Weekly Business Idea

June 29, 2018 – What Season of Life Are You In?

Posted on | June 29, 2018 | No Comments

Main Idea:

Are you thinking about retirement?  Are you having to deal with parent’s memory issues?  Are you newly single and dealing with all that brings?  Do you have two kids in college and wonder where the time flew?  What is more precious; time or money?

Expansion of the Idea:

Last week, my wife and I had the pleasure of watching our grandchildren for the week.  They stayed with us so that they could attend vacation Bible school at our church every morning.  In the afternoon, we did stuff.  We had fun and more importantly they had fun.  It was a good chance to be around them for an extended period.  However, having a four and a six year old stay with us reminded me of one thing, kids have a lot of energy and are a lot of work.  While I did do some work last week, productivity was not at an all time high.  I knew that was going to be the case and planned accordingly.

What has this to do with running a small business?

I personally think that this has everything to do with being a leader.  A leader has to build trust with his team.  She must know where they are and how fast they can go forward.  Even the highest capacity person is only going to go so fast when he is battling cancer, or divorce.

As the kids reminded me at 5:45 in the morning, this is a season of life.  I went through this particular season 30 years ago.  But I don’t think about it as much as I should.  I am glad that I am partially reminded of what my son and daughter in law go through every day for their kids.  I know it can be a grind getting up in the middle of the night for a sick child and then going to work the next day.  Yet our team members do just that.

Everyone that works for us is in a different season of life.   When we understand what season of life someone is in, it can help build a relationship.  Life is too short to just focus on the business.  It is infinitely more fun, and profitable, when we focus on the relationships.  By focusing on the relationships, we bring mutual purpose into our businesses and strengthen our businesses.

I want to point out that we are not lowering our standards or expectations.  I believe that I have the highest expectations of my team.  However, when they have to deal with a personal issue, I do not question them because they more than make up for any time away.  I fully trust them.  They know that I trust them and I think that has helped them build trust with me.  As that trust has developed over the years, the improvement in my business is very noticeable.  While there are situations that are not always ideal for me, they are making the best choices available.  When we pay attention to our team and understand where they are, we are making an investment in our business that will pay significant dividends in the short term and long term.

Questions to Consider

  1. What season of life are you in?
  2. Does it impact your energy or focus?
  3. Do you need to do something different than what you did 20 years ago?
  4. Think about your team.  Are they in a particularly challenging season?
  5. Is there something you can do to help?
  6. Think about your key customers in light of their season of life.

June 22, 2018 – Will You Survive?

Posted on | June 22, 2018 | No Comments

Main Idea:

Are you a planner or a reactor?  Do you do business in multiple states?  Do you know who your competitors are?  Do you know who the disruptors are in your business?  Do you have too much to do and not enough time to do it?  Are you sure of the answers to any of the above questions?

Expansion of the Idea:

Yesterday, the Supreme Court overruled 50 years of established business practice and opened the door for states to collect sales tax on internet sales.  Whether you agree with it or not, everyone saw this coming.  The business environment has significantly changed since this was last ruled on in the Quill case primarily due to the internet.  This ruling opens the door for nexus to be revisited and this could impact everyone, even the home businesses that occasionally sell something that is delivered to one customer in another state.  This will be a cash grab by poorly run states (almost all of them) and small business owners will face increased compliance costs.

Six months ago, Congress passed a major tax act that dramatically changed the tax structure for small and large businesses.  This was passed to make the United States more competitive internationally.  As a result of the tax law, every business needs to evaluate how they are structured to make the most of the new tax law.

The changes in nexus and income tax should get every leader’s attention.  If you throw in the internet, state regulations, proposed tariffs, full employment, lower barriers to entry in most businesses, and a whole host of additional factors, you end up with a very precarious business operating environment.  A lot of people might look at all of this and ask if they should continue.

Now that you are depressed, you also need to look at the bright side.  The economy is doing well.  With technology it is easier to get closer to your customers.  You have more information than you have ever had about your business, your industry and the economy.  Markets are easier to enter.  If you think about it, you could add another half dozen items to this list.  The point is that there will be winners and losers.  The key question is:

What will help insure that you are a winner?

Here is my top ten list for how to make sure you are winning.  This is not in any particular order except for number 1.  That is critical for all the other items.

  1. Make sure that the leader’s attitude is a winning attitude.
  2. Proactively manage the situation versus reacting to external events.
  3. Get close to your customers.
  4. Get close to your team.
  5. Provide tremendous value to your customers
  6. Know the critical success factors for your operations and how to measure them
  7. Clarify your marketing message and plan.
  8. Be innovative and creative.
  9. Know your purpose.
  10. Know what you won’t do.

The above list is not all inclusive. However, if you are doing these things, you will be on the right path.  We will discuss these in detail over the next few weeks.  Right now, I would encourage you to think about each of these and pick one that resonates.  If the sales tax issue scares you give us a call or send us an email to discuss it.  If you are concerned that you aren’t innovative or creative, discuss it with your team.  The point is to pick something and start working on it.  Now is a great time to build a business.

June 15, 2018 – Are You Focused On the Long-Term?

Posted on | June 15, 2018 | No Comments

Main Idea:

How do you evaluate the health of your business?  Is it determined by your cash flow or profitability?  Is it growing or declining?  How do you measure your investments in your business, including new people, services and divisions?

Expansion of the Idea:

I recently finished reading a book called “Go Long, Why Long-Term Thinking is Your Best Short-Term Strategy”.  It is a pretty good read and discusses several large companies’ decisions to jettison parts of their business to remake their future.  One example is CVS deciding to get rid of selling tobacco products in order to focus on being a more dedicated health services company.  They felt that selling tobacco was holding back their main business and they needed to do something about it.  I can’t determine if it was a core value decision or just a strategic decision.  No matter what your perspective, they were giving up $2 billion of revenue.  Yet, one year after they announced that they were getting rid of tobacco, their stock price went to $100 from $73 a year earlier.  Their business model changed and was stronger as a result of their decision.

Most people would look at this and say that is fine for large companies.  It doesn’t apply to small businesses.  Small business owners can’t afford to give up revenue.  They are fighting for their lives and need all of the business that they can get.  The irony is that most small business owners started their business with a long-term view.  They would never have started or acquired a new business if they were thinking short-term.  As they have achieved some level of success they tend to get comfortable and they don’t want to risk money on a long-term prospect.  As a result, they end up with good businesses not great businesses.

Short-term versus long-term thinking shows up in a lot of areas.  Some to be considered are:

  • New product development
  • Training of employees
  • Delegation of duties
  • Development of systems
  • Customer service policies
  • Intentionally cannibalizing your own sales with new developments at a lower price point
  • Taking time for planning or vacations
  • Saying no to the wrong types of customers and businesses
  • Succession planning
  • Physical plant or offices

The above list doesn’t scratch the surface of areas where small business owners can intentionally focus on the long term.  Changes in any of these areas when implemented might have a small short-term cost.  However, making investments in any of these areas has significant short and medium-term benefits when implemented properly.  When we do think about the long term and act on those thoughts, we end up running better businesses now.  Frequently, this turns into more cash flow currently and in the future.

Questions to consider:

  1. Are there areas of your business that need an investment of time or money?
  2. What are your metrics to evaluate your business?
  3. Are they short-term or long-term metrics?
  4. Review the list above.  Pick one item that you think you need to focus on.
  5. Discuss this with your team.

June 8, 2018 – What is the Cost of Your Core Values?

Posted on | June 8, 2018 | No Comments

Main Idea:

Does your company have core values?  Are the real core values the same as the stated core values?  Does your team know the company core values?  Do you know what the real core values are?  What happens when they are tested?  Which core values win?

Expansion of the Idea:

In the Tuesday morning Wall Street Journal, there was an interesting article on the departure of the founders of WhatsApp from Facebook.  WhatsApp is a simple, secure messaging system that Facebook bought for $22 billion dollars in 2014.  I have never used WhatsApp, but from what I read, one of the founders’ core values was privacy and security.  They had accumulated 450 million users but weren’t making a ton of money.  When Facebook bought them that was their opportunity to cash out.  However, Facebook’s core values don’t include privacy and security.  A clash was coming.  It took about 4 years but Facebook’s advertising model was introduced to WhatsApp’s business.  The founders could not handle it and finally left.

As I was reading the article, it was apparent that the founders’ core values were such that they could not handle the intrusion of Facebook type ads in their software and they finally left, leaving $1.3 billion on the table.  (It is a lot easier leaving that much money on the table when you have already collected over $20 billion.)  I had three observations on this:

  1. They had built a huge business with core values.
  2. They then sold out the business and their core values for a lot of money.
  3. They rediscovered their core values and left money on the table.

The main takeaway is that core values have a cost.  If they don’t have a cost then they are probably not a core value.  The cost may be money, time, lost opportunities or inconvenience.  But there is a cost.  The reason is that they are a boundary.  Your core values help control your decisions.  The irony is that only by sacrificing short term cost will you gain long term benefits.

If your core values include customer service, then you need to have systems to provide that service, even if it costs you money.  If one of your core values is teamwork, then you need to be prepared to get rid of a high performer who is not a good team player.

Core values are really beneficial for companies that are focused on long term results.  Companies that are strictly focused on short term frequently end up with a core value of making the most money that they can.  I am all for making the most money that you can.  However, when you focus on the short term, you risk losing long term customers or employees.  That is the cost of that core value.

Core values have a lot of power.  They can help build great businesses by inspiring employees and customers.  They can also shatter relationships when they are violated.  They are like a lot of other pieces of running a small business, they need attention.  However, when they are clear and visible in a business, the results can be extraordinary.

Questions to consider:

  1. Do you have stated core values?
  2. Are there unstated core values?
  3. Are there conflicts between numbers 1 and 2?
  4. Have you discussed core values with your team?

A very interesting book to read about implementing service standards (core values) is Be Our Guest, written by the Disney Institute.

June 1, 2018 – Do You Want to Be Great or Good?

Posted on | June 1, 2018 | No Comments

Main Idea:

Are you putting off selling your house because you dread the to-do list?  Would a real estate professional tell you that you had to replace the carpet, update the kitchen or redo the master bath?  Would you spend 2 weeks fixing the garage door, replacing the toilet that doesn’t flush, repainting the upstairs bedrooms and a whole host of things that you have just lived with?

Expansion of the Idea:

Most of us tend to put off things until we have to do them.  And sometimes as in the case of selling a home, we may not know what we need to fix until a professional tells us that something needs to be done before we put it on the market.  The problem with waiting until we sell is that we don’t get to enjoy the benefits of the repair or replacement.  We just live with the old.

The same is true of our businesses.  Most businesses are not organized and run with an exit plan.  This exit or succession plan could include being prepared to sell to an outsider or given to a family member.  It really doesn’t matter what your plans are.  It is important to have a plan and to organize the management of the business towards that plan.  It doesn’t matter if you are 60 or 30 years old.  You may have just started the business.   It is critical to think about where you want to go.

In his book, “The E-Myth Revisited”, Michael Gerber talks about creating businesses that really work.  In “Seven Habits of Highly Effective People” by Stephen Covey, one of the key concepts is to begin with the end in mind.  Both of these authors are really talking about the same problem that exists in small businesses.  We need to create businesses that have systems and processes that lead to the results we want.  But first we have to define what we want and where we want to go.

Just as we enlist a real estate professional to help with the sale of our houses, small business owners need outside input on getting their businesses working the way that they need them to work.  This could include systems, goal setting, strategic planning or reporting.  Every business has different needs.  The problem that small business owners have is that they don’t always know what they need.  Outside perspective really helps.

I have seen a number of situations where a small business owner says that they want to sell their business and the business is not ready for sale.  They can try to clean up some systems to provide a quick fix.  This will help but normally they will end up selling for significantly less than what the business is worth.  However, if they had begun the process 2 years ago or longer, they will end up realizing a lot more on the sale of the business.  The bonus is that normally when you improve how you manage your business, you will end up making a lot more money and have significantly fewer headaches before you sell.

As Jim Collins says, “Good is the enemy of Great.”  Because we have good companies, we don’t have great ones.  The question for you is:

Do you want to be great or good?

Questions to consider:

  1. Is my business good or great?
  2. Are there areas that need improvement?
  3. Do I have a robust reporting mechanism and management system?
  4. Who am I getting input from?
  5. Who should I involve in running the business?

May 11, 2018 – Are You Sherlock Holmes or Inspector Clouseau?

Posted on | May 11, 2018 | No Comments

Main Idea:

Are you a curious person?  Do you get answers to things and then move on?  What do you do when you lose a customer or a key employee?  Is your first instinct to figure out how to replace them?  Do you pay careful attention to details?

Expansion of the Idea:

I lost a client this week.  Okay, maybe it wasn’t a client since they never paid me.  And no, we had not done a significant amount of work.  However, I still feel I lost something valuable.  This client had hired us in December to convert his accounting record into a more streamlined system and then to provide accounting and tax services.  The problem with the client started when they deferred the start date.  Then they did it again. Subconsciously, I think they knew a month ago that they weren’t going to have us do the conversion.  They didn’t want to face the time commitment that they knew was needed during the conversion.  They didn’t see the long-term benefits.

When these situations occur, I try to digest the event, and then evaluate our systems and performance.  The goal is to figure out if we could have done something better.  On the front end, I probably could have spent more time understanding the client to get a better feel for his concerns and, most importantly, his commitment.  In this particular situation, I think that there was only one way I could have achieved a successful situation.  I could have asked the client for money in advance to make sure that he was committed to the process.  That might not have guaranteed success, but it would have improved the odds.

All of us have these types of situations in our businesses.  We have situations that look normal on the surface.  An employee leaves and gives a reasonable explanation of why they are leaving.  Two years later you find out that there was more to the story.  (And you are stuck with the wrong employee that stayed.)  Sometimes this can be figured out by asking more questions and being more observant.  We have to look for clues that tell us whether we have the whole story.

Digging into the story behind the story is critical in all aspects of our businesses.  To get started, here are some questions to consider:

  • Why do customers really buy from us?
  • Why do customers quit buying from us?
  • Will our products or services continue to attract customers in the future?
  • Why do employees work here?
  • What can I do to ensure that good employees stay?
  •  How do I know if an employee is doing their job well?
  • Are my systems working properly?
  • Can my systems be improved?
  • Is my business as profitable as it should be?
  • What are the key levers to improve the profitability of the business?
  • Is my business prepared for an emergency?

Curiosity may have killed the cat.  But, for small businesses, curiosity and observation will help you thrive.

April 27, 2018 – What Do You Need to Own?

Posted on | April 27, 2018 | No Comments

Main Idea:

Are you still having problems even when you are being proactive?  Are there some issues in your business that can completely derail your day, week, or year?  Is having a plan enough?

Expansion of the Idea:

On December 22, 2017, tax reform hit the United States.  As I started to learn what was included, I realized very quickly that this was potentially a game changer as far as my business was concerned.  Provisions in the bill changed advice I would give clients.  Clients were going to have a lot of questions.  More time would be spent explaining things to clients.  The tax simplification included in the bill possibly would significantly change my client base in the future.  (And not in a good way.)  It became very obvious to me that this was going to disrupt tax season.

Last week I wrote about being proactive, which is a critical quality for a small business owner or manager to have.  Being proactive solves so many issues for small businesses.  However, as I started thinking about the tax reform, proactivity wasn’t enough.  This situation required something beyond being proactive.  I needed to own it.  I needed to know what was in the tax reform.  I needed to be able to consult with clients in connection with their type of entity.  I needed to communicate with clients on the impact of the tax bill.  I needed to know what the impact of the tax reform will do to my client’s 2018 tax bills.  And I needed to do all of this before I got real busy with tax season.

This was a very large project because of the various moving parts of the tax law.  I did four main things to deal with the problem.

  1. I created my own template for analyzing the choice of entity.
  2. I created a template for explaining the tax changes at the personal level.
  3. I offered four workshops to explain the tax changes to business owners
  4. My team prepared tax projections for all individual clients in connection with preparing the 2017 tax returns, which we gave to the clients.

My point here is not to say I did a good job.  I messed up parts of this process.  The real point is that there are some things that we positively, absolutely have to own.  All of our businesses have some of these things. These are the areas of our business that are so critical that we need to be in control of them.  We cannot allow problems in these areas. They might include:

  • Our marketing plans
  • Product quality
  • Supply chain
  • Employee training
  • Customer service
  • Finances and financial decisions
  • Succession and retirement

At any time, you probably should not have more than one thing that you must own.  If everything is important then nothing is important.  I think most of us know in our gut that we need to focus on a particular area right now.  This area can make or break us in the short term or long term.  As a result of my firm owning the tax reform, we had significant interest in the workshops.  Clients appreciated the information and didn’t stress about it. And most importantly, most of our business clients took the time to do some planning.  That will help them and me as we go through this year.

Here are some possible next steps:

  1. What is one area that you need to own?
  2. Carefully define it.
  3. Brainstorm with your team ways to get ownership of the area.
  4. Go do it.

April 20, 2018 – Are You Proactive?

Posted on | April 20, 2018 | No Comments

Main Idea:

How quickly does the pace of life hit you?  Do you have enough time to get everything done that you are supposed to do?  Do you enjoy the daily list of surprises that show up at your office or email?

Expansion of the Idea:

Small business owners frequently complain about the demands on their time.  They are getting pulled in a dozen different directions.  And just when they think they got things under control, an emergency hits and they have to react.  Then a system breaks down and they need to fix it.  And a vendor doesn’t ship on time.  It seems that once something goes wrong, more problems start to surface.  Pretty soon you have become a victim and there is nothing you can do to take control.  The funny thing is that most business owners will tell you that there was nothing that they could have done about it.

Yet, there are some businesses that get hit with all of the same problems but they are ready for them.  They still may have some financial damages but it doesn’t cripple their operations.  Why?  Because they have proactively planned.  The leaders of those businesses embrace the term “Proactivity”.  They react before they need to.  They spend time in Quadrant II as defined by Stephen Covey.  This is where they do the important but not urgent stuff.

Proactivity manifests itself in different ways.  It might include:

  • Firing a client before the client becomes a problem.
  • Discontinuing a product line that is eventually going to have a major supply chain problem
  • Upgrading a computer system for the second time in three years because of changes in your industry
  • Spending a full day or two offsite with your key managers analyzing your business.
  • Having a difficult conversation with a key employee who isn’t working well with the team.
  • Meeting with key customers even when nothing is wrong
  • Taking a valued employee out to lunch just to celebrate their contributions.
  • Writing a handwritten note to a referral source.
  • Developing contingency plans in case your sales plan doesn’t work out.
  • Developing contingent operational plans in case your sales plan is working too well and your systems are stretched too thin.
  • Meeting with your insurance agent and analyzing the risks in your business.
  • Analyzing profitability of your customers or product lines

There are a million more ways to be proactive in our businesses.  And no one does everything possible.  However, if you can start thinking proactively, your actions will follow.  When you start acting proactively, you take control of situations quicker.  That speeds up your services and solutions to problems.   And that can make all the difference.

Here are some possible next steps:

  1. Pick a topic from the list above.
  2. Or, make a list of issues that you have had recently.
  3. Brainstorm with your team on ways to be more proactive.
  4. Put a plan in place.

March 16, 2018 – Do You Know Where You Want to Go?

Posted on | March 16, 2018 | No Comments

Main Idea:

Are you prepared for the year?  Is your team ready?  Do you have the skills necessary to win?  Do you have the balance and endurance to make it?  Do you have a good cash flow plan?

Expansion of the Idea:

This weekend is one of the most exciting weekends of the year for sports fans.  Of course, I am talking about the NCAA basketball tournament.  Even casual fans get excited because generally the games are very good, the big guys lose, and no one really knows who will win the tournament.  After one day there have been a couple of upsets.  I suspect that there will be a number of surprises today.  That is the beauty of the tournament.  Almost anyone can win a particular game.

As soon as the tournament is over, the coaches spend the next 7 months preparing to get their team ready for next season and then for the tournament.  It is a never-ending loop of vision casting, planning, recruiting, execution, feedback and refinement.  The better coaches have more developed teams of assistants that help them with this process.  No matter how well you do all of this, there is no guarantee that it will work.  However, you do consistently see certain teams at the elite levels so you know that they are doing something right.

How does this relate to your business?

Most small business owners don’t have a finish line for the year like the NCAA basketball tournament.  However, I think we can learn a lot from certain coaches and teams in the tournament.  Whenever I talk to small business owners and ask about goals, I get a lot of different answers.  Most are pretty vague.  Very few owners and managers have specific goals for the current year and for the next three years.  Contrast that with a college basketball coach.  If you ask them what their goal is they will clearly tell you that they want to win the NCAA tournament.  There is no ambiguity.  Their team understands the goal.  Everything that they do over the next 7 months will either lead them closer to the goal or move them away from it.

What would happen if small business owners had the same clarity with their goals?  Would it be easier to develop plans?  Would you be more careful in saying yes to something that could potentially take you away from your goal?  Would you use the NO word more often to get rid of unnecessary projects or systems?  Would you fire that customer that drains resources?  Would you watch your costs closer?  Would you invest in new technology or systems?

The questions and possibilities are endless.  When we are clear on what we want and where we want to go, we make much better decisions and end up with better results.

How clear are your goals?

Here are some possible next steps:

  1. Revisit (or develop) your goals.
  2. Clarify the goals.  Make them very specific.
  3. Discuss your team’s individual goals.
  4. Make sure that they are all in sync.

March 9, 2018 – How Is Your Energy Level?

Posted on | March 9, 2018 | No Comments

Main Idea:

Do you get tired?  Does every day seem like “Groundhog Day” where you are continuously doing the same thing and not achieving any results?  When you get behind at work, do you put your head down and work harder?  When was the last time you took two days off to work on your attitude and skills?

Expansion of the Idea:

Most businesses aren’t as extreme as public accounting.  We are busy all year but there is intense pressure for three months.  Everyone wants to know their financial results or whether they owe taxes.  There is a lot of demands on my time and that of my team.  Thirty years ago, I would have just put my head down and do as many tax returns and financial statements as I could, go home and repeat it all the next day.  While this may be admirable at one level, it was also probably not as productive as it should have been.  It is hard to focus intensely for 10 to 12 hours a day for three months straight.

Is there a better way?

For the last few years, I have been able to take a few days off at the end of February and attend the Global Leadership Summit point leaders’ meetings which are generally held somewhere warm.  The meetings are really educational opportunities where I can develop as a leader.  The other significant benefit is that this whole exercise energizes me.  I like learning new things and being around people who are much smarter than me.  By taking a few days off in the middle of a long push, I am able to be more focused for the last six weeks of tax season.  This allows me to work at a higher level and keeps my endurance up.

All of us have different demands and challenges.  Owning a small business can be a challenge.  Add on being a spouse, a parent and a myriad of other duties and you can be overwhelmed.  There is never enough time in the day to do everything that you should probably be working on.  That is why taking some time off is so counterintuitive.  By pulling back from the everyday grind, we actually can be more effective in doing our basic jobs.  Stephen Covey writes about it in his great book, Seven Habits of Highly Effective Leaders.  He calls it “Sharpening the Saw”.  This is time that you are doing activities that energize you.  Some examples are:

  • Going to an educational conference such as the Global Leadership Summit
  • Going with your spouse for a long weekend vacation but do it in the middle of the week.
  • Go golfing or to the zoo
  • Read a book that you are interested in, even if it doesn’t relate to your business.

Some business activities will energize you also.  Some people might get energized by spending time planning or doing a management retreat.  The key is that you intentionally block out time to do something that energizes you.  When you intentionally energize yourself, you will help energize your team and your business.  Businesses with energy are easy to spot.  They are the ones that are thriving.

Here are some questions to consider:

  1. What is your current energy level?
  2. Do you have some time scheduled for energy renewal?
  3. Is your company culture energetic or is it lethargic?
  4. Brainstorm with your team on how to improve.
« go backkeep looking »
  • About

    These weekly ideas are brought to you by FitzGerald & FitzGerald P.C. For more information about how to use these ideas with your small business contact Tim FitzGerald at trfitz@fitz-net.com.