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3 Greatest Myths about Owning a Business

Posted on July 22nd, 2014 by The Learning Factor

When I was younger I wanted my own business, but I didn’t know how to begin. Should I buy a franchise, join a multi-level marketing company, or start my own business?

I went to seminars, presentations, and sales pitches on selling everything from milk additives to fuel additives, from soap to jewellery.

A lot of the presentations were very high-pressured. They were designed to get you to buy, sign, and commit. It was all about selling the dream of a life of leisure; you could live like a king and enjoy life without hard work. You could be different from the average Joe—no longer serving the man but living the dream.

Having started and run three successful businesses myself and spoken to hundreds of small business owners I can look back over 35 years and say, “Yep, that was definitely a bunch of crap!”

These are the three great myths:

MYTH 1: You will have more leisure time with your family.

When this statement is made, the PPT slides in the background show families happily milling around huge Winnebagos, small airplanes, and large boats. They are on one long beach holiday with an endless summer and they appear to have no shortage of money, time, or staff.

REALITY: You may have the flexibility to have holidays and time off when others are working, and after many, many years of working your butt off, 80-100 hours per week. You may eventually be making enough money to buy nice things but the reality is that nobody I know, while they are running a business, has been able to go off and take long extended holidays without a major effect upon the business. In fact, one of the challenges of having a small business is the fact that you need to be there to drive the ship because nobody has the passion, drive, and determination that you do.

MYTH 2: You will have money flowing in as you sleep.

This myth seems to imply that money will just come into your life day and night once you put your shingle up, with no assistance from you or any employees.

REALITY: Cash flow is the No. 1 reason that small business fails. Business owners never stop business developing to bring in revenue. Sales and marketing are part of every employee and the moment you snooze, you lose. I have a home in Byron Bay, one of the great hippy surf towns of the 70’s which has become a trendy and expensive place to live, and one of the things we see all the time up there are people who come up and buy a business for more than they should and have their children run it. The parents think that money is going to flow like a river, and the children think that they are living in a hippie heaven where work is a dirty word. RESULT? One day the parents get a call: “We are leaving, and the business is all yours!” They arrive to find that the business has been run down to the ground, and nothing has been done for years.

MYTH 3: Your business will continue to grow in worth and one day you will sell it for millions.

Many people think that starting or buying a business is like buying a house. If you sit on it long enough, the price will keep going up.

REALITY: Most small businesses peak after 5-7 years and then start dropping off. Needs change and people change. You thought buying that franchise bakery meant you could sell it for a profit, but today, people no longer eat that sort of bread. You thought that franchise fast-food store was going to sell for millions, but today, people want to eat healthily. I have a friend who took over a small law firm from hid dad and sold it for $45M but he never stopped working, reinventing, going to seminars overseas to learn and grow. Small businesses must continually reinvent themselves to meet the needs of their customers; otherwise, at the end of your time, you will have a worthless shell.

In spite of the challenges involved in starting and growing three successful businesses without any venture capital, I love what I do and wouldn’t have done it any other way. I know it was the hard way, but it was the way I wanted to do it.

Author: Chris Gaborit

5 Benefits of Training Outsourcing

Posted on June 30th, 2014 by Victoria Kossoff

1. Reduce Costs – The number one reason why companies outsource training is to save money. Our experience shows that organisations can save up to 30%.

2. Speed to Market – Planning on bringing a new product to market? Your success may be dependent on getting resellers trained on how to sell or service your product. With training outsourcing you can quickly get your product into your customers’ hands, without scaling up internal resources.

3. Geographic Reach – When Cisco needed to train local employees in China, they simply outsourced training to The Learning Factor. We have resources in China who already understand the Chinese culture. Makes sense, doesn’t it?

4. Access to Talent – The most strategic way to source the best training talent at the best possible price is to outsource. Instantly you have a pool of trainers and facilitators, who are industry experts in their field. This commercial experience brings training to life.

5. Improve Scalability of Resources – Running an internal training department takes a number of people with different skills and talents. Internal staff are a fixed resource. But training is a variable activity. When you work with a training outsource company, you are able to scale up or scale down the number of resources you need– just when you need them most!

Build Your Business $0 – $1,000,000 in 3 Years

Posted on June 13th, 2014 by Chris Gaborit

The day I started a business of my own was one of the happiest days of my life. I have successfully started a number of companies and in every case, they have been profitable within 12 months and have built from $0 – $1,000,000 within 3 years and then grown to become multi-million dollar companies.

There are definitely some keys to reaching that illusive $1M mark and just to show that it is challenging for many people, there are 28 million small businesses in the USA and the number of them that have annual incomes of over $1Million is only 0.1%!!

I understand that some people are happy to stay employees. They love the feeling of stability, the fact you get a regular income, the team spirit and the holiday and sick pay. For me, I have loved being a business owner since I was in my late 20’s. I love the feeling of being in control, of having something that is mine, of working so hard for my own company. I love connecting with clients, seeing lives change, watching stock prices grow for companies we work with and winning global awards for our services. I love what I do!

When we launched The Learning Factor a number of years ago, it started in my living room. Within only a short time, we were working with Fortune 500 companies and moved into our own offices. It was exciting to be training supervisors and managers for some of the world’s largest companies from Texas to Tokyo, Canada to Cambodia, Bangalore to Borneo, and Shanghai to Sydney.

Almost every week, I am contacted by people who long to break free and start their own company. Their big question is, how do you do it?

1. Your company is in your DNA

You need to realize that your company is in your DNA. When you ask yourself “what can I do?” think about such things as your passion, calling, gifts, skills, background, parents, and ancestors.

After the sale of one of our companies, I went to live in Santa Clara, USA. I was trying to decide what I should do next with my life, what was my next chapter. After some deliberation I asked myself, some questions, “What do I love? What are my gifts? What am I called to do? What do I enjoy the most?” I came to the conclusion that I love training and developing people and running a training company and so I started a training outsource company.

When I was a child my mother used to speak about a famous relative who was once the Lord Mayor of London. To be honest, I thought it was like Santa Claus or the Tooth Fairy. However a few years ago my uncle sent me a copy of a book about this great great uncle, Sir Joseph Savory. He was the major of London in the 1890’s and also a very successful businessman in shipping, finance as well as a public speaker. Is it any surprise that I started working in the banking and finance sector and am a public speaker and have a passion for having my own training company? In hearing about his life from my mother and reading his life story, I felt that it was my destiny to succeed in business. It is in my DNA!

2. Begin with the end in mind

Decide at the beginning what you want to achieve. Do you want to build a company to sell one day, or do you want to make just $3M per year and have a more comfortable lifestyle in five to ten years? Do you want to have multiple staff with smaller profits, or do you want to contract people when you require them, pay them more, and make larger profits?

3. Start with your own money

To me, the important thing about starting my own company is that I want to be the boss. I want to set the strategy and I want to be the leader. Yes, you can find investors and shareholders, but the moment you do, you are subject to their control. Every company I have started I have built from the ground up with no investors.

4. Run your new company in parallel to your old job

I encourage you to stay in your job and then, for the first year or two, work an extra 30 hours per week building your own company after hours and on weekends. Set a financial goal for your company, and when you reach this, then you can step out and work full time for your company.

Another option, which is what I did, is to consult to a company for 2 or 3 days per week for the first 6 months. This way, you have a buffer where your mortgage is being paid and the other 2 days per week you can use to build your own company.

5. Be willing to work 70-80+ hours per week the first few years

If you think that you are going to build a new business working 9-5, then you are fooling yourself. Startups take a lot of time to establish all the processes, products, etc. This is going to take you away from family, friends, exercise and a lot of other things that you may have time for as an employee. However, the longer term benefits will be worth the initial pain.

6. Build your network as big as you can

Companies spend a fortune building a database of contacts, potential clients, and connections. Don’t wait until you are out there on your own to do this. Start connecting now through LinkedIn. One of the biggest challenges with a database of contacts is keeping them up to date. People are constantly changing companies.

That’s why I love LinkedIn, because you can connect with people and stay connected for life, no matter what company they may move to. It’s amazing how many people you can connect to in 12 months if you only spend 30 minutes each day connecting with people

7. The power of processes

The great companies in the world have great processes. It’s the power of process that makes the product successful. We can deliver the exact same training course in Shanghai, Tokyo, London, New York and Sydney all on the same day in multiple languages because we have excellent processes. From day one, start developing processes and document them. These are worth a lot of money.

8. First the scaffolding, then the building

It takes a lot to get that first client, but all you need is one. Building a company is like building a home. First the scaffolding goes up, and then comes the house afterwards. When the house is complete, the scaffolding gets pulled down to reveal something solid and permanent.

Sometimes, in building a business, you have to start with the “scaffolding clients.” These are not permanent clients. Sometimes, these are small and painful jobs, and not always your core business. It is called “being all things to all men” to pay the bills. These scaffolding clients get you started, pay your bills, and help you eventually build the company. Don’t be too proud to accept any work at the start; it may be a blessing in disguise. Eventually your long-term blue ribbon clients will come if you stay positive, be persistent and do No. 9.

9. Sales & marketing every day

Every day, you must wake up and look at your company goals. Check out your $X per annum, X number of clients, and X people in your database. To reach $1M in 3 years, you need to be focused on sales and marketing every single day. This is your number one priority. You need to live it, breath it, love it, and never stop doing it. Although we have marketing automation set up at the end of the day, you still need to connect, even if it is virtually with your customer.

Even I this virtual world, we need to connect. Remember this, before a company buys from you the buyer asks three questions:

  • Do I like this person and could I work with them?
  • Do I like their company and could I work with it?
  • Do I need their product and will it meet a need we have?

If all three are yes, then you will win the business.

10. Customer service is king

In this day and age, unique products don’t last long. We need a differentiator, and that is customer service. We work with some of the world’s largest companies, and many of them have learnt this lesson. We have helped them change their culture from a product-centric culture to a customer-centric culture. Products will never be perfect. At the end of the day, it’s customer service that will make or break your business.

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