Last weekend we entertained nearly 100 students and faculty from Nanyang Technological University located in Singapore. They were keen on finding out what made us tick as entrepreneurs. Every year the school sends 100 of its brightest entrepreneurship students to the United States where they visit some of our country’s most successful entrepreneurs at businesses and schools in Silicon Valley and the Boston area.
One of the highlights of their visit has traditionally been a visit to the Napa wine country. Bonnie happened to be sitting next to their organizer at the World Conference on Entrepreneurship in Dublin, Ireland where we gave the keynote address last June. She suggested the students visit Sonoma County’s wine country instead this year and offered a two-hour seminar personally hosted by us.
Last Saturday they arrived in Sonoma County where we took them on a walk-and-talk. At each stop we gave them an essential lesson in entrepreneurship:
The 3 Core Competencies. No matter what business you think you are in, you are actually in 3 core businesses which you must master to be successful.
- Cash-flow Management: paying your bills with income from your business. You have to reduce your need for capital by outsourcing as much as you can, and by using your suppliers and buyers as bankers. Regular meetings and empathy for their interests are the keys to building trust and extending credit.
- Personnel Management: finding good people and building great people. This results in a reduction of turnover, the #1 hidden cost of any business. Requirements include the ability to create compensation systems for all staff based on sales, growth and profitability; public recognition for a job well done; and treating your people as an asset rather than a cost.
- Distribution Management: making every “sale” between you and your end-user. The first sale is to your own people who buy because they believe in your product and what your company stands for; next is the distributer’s or wholesaler’s ownership, who buys for strategic reasons; then the wholesaler’s sales people who buy for commissions; the retailer comes next who buys for quick turn, followed by the retailer’s clerk who buys for attention and recognition; and finally, the general public who buys for value, availability and social reasons.
The 2-Division Company. The most successful entrepreneurs think of their businesses, no matter how many divisions they have, as having only two divisions.
- Sales: Without sales there can be no other divisions because there simply won’t be any funds to support them. All income comes from the customer. The feedback that keeps your products and services relevant and marketable passes through your sales and customer service departments. They should be advising Marketing and Production, and not the other way around.
- Sales Support: This is everyone who is not in sales! This includes the administration, marketing, production, research, legal, accounting, HR, and even the receptionist. Tie part of their income to sales, such as a bonus. Have regular meetings between your sales and sales support people to discuss market changes, opportunities and challenges, and work together on solutions.
The #1 Rule. At every level of business, put yourself in the other guy’s shoes. Ask yourself how would you like it if you were on the receiving end of your own employment, sales, buying, and accounts payable policies? Empathy drives and bonds all business relationships.
We offered the students some infographics we have developed which take some of these complex concepts and graphically represent them for easy understanding. They are available to you as well with our compliments at www.barefootbonus.com.
We wish the students of Nanyang U. good fortune in their own businesses!
Who We Are.
Michael Houlihan and Bonnie Harvey co-authored the New York Times bestselling business book, The Barefoot Spirit: How Hardship, Hustle, and Heart Built America’s #1 Wine Brand. The book has been selected as recommended reading in the CEO Library for CEO Forum, the C-Suite Book Club, and numerous university classes on business and entrepreneurship. It chronicles their humble beginnings from the laundry room of a rented Sonoma County farmhouse to the board room of E&J Gallo, who ultimately acquired their brand and engaged them as brand consultants. Barefoot is now the world’s largest wine brand.
Beginning with virtually no money and no wine industry experience, they employed innovative ideas to overcome obstacles, create new markets and forge strategic alliances. They pioneered Worthy Cause Marketing and performance-based compensation. They built an internationally bestselling brand and received their industry’s “Hot Brand” award for several consecutive years.
They offer their Guiding Principles for Success (GPS) to help entrepreneurs become successful. Their book, The Entrepreneurial Culture: 23 Ways To Engage and Empower Your People, helps corporations maximize the value of their human resources.
Currently they travel the world leading workshops, trainings, & keynoting at business schools, corporations, conferences. They are regular media guests and contributors to international publications and professional journals. They are C-Suite Network Advisors & Contributing Editors. Visit their popular brand building site at www.consumerbrandbuilders.com.
To make inquiries for keynote speaking, trainings or consulting, please contact email@example.com.