Lessons From 2021 Business Coaching - Part One

I’m doing more coaching than ever before, with businesses all around Australia, the South Pacific, the UK and the US.
Here are some of the recurring conversations with business owners, designed to unblock their challenges and help them take their work to the next level…

You need a cash flow management method
It’s awful to be at the mercy of one major customer.
It’s not much better if that one customer is the national government.
Sure, you’ll get paid eventually, but a pinched cash flow leads to all sorts of headaches throughout your business.
An entrepreneur needs some way of keeping track of their cash flow, so that they can spot issues ahead of time.
We assume the best in our clients, but take responsibility for chasing up invoices and staying front-of-mind.
My suggestion is to ask other people in your industry how they do it.
At the very least you’ll hear war stories that will make your situation seem comparatively easy, and you also might get an idea of what is helpful for chasing clients in your field.

What would a good day look like in five years time?
It is really hard to picture the world in 2026 – imagine trying to picture 2021 back in 2016!
So when asked to set a vision and some goals, an easier starting point is: what would a great day look like in 2026?

Where would you be?

What would be your responsibility?

Who would you be working with?

What skills would you have?

How would you structure your time?

Then the next question is – what’s missing?

What would you like to have in 2026 that you don’t have today?

It could be a skillset, some tangible assets, a team, a great reputation, digital assets, or a community of practice.

How might you reverse-engineer these?

My favourite conversation of the month
Eleven minutes into our first session:
Isaac: “What’s holding you back?”
Lovely Client: “…nothing. I can find finance partners… There’s no limitation.
I feel like I’ve just grown up!”
We spent the rest of our time together articulating and mapping out all of the goals they had been thinking about in the back of their mind, but never felt confident enough to say out loud.

Instrumental Goals vs Ultimate Goals
Aristotle defined two types of goods:
1. Instrumental goods, which help you obtain something else.
2. Ultimate goods, which are the final thing you’re actually after.
Money is an instrumental good, whereas a big family holiday might be an ultimate good.
A university degree is often an instrumental good, whereas your dream job might be an ultimate good.

I think the same terminology applies to goalsetting: instrumental goals and ultimate goals.
These are worth separating, since instrumental goals are likely to be shorter term, but also less emotionally motivating.
It also gives clarity to why you want what you want, as well as which goals are open for negotiation.
e.g. you might be open to growing on a range of platforms, but resolute on where you want to open your office.
I never want to change someone’s mind about their ultimate goals, but sometimes it’s helpful to re-evaluate the instrumental goals – there might be quicker ways to get what you really want.

Generosity comes from stability
A lot of social entrepreneurs are motivated by the prospect of empowering, supporting and creating employment for others.
Their motives are genuinely selfless.
Here’s the catch: decisions that feel selfless in the short term are often extremely limiting for their long term vision.
For example, draining the free cash flow from the business (for generous causes) destabilises the company, especially if there’s an unexpected event in the following months.
The same goes for who you add to your team – training a rookie can change their life, but if this is your first hire, it’s going to slow you down.
By comparison, a team of six or seven is much better placed to support someone inexperienced.
Building a stable, resilient business isn’t selfish, it allows you to be consistently generous over the next decade.

Do you actually need capital to start?
I’ve had four people in two weeks say the same thing: “the thing that’s holding me back is access to capital.”
Controversially, I don’t believe them.
More money would be lovely, especially free money, but it would not solve any of their underlying challenges.
Sometimes when people say they need more capital, what they actually want is five paying customers or assurance that people will like the business.
They want to feel that the business is “real”, and that it is appreciated and respected.
Can you just start doing the core activity?
Can you borrow equipment, resell existing products or launch a pilot?
These scrappy approaches will either give you more money/capital, or will make you glad you didn’t sink your money into the wrong things.

Three task lists
Here’s a neat trick for sorting out all of the obligations and prospective tasks on your plate.
Instead of making one big to-do list, make three:
1. Urgent and important.
2. Great long terms ideas.
3. Other people’s hopes and expectations for me.

It’s a good combination, for a few reasons.
Firstly it highlights which items should actually be at the top of your daily lists.
Secondly, it reminds you that the long term goals won’t get done until you can break them down into actionable little steps.
Thirdly it names the weighty expectations of others, which might not actually be goals of your own.

Am I looking for solutions or a graceful exit?
A lot of entrepreneurs feel the need to fix all of their current problems before starting a new venture.
This comes from a good place, but it can burden them with guilt and responsibility.
The question we use is: are you looking for solutions, or a graceful exit?
More often than not, a graceful exit will do – handing over responsibility to the right person, preserving relationships and giving you peace of mind.
It is really hard to begin a new business if your plate is already full.

“Am I too old to start a business?”
This came up recently and it’s a classic example of the types of lies our brains cook up to keep us safe.
First of all, I don’t know of anyone too old to start a business.
There might be stages of life where you’re the wrong person for a certain type of business, or where you don’t have the energy for a certain type of role, but none of these rule you out of entrepreneurship in general.
Curiosity got the better of me and I had to ask their age.
The result made me laugh out loud, possibly unprofessionally: 51.
You can absolutely start a business at 51.
You’d never tell a 51 year old friend that they were too old, why are the rules different for you?

Making the leap vs 100 baby steps
Lots of people talk about making a metaphorical leap, I’m sure I’ve done it in the past too.
Sometimes this is a good analogy, representing a bold move to abandon the past, take a risk and land somewhere new and promising.
But in a lot of cases, there’s no metaphorical ravine, no dramatic moment.
Instead, the founder needs 100 baby steps; tiny little shuffles that add up over time.
You can break down a startup launch into lots of simple tasks, which can be ticked off like a To-Do list.
The first baby step is still the most important: deciding that you are worthy of being an entrepreneur, that business is not “for other people”, and that you’re allowed to start down a path that could lead anywhere.
After that, registering the company and setting up a website are comparatively easy.

Undercutting cuts both ways
I understand the frustration that comes from having someone else set up a rival shop to yours, offering similar products but with lower prices.
It’s frustrating because you know there’s not much you can do without going into dark places, and those dark places will feel tempting.
It’s double upsetting when the person undercutting you is someone you know.

What’s funny is that a lot of the business owners with these complaints are themselves undercutting their rivals.
They thrive off selling their products cheaper than other retailers, but see no irony when others do the equivalent to them.

There are a few options available to the undercut entrepreneur:

·      Source products that others can’t

·      Create your own products

·      Decide to compete in a different part of the market

·      Add something else that sets you apart from your rivals

·      Change to a market that is harder for rivals to enter

·      Decide that being undercut is a part of life in your country and that you won’t take it personally

Bad alternatives include:

·      Feel terrible and let it ruin your month

·      Threaten or slander your competition

·      Lose otherwise good friendships

·      Give up altogether

 
Too many sets of rules will keep you paralysed
Following your own moral code is straightforward but tough.
Following good business advice is wise but hard to pin down.
Following the expectations of your team becomes more complex.
Following your friends and family’s expectations becomes even trickier.
Trying to do all at once?
Almost impossible.
On their own, sensible parameters and lofty goals are good for you.
The problem comes from the combinations of rules, which can either contradict each other or eliminate all options.

For example, it’s hard to choose your lunch in a food court if the parameters are:

·      It must be healthy

·      It must be delicious

·      It must be cheap

·      It must be quick

·      It musn’t make a mess

Any two of these rules – totally fine.
Any three – doable.
But when all of them are applied at once?
You freeze, get agitated and start overthinking, all while your blood sugar drops.

What if you (temporarily) paused one or two of the sets of rules?
Which would you drop?
What would that allow you to do?


I’ll be posting mpore notes throughout the coming months…