July 25, 2008 - Do You Understand Your Business Environment?

Main Idea

Does the idea of strategic planning scare you?  Do you have to be able to see into the future?  Is it even necessary?  When was the last time you took some time to adequately plan for the future for your business?  When was the last time you planned for your family?  Do you know your partner’s goals?  What about your spouse or your team member’s goals?    

Expansion of Idea

My son, Mark, was able to go surfing this year and explained to me the whole concept of riptides.  This was not something that I had thought a lot about since they don’t generally occur in Ellisville Missouri.  Basically, they can be very beneficial if you find the riptide and ride the riptide out with your surfboard.  But many people drown in riptides because they try to swim into the face of the riptide instead of swimming parallel and getting out of the flow.  This is just a matter of planning and understanding the environment that you are in. 

The business world is the same.  Strategic planning is often viewed as worrying about the future.  In a few isolated instances with technology, that is correct.  However, for most of us strategic planning is understanding the world as it exists today.  Your business for the next five years is to a large extent already determined by inventions, patterns and world climate as it currently exists.  But most of us do not take the time to adequately assess our businesses, our lives and the world to put a plan in place that will help us not only survive but thrive in the future.  We are just trying to get back to the shoreline and safety. 

Area to Start

1. Talk to the key people in your business and your lives

2. Assess your business and personal goals

3. Ask yourself the key questions, “Do you have a good direction of where you are going and are you on track to get there?”

July 18, 2008 - Do You Have a Communication Problem?

Main Idea

Do you have problems with communication?  Is your business not going as well as you would like?  Has anyone told you that you are just not listening to them?  It is most likely that you answered yes to one of those questions.  All bosses, employees, partners, spouses, and parents have been told that they don’t listen sometime during the past year.  (Maybe in the last 24 hours!!!)

Expansion of Idea

The famous management consultant, Peter Drucker, is quoted as saying “When it’s obvious we’re not being heard, it’s time to listen.”  This is true for us in business or in our personal lives.  Too often, I think it is someone else’s problem because of a miscommunication, but in reality, it is my problem.  I wasn’t listening to what was really going on with a client, a coworker, my spouse, or my kids.  They will tell me about some problem and I will nod, say I am sorry and then jump into my problem or topic that I wanted to talk to them about.  I have found myself doing that.

I hope that I have gotten better but I still find that I have to suppress my desire to say something.   This is critical for helping our businesses and our lives.  Customers want to be heard.  Employees want to be heard.  When we can tap into those two pools of information, our businesses can thrive, even in the current economy.  Right now, there is huge opportunity because people do not take time to listen.  Go out and practice this.  If you need duct tape to keep your mouth shut, go buy some. 

Areas to Start to Apply the Art of Listening

1. Customers & Employees

2. Vendors & Service Providers

3. Spouses & Children

July 11, 2008 - What is Your Strategy?

Main Idea

Last week we celebrated the Fourth of July, which was the 232nd anniversary of our independence. That holiday is very relevant for most small business owners because they went into business looking for freedom. However, most small business owners aren’t free because they are held captive by their business because of either a lack of strategy, a lack of clarity about their strategy, or a lack of execution.

Expansion of Idea

How do we gain freedom? We need to be crystal clear about what our strategy is. Only then can our team can help us get to our destination. Do you know what your strategy is? If you aren’t clear, then you need to work on your clarity. One simple way is to start defining what you are not and then actually start a “Not To Do” list. After you do this for awhile you will start getting closer to your true strategy.

Several years ago, I eliminated almost all of the personal tax returns for clients who live in other states. Some of which had been with my firm for over 15 years. This was a hard decision, but I didn’t add as much value to those returns. They were unlikely to start businesses that we could work with and used very valuable time during tax season that I could spend more productively with my business clients.

There were some important lessons for my team as a result of this. They realized that we needed to spend more time with these business clients to help them achieve their goals. Taking this step also helped the team see that I was serious about doing more for the small business clients, allowing them to concentrate on a more narrow focus and not have to worry about 25 different states. Deciding what you are not going to do will free up valuable time and resources. 

Areas to Look At

1. Systems

2. Customer Selection

3. How you and your team spend time

4. Customer Profitability

5. Product Profitability

6. Employee Profitability

June 27, 2008 - Are You Accountable?

Main Idea

In your business who are you accountable to?  Do you have a board of directors, a management team, or a spouse that holds you accountable?  Is your bank the only one who holds you accountable?  

Expansion of Idea

Most small business owners are in business for themselves because they want freedom.  And freedom is very good.  However, most of us need some structure and deadlines to get things done.  Our spouse is generally the wrong person to hold us accountable in this area of our lives.   

One of the best business decisions that I have ever made was to start an advisory council that is composed of one of my team plus two outside directors.  After my dad died several years ago, there was no one who would hold me accountable.   I was making okay decisions but was not following through.  This council has helped improve my decisions, brought outside input, and held me accountable for follow through.  I am not quite as transparent as I would like to be, but I am a lot closer than before.   

How far you go with this depends a little on the size and complexity of your business.  However, almost everyone would benefit from increasing the level of accountability.  And there is one other huge benefit from doing this.  You are creating a culture at the top which will spread throughout your organization. 

Areas to Look At

1. Personal accountability

2. Peer accountability

3. Management team

4. Board of Directors

5. Overall culture of accountability

June 20, 2008 - Are You Measuring What You Need to Manage?

Main Idea

What do you measure in your business?  Do you measure things that you have to manage?  How often do you measure and manage parts of your business?  You probably know sales numbers and cash balances.  Do you know what your customer retention is?  What about employee engagement?  What is the average ticket price? 

Expansion of Idea

This is a critical area for all businesses.  The business needs to know the score. Each department and team member need to know their respective scores.  Are we moving forward or backwards?  It is hard to manage something without any measurements.  Why do people hate performance appraisals and evaluations?  They have not set clear goals and then do not measure performance through out the year.  At year end, it becomes a huge problem and nobody enjoys the process.  It is critical that you decide what is important and then set up a system to measure that.  The main thing that you need to consider is that what you measure is what you will get.  The act of measuring will change behaviors and could change the focus of the organization.  So, these measurements need to be closely aligned with the overall goals of the organization. 

Areas to Look At

1. Priorities and goals of the business

2. Customer profitability analysis

3. Customer acquisition and retention

4. Product and vendor profitability

5. Average sales per ticket or customer

6. Employee turnover and engagement

7. Key overall ratios and breakeven analysis

8. Feedback and accountability

June 13, 2008 - What Do You Need to Abandon?

Main Idea

Do you or your spouse do a spring cleaning at home?  Why?  As part of the spring cleaning, do you pitch stuff that has accumulated?  How did it accumulate?  Sometimes it just seems to show up, especially with kids.  When was the last time that you went through your business and pitched the stuff that was not working?  This could be customers, product lines, systems, and maybe employees.

Expansion of Idea

The idea of abandoning something such as customers seems like a stupid idea on the surface.  We are trying to grow our business and yet I am suggesting that maybe you should abandon something that is important to you.  What I am really saying is that we should see what is no longer productive.  If it can be fixed, that is fine.  But sometimes, it just needs to be let go.  I know I have clients that have actually cost me money in the past, not to mention a lot of wasted time.  And those customers were typically ones that were slow in paying bills and eventually will lead to bad debts.  I could have used that time to better serve my other clients, train employees, develop systems, take a vacation, etc.  I know that when I have severed relationships with customers in the past, it has not cost me money.  On the contrary, my business runs smoother and is more profitable. 

Areas to Look At

1. Customer profitability analysis

2. Priorities & Goals

3. Product and vendor profitability

4. Systems

5. Business plans

6. Changing business dynamics

7. Feedback and accountability

June 6, 2008 - Do You Have Balance In Your Life?

Main Idea

Do you have balance in your life?  Are you working too much?  What would your spouse or kids say to this question?  Or is this a problem for someone who works for you?  Can you improve your business and at the same time get better balance in your life?  What are you doing that you should not be doing? 

Expansion of Idea

Sometimes the lack of balance is a big red flag that things aren’t working right.  It is easy to see in others, such as our kids or family members.  However, it is a lot harder to see this in ourselves.  When we do not have balance, mistakes happen and we don’t spend as much time planning the future.   Busyness creates problems and masks the truly important things that we should be doing. 

Areas to Look At

1. How you spend time

2. Priorities

3. Goals

4. Unrealistic expectations

5. Staffing levels at work

6. Systems

7. Business plans

8. Changing business dynamics

9. Customer profitability analysis

10. Employee/manager training

11. Feedback and accountability