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Building a winning business Building a winning business
by Joseph Gatt
2020-07-06 07:40:20
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You can only win at business if business becomes second nature. That is if everything you do is natural, and if you have that “sixth sense” when it comes to knowing whether business is going well or not, and how to fix it.

Before I start discussing what makes a winning business, here are some common mistakes that have broken businesses.

Mistake one: focusing on one aspect of the business and neglecting all others.

Example: Mr. Kim sells blinds in South Korea. His clients are mostly cheap motels who prefer blinds to curtains. The trend goes likes this. Mr. Kim opens his business in 1995, when the cheap motel business was booming. Mr. Kim meets with motel owners, and manufactures and installs their blinds.

winbus001_400Things are going great until 2008-2009, when the cheap motel business starts freezing. Most people who used cheap motels were young couples looking for some privacy, but starting 2007, many young people in South Korea started renting single-bedroom apartments and moving out of their parents' house.

The other problem is Mr. Kim got so complacent with his business over the years that he delegated 100% of the sales job the his salesmen, Mr. Lee, Mr. Oh, Mr. Song and a few others. Mr. Kim's salesmen are scared of their boss's reaction to slow business, so they play this game (during the motel freeze) where they Mr. Oh spends the entire days fishing, Mr. Lee spends his days taking a truck driver's license and studying for the real estate agent examination, and Mr. Song spends his days selling gold and jewelry. At 5 PM, the salesmen enter the headquarters, and tell Mr. Kim they met dozens of potential clients, and that “they will contact us soon and maybe they will order something.”

The problem: Mr. Kim was so obsessed with sales figures and numbers, that he neglected the environment.

Mistake 2: trying too hard to sell

When you go to the supermarket, you pick up your groceries and leave. There are a few subtle hints here and there that encourage you to pick up some items. But you don't have sales clerks begging you to pick stuff up.

Some businesses work like that. In South Korean makeup stores, which are often owned by women, women have this mentality where sales clerks need to constantly invade the “privacy” of shoppers by “interfering” with their choices (often to get them to buy more expensive makeup items). This tactic works in the short-term (many women and men looking for a gift for their girlfriends do end up buying the expensive stuff) but, in the long run, clients don't come back (they either order online or go to a store where their privacy will be respected).

Other example: French singer Faudel was the epitome of “Oriental joy, happiness, have fun and play hard” kind of singer. People danced to his music with joy. This was in 1998. Over the years, Faudel would appear on TV begging people to buy his albums. He looked a lot more serious, depressed, cranky, nothing like the “love, joy and happiness” his music used to convey.

Mistake number 3: Diversifying

Samsung was world number 1 when it came to textiles until 1986. People wanted Korean textiles, and they did not want textiles made in competing countries like Bangladesh, Vietnam or Tunisia, because Samsung had that devotion to detail that the Tunisians do not have. Those Moroccans, Tunisians or Pakistanis tended to be more “slack” with their textile production, and did not have the “serious, dedicated work” the Koreans had.

But, in 1986, surprise! Samsung shuts down its textile mills, to focus on electronic devices like TVs and washing machines and dishwashers and what not. That did work out fine for Samsung (what I would have done is keep focusing on textiles, and perhaps invest large shares and stock options on a relative who works on selling TVs).

But then Samsung wanted to enter the construction business, the automobile business, the oil refinery business, the entertainment business, the hotel and resort business, the theme park business, the tourism business, the banking and financial industry, the insurance and financial services industry, and even (unofficially) the sex industry.

For the analogy, there's this really nice restaurant in Taksim square in Istanbul. It's built like a buffet, but you pay for each dish. I usually have my Iskender Kebap there, but when I take my friends there, they don't take into consideration the fact their stomachs can only handle so much stuff. They take a little bit of everything, eat until they are full, and 80% of the food goes to waste.

Mistake number 4: Thinking every day is going to be a great day

Tennis racket producers know something about business cycles. The tennis industry competes with three or four other major sports: soccer, basketball, track and field, and to a lesser extent rugby, American football and baseball.

So the tennis industry knows that when there are major track and field events (the world championships) racket sales tend to go down. When there's a major soccer event (the world cup, the European championships) racket sales drop. Racket sales also drop during the NBA playoffs and a few other major sporting events.

But, there are intervals. Usually between the months of February to May, there tend to be no major sporting events. Tennis games are widely broadcast, and that's when quite a few people buy their tennis gear and equipment. In some cases, say in France wins the soccer world cup, a lot of kids are going to ask their parents to drop them from the tennis lessons and try out soccer lessons instead.

In sum, the game of tennis is probably never going to go bust. But, there are good days (when there are no competing sporting events) and there are terrible days (when France wins the soccer world cup, or when the LA Lakers reach the NBA finals, and that's when people in France or LA are going to try their luck with soccer or basketball).

So, how do you win at business. The very brief guide.

-Values: The problem with lies and liars is that their stories often don't add up. Tell the truth, encourage your staff to tell the truth, encourage your clients to tell the truth. A good day is a good day. A bad day is a bad day. A horrible day is a horrible day. Cheers to many more good days, and let's hope the horrible days don't last. 

-Production: You want to understand and master the production cycle of your product (if you are a factory). But you also want to customize your products, take suggestions on your product, take feedback on your product. 

-Catalogue: A lot of companies don't have a catalogue, or don't put their catalogue online, or have a catalogue but rarely share it because they are worried people might steal their ideas, or are too ashamed of their products.

You want a great catalogue, you want staff to understand the catalogue. You want staff that can answer (almost) every single question about (almost) every single product. Some clients ask weird questions (like where are the raw materials made? Or what are the raw materials made of). Answering questions is important (in the raw materials case maybe some raw materials are banned in their country or some people have allergies or something).

-Sales and marketing: the weird thing about sales. Sometimes you are going to have very quiet days and then... boom! 70,000 kilotons of clients make orders and you make a fortune in a single day. Then things go back to normal.

The general idea, or general philosophy if you will, it to forget about yesterday and to focus on today and plan for tomorrow. You might try to understand why 70,000 clients showed up the other day, and try to anticipate whether there will be other days like those.

But in general, keep your marketing simple. Use simple sales strategies. Simple means don't use elaborate rituals or anything. Don't say things like “I won't sell you anything unless we have a drink because in my culture we only trust clients we drink with.” Do away with such nonsense.  

-Clients: If you hate categories of people, or judge categories of people, you are bound to fail at business. A lot of people say “I'm not racist” or “I don't hate anyone” but deep inside there are a lot of categories of people they don't like.

When it comes to clients, there will be rich clients, poor clients, polite clients, rude clients, harsh clients, soft clients, clients of all ethnicities, creeds and colors, clients of all shapes and sizes.

You want to watch out for scams, you want to watch out for clients who behave in unacceptable ways. But treat everyone kindly, treat everyone gently, kill every rude person with kindness. Some clients are so used to being treated harshly that they are always on the lookout for harsh treatment. Reassure those with your kindness, and they will purchase double what they intended to purchase. 

-Answering client questions: I've touched upon this. Be prepared to answer even their weirdest and wildest questions. If you don't know, you either call an employee who you think knows the answer, or promise you'll answer that “difficult” question. The more stuff you know, the better.

-Negotiating deals: What you'll soon find out is most negotiators don't want to give you a fight. They'll take whatever deal you offer them. They might attempt to get a better deal, but won't try hard.

But then, some negotiators use “hard” tactics. Some can grow rude, impatient, can use threats, can pound their fists on the table, can make a scene. Keep in mind that these guys are also more likely “not to pay” and are more likely to “take you to court.” So don't hesitate to end the day with “no deal” and don't cry because you just lost 10,000 dollars or whatever. No big deal.

-Staff: Here's a big mistake a lot of businesses make: they are so obsessed with HR that they neglect everything else. Staff is a “work in progress” and sometimes you'll hire great people, other times you'll hire the wrong people.

Keep in mind that if you value accuracy, you will get accuracy. If you value fact distortion, you will get distorted facts. If you value solidarity, you will get solidarity. If you enjoy looking at people fight each other, you will get lots of fights. 

-Coaching staff: Some companies like to hire “coaches” the help staff get by in sales, marketing, or other business aspects. A coach can be a good idea. But there's an IF.

IF the coach knows that every business is different and faces completely different realties, and the coach can help you with tips designed at those specific realities, you could use a coach.

IF the coach preaches with a “one-size-fits-all” model or does not realize that every individual, every business, every industry, every era is a world of its own, you want to do away with that coach.

-Accounting practices: An honest accountant will have an easy job and lead a stress-free life. If the books are “cooked” this could be a terrible thing. “Cooked books” is almost like “castration” that is the man is no longer sure what his gender is. It's that bad!

-Legal practices: Keep it legal and you'll have few or no problems. Take risks with the law, and you'll be receiving lots of subpoenas.

-Business cycles: Finally, some days are great for business, other days are terrible for business. So you need to know your “break even point” and to think about what to do with all the “extra money.” And of course what to do if the “break even point” is not being reached.


     
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