Business #12: Product Management
Your products will grow and eventually will need to have a product manager. This person handles the development of the product(s), knows it inside-out, and is the bridge between multiple departments working on the product. The product manager is also in charge of briefing and ensuring all the relevant teams know what they need to know about the product. Because departments typically don’t have full visibility of what’s going on, the product manager has to communicate reasons, problems, limitations, and features among departments. This is especially important to get everyone’s buy-in and support for the product.
I found that these few areas really helped my company keep its focus together as a team, and was instrumental in our growth. Try them out for at least a few months, and let me know what results you see. If you have other areas that you have found to work for your company as well, feel free to leave me a comment below.