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What Do High Growth Businesses Do Differently?

Over the past 5 years the importance of the “High Growth Business” and how this relatively small group of businesses disproportionally impa...

Monday 15 December 2008

If You wont take advice from me, What about from "The Sage of Omaha"?

This article is by the legendary Warren Buffett, whose simple homespun philosophy has made him the worlds richest man. His company Berkshire Hathaway has a price per share of a staggering $100,000 per share, thats right, $100,000.

This article demonstrates, if ever we needed reminding, that there are opportunities for us, even in the darkest of times.

New York Times Article by: Brad Holland Times Topics: Warren E. Buffett

THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So ... I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.


A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.

Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.

Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky’s advice: “I skate to where the puck is going to be, not to where it has been.”

I don’t like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I’ll follow the lead of a restaurant that opened in an empty bank building and then advertised: “Put your mouth where your money was.” Today my money and my mouth both say equities.

Warren E. Buffett is the chief executive of Berkshire Hathaway, a diversified holding company.

Friday 12 December 2008

Qualification, Qualification, Qualification 4 critical steps to successful selling

Fed up with closing too few sales? Keep coming up against surprise objections? Use qualification best practises to improve your close rates.

The qualification process in sales calls seems to have fallen out of favour recently and there’s an almost unnatural preoccupation with “the close”. Whilst there’s no denying the importance and the sheer pull of closing. If you don’t qualify properly “the close” will tend to become a painful and an increasingly fruitless experience. Simply put; by qualifying better you’ll close more business.

Step One - Do Some Planning!

Now before you roll your eyes and think to yourself “here we go again”, do you really think that this article sprung miraculously out of my head just as it sits on the page. No of course not; I planned out what I was trying to achieve working on the structure and presentation before I put a word down on paper. You know your product or service; think about what questions you’ll need to ask to properly qualify your prospect. Take a prepared crib sheet of questions if it helps.

Step Two – Understand your prospects issues and their consequences

Too many untrained sales people on hearing an answer that indicate the prospects needs their service or product rush straight to “Well Mr prospect our XYZ thing can solve your problem because it does....”. Don’t do it, just resist that temptation. Back to bit of Psychology, we all have problems, how do we deal with them? Mostly by putting them to the back of our mind and closing the hatch on them. That way for the most part we can try to ignore them. What you want to do is to keep asking questions such that this problem you can solve is unlocked from the back of your prospects mind and the full horror of it is brought home to him. This is best done by asking him questions about why it is such a problem and what the consequences are if it doesn’t get fixed. The more questions you ask like this and the more your prospects talks about it, the bigger his problem becomes and the more valuable your solution will appear to be.

Step Three – Act as a (responsible) journalist

Your prospect will in all likelihood, not have the answers to all your questions so he’ll “guess” some of the answers. Your problem is you won’t always know when he’s guessing. Furthermore there will be some issues which he will not want to talk about so he’ll adjust the truth to make his responses more palatable (at least to him). To identify this you need to be able to ask for the same information in different ways rather as a journalist does by using separate sources. This is an important but largely ignored part of qualification. After all you don’t want to find out that the critical information on which your subsequent sales pitch rests is based on either guessed or incorrect information.

Step four – Summarise your prospects needs

You’ve now spent a large portion of the meeting (say 40 minutes in an hour) uncovering the consequences of his problem. You should now be able to list a number benefits that your solution will offer and demonstrate how it’s going to take all that pain away. You can now head for “the close” with confidence, but that’s a subject for another time.