Business sayings – what do they mean?
There are some phrases and sayings that we often use in the workplace. Sayings that we take for granted; just assuming that everybody understands what we mean when we use them.
But do we understand them fully? And can we learn something from them?
Some of these sayings can have a deeper meaning than at first might appear. Here we examine a few of our favourites to find out what wisdom we can discover.
Karma mainly relates to religions but for me its core principle “what goes around comes around” applies equally in business:
- do a good job and you’ll avoid adding time-consuming, costly repairs to your work
- be honest and fair in your business relationships and you’ll be treated likewise
- do what you say you will do and you’ll be known for your reliability
This will all lead to more work through repeat business and referrals.
The Secret by Rhonda Byrne
Following on from Karma is a book called The Secret. Where Karma is all about good deeds attracting good outcomes, The Secret is about a positive attitude attracting a positive outcome. It gives a little more guidance when unexpected or bad things happen outside your control.
When bad things happen, it’s human nature to focus on those bad things and dwell on what you do not want to happen. Instead The Secret focusses on positive outcomes.
For example, your biggest customer goes bust owing you a lot of money. Your first reaction is to think about it too much and focus on what you do not want to happen i.e. I don’t want to go bust myself, I can’t pay the rent this month, I can’t pay my suppliers and so on. Dwelling on this depresses us and puts us in a negative frame of mind so it is only natural our decision-making will be adversely affected.
- The Secret tells us to accept that this has happened, there’s not a lot one can do about it so move on with a positive attitude. Instead of saying:
•Oh no I do not want this to happen
- Oh no I hope that doesn’t happen
Switch things around to what you want to happen:
- I want to trade as normal so let’s call the landlord and the suppliers I owe money to, explain what has happened and agree a plan with them
- What can I do to get my sales back to where they were before I lost my biggest customer?
- Network and let it be known you have capacity should anyone need some work doing urgently
- Call my existing customers to see if they want to bring forward any projects
- Do I need financial support to see me through? Work out what finance you need and what you can afford to repay. Work out what you need the money for and how that will get you back to where you need to be. Generate a financial plan to reassure yourself that your plan will work and to support your loan application.
In a nutshell, if there is nothing you can do about it, do not dwell on it. Work out a plan to overcome it and get you back to where you want to be. Be positive.
Circles of Influence
One of my favourite theories is the Circle of Influence. I like it for its logic. The theory goes that most successful business people focus on things they can influence or control directly, largely ignoring the things they can’t.
The more you address the things you can influence or control, the bigger your circle of influence becomes and the more you are in control of your own life, business and environment.
Each diagram above contains two circles:
- The outer circle is our whole world
- The inner circle is the things we can directly influence by our actions
- The bit between the inner and outer circle is called the circle of concern (things that worry us, but we have no control over)
The theory goes the more we focus on the things in our life we can influence, the bigger our inner circle becomes and the more we are in control of our own destiny.
The Proactive Focus diagram shows someone focused on things they can control such as working harder to get promoted, taking exams or training to improve their ability/income, going to the gym to improve their fitness, quitting smoking to improve their health/life expectancy
The Reactive Focus diagram shows someone spending too much time worrying about things they have no control over and just reacting to things as they happen to them. For example, not going to the gym or quitting smoking could lead to health issues which could negatively impact their life. Not working hard or not getting qualifications could prohibit their earning capacity so they have less money to do the things they want to do.
For me a good business example is Brexit. It will impact all our businesses, but my advice would be:
- let the politicians talk in circles and eventually sort it out
our job is to focus on our businesses, so that they are in the best possible shape whatever the outcome the politicians eventually get to.
Turnover (Sales) is vanity. Profit is sanity
When we talk in terms of how big a business is, we talk in terms of Turnover (Sales). It doesn’t disclose too much confidential information but the bigger the turnover, the assumption is the better the business is doing and that makes us as business owners feel good.
But far more important is profit which, in its basic form, is the difference between money you receive (sales) and money paid out (costs). Profit belongs to the owner and is effectively our salary.
Big sales may make us feel good, but it is profit that allows us to pay our bills and do the things in life that we want to.
Cashflow is King
Although profit is ultimately the key objective of most businesses, it is cash that allows us to pay our bills (both business and personal).
Sometimes a business will have good longer-term prospects but is currently making losses i.e. more money is going out of the business than is coming in. The owner might take on a short-term loan to help the business get through the short-term losses but by introducing the loan the owner must build into their cash flow forecast the loan repayments alongside the projected losses to ensure the business has enough cash until it regains profitability.
Overtrading is where a business is rapidly expanding and all looks good. But the additional costs of achieving the additional sales combined with longer credit terms on the additional sales mean the business has increased its profitability but worsened its cash flow position.
In the short-term it will look like your business is expanding and you are doing well but very soon your business will run out of money unless you put plans in place to ensure you can fund the expansion.
Ability to pay the bills is why cash flow is king.
Consumer sovereignty is saying our customers are the most important thing in our business, which is of course true as without customers you have no business.
Having said that I have heard over the years:
- a nurse – this place would be OK if it wasn’t for the patients
- a lecturer – this place would be OK if it wasn’t for the students
- a shop assistant – this place would be OK if it wasn’t for the customers
Admittedly it is usually an employee saying that, not the owner, but surely the employee realises the customer pays their salary? Of course, they do, they are just having a bad day.
But the point is the customer is the most important part of any business. Without them there is no business or no job.
Surround yourself with good people
It is human nature to focus on the negatives in life: the goalkeeper who lets in a howler or the striker who misses a penalty will be remembered far longer than the man of the match.
It is the same for businesses. Your customers are far more likely to remember and talk about a bad job than they would tell people about something good you have done. This could be very harmful to your business so you, and every member of your team (employees, subcontractors, suppliers), must all deliver a quality service your business can be proud of.
As the business owner it is your responsibility to:
- adequately train your employees
- provide employees and subcontractors with guidance and tools to do the job
- vet suppliers to ensure they supply quality products going into your job
Because your business name is on the job, ensure you are proud to be associated with every element of the job.
A connected saying is that your team is only as good as its weakest link. Focus your attention to ensure your business has no weak links.
I know that half the money I spend on advertising is wasted, the problem is, I don’t know which half.
I was the Financial Director for a big advertising agency for 14 years, so I know a lot of thought goes into an advertising campaign, the media channels to use, the message, the target market and so on.
But whether you are a multi-national company or local tradesperson, advertising is about creating brand awareness so that when the customer wants to buy they know what you offer and how to find you.
A lot of advertising spend, especially for local businesses, is trial and error. I heard of an accountancy practice putting a small advert in the parish magazine for two parishes next to each other. In one parish the accountant’s advert generated several leads but in the other it generated nothing.
One year, December and January, BKPS advertised on local radio for anyone needing their self-assessment doing, I thought it was a great idea which would generate lots of new business. Unfortunately, we got a number of existing clients telling me they heard our advert and thought it was great but the two-month campaign only generated three new clients which just broke even with the cost of the advert. At the time I thought this was disappointing but now I realise a lot of people heard that campaign and together with other marketing BKPS Ltd achieved its goal of letting people know where we are and the services we offer.
All advertising creates awareness but unfortunately less than half of it delivers payback. My advice to local businesses is try different things to get your name out there. It doesn’t have to be expensive. Sponsor your child’s sports team, get a card up in your local post office, ask your newsagent how much they charge to insert your leaflet in newspapers, do a leaflet drop etc.
Today though, the internet is usually the first port of call for most potential customers. Recently the cost of building and supporting a web page has come down but to be of value to your business it needs three elements –
- to look nice and be easy to read
- to be easily found
- to have positive reviews
This may be an area where an investment in your website may pay dividends.
Burton Mail – Wednesday 15 August 2018.