How Can I Save This Sinking Ship?

Sinking ship with crew member bailing it out. Business metaphor.What causes a ship to sink? A leak in one of the systems? Too much weight? Hit by an unexpected object?

You’re on the high seas on the way to deliver a valuable cargo. Suddenly you get word from below that the ship has developed a leak that unless stopped could, over time, cause the ship to sink. What’s the most effective first reaction? Plug the leak? Find the source or cause? Protect your valuable cargo?

Or perhaps in your exuberance to maximize your profits you’ve taken on more weight than the ship can manage. It’s riding so low in the water that eventually it will be pulled down below the surface.

Of course, it could also be an undetected iceberg.

As captain of your business (your ship) you may be faced with similar situations.

A System Leak?

A business leak might be an employee skimming from revenue. I once had a client whose bookkeeper loved to gamble and would “borrow” money from the incoming cash, and of course, never pay it back. These kinds of leaks are insidious in that it’s often hard to even know there is a leak until things become bad. The business owner needs to have systems in place that match products and/or services provided to expected income. Yet, many small businesses do not.

Too Much Weight?

An overweight business has more expenses than income. It’s easy to forget that often the money doesn’t come in until well after the expense must be paid. If not corrected early, the business will find itself sinking deeper and deeper each month. At some point it’s too late. This business ship can be saved by preparing a monthly budget, observing expenses and income on at least a monthly basis. Considering the long term effect, it’s imperative that expenses must be brought down until the income can match them. Additional capital funding sources may be a short term answer, but eventually it has to be paid back.

An Unexpected Hit?

Then there’s the big lucrative client who had been buying from you for years. Suddenly, there’s a better mouse trap somewhere else and they are gone. Of course, you can try to get them back, but meanwhile the expenses go on. Having a strategy for dealing with the unexpected will help you get to the issue immediately.

These situations deal with systems, budgeting and crisis management. Every business at some point will likely experience similar situations. The answer to all of them is the same:  having a solid business management system. That means having time-specific measurable goals, a clear plan of action, consistent monitoring and decision-making based on results.

Now, don’t panic. This stuff is not hard to do. It’s just a matter of learning the techniques and tactics to run your business proactively rather than reactively. I’ve packaged a new six-month semester course called Captains School, which covers the gamut of what it means to function as captain. It provides the training, tools and support to give you the confidence to consistently make sound business decisions.

Aren’t you tired of bailing water?

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Don’t wait until it’s too late. If you’re getting that “sinking” feeling, send me a note and I’ll be in touch to schedule a phone call.

Help! I Want to Dissolve my Partnership

A client, we’ll call her Susan, had a business that was struggling financially and operationally. She was totally disgusted because her partner of 10 years was no longer carrying his weight and didn’t seem to understand the gravity of the situation. She was so stressed she was seriously considering liquidating the business if things couldn’t be changed for the better in a very short time.

What to do? Her first commitment had to be to herself. Susan was able to realize that it was up to her to take command of this situation. She was coached to create some measurable goals with time frames. She decided she wanted to give the business and her partner one last chance. Susan knew she must bring her partner, and eventually her staff, into the picture in order to get their buy-in.

She created Job Roles for herself, her partner and each of her staff (Office Manager, Buyer and 2 Salesmen). Because of the longstanding relationship between her and her partner, we agreed it was best if I met with the partner and her to present things up to this point. Preparing for this was anxiety-producing for Susan, but also liberating. NOTE: Using a third party (like a coach or consultant) can offer a different perspective to a known problem. [Read more…]

8 Steps to Set Your Business on Fire

All too often I hear comments like “I’m tired of putting out business fires on a regular basis. There must be a better way.”

Well, of course, there is, and we want to convert the energy that’s being spent on putting out fires to a more constructive use. Let’s talk about setting your business on fire – on purpose – by being smart. Set those fires yourself and plan in advance how you will leverage the energy that’s released.

If the energy is organized and has a mission or target, the chances of hitting the target (goal) will be a lot greater. (Consider a bullet in the cylinder, awaiting the trigger to release its energy). We want to get you and your business organized and focused so the energy you release will propel your business forward in the direction you choose.

Following are the steps that seem to work best if done sequentially, all with the specific purpose of setting your business on fire. Literally translated that means bringing in more revenue, more customers, more brand recognition.

1 – Get your foundation in place
Without a sound business structure, you won’t be prepared to handle the surge in activity when your business takes off. Start by being really clear about what value you bring to the marketplace and making sure you are clearly communicating it in a variety of ways that put you in contact with your target market. Set measurable, realistic goals and create a strategy and plan to achieve them.

2 – Focus on Sales
What’s the most important part of your business? Sales, of course. How much of your time are you spending on Revenue Generating Activities? I find I need to spend at least 50% of my time on staying in touch with my market and interacting with clients and potential clients. A specific marketing plan with timeframes will keep you focused and allow you to assess the results of your actions.

3 – Commit to being responsible for and accountable for your business results
Set goals based on research and strategic decisions. Commit not only to yourself, but to a coach or a colleague. This adds fuel to your commitment. Communicate your goals and make sure your team and staff know their role and responsibility in achieving desired results. Get their commitment as well so everyone will be adding to the focused energy.

4 – Develop Strategic Alliances
You know you can’t build a business without help from others. Strategic alliances are how smart business people are leveraging their connections to reach beyond what can be done alone. I use my connections to add expertise beyond my own for many of my programs. This helps both of us reach new targeted connections where we can share our expertise. I also use marketing and technology alliances to open new networks. Every time you add an alliance you are expanding your network exponentially.

5 – Showcase Your Expertise
Every entrepreneur has expertise in something. The key is to identify and showcase yours. Your combination of training, experience, knowledge and resources makes you unique. Who cares about that expertise and how can you best share what you have to offer? Some people look for speaking opportunities in front of their target market; some who like to write will create articles, newsletters, books, CDs. Give freely of your knowledge; share your unique perspective, focus on helping others accomplish their goals. You will attract those who relate to what you say and do.

6 – Use the Web strategically
Most businesses today can benefit from using the web. This may or may not include a web site, but e-mail is definitely a prime means of communication for most businesses. It’s important to learn e-mail etiquette and to stay current on use of e-mail for marketing. Search Engine Optimization has become a key strategy for web sites. Changes happen so rapidly for anything that’s web related you’ll want to consult with a web marketing professional before undertaking any campaign.

7 – Support Yourself
You want to focus the majority of your time and energy doing what you do best in your business. That may mean product development, marketing and sales or overall management. Enlist the support of others whose expertise complements yours. Consider whether you’re better off doing that by adding to staff or through a strategic alliance. Sometimes bartering services can be a great way to get what you need and generate a client/customer at the same time. Keep adding to your team until you’ve covered all the gaps.

8. – Begin to act “as if” your goal (target) is already achieved
Thinking and acting “as if” magnetically pulls you to your goal. Success becomes easier when you’re operating in success mode. And success begets more success. Jill Ammon-Wexler’s article offers more on why acting “as if” is so powerful.

Focus, like a laser, can set your business on fire. Follow through with these steps and watch your business heat up.

Prepare for Recovery: Think Like a Leader

As most of you already know, my mission is “transforming business owners into business leaders”. As the economy moves into the next phase of recovery, it will be those who think and function as leaders who will be the winners. Leaders will have identified pertinent opportunities and prepared themselves for advantage as things improve.

Are you thinking like a leader? Let’s see.

1 – A leader accepts responsibility for business results. As a leader it’s your job to recognize and solve problems, make good decisions and take effective action. The more you can systematize the process the easier it will be. But the final outcome, success or failure, is up to you.

2 – A leader is Vision/Mission driven – Do you know what you want for your business? Do you have a clear mission? If not you’re just flapping your sails in the wind. You won’t be going very far very fast. The clearly thought-out vision is the magnet that pulls you forward. And the clearer, the better. You’ll be less likely to get off track, but when you do, the vision will be there to help you get back on track.

Your mission is what you do to achieve your vision. Business leaders have strong missions that take into consideration accomplishing something of value beyond themselves. [Read more…]

Common Business Challenges: You’re Not Alone

If you’re in business, you’ve got challenges. Some are priority; some can be deferred. Some will take time; others can be handled quickly and easily. Some will require a financial investment; some will not. They are all business challenges because they are holding you back in some way.

Rather than see a challenge as a negative, I find it’s helpful to think of it as an opportunity. It usually means choices must be made, and that’s where it can get sticky. Sometimes we feel stuck because we’re unsure about the right course of action. When the problem continues, we feel the stress and so does the business.

Some of the types of challenges I frequently hear about from small business owners are:
– sales – how to get more
– time/organization – not enough time, chaos mode, overwhelm
– cash flow – unpredictable and uneven income and expense
– staffing – conflicts, poor delegation and job matches
– technology – not adequately supporting operations

Anything sound familiar?

Even though the specifics are unique to your business, thousands of others experience the same kinds of challenges. The great thing is you don’t have to deal with these all alone. You can learn from those who’ve been there.

There are also experts in each of these areas who may be able to help you better see the issues and create a smart strategy. Even getting their perspective can sometimes trigger a new idea or technique that will let you move forward.

As entrepreneurs, the buck stops with us, so we need all the help we can get. I’m happy to share with you my perspective, suggestions and case studies. Let this be a point of reference for your next steps.

Sales

If you’re struggling to make sales, something needs to change. Sales happen when the perceived value is equal to or greater than the cost. Of course, it’s a matter of timing also. A customer may not need computer repair today, but sooner or later they probably will. The key is to be there, at top of mind, when they do.

You may benefit from an outside perspective on how to better reach your target market, pre-qualify or follow-up. Don’t continue to sink resources into something that isn’t working. Find out how others have addressed this type of challenge. Talk with a sales consultant, trainer or specialist to help you see things from a different perspective. At least you’ll know you have options.

Sylvia was a publicity and public relations consultant who increased her sales dramatically when she changed her marketing strategy from shotgun to rifle focus. She decided who were her best clients and focused her efforts on finding what they wanted.

Time/Organization

Who has enough time? It’s a challenge for every small business owner.

Analysis, organization and systematizing operations are the key to making the most of your time and that of all your staff. With organization and systems to support the operation of your business, time will be on your side.

Most businesses have “predictable” activities, many of which can be automated to some degree. In the process of putting this in place you are forced to review the actions of your business. You’ll also become aware of areas that can benefit from streamlining.

Yes, bringing time under your control will likely require some more invested time, but the payoff can be huge.

For Gus, owner of a bakery products distribution company, creating a system to track movement of his inventory saved him many hours of searching for information when he needed it. There was a financial investment for purchase of computer hardware and software, but he was able to break even in less than a year and has knocked 4-5 hours/week off his own job.

Cash Flow

Both new and well-established businesses often find themselves in a difficult cash situation and don’t know what to do about it. The answer, of course, is cash planning. In order to do that, you will need accurate and timely financial information and know how to interpret what you see.

Good cash planning requires review of historical financial information, including a look at business cycle and sales cycle. Credit policies and practices, marketing plans, periodic expenses, debt and cash access need to be considered as well. The concept is to control what can be controlled and to manage what can’t.

Erica, owner of a wellness center, was able to move into a bigger space because she knew her cash flow would support it. Using her past 2 years cash history, the results of a recent marketing campaign and a change in patient planning strategy, she was able to project more than adequate cash inflow to cover the expected increase in expenses.

Staffing

You may have difficulty finding or retaining qualified help. Your staff may not be onboard with your goals. There may be interpersonal conflicts. The real problem with unresolved staffing issues is it will hold back the growth of your business. Until you can get your people, as well as your systems, to support your operations, any potential growth is in jeopardy.

It may not be difficult to identify where the problems are. Reaching the right resolution, however, may prove to be more difficult. Certainly, until you are totally clear about where you’re going and have a plan to get there, your staff won’t be able to provide consistent support.

Adam was an engineer who owned and managed an 8 person company. He had an assistant who just wasn’t performing at the level he needed and expected. In a focused interview he learned she had no idea what her job was supposed to be.

His steps were to wrote a job description discuss it with her, get her agreement, include some of her suggestions, show her the critical nature of her role and help her set personal goals.

Some follow-up and reinforcement was necessary, but in less than 3 months he was able to delegate management of the administrative portion of his jobs. This, of course, freed him to spend more time seeking new business.

Technology

Every business must first define and streamline its business practices and processes, then seek the technology to carry out and support operations. Correctly applied, technology makes information more available and useful, helping small firms better manage their finances, sales, prospect development, customer relationships, inventory, etc. A good marriage of business and technology saves time and money. expedites workflow and provides accurate and timely information.

When Jonathan transitioned from being head of a division in a mid-size company to opening his own business, he knew this was the time to introduce technology that could streamline his operations.

After being in business only six months he researched and chose a paperless system that allowed him to scan and archive the numerous forms and documents that are required to be maintained as part of his operation.

He estimates the business saves 1-1/2 to 2 hrs. (20-25%) daily in time previously spent on filing and retrieving paper. And the cost of storage is practically non-existent.

These are certainly only some of the more commonly reported challenges. Consider which of these areas need your attention. If something else is more urgent, by all means, address it first.

And don’t forget, you’re not alone. Ask for help when needed and find out what others have done in similar circumstances. Use this information to help you gain the confidence you need to make a commitment to a strategic course of action.

 

Delegation & Teamwork

Delegation & Teamwork, businessman covering his head with his laptopRegardless of the business you’re in you’re not going to be able to build a viable, thriving enterprise without the help of others. This is where some entrepreneurs get stuck. Many of us fall into the rut of trying to do it all ourselves even as the business grows. And that’s where problems can begin.

Alfred Peet, founder and former CEO of Peet’s Coffee & Tea, Inc., admits his biggest mistake was not being able to delegate. Quoted in an Inc article, he said, “I know exactly where I want to go, but I can’t explain every thought, every idea I have for the future of this company. Many people left. I was burnt out, so I had to sell. Do you know what it’s like when you’ve given so much, there’s nothing left?” He sold Peet’s Coffee in 1979 after 13 years in business.

Burn-out takes its toll and the business feels the stress. [Read more…]

How to Create a Strategy: A Case Study

Clients often tell me they’re not really clear about the concept of Strategy. It’s a lot easier than you might think. Strategy is one of the steps in the planning process and cycle. The sequence in the business planning process is Vision, Mission, Goals, Strategy.

Vision is where you start and is the most abstract. Once clarified it become the guiding light toward which all your activities will be directed. Your Mission is what you do in your business to carry out your Vision. Goals are specific measurables that define what will exist when you’ve realized your Vision. The Strategy step is the thinking through of how you will achieve those Goals.

Start by considering the resources you have and the direction you want to go. Evaluate various scenarios and steps and predict how they will turn out. An analogy that makes it easier to understand is the game of chess. Various moves are considered with predicted outcomes BEFORE the actions are taken.

Some examples of Strategy might be:

– identify and develop an untapped market (based on observed trends);
– provide staff training and coaching (to strengthen customer service)
– redefine our brand (to fit our updated target market)

Developing a clear Strategy is critical because you’re going to base your Plan on your Strategy. As you know, it’s the activities you carry out in your day-to-day operations that produce the results you see at the end of the month. It is likely that you will have more than one Strategy because you’ll probably have several Goals.

There may be more than one Strategy for each Goal. An example might be to “create a contact database” and “hire a part-time assistant to manage your database”. You’re not actually at the Plan level until you determine the steps you’re going to take to hire that assistant (seek employee referrals, network word of mouth).

Bill Sipes, CPA, is founder and CEO of a community-based Accounting Business, which provides Tax Management, Write-up, Financial Services, Financial Support Systems and Business Valuation. He sees opportunities to add even more services and products and has decided to take on the persona of a Financial Advisor. I’d like to share the story of how he recently developed his Strategy for this business because it clearly exemplifies the process.

When there was an economic downturn in his local community, Bill realized he needed a new Strategy that would “turn his clients into cheerleaders” and turn around his bottom line. He decided to find out where his business had been coming from in the recent past.

He found out he got most business from 3 sources: mailing to professionals, new business/product mailing, and new sales to existing clients.

He called together his staff to discuss his findings and to ask for their help in determining a new Strategy. Following the meeting he sent out a summary of “what he heard” and asked for their continued thoughts. The staff were acknowledged and given a role in the process.

Here’s Bill’s memo to staff.

“Thanks to all. I think this is the most important meeting we have ever had. This is what I heard.

1. We need to separate ourselves from the other CPA firms.

2. Several ways to do this were mentioned. Speed of service was one. Another was building relationships.

3. We are going to develop a system of building relationships with our clients. Jane is going to write a rough script to follow whenever we get with a client…..The Moment of Truth.

4. I am going to ask Annette to print a few banners that say…..The Moment of Truth.

5. Jeff is going to check with the software people about Telemagic and Act.

6. We are going to spend more time “showing our face” in the community and to our clients.

7. When with a client always ask……How are we doing?

Thanks again for a great meeting……which I am sure will lead to a great system that will turn our clients into cheerleaders.”

Here’s Bill’s Strategy.

– Develop a plan to cross-sell existing clients.
– Continue to use Marketing Assistant to carry out marketing campaign to targeted list.
– Make Customer Service visits with our commissioned software salesman to cement relationships and try to cross-sell.
– Hire a commissioned insurance sales rep with a benefits background to sell Long Term Care Insurance as a new service (to cross-sell).
– Redefine our “brand”. Develop our new image to support our updated profile.

He’s building his redefined brand on “trusted relationships”. The staff is very enthusiastic and willing to support each other’s efforts. He also plans to have “Moment of Truth” banners made up to keep the staff focused on what’s important.

Bill is utilizing a Strategy that’s based on research into information about his own business and he has buy-in from his staff. He not only knows where he’s going, he has a Strategy to get there.

The Call to Leadership

Business Leadership NOW is the cry across the nation for businesses both large and small. As a business owner, by default, you are the leader of your business. You can either ignore the impact of the role and bear the consequences or grab the reins and choose your destiny.

The problem I see far too often is the business owner who feels overwhelmed because things are happening too fast and there’s not enough time to follow through. Or at the opposite end, sales have dropped off drastically and all attempts to turn things around have failed.

What can be done to bring these challenges into perspective and gain control? The answer is: think like a leader.

As a coach working with small business owners for 13 years I’ve seen the difference it makes when entrepreneurs consciously choose to function as leader and learn to apply the fundamentals of good business practice.

I base my work on what I call the Prime Strategies. These are the strategies [Read more…]

The Partnership Model for Growth and Profit

If you’re thinking a partnership is a business with one or more equity owners, you’re absolutely correct. But the terms partner and partnership have a much broader meaning in usage. Read or listen to the business news and you’ll hear lots about business partnerships. Businesses large and small are growing through partnerships.

Dallas Business Journal reports, “American Airlines has forged a three-year marketing partnership with National Football League’s New England Patriots.”

Reuters states, “Jamie Kennedy partners with Yoostar ™ to create original viral content and launch the Yoostar Comedy Channel”

Wall Street Journal announces, “Google and SpotMixer expand partnership to include In-Stream video advertising. [Read more…]

How Do I Find the Right Business Partner?

Having a business partner presents a complex mix of interpersonal and business issues, and both need to be addressed for it to work.

If your primary interest is having someone to brainstorm with and to help your business move forward, there may be other options besides a partner. A consultant or coach may be able to fill that role. In that case you’d have the benefit of an objective dedicated mind but would still make the final decisions.

Likewise, if additional capital is needed now, there may be alternatives to giving away your hard-earned equity. Debt is usually preferable to equity unless the partner can add significant value to your business. If an equity partner can open a sizable new market, take on critical responsibility or provide access to valuable resources, it may be worth serious consideration.

Base your decision to have a partner on sound logic and reasoning. Be careful of just wanting to dump responsibility on anyone who will agree.

The purpose of the partnership should be clear in your own mind first. Then you’re ready to determine the qualities and assets a potential partner would bring. A partnership is usually a long term arrangement, so think long and hard as to whether or not you’re ready for that level of commitment.

If you believe that a partner is right for you, you must select very carefully. Here is the approach I would take.

Start with your own strengths. [Read more…]