Red Dragon Entrepreneur |
Alfred Ball's Entrepreneurial Blog
Health Care Entrepreneur | Kinesiologist | Author | Presenter
Formally Adventures of a Young Entrepreneur. Red Dragon represents 2012, Year of the Dragon. Alfred was born in this year and is of Welsh ancestry. Follow his lessons on how to stay active and build a health care business.
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 A couple of weeks ago the North Vancouver Chamber of Commerce hosted a series of seminars as part of a tradeshow. One that caught my interest was on how to value a business as well as how to create more value in a business. The presenter was Paul Savage of Pacific Business Brokers. This seminar made me think of two of my favourite TV shows.
Dragon's Den and Shark's Tank participants always fascinate me with how much value they add to their businesses just because of their passion for their own business - sometimes disregarding the fair market value. Some of these evaluations can be so astronomical that it puts the investors off while others have completed their numbers accurately and come prepared with a value that is quite reasonable and attractive
Many of the seminar's participants have been in business for 20 - 30 years and only now examining their succession plan. While, Life Moves Health and Fitness Inc approaches it's seventh year I am trying to think of what value my business brings to me, not just financially but also other more personal rewards. Part of this valuation is figuring out what my own retirement plan is for 20 - 30 years from now.
4 Keys to Increasing Business Value
- Create Documented Systems (Policies and Procedures)
- Clean Up Your Financial Books
- Create Business Where the Owner is Not the Operator (main income generator)
- Create a Business With Excellent Client/Customer Loyalty
Create Documented Systems
A business has very little value of how it is operated is all in the owner's head. Get all that information out on to paper where someone is able to pick it up, read it and then duplicate it. Trying to keep a business growing when the owner who has all the businesses' knowledge is seems like a very daunting if not impossible task.
Clean Up Your Financial Books
Make sure that all your financial information is up-to-date and it is easy for the buyer to complete their due diligence. Get all your cash sales on the books, e.g. record everything. One way to value a business based onmultiples of earnings before taxes, income and amortization (EBITA). One client who invests in businesses said many business are trading on 1.5 x income. This could mean a significant change in value if half of the revenue is in cash sales and not recorded, Paul said to get that on your books.
Create a Business Where the Owner is Not the Main Income Generator
There isn't much to sell being a owner/operator who generates all the income. It isn't a bad thing to own a job, being a single person operator. However, what about creating a business with a team of people - such as a Personal Training business with a team of trainers instead of the slew of independent trainers that are out there? Is your team empowered to make decisions are you able to delgated to them?
Create a Business With Excellent Client/Customer Loyalty
Clients tend to follow the trainer or practitioner but not always; clients are often referred to the practitioner, not the business. Paul mentioned that value of the intangibles such as client goodwill is reflected in the financial statements - e.g. revenue is generated by clients.
If you own a studio or clinic try to make your clients part of the fabric of the business by incorporating them into the business' culture. Introduce them to all the staff, find ways to have them be treated or trained by other team members. As owners make sure you get to know as many clients as you can. Make a connection with them so they feel connected with the business, not just with the provider.
Educate current clients on how to refer to the business, not just the individual team member. When new clients comes to your clinic help them understand your process and that you work together to assist with the client/patient's needs. Doing both of these while having a client transition plan will help mitigate any loss of income when staff leave.
These are only some of the considerations Paul Savage mentioned when considering selling or seeking investors, however they are what resonated with me. All four of these are not easy, however I believe that focused attention and a lot of hardwork to these matters will add value while increasing the viability of Lifemoves.
Throughout the London 2012 Olympics, which are heading into their second week we have witnessed feats of extreme dedication and human drive. These athletes have not become overnight successes, many toil for a decade or more in their sports before finishing on the podium. What they do have in common is the intense desire to achieve success and the knowledge that this is their time to shine, to lay it all on the line.
How can we harness the same dedication, perseverance and patience to achieve our own entrepreneurial goals?
Start with a Long-Term Plan - Finish with Today's Plan
I remember starting my business with plan which had the next 3-5 years outlined with specific steps and performance measures. This is very similar to the way high performance athletes train. Each Olympic cycle is called a quadrennial, which is broken down into smaller and smaller segments until the details for each training day are specified. Do the same with your business. How often are you taking the time to sit-down, review, adjust and plan?
Find the Internal Flame
Find an intrinsic reason to reach your goal. This will light the fire within that will burn no matter what others say or which obstacles you come across because it can't be put out! It took Brent Hayden three Olympics to stand on the podium, that is 12 years. Since he was young double leg amputee Oscar Pistorius has had an intense desire to run in the Olympics; Friday he did and reached the semi-finals of the 400m in Track and Field! Having a meaningful reason for reaching your business goals keeps you motivated.
Set Performance Goals
Athletes set performance based goals, not results based. To reach the Olympics athletes must meet specific performance criteria to qualify in events preceding. In a business goals of $X income or $Y profit (which are results) need to be broken down into what needs to be done on a daily basis to achieve them. For example how many widgets do need to sold or how many clients need to booked or called?
Be in it for the Long Haul - Celebrate Everyday Wins
Olympians don't step onto the field of play without years of dedication to their sport. Entrepreneurs need be in it for the long haul. Starting and growing a business is not for the faint of heart, but it has been the most enjoyable part of my working life.
Sure, some businesses launch and have tremendous success early on, then they burn and crash like those rockets we made as kids. Instead ride a the wind like a kite. Keep your hands on the string, but as the winds change learn to change strategies with it so that you can soar for as long as possible. Each day has at least one success; smile and celebrate it! Be patient, long-term success is much more rewarding.
Do Just Enough with Appropriate Volume and Intensity
Olympians do put a lot of effort into their training, however there is always a balance between stressing the body enough through training for it to both physically and mental adapt and incorporating appropriate recovery strategies. Entrepreneurs need to do the same to avoid mentally breaking down; they are notorious for neglecting vacation time.
There will be times in business when you have to do more work to get a project completed or launch new producted but, with appropriate planning you can add periods of recovery after these intense and volume laden times. Pushing too hard each day in training often leads to over training or injury which sets athletes back weeks or even months. The art is to do just do enough to keep the momentum rolling so that the joy remains.
Keep it Simple
Business growth always adds complexity. Greater complexity adds to the mental strain so, keep examining your business to create more simplicity.
Labels: Achieving Common Purpose, Being a Professional, burn-out, Business Process Management, olympics, perseverance, recovery, Success strategies
A client asked me the other week “What brings you joy?” At the time I had difficulty answering, perhaps it was because it was the end of the day and week and I was a little tired. There are many things that bring me joy including the Grouse Grind® which provides a close by escape from the city.
Since picking up the timer card in 2009, I have climbed the Grouse Grind® over 125 times. Last night the trail was quieter and more relaxed with several sections where I was alone. On rainy days it is mostly those who are dedicated Grinders who visit the mountain.
There are several reasons that I come to Grouse every week during the summer and crave it during the winter when it is closed.
Reconnect with Nature - Get GroundedWe get so busy during the day that we can lose contact with the beauty that surrounds us in Vancouver. Yesterday, was no exception. The rainforest canopy last night was absolutely gorgeous after the rain stopped. My family travelled from Saskatchewan to Alberta during the summers for overnight week long hikes in the Rocky Mountains. Now living in Vancouver I appreciate the landscape this city has. It would be a shame to neglect the beauty that is in my backyard. Each climb provides time and space to be my introvert self, reflect, and calm my nerves from running a business while reconnecting with the earth.
Increase Physical Conditioning and StaminaThe 2,800 steps offer an unparalleled opportunity to challenge my physical capacities. I grew up competing in cross-country skiing and biathlon; it was the hills that I was able to catch people on. Each season I continue to push myself to see how fast I can get on the Grind®, with the aim of being the fastest in my age group.
It is a set course that is measurable. The timer card combined with a heart rate monitor makes it very easy to see changes in fitness as well as chart age group progress.
Being among the fittest in my age group will keep me physically younger, prevent injuries and chronic medical conditions while continuing to inspire others to challenge their own physical limitations. Increasing my stamina leaves with me more energy at the end of some of my long work days which are often both mentally and physically taxing.
Build Self-ConfidenceFor years I struggled with depression due to school bullies. They thought that biathlon was a sissy sport – though we were skiing 10-20km per race, with a rifle on our backs and competed in two races per weekend; this was until I skied circles around my classmates during a PE outing to Cypress. I strongly believe that this lack of self-confidence prevented me from reaching my potential in the sport.
Just cresting the top always makes me feel great and like I have really accomplished something. This endorphine kick lasts most of the day and spills over to other activities. Setting new Personal Bests, doesn’t happen every climb, but when it does I feel fabulous for several days. It provides something to celebrate; it gives me more confidence and belief in myself. This renewed confidence assists me with feeling like I can do what is necessary to grow my business.
I climb to show those who thought that I wouldn’t accomplish much that I am physically capable of great things. I might not be able to win a marathon, but I believe I can be among the fastest on the mountain.
Make Friends Although I am in introvert and I like to climb alone part of the reasons I come to the mountain is to see friends who share a common interest. There is a group of us who go up multiple times per day (something I once thought was CRAZY). We all encourage each other to push our limits, support each others’ goals and celebrate our accomplishments. We catch up between Grinds at Startbucks or on the Gondola.
When you ascend the Grind® as often as we do – you get to know the wonderful Grouse Mountain staff. Also, it is always nice to say hello and encourage people on the trail who are sharing a similar experiences, but might be climbing for their first time.
Fundraise for BC's ChildrenThis year I am participating in the Grind for Kids fundraiser because the Children’s Hospital was a big part of my personal well-being and I want the kids today to able to experience the same joy I do when I am moving outdoors. My goal is to raise $1000 in 50 Grinds with 25 of those under 40 minutes. I am half way to my Grind goals, but need a little help with the fundraising.
If you enjoyed reading these blog posts please consider making earthier a pledge per Grind or a direct donation on my behalf – click here to donate.
Why do you climb the Grouse Grind®?
Other Grind Articles
Labels: Achieving Common Purpose, grind for kids, Grouse Grind Training, Growth
 Sometimes my entrepreneurial motivation wanes and I need something to fire me up again. On Canada Day I was listening to a podcast
about how to harness your inner athlete while heading to the Grouse Grind®
where my inner athlete thrives. That day I took 1:45 minutes of my personal best to set a new one of 37:13, this places me in the top for 15
for my age group. I am AMPed!
The Grouse Grind® is 2.9 km climb with a 2,800 feet
elevation gain, a small mountain which I have climbed over 100 times. I am
striving to be among the best at this and it is something I know I can be a
master at, it is also something I can do on my own and the purpose it is to build
confidence that transfers to other parts of my life.
Why? It is both a mental and physical challenge that I can
complete and feel victorious every time, especially on Sunday. The rush
lasts several days which gives me confidence to complete other activities especially those related to my business.
How do we find the motivation? How do I reignite the passion
for my business? What does being AMPed up mean? The term comes from Mark
Margolies, a sports psychologist who has worked with over 2,000 people. The podcast was an interview by Beth Beulow of the Introvert Entrepreneur (yes, I am an Introvert); she can be found on iTunes.
Autonomous
Entrepreneurs have a lot of freedom to do what we want to
do. Yes, sometimes there are certain
constraints that we might “THINK” are limiting us; however maybe there other ways to get there? I am not working for anyone who is telling me what to
do on a day to day basis or how to do it.
I have the freedom and autonomy to make it up as I go along.
My business can shift, grow and develop as its surrounding
do the same. I can shape it to be what I
want. After a great deal of thought I decided that my definition of success is to get
the two locations Lifemoves® has thriving such that I have more financial
and time freedom. Lifemoves® does not need to be
a national or global brand, nor do we necessarily need to have our own
facilities, because with that comes a lot more risk.
Mastery
What are we good at? What is your Hedgehog? Last week I had a good discussion with
one of my employees who agreed that I need to delegate more. Business leaders need to give people the opportunity
to do what they are good at so that they can be great masters at it while the leaders focus on the path towards the vision.
As a business owner and clinician there are certain things I
am good at, while others I am not good at. It is time to harness my strengths
and really master those.
Purpose
Knowing your purpose is really important. My purpose has
been reignited while listening to several podcasts on business and strength and
conditioning. What is it? There several
parts to my purpose: to assist as many people as I can to lead physically active
lives; to show them how to become physically and mentally resilient despite injury, disability or chronic medical condition; to show
them what movement is all about; to provide others with the opportunity to do
the same within my business.
After all Lifemoves®’s purpose – is that movement is an
integral part of life. I am AMPed about moving into the new space in North Vancouver. It will provide a more optimal environment to be autonomus, fulfill our purpose and be masters at what we do.
How are you going to get AMPed up about your business? Labels: Achieving Common Purpose, Being a Professional, confidence, Entrepreneurship, Excellence, Happiness
Moving from the confines of a large gym,with lots of foot traffic to a smaller independent training studio has presented many challenges. A recent article in the Vancouver Sun “Vancouver’s
Sweat Equity: Facilities vie for their share
of city’s multi-million dollar fitness industry” has reignited the entrepreneurial fire within while helping me become aware of the opportunities for and threats against my business. Much of the $2-Billion Canadian fitness and
recreational sports centers industry is in B.C. which has grown 30% from 2006
to 2010 (Statistics Canada).
There have been some
major changes since 2000 when I joined this industry in 2000 when I volunteered
at a local community center to provide Personal Training for a client with a
cervical spine injury. Changes include a
few new big name players, GoodLife Fitness and Club 16 as well, the 50 year old
local chain Fitness World which sold to a U.S. based company in 2009 hoping to
cash in Fitness World’s longevity and the celebrity name of Steve Nash. There
have been some smaller studios which have flourished while others have come and
gone within a couple of years.
Personal Training has become a career that many people are
pursuing, so smaller boutique studios and independent training studios (where
trainers pay drop-in fees per client) are popping up across the lower-mainland. Some trainers are even moving out the big box gyms to pursue independent opportunities. It takes a lot of effort, risk and over
$100,000 open your own facility, so many trainers choose the shared competitive
space of an independent training studio.
If Industry Canada stats show that 30% of business don’t make their 5th
anniversary and the competition becomes fiercer, how can we thrive?
Kinesiologists are stuck in the middle between the
rehabilitation and fitness industries. Physiotherapists are doing a great job
of marketing their profession and businesses, they are also stepping further
into the realms of providing more exercise therapy which includes active rehab.
As Lifemoves reaches its 5th
anniversary what perplexes me is how do we maintain our differentiation and
gain a bigger market share of this large industry? Vancouverites have a lot of choices and the
number is only growing, so how do we get them to choose us?
Another question I have is how can this business be
structured and operated in ways that we are able to provide uncommon service
that is for the greater good, but is also profitable? There are several societal
benefits to growing a business that exclude more profit. These include being able to provide more
people with employment as well assist more people in their pursuit to return to
work and improve their health and quality of life.
The basic answers to these questions is first to relentlessly
pursue excellence for the greater good while making the right decisions in the
right context. Secondly, it is really know what your business is about and what
solutions you really provide. Thirdly, it is to find creative ways to market
our services so that the values and benefits we provide our clients remains top
of mind so that they do talk about us to others.
There seems to be room for growth in the fitness and
rehabilitation industry? How are you going to grow your business?
References
Vancouver
Sweat EquityLabels: Achieving Common Purpose, Entrepreneurship, perseverance, Standards, Success strategies
The following is an opinion and experience piece and NOT financial
advice.
It took a long time to climb out of a deep canyon, but this
week I celebrated one year of being free of consumer credit card debt. The debt burden saddled me for close to a
decade and prevented me from doing many of the things that I wanted to. It is also kept dragging down my moods.
Our financial wealth and our weight often
reflect our mindsets. Though I wasn’t
overweight and I was undervaluing myself.
It took several years of shifting my own thought patterns,
disciplined debt re-payments, support from friends and famiyl and financial education to free myself from the
shackles of consumer debt. Thankfully,
my interest rates weren’t too bad, however every month I was paying the credit card companies annual
interest of over 8%, instead of having this money invested and paying myself.
Have you ever watched shows like “Till Debt do Us Part”? It is actually pretty scary how much consumer
debt these participants have. This is money owed that is outside of their
mortgage. My fiancée and I have agreed
that we want to start our marriage with zero debt that is not building our
wealth (such as a mortgage). We have been
judiciously putting money aside on a monthly basis so that we are able to pay
for a wedding that is within our means to pay by cash. I can’t imagine paying for an extravagant
party that means that we spend the next 5-10 years paying it off. What a way to
start, eh?
I got into trouble
because I was living outside of means and because the credit card company
hounded me to take on a line credit of that I originally said no to. They also continually increased my limits to
beyond my ability to pay it back; lining their pockets with the interest
payments.
My self-esteem during
these years was low, so was my earning power. I found it difficult to find work
as a Kinesiologist after graduating in 1999. I also started a previous business
because I couldn’t find work. To increase my long-term earnings I did use my
credit card to pay for various educational investments which have definitely
paid off. However, now I make sure that I have the cash before paying for
continuing education.
A few of my fears are being homeless (though I know there
are many reasons that people end up on the street) as well as not having enough
income to support a moderate lifestyle in retirement. Much of the financial advice seems to be all
very similar and all makes sense. My goal is to reach retirement debt and mortgage free.
All I can say is live BELOW
your means so that there is always cash left at the end of the month. Money is
an object, it only has what value we attach to it. What is enough? Enough is to know that I can
pay my bills on time, have a roof securely over my head, feed myself and my
family and have the freedom to enjoy a moderate lifestyle. Next steps for me are to slowly add to my retirement
fund, while building a 6-month cash based emergency fund.
Being an entrepreneur means that I will have income as long
as I am able to build and run a business where others can perform work and clients are willing to pay for our services. Our health and wellness is not discretionary,
so health care businesses will do well as long as we provide value to our
clients.
There is a great piece in the Financial Post on why it is important to pay off your debt NOW. Have compounding interest work for you instead of for the credit card companies. Another good resource for entrepreneurs who are not financial gurus is "Finance and Accounting for Non-Financial Managers," which among other things explains how to calculate the value of money invested today.
The above is based on the author’s experience and opinion it
is NOT considered NOT financial
advice. Labels: freedom from debt, resilience strategies, risk management, Success strategies
Keeping things simple in an increasing complex environment
is quite challenging. In the beginning
my business was quite simple, because everything was completed by me and I
was the only person involved. However, as it grows it becomes increasingly
layered with more complexity because there are more people and more processes
to manage. Even the concept “Open New
Studio,” which seems simple has many steps and more things to consider than I initially thought.
My goal is create a culture where we are always striving to find
new ways to eliminate steps so that our business becomes more efficient and
less physiological and well as less psychologically taxing. Moving, hiring new staff and opening a new
space have made become acutely aware of the levels energy required when things
are complex. So, this week I took some steps to regain control and simplify.
1. How to Create a Consistent Brand Image
Our brand image is
very important to me. Everything has to have a consistent level of professionalism,
clean design and colours to it. So,
creating templates for our staff to write reports and programs was part of
this. These templates are in word and include a style sheet. We have particular colours, so those colour
numbers (pantone, RGB and CMYK) need to be communicated to everyone who uses
them.
Paint companies don’t use pantones
so, last Thursday I went to Dulux paints and colour matched three colours that
are part of their permanent colour collection with our Pantone colours. This
made it easier for the painters to pick up specific numbers and easier for us
to match in future locations while increase my confidence that I would be happy
with the overall design.
2. Hire a Payroll Service
I have been doing all our payroll which includes adding everything
up, creating the paycheque in Quickbooks, sending out statements and paying
payroll taxes. All of this takes time away from other activities I could do
like gain new clients. This week I
decided a payroll service would suit us better because all I have to do is
enter the pay information in the system and then enter a general ledger
statement into our accounting system.
3. Pricing, Services and Product Offers
If you have more than one SKU – then you know how complicated
it can get. Last Friday we sat down to
figure out our pricing schedule for new and current services. Making it as simple
and straight forward as possible makes it easy for new staff to sell and deliver. Also, our
clients will more easily understand what we offer. Alleviating confusion and reduces chances
of someone being over or undercharged.
4. Electronic Funds Transfers for Better Cash Flow
To manage cash flow, make it easy to pay bills and have
invoices paid. Often regular clients means that you have regular cash flow. This is
especially important in the fitness club and personal training environments. With EFTs clients have a predictable payment
schedule and you, the business owner can build your EFTs up to point where it
at least meets your fixed expenses. We also decided to have one of our third party
payers complete EFTs so that our payments are not delayed by mail delivery or having to go to the bank to make the deposits. It is also possible to set-up direct debits for vendors and employees or sub-contractors
(you don’t have to wait for them to receive and cash the cheque).
These are just a few ways to simplify your business. Can you
think of any others?
Thank you for reading my 75th article on this blog. Labels: Business Process Management, Growth, increasing profits
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A couple of weeks ago the North Vancouver Chamber of Commerce hosted a series of seminars as part of a tradeshow. One that caught my interest was on how to value a business as well as how to create more value in a business. The presenter was Paul Savage of Pacific Business Brokers. This seminar made me think of two of my favourite TV shows.
