The Key to Being an Effective Public Speaker

Listen to your audience.

My entrepreneurial journey has included a lot of public speaking over the past year. And as I have tested and tried different approaches I have learned one key rule to success: don’t assume you know what the audience wants to hear.

Have you ever sat through a PowerPoint presentation and dared to ask the speaker a question somewhere in the middle of their talk? The result is often an awkward pause, and then an answer to hold on 6 or 8 more slides when they will be coming to that. In this case the speaker is presuming that you want to learn in the way they have organized the information. That’s a mistake. As a listener and learner, I turn off every time.

My speaking this year has included a lot of work with Vistage Peer groups, which typically consist of 12 – 18 CEO’s of small and medium sized businesses. These small groups can be a particularly tough crowd. The members pay a lot of money to be there, their time is important to them, and they don’t want it squandered.

As a speaker preparing for this audience, the natural reaction is to prepare for every minute and be well orchestrated. Maybe it’ a slide for every two minutes.

I tried that the first few times, and I fell on my face. And then I realized that I had to stretch into the way that I want to learn, by setting up exercises for the audience, and then discuss their situations, and digging deeply into what they want to learn.

No slides. A workshop with a few exercises on a handful of pages. And a discussion.

One time, I was scheduled to present for an hour, we worked for three and a half hours. Once, a three-hour presentation only went for two. But when the audience was done, and had gotten everything they needed. It worked.

As I learned this style, I have tried it in bigger crowds at conferences with an audience of 100 or so folks that don’t know each other. Here I might set the stage with a few warm up questions, and then the balance of the time is open to Q & A.

In a typical hour presentation, a presenter will talk for 50 minutes, and then leave ten minutes for questions. Recently I have been talking for ten, and leaving 50 for questions. Guess what – most people seem to love it. And everyone is learning from everyone else, not just me.

Getting ready to make your next presentation. Try to dump the PowerPoint. Listen to the crowds. The results might surprise you, and them.

The Shark Tank Myth is Alive and Well

Yet there is often a better way.

Last week I attended and participated in the Inc. GrowCo conference in New Orleans which is my favorite conference of the year. It is exhilarating and stimulating to be in a community of about 600 entrepreneurs who have come together to learn and grow. Everyone has an idea, and the energy is powerful.

Kevin O’Leary, aka “Mr. Wonderful” from Shark Tank was one of the main speakers at the event and many of the CEO’s of his portfolio companies were on site participating in panels.

His presence and the excitement around him reflects what I call the ongoing “Shark Tank Myth” which is the belief by many entrepreneurs that the key to their success and fortune is to get that one famous or great investor who has all the answers and will lead them to the golden land.

The reality is that there is often another way. And sadly, despite the dream, Kevin O’Leary and his counterparts would probably only consider 1 in 100 companies they meet potentially investable.

While entrepreneurs pursue the “Shark Tank Myth”, many of them are wasting a fortune of time pursuing a path that will likely not work for them.

I met with many CEO’s during the conference whose goal was to raise about a million dollars from an investor like O’Leary. And I would automatically challenge them to ask what they would do with a $350,000 SBA loan at a reasonable rate with a long amortization.

Invariably, most of them had not considered the debt to be an option. And based on the existing cash flow in many of their businesses they could likely get a loan.

They can likely get a lot further with a $350,000 thousand infusion in their business today, than the pipe dream of a $1,000,000 raise that may never come to fruition. In fact, many of them could not clearly articulate what they would do with the bigger sum of money.

My best advice is do not fall for “The Shark Tank Myth”. You can do more on your own than you think.

The Number One Misconception about SBA Loans

The SBA is not a lender.

Business owners and entrepreneurs often think that the SBA is a lender. If they walk into their local bank and are told they are not eligible for an SBA loan, they assume that the program will not work for them.

This is the furthest thing from the truth.

The SBA is not a lender. It is a government guarantee program that encourages banks (and a handful of non-bank lenders) to take on riskier loans then they otherwise would. There are over 2,200 lenders in the country that utilize the program.

While every lender follows the same SBA rules, there are vast differences between lenders to be considered.

Every lender has their own credit policy and criteria. A loan that is not interesting to one lender, could be a home run for another one.

Furthermore, there are many different loan programs within the SBA. The lender whose branch you walk into might not utilize the loan program that is perfect for your business.

And finally, the person you are talking to at your bank (particularly if it’s a bigger bank) might not know anything about SBA loans, even if the same bank has a department three floors up that specializes in them.

SBA loans can be an incredible tool to help you grow and expand your business at reasonable rates with a long amortization. Be sure you speak to an expert who understand them, before ruling them out.

As a side note, this week is Small Business Week and in honor of it we published a detailed research piece called “Demystifying the Small Business Administration” with our partners at Vistage. If you’re interested, you can download it here.

A Lesson We Can All Learn From President Trump

Today’s challenges are different then yesterday’s lessons.

Whether you love or hate Donald Trump, there is an important lesson we can all learn from him. Simply – you must adapt to your new set of circumstances, and what worked for you previously might not be relevant to your new circumstances.

I have read dozens of articles talking about how Donald Trump is applying his previous management techniques and methodologies to how he is structuring the White House. If the stories are true, he is following his instinct of working in the way that he is comfortable.

Whenever we face a new challenge, it’s natural to reflect on prior experiences to try and solve what is on our plate today. And while this is useful, it’s also critical to think through how the new circumstances are different to what we previously encountered.

President Trump is now running the biggest and most complex government in the world. His prior experiences may have no relevance to what he is working on today.

The same analogy is relevant to different experiences in business. If you move from working in a big company to a start-up or vice versa, you need to adapt to the different structure you’re dealing with today. If you don’t realize your new surroundings or learn to adapt to them quickly, you won’t survive.

This lesson is also critical when you ask for mentoring or advice. Does your mentor or coach understand the current lens you are dealing with, or are they advising you through their prior experiences. If they cannot understand the new situation, the bias of their advice might not be useful.

And likewise, if you are the one giving the advice, take the time to really make sure you understand the current circumstances, and aren’t only making suggestions based on your previous experiences.

Good decisions are a balancing act between understanding what we’re facing today, and what we learned yesterday. Embrace both elements, and you will make the best possible decisions.

Looking to Raise Debt or Equity for Your Business?

Beware of scammers looking for upfront deposits.

Almost every entrepreneur will face different points in their careers when they need capital for various reasons. And sometimes to hopefully get the money faster and more efficiently they will turn to advisory companies (like my own) to help get the job done.

Here is the tricky part. Advisors come in all shapes and sizes with different ethical standards. And sometimes their clients feel like they are in desperate situations, and will give large non-refundable deposits to unscrupulous brokers to retain them.

Simply put, it is an awful idea to give any broker a retainer that does not go into an escrow account or have some performance guarantees behind it.

I can understand that sometimes brokers want a commitment from a client to lock them in. If this is the case, the money should be escrowed in a third-party account.

Over the past sixty days, we have direct experiences with two situations (one for equity and one for debt) where business owners paid large deposits to brokers, where led on for months to believe that everything in the process was moving along, only to find out months later that there was a scam and nothing was happening. These brokers have websites and no negative reviews on the web.

And now, two honest business owners have wasted deposit money and perhaps more importantly, months of their time derailed by a fraudulent scheme that was never getting off the ground anyway.

Typically, the brokers disappear to their next victim, and the entrepreneur doesn’t have the resources to fight to get their deposit money back.

To combat this, I am considering launching a web site like ripoffreport.com, where these scams can be discussed and pointed out publicly. Do you think such an initiative would be a good idea to help the entrepreneurial community? Anyone want to volunteer some time or resources to make this happen?

The fraudsters need to be stopped.

Five Steps to Consider in a Rising Interest Rate Environment

Today the Federal Reserve raised interest rates again.

Over the last several years we have lived through a period of extraordinarily low-interest rates. And for some business owners, they assume this is the norm.

I am often asked, “what do I think will happen with interest rates going forward?” And until recently I always answered with a joke “If I knew for sure, I would be on the beach in the Bahamas drinking martinis !!!”

But recently my answer is different. I think interest rates are going to keep going up (as they have the last few months) and this is a smart time to lock up long term fixed interest rates where possible.

We are in a period of economic growth, and tremendous uncertainty. There are new sheriffs in town in Washington. And as I wrote about in my last column, we have seen business lending by banks slowing down.

Here are five steps business owners should consider.

  1. If you foresee real estate purchases over the next year or two, you might wish to accelerate your search. Interest rates could be much higher in a year, and make the cash flow prohibitive.
  2. Look at the SBA 504 program for equipment and real estate purchases or refinances. This program offers exceptionally long fixed interest rates with ten percent down.
  3. Review your current loans and be sure you understand what happens at different trigger points in the agreement. If you have an arm, what happens at the next bump?
  4. If you own real estate without any debt it on now, considering getting a loan against it with fixed rates and use the cash to pay off other variable debt or invest in your business.
  5. If your line of credit is close to maxed out, consider terming some of the balance out with fixed rates.

Are You Over-Leveraged or Under-Leveraged?

It’s a simple and important question.

There are a lot of important variables and tools that go into building a business: people, product, service levels, marketing messaging, culture, financing – just to name a few.

In the middle of the ever-flowing puzzle is another question that can often be the key to a lot of issues: are you over-leveraged or under-leveraged?

To put the question more simply: some companies have borrowed the maximum they can. Even if they wanted to, borrowing more money and using it to expand or grow is not an option. They have leveraged their cash flow or collateral, and there are no more alternatives.

Many companies are in the completely opposite situation: they are under-leveraged. If they wanted to inject capital onto their balance sheet, there are plenty of opportunities to do so.

If you are under-leveraged, there are a few key questions to ask.

Firstly, how much money could you borrow, at what rates, and over what terms. If you were to “maximize your leverage” or take full advantage of the cash flow or assets your company has built, how much money could you get.

And then you need to ask yourself what you would do with the money, and if the potential benefits outweigh the risks.

The goal of this exercise is not to leverage yourself to the hilt.

The intent is to start managing your business off your balance sheet instead of your income statement.

If you can borrow more money, and have a good idea what you can do with it — come up with three simple scenarios.

What is the worst that would happen? If the investment is a disaster and doesn’t generate incremental revenue – what would happen to your cash flow as you pay off the debt?

The other side of the coin is the home run scenario. If everything worked out perfectly, how much incremental profit would you generate, and how quickly could you pay down the debt?

And the third and likely scenario is something in the middle.

Sometimes working through this exercise can unlock whole new ways to think about offensively growing your business.

Bankers Hate Change

And what business owners can do about it.

Have you ever gone to a cocktail party with a bunch of commercial bankers? It’s not typically a rowdy affair. Bankers, by nature are a conservative bunch who like things to stay as they are. And while they are in the business of lending money, managing risk is in their DNA. And any change on a macro or micro level gets their antenna up.

Election years typically bring about uncertainty, and this can often give bankers pause. And then the administration takes over, and things usually settle down.

But this year is different. If you love Trump or hate him, I don’t think anyone will disagree that change is in the air. And while typically business people high five the calls for reduction in regulations and taxes, the other side of the coin that is not discussed is the general anxiety across many industries and borders.

I wasn’t surprised to read in the Financial Times this week that, “For the first time in more than five years, total outstanding bank loans have dipped for two consecutive months with declines in December and January. The Federal Reserve’s latest figures, published on Friday, show that the weakness has continued so far in February.”

It’s tougher to get a bank loan today than it was a year-ago. If you like it or not, bankers are going to look at business plans more carefully, challenge assumptions, and worry about risk. Business plans that involve relying on imports / exports will be thought about much more carefully, just to name one example.

And likewise, periods of uncertainty typically lead to rising interest rates. This makes bankers more nervous to lock in long term fixed rates.

The “Trump Euphoria” is balanced by “Trump Anxiety”. This is not intended to be a political statement, it is the reality on the street.

To respond to this, we recommend business owners take a few steps.

  • Explore any opportunities to lock in long term fixed interest rates today. If you own real estate or are considering purchasing it, now is a good time to consider refinancing or taking the plunge.
  • Seriously consider using the SBA for your loan requirements. Banks will be more inclined to lend money with the government guarantee intact.
  • Give yourself extra time to get a loan and be prepared with good documentation, and a well thought out plan. The process will likely take longer than you think.