Within this article, I’d like to share with you the three fundamental flaws I’ve identified within more than 80% of businesses which is preventing them from successfully scaling their businesses, and a test you can do to determine how do you score on the sustainable SCALE chart!
My good friend Adrian wants to buy a house. He’s currently renting, has saved sufficiently to have a sizeable deposit ready and recognises the amount of money he can save by buying instead of remaining in rental accommodation. He’s ‘on the market’ and physically looking for his ‘dream’ house.
Bailey is the Managing Director of a large Estate Agent chain. Owned by American Venture Capitalists with swanky London Offices and coverage all over the UK. They sell houses. They have a great stock of houses for sale and a team of staff, including an in-house mortgage and legal team ready and capable of selling them. Adrian sees a house he really likes. All the photographs show it has been extensively renovated and is now simply ready to move straight in. Furthermore, there is no chain, and so no ‘waiting for others’ this property is on the market, vacant and ready for purchase. Adrian contacts Bailey’s Estate Agents and speaks to one of the many sales agents. Who, after confirming all Adrian’s details and talking him through the details ‘as depicted on the website’ asks
“Would you like to buy it?”
A little shocked, but not wanting to show any less enthusiasm for the property replies “Possibly, can I arrange a viewing?”
“We’ve got hundreds more photographs we can share, and we’ve recorded a 360 degree video of every room which I can share with you if you’d like?” came the reply.
“That’s great” he replied even more concerned “But I’d still like to view it”
“Viewings is a different team, I’ll have to put you through” the line goes silent, then some canned music and an American voice begins to tell Adrian as how to they are a Premium brand, and how many houses they have for sale, before a new member of staff answers the call, only for none of the information he has already shared to have been passed to the new agent, and Adrian has to repeat himself all over again.
The FIRST lesson in this tragedy is that there IS a house For Sale. There is a potential purchaser interested in said property. The Seller has entrusted Bailey’s company to sell this, and yet a poorly trained sales team and lack of internal communication and systems is currently jeopardising the sale!
Eventually a viewing is arranged, and Adrian meets a member of the viewing team at the property. This is not the first house Adrian has purchased and knows exactly what he is looking for. However, the viewings agent has a process, and tried to ‘guide’ Adrian through each room, pointing out the Features and Benefits of each, but either unwilling or unprepared for the prospective buyer to deviate from their plan.
Adrian is a little surprised to see, that whilst the house has been extensively refurbished and to a very high finish, wallpaper has been used to cover every single wall of the house. It’s nice, and modern. It’s ‘in keeping’ with the look of the property and not some garish colour that would need immediately removing, but surprised to see it has been applied and not left as a ‘blank canvas’.
Finally, having viewed almost everything within the property, the viewings agent again asks “Do you want to buy it?” and Adrian is again surprised by the forward approach to the sale. “I like it a lot and am interested in it. But I’d need to…” before he’s finished the sentence, the agent cuts in “We do have an in-house mortgage team if you’re still looking to finalise your mortgage. And, because it’s in house, we have a 94% rate of being able to get you a mortgage offer within 48Hours of being instructed”
Somewhat bemused by the approach, Adrian replied “That’s great. However I was going to say…” for only again the agent to cut in and state “I do know that the seller is looking to make this a quick sale, so if you were to make an offer of X, I think they are most likely to accept it”
The SECOND lesson here, is about Systems, Flexibility and Communication. I’m really pleased that the Estate Agents have a system. However, a distinct lack of flexibility within the system to allow for customer considerations is actually breaking the rapour and damaging the sale. Furthermore, that LISTENING is actually FAR more valuable than speaking. And that involves ACTIVELY listening rather than just HEARING. At no time has either agent picked up on the emotional buying signals of Adrian. Instead they have stuck to Features and Benefits which makes the buying decision analytical not emotional. Finally, by having the agent WRONGLY second guess WHAT Adrian was about to say, they have indivertibly let slip the seller is looking for a quick sale and to offer a price lower than the asking price! No wonder most estate agents are called Sales NEGOTIATORS rather than Sales PROFESSIONALS! This wombat has just knocked £15,000 off the asking price without even knowing what he was about to ask!
Adrian advises he will ‘go away and give it some thought’ and leaves the property. Within minutes of leaving the property Adrian receives an email from the Estate Agents asking for feedback on their performance. It states he can be ‘in with a chance to win a weeks holiday’ simply for asking a few questions, and when he clicks through to the survey, finds as suspected every question is on a 1-10 scale with no option to leave ACTUAL feedback as to his experience. He chooses NOT to participate and drives home!
The following day, he calls the agents, only to learn the initial call taker ‘no longer works for the company’ and that no notes have been recorded as to his previous dealings with the company. After 12 minutes of re-answering all their initial ‘onboarding’ questions he is finally able to ask what he had called to discuss.
“I very much like the house, and keen to proceed. However, to do so would like to arrange for a surveyors report” The call is immediately placed on hold, and the same canned music plays with the same American voice advising how great the company is, before a new voice introduces them as the Agents internal surveyor team “You’d like us to conduct a survey?”
“Thanks, but No.” Adrian replies “Oh, I’m sorry, my colleague advised you were asking about a survey?” the called responds sounding confused.
“Yes. I do want to conduct a survey.” Adrian explained, however I’ve got a surveyor company I use, and not sure having a surveyor from the same company as the seller and as the mortgage company really works for me” he replied.
“We’ve brought everything in house to make it quick, easy and most cost effective for our customers” he explains. “It’s a fully inclusive system unique to our brand and has helped us win several national and industry awards” he continues.
“That’s, wonderful. But I’d like to have my own team conduct the survey” Adrian insists.
“I’ll have to ask the seller, if they are happy for you to use your own surveyor” he replied!
Astonished, Adrian waits nearly 3 days before a text message confirms that an external surveyor can be used, however their report MAY not be accepted IF he chooses to use the Estate Agents internal mortgage team.
Finally, some 2 weeks after first viewing the house, (and between other viewers being systematically shown around the property) the surveyor is able to conduct a structural surveyor and calls Adrian immediately with a rough appraisal (pre-report being typed up)
“From the outside it looks a wonderful property, with a good plot of land and a south facing garden.” He begins “The inside has been refurbished to a good standard with a brand-new Kitchen and Bathroom.” Everything good so far “However, I was a little surprised to see every room has been wallpapered, and so I immediately went up into the loft” Not certain what loft insulation has to do with wallpaper Adrian listening as the survey continued “ALL the roof joists are damaged. The entire roof appears to be on its last legs. It’s as if the property has been vacant for a long time with no heating on. The damp will then set in you see, and when someone comes in and simply turns the heating up high. It dry’s too quickly and warps the joists.” He explained “Your gonna need a brand-new roof on that one. I’d say there’s around £24,000 – £28,000 to be spent on that before you wanna live there. “
And there it was, the elephant in the room. The high standard interior and the brand new wall paper was hiding the cracks of a crumbling structure. The £15,000 drop in asking price for a ‘quick sale’ was clearly because THEY knew the extent of work required. The ‘ideal’ house was actually soon to be a building site for whoever invested their money!
There are SO many lessons to be learnt from this I’m struggling to know WHERE to start in untangling the mess that represents at least 80% of businesses across the UK! And I say this not through personal frustration or assumption, but from having spent over 3.5Yrs studying more than 150 British Business Failures to understand HOW businesses get to NATIONAL status (with stores in every major town and city across the UK) only to then fail.
The MASS amount of data we collected, reviewed, collated and realised; that whilst everyone on the high street maintained a confidence in the brand they knew and loved, behind the scenes was a status of incompetence and of indifference to the huge holes within each business.
The conclusion led us to identify 3 FUNDAMENTAL flaws that were present and prevalent in each companies downfall. ALL of which could easily have been averted IF they so wished, and yet because no-one was willing to acknowledge the HERD of elephants in the room, they went unnoticed, unspoken about until the ‘nice new wallpaper’ was insufficient as the cracks became crevasses and each business imploded!
I thank you for reading my blog today, but ask you to not stop here, thinking “That was interesting” but to go back into your businesses, RIGHT NOW and determine WHAT is the ONE THING that is preventing you from taking your business from growth to SCALE?
Do you have an up to date Business Plan, that is followed and that everything in the business is measured against?
Do you have a Customer / TEAM focussed approach to all undertakings, that aren’t overly complicated or over reliant on systems and processes, preventing people and personality to shine through.
Do you know how EACH department within your business is performing, and do you measure and manage the interdependency on teams rather than the competitive edge.
As part of our MISSION to help 10,000 Business Owners #ADDAZERO Business Challenge to their Personal Disposable Income, we are offering you the chance to conduct your own SCALE audit on your business (based on the mass amount of data we collected over the 3.5Yr study into Business Failures!). Simply click here http://bit.ly/ADDAZEROAudit and answer 33 quick questions to receive your detailed, bespoke report on the current SCALEABILITY of your business!
Thanks again for reading, drop a comment below and let me know what this has prompted YOU to do today, and whilst your there, why not share this post also, and let someone else you know benefit from that FREE BESPOKE SCALE AUDIT report!
…Oh, and if you’re wondering what the 3 FUNDAMENTAL FLAWS are that we uncovered? Drop a comment below and I’ll share them with you!