Join Forces: Don’t Fight the Irresistible
Do you want results . . . or are you satisfied with excuses?
The barrier to irresistible growth is not the unstoppable,
uncontrollable external change, but fixed (and frequently
unexamined) ideas of how to respond to those changes.
John Kenneth Galbraith, the late economist, noted that “The
enemy of the conventional wisdom is not ideas but the march
of events.” And the tide of expected future change in our
society is now rapid and breathtaking to most — whether we
consider irresistible forces like the advent of the
Knowledge Age (with knowledge doubling in many fields
within a few years, months, or even days), the electronic
improvements in communication choices (the potential number
of ways for you to receive or send a message will continue
to grow rapidly for many more years), shifts in work
activities (from routine fulfilling of standard tasks to
Peter Drucker’s knowledge work) and stability (as a result
of down-sizing and a “free agent” work force),
demographic-driven social changes (ever older populations
in the developed countries and ever younger ones everywhere
else), weather volatility (both in temperatures and
storms), the movements of currencies and markets, social
mores of the moment (fads get shorter and shorter), or
personal styles of the young (differentiating from older
teenagers, not just from adults).
There is no doubt that today the world has become much more
complicated and interconnected. For businesses,
globalization means that the number and distance of
customers, suppliers and competitors have grown
geometrically. Such interconnectedness also means that what
affects one can quickly spread and affect all, like the
rapid expansions of computer and human viruses. These
connections mean that economic and financial adjustments,
especially in prices and currency values, travel faster and
further than before. Your irresistible growth enterprise
must be agile in adapting to these changes. I believe that
making rapid and best use of sudden changes in powerful
conditions no one can control is the key to becoming an
irresistible growth enterprise.
Plan Out Your 3-Year Vision for Attracting Clients
In practice building (and getting clients) it seems to be
that most self-employed people just hope for the best. They
simply keep doing what they’ve been doing and don’t have a
strategy for creating the practice they’d be truly and
deeply happy with. This is a big mistake in my opinion.
I used to write down my goals each year, but it never
really worked for me. I just didn’t feel really excited
about my new goals. They didn’t seem to propel me in motion
and so I kind of viewed them as being useless. I never
really looked at them, probably because they seemed like
“shoulds” rather than “really-meaningful-wants.”
Then I came across the concept of creating 3-year visions
instead of just a list of goals for the upcoming year. This
visioning wasn’t just about business goals, but also
family, financial, spiritual, and relationship goals. It
became a “holistic” way of looking at what you wanted in
your life. All the pieces looked like they would work
together, but only because you were compelled to make it
all work together, which was the first time I’d done that
in such depth.
The coolest thing about visioning 3 years out came to me
after I started doing this regularly. I noticed that ONE
year goals were never too much of a stretch. They seemed
like timid goals, goals that didn’t really get me excited.
But having to create a vision of what 3 years down the line
would look like allowed me to REALLY think BIG.
5 Ways to Quickly Improve Cash Flow
Copyright (c) 2007 George Sierchio www.actionbusinesspartners.com
Below are 5 quick ways to slow down the leaks in the money leaving your company so the money coming in can catch up
Bill Promptly. Ever find yourself so busy building your business and making deadlines that you don’t get around to billing on a regular basis? You’re not alone. In a consulting business I once owned, I often got so busy that every once in a while I forgot to have the invoices sent out until I realized I wouldn’t have the money for the next payroll. Seems like a stupid mistake, but it’s something that happens.
If you don’t already have a system in place, start (or assign an employee to start) billing for projects on a regular basis. When taking on longer-term projects or clients, negotiate in advance for regular payments based on time or upon reaching milestones instead of allowing the amount due to build up until completion of a contract.
Create Incentives for Faster Payments. Small businesses can sometimes significantly cut the time spent waiting for payment by offering a discount for quick payment. I have used this technique when necessary and have also been asked by customers if I offered that type of discount.
Basically I offered discounts of 1% or 2% for payment within 10 days. It is good for your bottom line and good for the business’s cash flow, too. The real bonus is that the customer thinks you are doing them a favor whether they choose to make the early payment or not.
Avoid Slow Pay/No Pay Customers- The best way to avoid cash flow problems because of customers or businesses not paying you is to weed out those slow pays/no pays before they become clients. So if someone is about to become a significant client or customer, do your homework.
Ask for, and check out, credit references. Call other businesses that have had a relationship with the client. You might even pay for a credit check from an organization such as Experian or Dun & Bradstreet.
Consider Consolidating Your Loans. I know it’s often tough for small businesses to borrow money. It’s also surprising how some small businesses manage to get multiple loans.
If you have several loans related to your business, review the rates and terms on each one. You may be able to consolidate two or more loans into a lower-interest account and improve your cash flow.
Trim Your Inventory. If you can’t go to a “just-in-time” inventory management system like many manufacturers have adopted then how about “just-in-less-time”? Money spent on over stocked inventory is money that isn’t producing any interest or savings for you.
8 BIG Small Business Mistakes
Copyright (c) 2007 George Sierchio www.actionbusinesspartners.com
Here’s an interesting notion: Do you realize that there are mistakes you can make at various stages of your business’ growth that can be slowly killing it for months or even years if you don’t watch for them?
Well, these mistakes do exist and they are not just reserved for the rookie companies. Many working businesses, including those you might think are “successful” because they’ve been around for 10+ years, are often still making them… and are possibly losing a lot of money and/or wasting a lot of time in the process.
Although some of these big and sneaky mistakes seem aimed more at service type companies, they really do fit the bill for almost any type of industry. I’ve done my best with the listings below to give examples to prove it.
Underestimating Project/Service Time- This is a big one and it pertains to service companies as well as companies that sell a product. This is a service company’s bread and butter.
If you don’t estimate your time to perform each and every service in your repertoire, you will get burned and there is little you can do about it but bite the bullet and learn from it. The best way to estimate time is to do it once yourself or watch your best employee do the task and then throw in a little fudge factor on top of it. For product companies, time becomes an issue with logistics so be aware!
Not Knowing YOUR Company Numbers/Incorrectly Setting Prices- Notice I emphasized the word “your”. It’s a common mistake to use a competitor’s as your pricing gauge without actually knowing why they use those numbers. Think about the nightmare you will get yourself into if you take a competitor’s price, cut it by 10% and then start selling.
What if the competition has a bad pricing structure and is barely making money or even losing money?!?! What if your costs are more than theirs?!?! You can use competitor as a starting point but you can’t base your whole strategy on it.
Different industries have their own variables as far as costs go and you need to be aware of them for your project or product pricing. What you pay for a product you are going to sell is not the only cost to have in your head when you are pricing products. How much your labor and materials cost for a service is only a piece of an hourly rate. Employees cost more than just salary and not every employee is part of your labor cost.
Every company has insurance to pay for. There are tons of overhead expenditures that need to be part of your price. Oh, by the way, the big one that many people forget about in their price is the quality factor. What you include as “standard services” or “standard product features” as well as job site etiquette or in store service or warranties all need to go into your pricing. I’ll get to more on why in the next segment.
Not Charging for All of Your Time & Costs- This seems like a stupid statement to some but I bet most business owners will admit that they have given away a little too much of the farm at times. Hey, there is nothing wrong with giving a little extra here and there to show you care. But either way, that’s not what I’m talking about here.
What concerns me are those that put a lot of quality into their work or products or stores and do not cover the cost for it. As an example, say you run a service company and your competitors don’t do a certain standard service that you do. You can’t just undercut their price to steal a job; you need to have that cost covered in your rate and advertise the fact that it comes with the price upfront. Stores undermine themselves, for example, when they put more people on the floor for customer service but don’t charge for it.
These things cost you money and when your competitors don’t do them it costs them less money. Put out better service and then under price them, and your competition just has to wait a little bit for you to fall on your face so they can swoop back in.
As a business owner you need to believe that you are providing your clients worthwhile wares that deserve to be paid for. If you get the chance to explain why your prices are higher, then take that opportunity and do it. If they don’t like the fact that you include things that others charge extra for later or that you treat them better, then they are most likely completely price shoppers. You don’t want them as regular customers anyway. Trust me.
Not Getting Paid Fast Enough- That’s right, the old cash flow issue. As long as you are actually making enough money to pay the bills, this problem can be solved, prevented or at least made to be not as bad as it could be. Here’s the deal:
First off all, bill customers very promptly. It is very common for a small business to not have the procedures or systems in place to get invoices generated and out the door in a timely fashion (see the next segment for more).
Again, this would seem unlikely since that’s the reason why we are doing the work- to get paid. But it is very easy for the people responsible for getting this info to the billing people to be too busy to get it there or not have enough organization to give it to them the right way.
The second part to slowing down or stopping a regular cash flow crunch is to make the quickest payment deals possible with customers and the slowest possible with vendors and employees. If there is any way not to pay employees any more than twice a month, you better do it. Contractors always have an issue with this.
If you must pay weekly, then tell them before they are hired that they will be getting the first week held back, essentially buying you a week. It will help, I promise.
Part three involves credit. If your company can get a credit card, then get it. This allows for certain important things to be bought (that you can afford) that might come up during a cash flow crunch.
Better yet, especially if you have no choice but to deal with 45+ day customer payments, do your best to get a company line of credit. This is a must if you plan on selling to the government or doing commercial service work. These clients often have 60 to 90 day wait periods.
Failure to Have Solid Systems and Procedures in Place- Too many procedures (known as “red tape”) is the reason why many people start their own business in the first place. Unfortunately, having no procedures and systems in place at all is not an alternative. Depending on the type of industry, business owners must come to a happy medium or chaos and the unknown will ensue.
Some basic examples where procedures or systems are needed include billing, collections, payroll, hr (interviewing, hiring, vacations, benefits, job responsibilities, etc.), manufacturing, operating equipment, maintaining equipment, inventory, sales calls/visits and logistics to name a few.
Even a one person show needs to have some admin procedures in place. This will make it easier to hire temps and subcontractors and control what they are doing for you. Without at least a watered down version of a system or procedure to do everyday work, you will be to blame for causing many major headaches as your company grows.
I can’t emphasize how important this is for when you bring on new employees. I’m sure you heard this before, but I am also a big proponent of having an employee handbook even for one employee. It’s amazing the trouble people can cause business owners just because they allow you to pay them.
Spending Advertising Money Just to Say You Advertise- I would almost rather see my clients not advertise then to spend without regard to tracking the results. There is no point in a marketing campaign if you do not put things in place that allow you to measure how well the plan is working.
The other wasteful part of marketing that many people make the mistake of doing, is not tracking their previously successful campaigns. Why some people think that just because a $400 dollar a month ad worked once very well for one busy season, that it will automatically work every year after that is beyond me.
Spreading Yourself Too Thin- This is a classic mistake made by every entrepreneur. The key is to figure out when you are at that “wearing too many hats” point and start getting some help. The solution here is to know your strengths and to be able see when you are not performing the duties that demand these skills.
If you are the best sales person on the company, you can’t get caught up in day-to-day operations. If you do, sales will slip and eventually you won’t have any operations to worry about. Think about this to help you figure out if you are spread too thin: Did you really go into business for yourself to work 80+ hours a week?
Not Getting Help Soon Enough- Set goals to know when to hire people to take over where you are light on knowledge. Not getting help or waiting too long can kill a company. Most people who start a business do it because they are good at the technical end or the sales end.
If you know the best way to make a widget, then your strength is in production and that is where your time should be spent. Hire an outside company or consultant to take care of the sales and marketing and then hire inside when you can afford someone full time. Don’t be something to your company that you are not. It will only hold you back.
The three big issues people like to tackle themselves but usually are least knowledgeable about are legal issues, accounting/bookkeeping issues and daily operations issues. The odds are that these three things are your weakest link so if you don’t have a partner that has the background for these subjects, then be prepared to get help as soon as possible. It’s preferable that you do this before you start a business.
Although looking for these problems at any time is a good idea, the end of a year or season is an excellent business interval to make sure you are not making these errors. Take the time, or make the time, to fix these problems. If you don’t know how to reverse the problems, then get some help. If you really don’t have enough time to either figure out if you have these issues or know they are there and can’t break away long enough to do it right, then get some help.
Tapping Into the Power of a Mastermind Group
You’ve probably heard the old expression, the whole is
greater than the sum of its parts. This concept proves
itself over and over with the exponential power of the
Mastermind Group. The idea of a mastermind collective was
formally coined in Napoleon Hill’s classic book, “Think and
Grow Rich.” Hill wrote, “No two minds ever come together
without thereby creating a third, invisible intangible
force, which may be likened to a third mind.”
Today, more and more people are harnessing the power of the
Mastermind Group to help them think bigger. This concept
can be applied to business, social causes, politics,
relationships, health, and artistic endeavors. Combining
the abilities of multiple individuals to solve problems,
brainstorm ideas, seek solutions, and develop strategies
creates greater results than going it alone as a “lone
ranger.”
The size of a Mastermind can range from two to eight
members. Any more than that can get chaotic. The group can
meet in person if they are in a similar geographic
location. Or if the Masterminders live in different states
or countries, they can also meet via a bridge line. The
members of the group make a commitment to show up regularly
and to contribute to each others’ success.
The types of groups can be as varied as your imagination.
However, compatibility is vital to the success of the
group. Members should have similar interests and/or should
be at a similar “level.” For example, participants can be
in a similar area of business like realtors or life
coaches. Or the group’s members can have a common goal like
writing a book, building an Internet subscriber list, or
losing 30 pounds.
Overcome Stalled Mind-Sets That Keep You from Accomplishing 20 Times More
A mind-set is simply the way we organize our thinking,
whether consciously or unconsciously. Most of the time, we
act based on unconscious mind-sets that simply repeat what
we’ve done most recently. In a new situation where our
conscious mind is engaged, we may also repeat past behavior
because when faced with a new choice, we often search
through our alternatives in a predictable pattern that
includes some perspectives while ignoring many others.
Organizations develop their mind-sets through rules,
processes, and rituals, as well as through the mind-sets of
those who work in them. The fewer people who enter an
organization, the more likely the organizational mind-set
is to become fixed.
The Individual Stall Mind-Set
Are you awake, aware of, and working on what you want to
accomplish … or are you usually daydreaming? It’s easy to
spend most of your day with your conscious mind turned off
while you endure your commute, struggle to stay awake
during meetings, listen to long-winded people on the
telephone, exercise, perform routine chores, and watch
television. The focus for your whole mind starts in the
conscious part of your brain. Keep that conscious focus
turned off, and the whole brain runs on automatic
instructions.
Overcoming that lethargy is pretty easy. Take these steps:
1. Create written goals for what’s important.
2. Read those goals aloud twice a day.
3. Write out plans to help you accomplish your goals.
4. Increase the number of hours a day when you are
consciously working on those goals.
5. Tell others what you want to accomplish and ask for
their help.
6. Check your progress daily against your goals to identify
where you need to shift to doing something more effective.
7. Get help in looking for ways to improve in those lagging
areas.
8. Put improvements in place as soon as you can.
Beta Testing, Anyone? 10 Potent Strategies for Achieving Success
Successful beta testing starts even before your system is
born! Does that idea sound strange? It’s not really that
odd when you think that beta testing is meant to involve a
methodical prove-in of a carefully designed system, such as
an electronic device, Web site, or automated tool. It’s not
meant to be a hit-or-miss,
cross-your-fingers-and-hope-everything’s-OK Band-Aid that
you can apply at the last minute.
We’ve all seen examples of software programs — even from
well-known, respectable software companies — that arrive
on our desktops barely breathing. They seem to be full of
bugs, and thereby cause us more grief than they help us
carry out work. Or we try to use a Web site that looks
great, but we can’t get from the shopping cart to the order
page. Or we buy a new widget, yet even using the
instruction booklet, we can’t jump from the main menu to
the critical functions the way we’re supposed to.
Are you anxious to catapult your business into the ranks of
companies that frustrate their customers this way?
New Year’s Resolutions, “The Word” and a Small Business Retreat
Do you spend so much time working in your business that you
never work on your business?
The corporate world knows the value of taking time out for
a step back, taking time to assess what is going right,
what is going wrong and what just plain isn’t going
anywhere. As a business owner (or as one who dreams of
owning a business), it is critical to take time out to plan
for the upcoming time period, be it a year, or even a
long-term goal. Otherwise, how can you get where you want
to be if you don’t know where that is? I usually plan two
business retreats per year:
~ One in late summer — it’s late enough in the current
year to have a good idea of how the year is progressing and
yet still have enough time to make changes if necessary.
