12 Business Lessons from the 'Wolf of Wall Street'

We learned a lot from The Wolf of Wall Street before the movie even hit theaters. Now that it’s been around more than a month and has made a killing at the box office, we’re learning some more practical lessons from the instant hit. No, I’m not about to go emulate the infamous Jordan Belfort because, among other things, I have a conscience. But he still has a lot to teach about good business. Here are some of the top business lessons to take away from Belfort and The Wolf of Wall Street.

1. Know What You Want

More than setting goals, look to the future and really figure out exactly what it is you want and how you can get there. Have a vision in mind, and let that steer your decisions. Belfort didn’t get rich by accident.

2. Sell Yourself

Belfort acted powerful and wore fancy suits, and people saw him as confident and successful. Understand how others view you, decide how you want them to view you, and then present yourself in the right way.

3. Find A Specialty

Belfort’s Stratton Oakmont specialized in penny stocks. It sold cheap stocks to the public. He effectively found his niche and exploited it.

4. Adjust And Perfect Your Strategy, Then Keep At It

Belfort knew the ultra-wealthy wouldn’t go for typical Wall Street pitches. He came up with a strategy that worked for his target demographic, and he tweaked it until it worked perfectly. Belfort found a way to cater to a specific demographic in the 1990s, long before personalized ad experiences and Google Analytics were there to help out. Keep your customer base in mind and tailor your pitches for them.

5. Train People Well

Belfort was the brains behind Stratton Oakmont’s business model, but he used a large staff to implement his ideas. He was able to train otherwise clueless people to sound like knowledgeable and experienced stock brokers. He kept things simple and effective, and employees always knew what he expected from them. Instead of doing all the work yourself, hire a good staff and show them exactly what you want.

6. Try, Try Again

No one does it right the first time. Even Belfort managed to bankrupt his own small business before he went to Wall Street. But he didn’t give up on his ambitions to be filthy rich. This goes for smaller goals, too: never end a conversation when you’re trying to sell something. It’s not over until the person hangs up or closes the door.

7. Provide A Solution

Belfort’s clients were happy until the truth came out, because he made sure to provide a solution and an answer for people. As Belfort himself explained, “At a certain point, one of the questions I always ask is, ‘What is your greatest headache right now?’” Find out how you can help your customers and then do exactly that.

8. Keep Employees Happy

Belfort threw outlandish parties and gave grandiose speeches of encouragement. He celebrated victories with his team and included them in his success. Happy workers mean continued success and loyalty. That is, until the cops find out.

9. Avoid IPOs

Business lessons aren’t just for people in the business. If you’re on the other side of the story and are interested in investing, the movie teaches you to avoid initial public offerings you’re not familiar with. Most of Belfort’s scams involved fraudulent IPOs and “pump and dump” schemes.

10. Use Well-Known Brokerage Firms

Stratton Oakmont didn’t have a long history and wasn’t well-established. When it owed people money after court rulings, it simply closed up shop and didn’t pay. A well-known brokerage firm is a safer bet and, if fraud does occur, you’re likely to collect a court judgment.

11. Take Your Time

If you’re offered a deal and you’re hesitant, follow your instinct. Take some time to think about it and research the opportunity to make sure it’s legitimate.

12. There’s No Such Thing As A Sure Thing

Belfort offered his clients “sure things” and quick returns. Such promises are unrealistic and need to be investigated, if not ignored outright. Do your homework and find out what the real story is before you agree to anything.

GBSH Consult is a top global consulting firm that delivers essential advantage to the world's top influential businesses, governments, and organizations. Follow us on Twitter @gbshconsult 

What Investors and Partners look for before Investing

A full snapshot of your intellectual assets and a considered and strategic plan for deriving value can help attract investors. What do they look for?

The General Picture

• The broad category (e.g. ICT/ Manufacturing/ Life Sciences) of your business.

• A description of your business in one sentence.

The Product/Service

• A complete description of your business and the product or service being developed.

• The value proposition describing the gap/ problem in the market that your innovation will solve, and why customers will purchase.

• Information on any sales of the product/service.

Market Information and Access

• The market that you will be targeting and why.

• The need in the market and how the new product/service will address the need.

• The current size of the target market. How much of the market can you expect to capture.

Note that where a new market is being created, solid information might be difficult to obtain.

• Where the market is located, and how can it be accessed. For example, is a partner needed who currently has the infrastructure in place to provide the access, or can your company do this alone?

• Who is currently in the market? Whether they are direct competitors and if so, what advantages your new innovation offers over your competitors’ offering.

• Information on indirect competitors and current products/services satisfying the needs of the market. For example, prior to video being available, cinemas fulfilled the needs of the market. Introduction of home video systems created a new market that had been previously satisfied. The market needed to be convinced of the benefits of buying a new entertainment system.

• Who future competitors are, where they are likely to come from and when they would be expected to enter the market.

• The barriers to new products/services entering the market.

Competitive Advantages

• Information on the intellectual property owned by your company and how it is protected. This includes patents, trademarks, know-how, trade secrets, designs, and methods.

• The sustainable competitive advantage the company has, and how you will maintain this when competitors enter the market to address the same problem.

• Your company’s core strengths and weaknesses.

Management and R&D Teams

• Brief bios with core competencies. Business Model – How the Business will make money

• A financial forecast over 3-5 years showing projected revenues, gross margins, total expenses, EBIT.

• When you would expect the business to break even.

Financing your Company

• The ownership structure of your business. Name/equity holders(s)/% ownership/cash injected.

• How much money you are seeking. The percentage of the company investors will own.

• What the money will be used for. Include materials, equipment, people, time, dollars, and additional technology, new office locations needed to develop and market the technology / service.

This information forms part of the operational plan within the Business Plan. Each major activity should be costed and briefly explained. A 12 month cash flow forecast should also be included.

• The risks faced by the company that could prevent it achieving its goals, and how these will be managed.

• The company’s current cash balance. If relevant, the company valuation at the last funding round.

• The expected monthly “burn rate” over the next 12 months.

• Who has been approached for funding (including granting bodies).

Click here to access our business plan readiness toolkit and our investor readiness toolkit...GBSH Consult Tool kits

GBSH Consult is a global management consulting firm proven in dealing with mergers and acquisitions. GBSH Consult supports clients in making their deals successful as well providing analysis, trends and recent M&A middle market transactions, deals and private equity investment. For more information go to www.gbshconsult.com

Are You Investment Ready?

A Checklist to use if you are considering an investment route for your business.

The big idea

Investment readiness means that you are in a strong position to present your business to different investors and meet their requirements. You may have a particular project to put forward or you may feel that your business is ready for rapid growth. On this basis you might consider approaching different sources of funding, such as:

·         Business angels

·         Venture capitalists

·         Banks

·         Other funders such as high net worth individuals

Purpose

Seeking external support to allow your business to grow involves both ensuring you have a credible case to present and making a series of personal decisions to make sure you are comfortable with the direction you are taking the business in. The purpose of this tool is to help you think about some of the issues that might arise during this process so you are more likely to meet the needs of the investors and to succeed.

 You are unlikely to be investment ready if:

·         You are unwilling to give up a stake in the business

·         You have an inadequate business plan

·         You are not looking for fast growth. Can you provide a growth level of eight to ten times within five years?

·         You do not have a proven need for your product or services

·         You lack knowledge of your market

·         You lack knowledge of the investment process

·         You are unable to pitch your business effectively or credibly

The Tool

This tool consists of a questionnaire that takes you through some of the key questions you need to consider to work towards investment readiness. It can be done on your own or with people who know you and your business well. It is for businesses of all scales interested in external investment. The questionnaire should take 20 minutes to complete.

Download this tool(PDF)

Join us in the upcoming series on the Business-survival Toolkit coming soon......

GBSH Consult is – an award winning, international business transformation and turnaround firm with proven success in solving complex financial, operational and people performance issues. www.gbshconsult.com

Business Plan Competition for Early Stage Entrepreneurs seeking funding

“To be successful, you have to have your heart in your business, and your business in your heart. – Thomas Watson, Snr” 

Do you have what it takes to represent Africa for the local and possibly global U-Start Conference Business Plan Competition In Italy in May 2014?

U-Start is a global boutique advisory firm offering services targeted at facilitating the matching and cross-border investment amongst a select group of international investors (Angels, VC funds, family offices, corporate offices and wealth management institutions mostly based in Europe) and early stage companies in Southern and Eastern Europe, Africa and Latin America.

HOW TO ENTER THE U-START CONFERENCE IN AFRICA 

The local U-Start business plan competition will be held in Cape Town, South Africa on the 6th March 2014. Prominent local and international investors will be scouting and only the top 15 - 20 businesses will be allowed to pitch in front of a panel of expert judges. 

From the top 15-20 pitches only 3 companies will be chosen to represent Africa in the U-Start Conference happening in Italy, 2014. 

U-Start will be sending 3 Early Stage Entrepreneurs to Italy in May 2014 to meet investors, growth partners and exclusive mentorship to grow and accelerate your business.

CRITERIA TO APPLY

A Full Business Plan or Pitch Presentation

A Financial Deck

THE STAKES

 - Flights and accommodation for 4 nights in Italy in May 2014

 - Mentorship, incubation and a training week in Italy. 

 - One on One Introductions to a wide network of pan-European Investors. 

 - 1 year free access on U-Start

 - International Media Exposure

 - Exclusive networking opportunities

 - Free private dest at the U-Start Conference for the winners. 

TO APPLY

Submissions are already opened until February 24th. To register go here and submit your executive summary and elevator pitch. 

For further information, please visit our partner website or contact us at info@gbshconsult.com 

When is the Best Time to Sell your Business?

WHEN IS THE BEST TIME TO SELL YOUR BUSINESS?

I have heard off-the-cuff opinions such as:

• Ø  Only when you get the highest Price.
  Ø  I will not sell unless I get all cash.
  Ø  Do not sell unless you know what you want to do next.
  Ø  Everything is for sale… for the right price.
  Ø  If it is a good business that makes money, then don't sell.

The above answers just address the price and terms…but there is much more in a business owner's decision to sell.

What is the Opportunity Cost of Not Selling?

We exist in a world of limited resources such as time, energy, talented people, and capital. Consequently, the true cost of not selling is the outcome one could have achieved from committing those same limited resources to a different course of action. Said in a different way, there is only so much time, energy, and capital available to a business owner at any particular point of time, and those resources invested in a business are not available for him/her to use, enjoy, or invest in other ways.

The opportunity cost of being involved in your current Company might include giving up:

Ø   Another business venture or opportunity

Ø   Time for rejuvenation and reflection

Ø   Friends, family, and grandchildren

Ø   Diversification of investments or reduced risk

Ø   New challenges, intellectual stimulation, or education

Ø   Health, travel, community involvement, spiritual service

Ø   Or, any other opportunity that can not be pursued because of the demands of your current Company.

The opportunity cost is relevant only in terms of the life goals of the business owner. When a business owner decides that the opportunity cost of owning his/her Company is greater than the overall value (not just money) received from owning the Company, it is time to seriously consider selling. Conversely, a business owner should not sell if he/she finds the business provides the most satisfying, enjoyable, and profitable way he/she can invest his/her time, energy, and capital at the moment.

Many business owners have been involved in their companies for so many years that they have a difficult time envisioning what their life will be like after they sell. Once they sell they are free to discover other opportunities. Not having the freedom to discover alternatives is one of the opportunity costs of business ownership.

Following are three examples of what "Opportunity Cost" sounds like when spoken by a business owner who should consider selling:

·        Burn Out – "My Company has been good to me. I am proud of it. I poured my life into it and for many years it was very fulfilling and financially rewarding. For a while though, I have not been having much fun and it has been boring. I know I could do more with the Company, and it has lots of potential. However, I just do not want to put any more energy into it. It is time to do something else with my life. I am not sure what that should be, but I am sure I can figure it out, once I am not preoccupied with this Company."

·        Another Business Opportunity – "My Company is going well and I could keep running it forever. But, it takes lots of attention and distracts me from a different business venture, with which I believe I can have even a greater success. It may seem foolish to sell a good business, but I need to let go of this one in order to take hold of the next one."

·        Owner Skills – "My Company has been successful, but based on my talents and experience; I have taken it as far as I can. The business is well positioned, but it needs a person in charge with different skills and ambitions. Both the Company and I would be better off if I sold it to a buyer that could take the Company to the next level. Then I could focus on what I do best, either working with the buyer, or moving on to a new opportunity."

Opportunity costs can be applied by Buyers also. Business buyers acquire Companies because the company presents a more attractive opportunity than the alternative uses of their resources.

How Much is Enough?

No matter how much you make, there is always someone with more. We see business owners who persist in owning their business just because they want more money. Meanwhile, 99% of the people make and have less money than they. We see their "nose-to-the-grindstone" in their particular Company because:

Ø  They are in Business

Ø  They want more money

Ø  A few years ago the Company was worth more

Ø  The market may be better in a few years.

                  

When a business owner is passionate about his/her company, working for increased profits is an energizing goal. However, sometimes business owners lose the focus, intensity, and passion that they had when growing it. They then push ahead day after day just because they believe they should use the business to make money. They own great businesses, but as individuals they feel discouraged and trapped.

Important issues for business owners to address:

Ø  Why are we making money? And why in this business?

Ø  Are we making money in a way that is (still) personally and professional rewarding?

Ø  Is making money with this Company the highest and best use of our resources and abilities

ØRegardless of whether you decide to sell now, answering these questions is key to tactical and strategic planning, and developing an exit plan.

When is the Best Time to Sell?

The best time to sell is when you come to a decision that it is more compelling to invest your time and capital into something other than your current Company. To make that decision, understand that businesses sell for more when the business is doing well, the economy is doing well, and financing is easy to obtain by buyers.  As a Merger & Acquisition advisor, my role is not to convince business owners to sell their Companies. It is to ask owners the insight-producing questions, such as these, to help entrepreneurs clarify their thinking.

If the result of your reflections is a decision not to sell, you can focus on building your business with renewed commitment. If you decide it is time to sell, my role as a Merger & Acquisition advisor is to help you through the process so that you can move on to the next phase of your life.

If you are interested in discussing your business objectives in confidence, we welcome the chance to talk with you.

GBSH Consult is a global management consulting firm proven in dealing with mergers and acquisitions. GBSH Consult supports clients in making their deals successful as well providing analysis, trends and recent M&A middle market transactions, deals and private equity investment. For more information go to www.gbshconsult.com

How to Achieve Accelerated and Sustained Business Growth

In this special interview during the launch of their magazine Biz Titans, GBSH Consult offers tips, insights and best practices regarding how to achieve accelerated and sustained business growth.

Q: What is the difference between a Business Incubator and a Business Accelerator?

GBSH: A Business Incubator is focusing on getting a company off the ground, typically from idea to “Something”, from zero revenues to the first couple millions in annual revenue. A Business Accelerator takes over where the incubator left off, helping the company get to the next level through a business acceleration program.

While a Business incubator helps with office space, mentorship and connections, a Business Accelerator helps a ‘started-up’, or established mid-size company with professional services, management consulting, developing a strategic focus for the company and working with the executives at a company on a daily basis to execute on that strategy and achieve accelerated and sustained growth.

Q: What are some ways that you help small- and medium-sized companies achieve a significant and sustainable impact that translates into higher profitability, sustained growth and social impact?

GBSH: The way we help them is through a structured approach. Since 1997, we have helped over 400 companies in industries as diverse as agriculture and technology to achieve, on average, a 30% revenue increase the first year after acceleration. We do this through a 5 months acceleration program, in which we do an assessment of the company against best practices and help them in terms of strategic focus, business processes, talent and finances.

 For example, we helped a tech company which had reached a revenue plateau switch their strategic focus to become a customer service company and grow exponentially.

Q: What are some ways that you help your clients’ develop and strengthen the relationships with which the companies partner ?

GBSH: Once we have accelerated a company we know them well enough to know their core competencies, so we can introduce them to either other clients we are accelerating where we see there could be some synergies, as well as with large corporations in our eco-system for a potential joint venture in a new market for to develop a new product line, as well as for an eventual investment or acquisition.

Q: What advice would you give to a small company considering expanding into international markets?

GBSH: I would suggest for them not to “go it alone”. There is a better and faster chance of success for them if they partner with the right person, institution or organization that knows the playing field in the new markets and how business is done there, as well as access to the local suppliers and distribution channels. Building that from scratch is possible, but it takes much more time and resources than to partner with someone.

Q: Can you provide some tips to our readers when it comes to looking for investments?

GBSH: It is much easier to get funded if you know exactly what the money will be used over the next two to five years. No one has a crystal ball, but having reasonable assumptions on the table will help your credibility when presenting to investors. I would also recommend looking for “smart money” and not just money. What I mean by this is that the investor needs to bring more than just money, but also great contacts in either the markets you are trying to get into, or the suppliers you need to get in touch with.

Q: Can you talk a bit about your ambitious plans of stretching global offices around the world in the next couple of years? How much have you had to tailor the strategy and approach of each office to fit in with the specific business culture there?

GBSH: Very good question. We strongly believe in the value of the GBSH Consult network and we are starting to see the benefits of this. A lot of our clients in emerging markets are coming to us to help them create a presence in the global marketplace, either by soft-landing there, relocating or finding the right organization for them to partner with. Similarly, some of the companies we are accelerating in the global marketplace want to have either a production or commercial presence in the emerging markets we have a presence on, so we are helping them with those activities. The more offices we have around the world, the more valuable that network becomes and the more value we can bring to our customers in terms of cross-border trading and strategic partnerships.

GBSH Consult Business Accelerator is a program under the GBSH Consult Group that helps small- and medium-sized companies grow to become the next generation of market leaders. Their Business Acceleration Program enables accelerated and sustained growth for small and medium-sized companies seeking to reach that second level of growth.

This interview was previously published on Biz Titans.