CHAPTER 11
Who Are All These People?
Funders want to know more than just who the CEO is. They need to know that, if something happens to you, your team will be able to continue running your business, and that they will be able to do that as well as you can. This is the reason why selecting staff, from key personnel to directors, must be made for the good of the company, that is, by emphasizing on their qualifications, experience, skills, and their reputation.
Building Your Team
Every entrepreneur must learn to delegate, identify what tasks need to be done, and assign these to personnel. Almost every new business today uses consultants for the complex areas of research, law, audit, taxes, and insurance.
Management
Most capital providers will place a major emphasis on the skills and experience of the board of directors and key personnel. While your firm may be small when you are approaching these funders, remember that they are assessing your ability to run a much larger company in future. Why would you need capital if not to expand your business?
Rainmakers always look at your executive triparty team, namely, the CEO, the financial director, and the chairman. Your ability to show funders that together you form a powerful combination of leadership, industry knowledge, and financial discretion will be a major benefit to your organization, from capital raising to company control.
A range of other skills required to manage a business successfully include the ability to lead a group of employees; the ability to resolve conflicts arising among staff members, management team members and those between management and staff; and good communication skills.
Consultants and Professionals
The extent to which you employ professionals will depend on your own expertise, risks associated in the industry sphere in which you operate, and your goals for the business. The following aspects require due attention:
• How do I appoint the right consultants?
• Importantly, make sure that their expertise is both theoretical and practical.
• You will be working closely with these consultants, so ensure that your personalities don’t clash.
• Assess their fee structure and compare this to what other consultants charge.
• Appoint financial accountants that have a background in auditing and forecasting.
• Build a legal team to resolve legal issues that may arise in the future.
Before the final selection of your team takes place, consider the following:
• Personality: Funders are concerned about their funds and your ability to pay them back, so obviously they want to feel comfortable that you have what it takes to be successful. Do this by highlighting your team’s combined skills and experience to demonstrate that you have the ability to make your business a success.
• Management: Key personnel must display an understanding of your market and have the skills to succeed. Give detailed resumes of your management team, outlining in particular the vital roles they will play in the business’ success. If your team can be stronger, take on the task of building up a team to support your own success as well as the success of your funding request.
• Consultants: Carefully select consultants who can help you. Know what it is you want in advance of your need to avoid delays.
• Continuity: Ensure that you have detailed and documented plans for your business so that it can continue to prosper even in your absence. Train someone to take over the firm and have keyman insurance in place considering the possibility of illness, disability or death. Funders will ask whether, without you, the business can continue to prosper.
Employing Staff
• In a world where labor-related laws have proliferated to protect employees from unscrupulous employers, you need to be more discerning when appointing staff. SMEs generally battle to comply with all the relevant legislation that pertains to employees and employment. For this reason, you must have employment contracts drawn up by an attorney specializing in labor law.
• You can also look to recruiting your staff through a reputable personnel agency. If you do not plan carefully at this stage you could face huge penalties in staff labor-related actions.
Employment and Termination Contracts
• These contracts are unique in every business and must be prepared by professionals.
• My advice is to review contracts annually to ensure it is up to date with any new legislation or changes to existing labor laws and legislation.
• Laws pertaining to dismissals or retrenchments are complex, and it is simply prudent to hire the right professional to handle such issues.
Treat Suppliers and Customers Like Staff
Suppliers
This can be a strange element to the success of your business. Once you have researched suppliers and made your selection based on price, quality and references ensure that these suppliers understand your specific needs.
The secret is to be loyal to a small group of suppliers to build relationships. Consequently, if a deal collapses or you have customers that haven’t paid you, you can negotiate with your supplier to assist you.
Credit Customers
If you sell goods on credit, it is critical to ensure that your credit control systems are established and professional. This means that credit applications forms must comply with the laws of the land and that your systems can handle sales volume.
Strangely, a well-drawn credit application often results in clients paying on time if there are incentives via discounts and so on.
Social Media—More People to Know?
In today’s electronic world, the quickest way to market your business is via networking, which is now critical to the success of your business. This is especially true if you are selling industrial products. Here too, you will need to hire professionals to truly understand the benefits of social media. At the outset, it is also important to note that social media highlights your business to competitors, and fake news and negative rumors are easy to start but difficult to defend.
Quite simply, social networking must be targeted and specific. Knowing many people doesn’t equate to more business. Traditionally, networking is maximized when you join an organization such as the chamber of commerce. Here you get to meet members face-to-face, and deals are more definitive and potentially profitable. Remember, the idea is to meet people and not to get business, as people will automatically do business with those they like. Building contacts is important for now but even more important for the future.
Five Basic Steps
• Step 1: Why network? The aim is to promote your company, products, and brand. When the market gets to know who you are, your brand, in turn, gets promoted.
• Step 2: Setting goals. Brand specialists organize potential resources effectively to track and identify people, market leaders, and industries with whom you should connect.
• Step 3: What network? There are thousands of networking sites, and many cross the divide between personal and business; stay away from these sites. You are here to promote yourself to the business community, so stay on track. Be selective and specific as to the sites you choose to subscribe.
• Step 4: Making contact. Once the above steps have been completed, determine which organizations you wish to join and make contact. Sometimes you may be required to be referred by an existing member.
• Step 5: Your approach. The most appropriate approach depends on the organization, but the norm is the following:
Ensuring that calls are followed up and meetings organized and attended.
Promoting your organization’s products and services.
Rainmaker Observation: To successfully run your business or to raise new funds, you must be able to demonstrate that you are consistent in achieving and succeeding in all that you do and, more importantly, that your staff are coordinated, happy, and faithful to your company. One-off successes may be impressive, but they are not enough to secure funding. In essence, do not leave things open to interpretation.