Management vs Leadership Part II – Clarity to Perform

Part II
Click for Part I

In the previous installment, we discussed how leadership is one of the biggest problems in business.  Not because leadership is bad but because there is a lack of management leading to the leadership.  In reality, most people are just lazy managers.  They just give someone a task but they don’t give them a time frame or a schedule or plan to get it done by.  Then we complain that they don’t get it done on time and correctly.

So let’s take a look at how we can become good managers as well as how we can operate as good leaders.

There are 4 keys to a good manager are…

• Creating clarity on how to perform  their job
• Creating clarity on what needs to be achieved
• Asking Questions
• Provide ongoing Training

In this article, we are going to focus on the first key.  Does your team know how to perform their job well?  Do they actually know what their job is?  If you were to ask your top 10 employees to write a list of what they think their job is and at the same time you are writing you list of what you think their job is, do you think the list would be the same?

Most employees don’t actually know what is specifically required of them.  Their job description is too vague and there is no reality about what they are actually doing and why they are doing it.  Or if they know what to do, do they know what the actual outcome is that you are expecting? 

Management starts with a really good job description or positional agreement. 

A good manager will be sure his staff knows…

·        What they are responsible for

·        Who they are accountable to

·        How to do it

·        Why they are supposed to do it.

·        What is the expected outcome when they do their job well.

Give your people checklists and systems
This will allow them to be competent in what they are job doing so they deliver the actual results that you expect. 

Good management starts when people know what their job is, what they’re expected to do, and at what level they’re expected to do it (performance standard), the time frame it should be done in.  They should also be told why they are doing it.

When you give someone a job and you don’t agree on a time frame of when they need to finish that job that’s just lazy management.  Some people call it micromanaging.  Yes!  Some employees need micro managing until you built their competence and their ability to do it.  You don’t have to do it forever but this is part of the coaching, training, the managing, and mentoring of these people so they can actually become good and productive at their job.

Next, I will continue to be covering the 4 keys of a good manager.  The 2^nd key we will be discussing how to create clarity on what needs to be achieved.

Management vs. Leadership Part I - Are you a lazy manager?

Leadership is one of the biggest problems in business. Not because leadership is bad but because there is a lack of management leading to the leadership. I would like to share with you what I’ve learned from my business mentor and ActionCOACH founder Brad Sugars about the differences between management and leadership. Many of us are trying to find the golden goose of leadership. We’ve read the books; we’ve been to the seminars, we’ve watched the latest TEDtalk on leadership. If you go to the bookstore or go on Amazon, there are a massive amount of books on leadership but there are very few books on management. If we think about it, the last bestselling book on management was the One Minute Manager from the late 70s or early 80s. Let’s take a look and define what the differences are between leadership and management. Management is about creating competent and productive people. They have a level of competence, they know what they are doing and they know how they’re doing their jobs. If a company has a group of people that don’t know what they are doing, there’s a lack of competency or productivity going on in the organization, that’s a management problem or issue. Let’s flip to the other side of the coin and take look at leadership. Leadership is about creating passionate and focused people. If the people in the organization lack passion and motivation to do their job and they’re not focused on what they need to be doing, that’s a leadership issue. The challenge that I see most businesses have today is that the business might have been built very well from a leadership perspective, but because of the lack of management, we got people that are not good at their jobs, they’re not that productive. They’re passionate and excited but we’re not getting the results that we want. So how do we get the results that we want to get in our business? This is not brain surgery. It’s not actually that complex. What I have seen throughout my career if someone gets promoted to be a manager in a company they don’t get much management training. In most cases, they got promoted because it was assumed that they had those skills. One of the biggest challenges they face is the transition from being “one of the guys” to being the boss. In this day and age, the lack of management training is extortionately high. Now, why is that? Simply, it’s because businesses don’t give management training to their staff. Maybe management got a bad rap somewhere in the 90s or early 2000s. The mantra was that you don’t need to manage your people you need to lead them. It was like leadership was saying that management was a bad thing. To get the job done, we need competent and productive people if we want to get the job done in any business. We do need to learn management skills; we do need to understand what those management skills are and how they work. Let’s now focus on both leadership and management. Management is where we start because if we see negative behaviors in an organization normally it’s a lack of management. When there is a lack of management I see that they’re in denial of how competent they are. They think that they are better than they are. There’s a lack of responsibility, people are blaming others and there is no team cohesiveness. A lot of these issues are around lack of management. In reality, most people are just lazy managers. There I said it. They give someone a task but they don’t give them a timeframe or a schedule or plan to get it done by. Do you have a system to manage your people and tasks or do you just wing it? As a friend once told me winging it is not a strategy. Over the next few installments, I will be covering the 4 key of a good manager that you need to be focused on.

Steve Goranson has owned and operated the North Florida office of ActionCOACH since 2004. He is also a certified team engagement specialist and a social media educator with Luv4 Marketing.  Contact Steve to discuss how he can help your business in the areas of Team Engagement, sales & marketing, and operational efficiency.

4 Tips to a Successful Social Media Strategy

By now most of us have figured out that social media is not a fad but a fun mental shift in the way we communicate. Buying mailing lists to target potential prospects will soon be a thing of the past.

Your social media contacts and their connections have now become your interactive database. Interactive because now you can engage in 2 way communication with the people you are connected to.

But remember, people don’t use social media because they want to be sold something. Hector Cisneros discusses in his blog Six Cardinal Rules for Success in Social Media Marketing that there are 4 reasons why people use social media. They want useful information, interesting facts, to be entertained, and to connect with other.

In building any relationship you need to understand the other person’s needs and wants. Continuing to ask friends for favors and giving nothing in return is a quick way to lose friends.  With social media the BNI motto of givers gain really holds true.

If you are trying to build your business through social media there are 4 basic rules to follow in order to successfully communicate with your new interactive database.

1. Be Human – As Jeffery Gitomer says, people buy from people they like. Don’t join a LinkedIn group discussion and start spamming the discussion about your next seminar. It would me like walking up to a group of people in conversation and you start selling them on your business. That’s plain rude.
   
2. Add Value – Sales is about building relationships. What can you do to provide value to your social media contacts and their connections? Provide interesting facts or useful information that your connections are looking for.
   
3. Interact – Create a dialog to build trusts and a relationship with your contacts. What’s nice is that with social media, your conversation can go viral reaching out to your contacts connections that you are not currently connected to.
   
4. Promote – Don’t hard sell. Use soft promotion to communicate how you can help your contacts get what they want. Promote your business in a way that you provide value to your contacts.

Most importantly, remember tip #1 Be Human. You communicating with a live human being and not a computer or a smart phone.

Is your company’s marketing awesome or lame? Take our quick marketing test to see how effective your current marketing efforts are.  CLICK HERE to take the FREE marketing test

4 Reasons You Can Be The Next Billionaire

Years ago, when ActionCOACH founder Brad Sugars was starting out in business and was still struggling to make ends meet, he thought becoming a millionaire was the ultimate financial goal. His perception changed, however, when he became a millionaire. It was then he discovered being a millionaire just isn’t rich enough. Here is how you can become a millionaire, then a deca-millionaire, then a centa-millionaire and then the ultimate- a billionaire…

1 . Education

Knowledge is the new money… In the business world, employees are taught to acquire higher and higher levels of education, to specialize, work hard, and make enough income to pay taxes, the mortgage, and then to exist until retirement. However, successful entrepreneurs that have come to make billions are generalists. Entrepreneurs think a lot and work a little, they take profits, write expenses off before paying taxes and live the life of their dreams. His book Billion in Training can teach you everything you need to know to get the type of knowledge to become the next billionaire.

2. Mindset 

It’s easy to choose success over failure. It’s easy to choose riches over poverty. In fact, it’s easy to choose any dream over it’s dreary counterpart. What’s hard to do is to re-choose that same goal, that same dream, that same level of success every single day, every single hour, until it becomes a reality. You see, while it’s easy to choose success and riches, it’s not easy to carry through with your thoughts every hour of every day. Successful people choose to do what unsuccessful people don’t do.

3. Opportunity

Once you get the education and change your mindset to what you really want you’ll begin to see opportunity around you. You will be better versed in making the right decisions and accepting only the opportunities that are for your best interest. There are so many opportunities out there, but what is so important is to know which opportunities are the right opportunities for you.4. ActionJust like a baby, you must first learn to crawl to walk and walk to run. Deciding what you want and taking the necessary steps to make your financials dreams a reality, can be a difficult decision to make. Once you’ve gone through the right education, you have the right mindset, get in-front of all the right opportunities… the only other thing to do next is to take Action.

Take Action NOW… To get more great strategies and philosophies on buying, building and selling businesses to leverage you as the next billionaire. Brad will be in Jacksonville FL on December 8th and Tampa on December 10th; here is your opportunity to attend this FREE Seminar, The Billionaire Tour, where I help you become the next billionaire… www.thebillionairetour.com 

4 Traps To Avoid When Selling Your Company

Business owners have been known to refer to due diligence as "the entrepreneur's proctology exam."

It's a crude analogy but a good representation of what it feels like when a stranger pokes, prods, and looks inside every inch of your business.

Most professional acquirers will have a checklist of questions they need answered if they’re considering buying your company. They'll want answers to questions like:

• When does your lease expire and what are the terms?
• Do you have consistent, signed, up-to-date contracts with your customers and employees?
• Are your ideas, products and processes protected by patent or trademark?
• What kind of technology do you use, and are your software licenses up to date?
• What are the loan covenants on your credit agreements?
•  How are your receivables? Do you have any late payers or deadbeat customers?
•  Does your business require a license to operate, and if so, is your paperwork in order?
• Do you have any litigation pending?

In addition to these objective questions, they'll also try to get a subjective sense of your business. In particular, they will try to determine just how integral you are personally to the success of your business. 

Subjectively assessing how dependent the business is on you requires the buyer to do some investigative work. It's more art than science and often requires a potential buyer to use a number of tricks of the trade, such as: 

Trick #1: Juggling calendars

By asking to make a last-minute change to your meeting time, an acquirer gets clues as to how involved you are personally in serving customers.

If you can't accommodate the change request, the acquirer may probe to find out why and try to determine what part of the business is so dependent on you that you have to be there.

Trick #2: Checking to see if your business is vision impaired

An acquirer may ask you to explain your vision for the business, which is a question you should be well prepared to answer. However, he or she may ask the same question of your employees and key managers. If your staff members offer inconsistent answers, the acquirer may take it as a sign that the future of the business is in your head.

Trick #3: Asking your customers why they do business with you

A potential acquirer may ask to talk to some of your customers. He or she will expect you to select your most passionate and loyal customers and, therefore, will expect to hear good things. However, the customers may be asked a question like 'Why do you do business with these guys?' The acquirer is trying to figure out where your customers' loyalties lie. If your customers answer by describing the benefits of your product, service or company in general, that's good. If they respond by explaining how much they like you personally, that's bad.

Trick #4: Mystery shopping

Acquirers often conduct their first bit of research behind your back before you even know they are interested in buying your business. They may pose as a customer, visit your website, or come into your company to understand what it feels like to be one of your customers.

Make sure the experience your company offers a stranger is tight and consistent, and try to avoid personally being involved in finding or serving brand-new customers. If any potential acquirers see you personally as the key to wooing new customers, they'll be concerned business will dry up when you leave.

In creating a more valuable business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business that if tweaked will increase the value of your business.

By completing the Business Health Check, you will receive a Free Report based on your answers, prepared by our team of highly skilled Business Coaches.  CLICK HERE to take your Business Health Check Now

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Business Advice: Become an Agent of Change

How do you affect change in your life and in the life of others?  By following ActionCOACH's simple formula of change you can truly become an agent of change in your life as well as the life of others and take your business to the next level.





Check out this short video where I discuss how to become an agent of change.

In business, it is always the little things that get the big results. Our Business Health Check will give you invaluable insights into the many areas of your business. By completing the Business Health Check, you will receive a Free Report based on your answers. CLICK HERE to take your Business Health Check

Business Advice: 1 Hidden Thing That Drives Your Company’s Value

At ActionCOACH our definition of a successful business is a commercial, profitable enterprise, that works without the business owner.  If the business can't work without the business owner, it's broke. You don't own a business, you own a job.  And... no one wants to buy a job or at least not pay a lot for it.

The main advantage of having the business being able to work without you doing the "technical" work in the business, is that you are now increasing the value of the business and at the same time making it more attractive to a potential buyer in the future.

In our previous post we discussed how the importance of the business owner not selling as a way to increase the value of the business.  In this post well focus on another area to increase the value of your business.

You already know that your company’s revenue and profits play a big role in how much your business is worth.  Do you also know the role cash flow plays in your valuation?

Cash vs. Profits

Cash flow is different than profits in that it measures the cash coming in and out of your business rather than an accounting interpretation of your profit and loss. For example, if you charge $10,000 upfront for a service that takes you three months to deliver, you recognize $3,333 of revenue per month on your profit and loss statement for each of the three months it takes you to deliver the work.

But since you charged upfront, you get all $10,000 of cash on the day your customer decides to buy. This positive cash flow cycle improves your company’s valuation because when it comes time to sell your business, the buyer will have to write two checks: one to you, the owner, and a second to your company to fund its working capital – the cash your company needs to fund its immediate obligations like payroll, rent, etc.

The trick is that both checks are drawn from the same bank account. Therefore, the less the acquirer has to inject into your business to fund its working capital, the more money it has to pay you for your company.

The inverse is also true.

If your company is a cash suck, an acquirer is going to calculate that she needs to inject a lot of working capital into your business on closing day, which will deplete her resources and lessen the check she writes to you.

How To Improve Your Cash Flow

There are many ways to improve your cash flow – and therefore, the value of your business. One often overlooked tactic is to spend less on the machines your company needs to operate.

In the restaurant business, for example, there is an often repeated truism that it takes three bankruptcies at a single location before any restaurant can make money. The first owner of the restaurant walks in and – with all of the typical optimism of a new entrepreneur – pays cash for a brand new commercial kitchen complete with fancy stove, commercial grade walk-in coolers, etc., as well as all new dishware, pots and pans, thus depleting his cash reserves before opening night. Within a year, the restaurant owner runs out of cash and declares bankruptcy.

Then along comes a second entrepreneur who decides to set up her restaurant at the same location and buys all of the shiny new equipment from owner number one’s creditors for 70 cents on the dollar, figuring she has made a wonderful deal. But the outlay of cash is still too great and she too is out of business within a year.

It’s not until the third owner comes along that the location actually survives. He saves his cash by buying all of the equipment off the second owner for 10 cents on the dollar.  

The moral of the story is: find a way to reduce the cash you spend on equipment, however you can. Can you buy your gear used on sites like eBay? Can you share a very expensive piece of machinery with another non-competitive business? Can you rent instead of buying?  In Jacksonville a great place to find used and new restaurant is www.a1restsupply.com.

Profits are an important factor in your company’s value but so too is the cash your company generates.  We call this phenomenon The Valuation Teeter Totter and it is one of the eight key drivers of the value of your company. Curious to see how you’re performing on all eight drivers? Get your Sellability Score here: www.actioncoachsellabilityscore.com 

10 Things That Make Your Business More Valuable Than That of Your Industry Peers

The value of your company is partly determined by your industry. For example, cloud-based software companies are generally worth a lot more than printing companies these days.

However, when we analyze businesses in the same industry, we still see major variations in valuation. So we dug through the data available to us from our partners at The Sellability Score and we found 10 things that will make your company more valuable than its industry peer group.

1. Recurring Revenue

The more revenue you have from automatically recurring contracts or subscriptions, the more valuable your business will be to a buyer. Even if subscriptions are not the norm in your industry, if you can find some form of recurring revenue it will make your company much more valuable than those of your competitors.

2. Something Different

Buyers buy what they cannot easily replicate on their own, which means companies with a unique product or service that is difficult for a competitor to knock off are more valuable than a company that sells the same commodity as everyone else in their industry.

3. Growth

Acquirers looking to fuel their top line revenue growth through acquisition will pay a premium for your business if it is growing much faster than your industry overall.

4. Caché

Tired old companies often try to buy sex appeal through the acquisition of a trendy young company in their industry.  If you are the darling of your industry trade media, expect to get a premium acquisition offer.  

5. Location

If you have a great location with natural physical characteristics that are difficult to replicate (imagine an oceanfront restaurant on a strip of beach where the city has stopped granting new licenses to operate), you’ll have buyers who understand your industry interested in your location as well as your business.

6. Diversity

Acquirers pay a premium for companies that naturally hedge the loss of a single customer. Ensure no customer amounts to more than 10 percent of your revenue and your company will be more valuable than an industry peer with just a few big customers.

7. Predictability

If you’ve mastered a way to win customers and documented your sales funnel with a predictable set of conversion rates, your secret customer-acquiring formula will make your business more valuable to an acquirer than an industry peer who doesn’t have a clue where their next customer will come from.

8. Clean Books

Companies that invest in audited statements have financials that are generally viewed by acquirers as more trustworthy and therefore worth more. You may want to get your books reviewed professionally each year even if audited statements are not the norm in your industry.

9. A 2iC

Companies with a second-in-command who has agreed to stay on post sale are more valuable than businesses where all the power and knowledge are in the hands of the owner.

10. Happy Customers

Being able to objectively demonstrate that your customers are happy and intend to re-purchase in the future will make your business more valuable than an industry peer that does not have a means of tracking customer satisfaction.

Like a rising tide that lifts all boats, your industry typically defines a range of multiples within which your business is likely to sell for; but whether you fall at the bottom or the top of the range comes down to factors that have nothing to do with what you do, but instead, how you do it.

Business Advice: How to Network in the 21st Century

Because of today’s economy you find entrepreneurs trying to find new and innovative ways to grow and build their businesses.

A lot of people have found that going back to the basics is working.  One of the basic marketing strategies a lot of people are using today is networking.

If you look hard enough in any city (and probably not that hard), you can find an opportunity to network with other business professionals on a daily basis.

What I hate most about going to networking events is that most of the people are there trying to find their next sale, instead of attempting to build relationships.

At one of our ActionCOACH International Conferences, I was fortunate to meet and hear from 2 of the world’s best networkers; Dr. Ivan Misner founder of BNI and Michael Port founder of the Think Big Revolution and the author of Book Yourself Solid.  They each had a unique perspective on networking.

In a nutshell Dr. Misner’s formula for networking is this:  Visibility + Credibility = Profitability.

1. Visibility:  People must know you and what you do
2. Credibility: People know who you are and what you do
3. Profitability:  People are willing to refer to you

A lot of time people get out there and are visible but they forget to build credibility.  If you are always in “take” mode, then people will begin to avoid you instead of giving to you.  But once you go into “give” mode you will find that people will soon in turn want to do likewise and give back to you.

Dr. Misner also added that there are 4 basic streams of networking…

1. Casual Networks – ie., Chamber of Commerce
2. Knowledge Networks – ie, Professional Associations
3. Strong Networks – ie, BNI, Meetup Groups,
4. On-line Networks – LinkedIn, Facebook, Twitter, Google+

To be successful at networking you must participate in 3 of the 4 streams in a consistent manner.

Now Michael Port’s system is similar but with a different twist.  His approach to networking is to build a deeper relationship with your current network.  His system is about targeting people you want to get into your network and then create a plan to build a deeper relationship.   He creates a “Red Velvet Policy”.  It’s a filtration system that attracts prospects & clients that energize and inspire you and most importantly allow you to do your best work.  It’s based on values not on circumstance.

Once you determine the customer values that are most important to you, (success minded, education, strive for excellence, collaborator, commitment, & family are some of mine) you begin to identify prospects that share your values to bring them into your network and begin to build a relationship.

There are 2 basic groups you want to connect with.  The 1st is already in your network and you want to build a deeper relationship with and the 2nd group people you don’t know and want to get to know better.

Building a deeper relationship with those in your network is what Michael Port considers networking.

There are 3 daily actions you need to do to build that relationship.

1. Share your network – introduce 2 people in your network
2. Share your knowledge – share 2 articles each day that are of interest to the people you are sending them to
3. Share your passion – send a card (not an email) to someone every day.

The first step to connect to the 2nd group of people you don’t know, but want to get to know is to create a list of 20.  Each day take the person on the top of the list and send them something that is relevant to that person.  Then move them to the bottom of the list and the next day send something relevant to the next person on the list.  Once you connect to one of these people move them to your networking list to start building the relationship.  Then add a new name of someone you want to get to know.

It will take some time to get this approach started but once you get the hang of it, it should take you no more than a ½ hour a day.  Once you commit to it, you will begin to see that you will be attracting clients that energize and inspire you and most importantly allow you to do your best work.

5 Ways To Attract The Attention Of a Buyer for Your Business

In any negotiation, being the person who makes the first move usually puts you at a slight disadvantage. The first-mover tips their hand and reveals just how much he/she wants the asset being negotiated.

Likewise, when considering the sale of your business, it is always nice to be courted, rather than being the one doing the courting. The good news is, the chances of getting an unsolicited offer from someone wanting to buy your business are actually increasing.

According to the Q2, 2014 Sellability Tracker analysis released in July 2014, 16% of business owners have received an offer in the last year, which is up 37% over Q1. Said another way, you’re 37% more likely to get an offer to buy your business today than you were at the beginning of the year.

Big companies are buying little ones for a lot of reasons and the current market conditions are accelerating their appetite: interest rates are low and stock markets are high, which provide the ideal platform for acquirers to realize a return on their investment from buying a business like yours.

So how do you ensure you are on their shopping list? 

Here are five ways to get noticed by an acquirer:

1. Win an award

Getting recognized as the “Widget Maker of the Year” by the Widget Makers Association is a great way to get the attention of acquirers in your industry.

2. Hire a PR person

Engaging a public relations professional to tell your story to the media can get you on the radar of buyers in your industry.  A lot of media relations professionals focus on the big mainstream publications, and while these are important, ensure that your PR firm also targets trade publication and industry-specific websites that are read by acquirers in your industry.

3. Host an event

 Consider hosting an event (e.g., conference, tradeshow, summit) for your industry and invite representatives from potential acquirers to attend. Being invited to an industry event can be flattering for acquirers and it is a good way to get them to notice you as an industry leader.

4. Join a board

If an executive from a company you think would make a natural buyer for your business is serving on a board of directors, consider joining the board. Serving on a board together can be a great way for an acquirer to notice you and your company without you having to say you’re for sale.

5. Grab lunch

Consider inviting a senior executive from a potential acquirer to share a meal under the guise of discussing trends in your industry. At the very least, you may glean some useful information about how big companies are seeing your industry evolve. At best, your lunch mate may realize that your company could play a key role in helping them grow.

The sale of your business is a delicate dance where it is usually better to be the courted, rather than the courter. Acquirers are on the hunt for new businesses, and having them notice you will put you in a position of strength when you get to sit down at the negotiation table.  

To determine the Sellability of your business find our your Sellability Score.  Get a free report  identifying how sellable your business is now the 8 areas you need to focus on to increase your business value now.  Click Here to learn more.

Business Advice: How to Create an Accountable and Responsible Team and Stop Being a SAPP

One of the keys to business success for an entrepreneur is their ability to build a team of motivated employees that are aligned to the company's goals. 

A common complaint I hear from my clients about their employees is that, "They're not accountable or responsible for anything - getting work done on-time or doing quality work" or "They continuously do sloppy work and running over budget on every job".  "Why can't they be accountable or responsible?"  They are at a loss of what to do and it stresses the hell out of them. 

When you think about it maybe you start wondering, that they don't care or don't want to work hard or they just want to do what is minimally required.  Does this sound familiar?

If we are honest with ourselves, what's holding most of us back from building a success team is, well...us.  Yes, I said it.  It's us!

As a business owner, most of the time, we are the one responsible.  It's our need or maybe fear that makes us want to control everything.  The problem is that when we control everything that turns us into a SAPP - Solving All People's Problems.

 

In business there seems to be a very fine bar between success and failure.  The question I consistently ask my clients is, are you and your team acting above or below this bar? 

We all know people who act below this bar.  They are always BLAMING others, coming up with EXCUSES, or might be in DENIAL that they are the problem.  

On the other hand...  Successful business leaders and teams play above this bar.  They are looking for Opportunities, they are ACCOUNTABLE for the results they need to achieve, and they are RESPONSIBLE for their actions.

The thing that most business owners or managers don't realize is it's with our actions and our speech that we can help raise our team Above the Bar or keep the Below the Bar.

We keep our team (and family members) below the bar by asking judgmental questions like, Why did you do that? What's wrong with you?  Why can't you get this right?  Who did this?  When we ask the judgmental questions all we get are Excuse, Blaming, or Denials that they are not the problem.

The way we coach our team to be Responsible, Accountable, and take Ownership, is by asking learning type questions like, What could we have done differently?  How could we have done better?  How can we prevent this from happening again?  What could we learned from this? 

Have you noticed one thing each of these questions have in common?  The use of the word WE instead of I.  When use WE, as owners, leaders, and managers, we are taking some responsibility and ownership of the mistake.  Instead of putting the focus on the employee, we are focusing on the action and learning what the appropriate action could have been.  This way they learn, we learn, the whole team learns.

Now your team will begin to make better choices and decisions.  They won't have to be standing at your door waiting to ask you how to do things because they are afraid of making a mistake.  The best part is you'll start becoming less of a  SAPP (solving all people's problems) and more of a leader.  Your team will begin to take Ownership of the situation, being Accountable to you and Responsible for their actions.  Now you'll be well on your way to building a more valuable business that can work without you.

Recession-Proof Your Business

Though we are not out of the woods yet, it does seem that the business climate is slowly changing due to the natural cycle of business.  It's been a rough 4-5 years for a lot of businesses.

Why some businesses thrive while others implode during an economic recession remains a puzzle to many business-owning entrepreneurs.  Not all businesses must suffer during a down business cycle.

An overwhelming majority of my clients not only survived the downturn but thrived as well.  In fact when one of my clients introduces me all the partners say if it wasn't for Steve we'd be out of business like a lot of our competitors.

What separates successful businesses from those that fail during those down cycles? 

They have planned for the future and have contingencies to confront whatever challenges arise.  They organize themselves are uniquely different and healthier approach to business.

An economic downturn can be overly challenging and devastating if you don’t put it into the proper perspective.  A business cycle very closely resembles that of the natural cycles of Spring, Summer, Fall, and Winter.  Let think of a farmer, in the spring he is planting his crop getting ready for a harvest.  In the summer, his crop is growing and begins to harvest his crop.  In the fall he is preparing for the winter that waits ahead. 

Let’s compare my analogy to the business cycle.  In the spring you need to cultivating business getting ready for the growth of summer.  In the summer you are feel great business is great but you understand that fall and winter are ahead so you need to plan.  You need to start paying down debt and save cash for when things slow down.  In the fall you need to begin to get ready for winter.  You need to start cutting the fat.  In the winter we a in survival mode but we begin planning for the spring that is just around the corner.

In the winter you need to look for opportunities to grow.  It’s a fact that during down economic times is when the true entrepreneurs begin to create their wealth.  Down economic times are times in which you can gain market share over the competition.  It’s a great time to grow through acquisition by buy up poorly managed competitors.

Currently we seem to be coming out of an economic winter, a serve one for that matter.  If you did not prepare, how can you survive and get yourself in a position to take advantage of the next business cycle? 

Jack Canfield in his book Success Principles states a simple formula for success that can help us over come this winter business cycle.  E + R = O - Event + our Response = Outcome.  We all have a goal, an expected outcome but some event always seems to come our way to make us lose focus and advert our attention.  That because our response gets refocused on reacting to the event instead of focusing on our desired out come.

ActionCOACH founder Brad Sugars, outlines 5 Steps to how to focus on looking for the opportunities available instead complaining about how bad the economy is.

Step 1 – Get you Mind Set right

If you are focusing on the negative all you will ever see is the negative.  Look for the positive, look for the opportunities that are available.

Step 2 – Set New Goals

The playing field has changed.  You need to reassess where you business is and where you want to go.  Will your current goals still realistically get you to your final destination? Or, do you need to revise your short term goals and strategies?

Step 3 – Get Around the Right People

You need to surround yourself with positive people who share your vision for success. Do you have the right people working with you?  Do they have the skills and the will to help you navigate your business during difficult times?  What about your business associates?  Are they bringing you up or taking you down? 

Step 4 – Create Quite Time to Think of New Ideas

It’s hard to stay focused during turbulent times.  You need to create quiet time each day to focus on your goals to help your mind to focus on what you need to do to get there. 

Step 5 – Planning

It all starts with a plan.  When you have a plan you can now determine what do I need to do or learn to achieve my goals. 

Did your business survive this far because you rode the wave of a good economy or because you have a well run business?  

If you are not sure, not our quick BusinessHealth Check and receive a free report prepared by our team that will give you valuable insights into your business.  www.bizhealth-check.com 

Business Advice… Stop Discounting and Start Increasing Value!

Discounting if used properly can be an effective strategy to increase profitability and cash flow, but if not used properly it can cause serious consequences to the growth and profitability of your business.

Most of the time discounting is a gut reaction to a slowdown in business.  Businesses find it easier to discount the value of their product than to sell on value.

One of the biggest negative consequences of discounting is that we are training our clients to buy only on sale.  This can have a big affect on our bottom line.  I’m not really sure a business understands how much more they have to sell just to stay at that same profit level.

For Example if you have a…

30% margin
You discount your product or service 10%
You will have to sell 50% more to make the same amount of money.
Contrast that with…

If your margins are 30%
You increase your prices by 10%
You can sell 25% less and still make the same amount of money.
Now isn’t that interesting…

Discounting is an appropriate strategy if your inventory is high and you need cash to pay bills or if it’s a perishable item that you will have to throw away.  However instead of just discounting your product, use it as an incentive for your customers to purchase more.

Let’s assume you have a product that costs you $5.00 and you sell it for $10.00.  If you were to have a sale of 25% off, you would now be selling it for $7.50 and only making $2.50 instead of $5.00.

Instead of discounting the full price you can have a buy one get the 2nd item at ½ price.  Now you’ll at least be making the same $-profit if you sold 1 at full price.  Another option is a buy 3 get the 4th free.  You are in essence still providing a 25% discount but you are now making $10.00 profit per sale instead of just $5.00 if you sold just 1 item.

The advantage here is that you are moving more inventory and turning it back into cash.

When it comes to marketing, “perception is reality”.  If you have a 25% off sale you become labeled as a discounter.  If you have a buy 3 get the 4th for free sale, or buy 1 and get the 2nd item at ½ price, you now are perceived as a place where you get more for your money.  You are now distinguishing your business from your competition by providing adding value to your customers instead of being viewed as just another discounter.

5 “Strategic” Ways to Sell Your Company

Did you see the news that Facebook has recently acquired Internet messaging service WhatsApp for $19 billion? It represents the largest-ever acquisition of an Internet company in history.

WhatsApp is a pearl for sure. The messaging service allows users to avoid text-messaging charges by moving texts across the Internet instead of the mobile phone carrier networks. This can save people who travel, or who live in emerging markets, hundreds of dollars a year, which is why WhatsApp is adding one million new users per day.

At the time of the acquisition in February 2014, WhatsApp had acquired some 450 million users. Their business model is to charge a subscription of $1 per year after their first full year of service. Even if all 450 million WhatsApp users were already paying, that is still less than half a billion in revenue. Why would Facebook acquire WhatsApp for a number that is somewhere north of 40 times revenue?

Nobody know for sure what is in Mark Zuckerberg’s head, but we can only assume that at least part of the opportunity Facebook sees is the opportunity to sell more Facebook ads because of the information they glean from WhatsApp users. Global advertising giant Publicis estimates 2013 online advertising spending in the US alone to be around $500 billion. Presumably Facebook believes they can get a larger chunk of the global online ad buy because they know more about its users by owning WhatsApp.

And therein lies the definition of a strategic acquisition. Most acquisitions run a predictable pattern of industry norms, but a strategic can pay a significant premium for your business because they are looking at your business for what it is worth in their hands. Rather than forecasting out your future profits and estimating what that cash is worth in today’s dollars, a strategic is calculating the economic benefit of grafting your business onto theirs.

There can be many strategic reasons why a big company might want to buy yours. Here are a few to consider:

1. To control their supply chain

 In 2011, Starbucks announced it had acquired Evolution Fresh, one of their providers of juice drinks, for $30 million. Now Starbucks is no longer beholden to one of its suppliers.

2. To give their sales people something else in their briefcase

Also in 2011, AOL announced the acquisition of The Huffington Post for $315 million, even though HuffPo had just turned its first modest profit on paper. AOL wanted to give its advertising sales people more inventory to sell and HuffPo had 26 million unique visitors a month.

3. To make their cash cow product look sexier

 Microsoft bought Skype for $8.5 billion dollars even though Skype was losing money. The good folks in Redmond must have assumed they could sell more Windows, Office and Xbox by integrating Skype into everything they already sell.

4. To enter a new geographic market

 Herman Miller paid $50 million to acquire China’s POSH Office Systems in order to get a beachhead into the world’s fastest growing market for office furniture.

5. To get a hold of your employees

Facebook reportedly acquired Internet start-up Hot Potato for $10 million, largely to get hold of the talented developers working at the company.

Most acquisitions are done for rational reasons where an acquirer agrees to pay today for the rights to your future stream of cash. You may, however, be able to get a significant premium for your company if you can figure out how much it is worth in someone else’s hands.

Curious to see what your business is worth and how you might improve its value to both strategic and financial acquirers?  Complete the Sellability Score questionnaire today and we’ll send you a 27-page custom report complete with your score on the eight key drivers of Sellability. Take the test now at:  www.actioncoachsellabilityscore.com 

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My Top 10 (time) Self-Management Tips to Achieve More

A wise man said that once you spent your money you can always make more, but once you spent your time it’s gone forever.

When I ask business owners what’s the #1 thing that they believe is holding them back from achieving more, the majority of them will say, being able to manage their time better.  The first thing they need to understand is that you can’t manage time.  Time is like a flow of energy, all you can do is manage yourself better to harness that energy.

Below are my top 10 tips on how to manage yourself better to achieve more….

1. Set personally motivating goals …Most of us know what we need to do to be successful but we procrastinate doing them for one reason or another.  Because we are not focused on a motivating goal, we will put off an important task for the next “shiny” item that looks interesting.  Having written, motivating, goals will help you align your task to your goals.
2. Don’t finish today until you plan tomorrow …If you wait for the morning to figure out what you need to do you are losing valuable time.  If at the end of each day you review your goals and write out your action items making sure they are moving you closer to your goals, you will find that you will increase your productivity by 15-20%.
3. Eat a Frog for Breakfast EVERY day …This comes from Brian Tracey’s book of the same name.  The idea is simple.  Each day pick the biggest, hairiest frog (task) you need to do and schedule to do it first thing.  If not you will push it off and you find that it keeps moving to the next day on your to do list.  Once accomplished your day will be filled with items you enjoy doing and you will feel more fulfilled and motivated at the end of the day.
4. Don’t Major in Minor things …This is tied to item #3.  If you focus on accomplishing the major items on your list you will find you will have room for the smaller items.  But, if you fill your day with the smaller items that will never be room for the big major items.
5. Create a default Diary / Stick to it …Most of us don’t get important tasks done because we don’t schedule a specific time to do them.  Create a calendar where you schedule default times to work on the major activities you need to get done on a weekly basis.
6. Invest time don’t spend it …Our biggest time waster is spending our time on doing busy work instead of important work.  We invest our time, by working on items that will affect our profits.
7. Have agendas for all meetings …You should not only have an agenda but have a goal for what is the desired outcome of the meeting.  Focus agenda items based on the goals of your meeting.  Don’t mix strategic meetings with tactical meetings.  When you do, you don’t accomplish as much.
8. Have conference calls to save time …Team communication is important but sometimes it’s inefficient to call in team members from the field to have a meeting.  Instead, conference in team members for tactical meetings.  This will help you keep your team focused and aligned to the overall goals of the company.
9. Learn to delegate to your team …The busy work we spend time on needs to be delegated to lower paid employees so you can invest your time on more profitable tasks.
10. Hire an ActionCOACH to keep you on track!Every business needs someone to help you see the forest through the trees.  That’s why I also have a coach.  I find that it is way too easy to miss the more important items I need to work on.  My coach helps me to keep focused on my goals.  I personally found that the more focused I am on my goals, the more productive I’ve become.

To learn more about how to make more and work less down load our Free E-Book 

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