Small Business Blog

Shared Vision in the Family Business

noreply@blogger.com (The Alternative Board) — Mon, 21 May 2012 21:04:00 +0000

The “Family” in Family Business can have a profound impact on the success of the company. The degree of impact varies with the stage of a company’s development, from a single founder, to late stage companies with nth generation family members embedded in management and/or holding equity stakes. The expectations and obligations of these individuals complicate standard business planning practices.

Many TAB members have prospered from the implementation of a Strategic Business Leadership program (SBL). The second step in SBL is the creation of a Pocket Vision for the principal and a Shared Vision for the company. When the company supports a complicated family tree, this step can present a challenge. The challenge of writing the Shared Vision can be met by assessing the primary vested interests of family and management and providing a statement of how the evolution of the company will affect them.

Interest Number 1 is that the company is managed to produce the best total benefits for its owners. Determination of what is most likely to produce the best result requires identification of all the interested parties and the creation of a matrix of their claims and obligations. From this base, sets of goals, strategies and action plans can be built to achieve a “defensible” outcome. I did not say “optimum” outcome because it is rare that all expectations will be met.

If the family has not adopted a formal process for growth, succession and the balance of members’ interests, it can be useful to draft a “Shareholder’s Agreement”. The concept is the creation of Michael Shulman, Toronto. It is a document that defines the “Rules of the Road” for the conduct of the enterprise. The preferred process is for the principals in the family to meet to identify the issues that are important to them, propose guidelines for family behavior, listen to dissenting opinions and write down the agreements. The Agreement is then distributed to all who will be affected by it.

In an ideal world the Agreement would be a collection of unanimous decisions or a democratic consensus. In real life, the founder or the head of the family may set some arbitrary rules and over-ride the wishes of the majority. This may not result in harmony but it does describe the reality of the situation and, when it is written, people have a clear understanding of their position.

The value of this document is that it states what the assumptions of the business are. It allows people to know their rights and obligations. It is a manifesto that can be challenged and modified, but it is the prevailing authority until it is changed.

When the time comes, the Agreement can give the founders a perspective from which to consider their plans for retirement and the succession in the business. It provides the next generation guidance successfully moving into the future.

Family businesses benefit from the commitments, trust and loyalty of family members. The advantage is strengthened by fair consideration in the planning process.

Financial Freedom

noreply@blogger.com (The Alternative Board) — Mon, 14 May 2012 16:07:00 +0000

By Allen Fishman, TAB Founder & Chairman

Do you have a long-term plan for financial growth? Without a plan, you will have stress. If your plan is high risk, you will have stress. Financial growth should be built on a long-term plan. Most of those who gamble for the quick riches in the stock market or other places live with a stress that makes it hard for them to focus on their business. A plan that looks many years in the future is the way to achieve freedom from financial concern so that decisions are not impacted by current financial needs.

As a business owner, is there anyone who can say that he or she is personally successful without his or her company being successful? Do you know a business owner who could have a failing business and say "I'm successful" or "I'm happy?" I would guess the answer would be no because the owner’s business is integral to the owner’s happiness.

To have freedom from financial worry, you need the ability to meet financial emergency contingencies. You must not be desperate to make deals that are high risk.

One manufacturer took a contract with a large retailer that resulted in over 50 percent of his revenue coming from the retailer. He financed a major expansion of plant and equipment to serve the retailer. When the retailer switched to another supplier, he was hurt. Why did he take the risk? He did it because he said that it was his chance at big money.

You have the ability to take advantage of situations in which others are motivated to take actions because of their financial needs. In 1990, a man I know bought land for 10 cents on the dollar from a developer who put the land together. The developer did not have the financial ability to develop the land and could not carry the cost.

Financial freedom is the ability to buy what you want without worrying about it. This is different for everyone. To some, this means tens of millions of dollars to buy planes. To others, it means taking great trips when you want. This will be determined by what is meaningful to you.

When you look at yourself, do you see a person who is managing his or her life or a person who reacts to challenges and opportunities without a plan for getting you where you want to be? Business owners starting up are rarely debt free. They are generally going to be personally guaranteeing loans for some of their expenses. One thing I constantly hear from business owners who have been in business for 10 or more years is that they would like to eliminate or cap their financing guarantees. They are at a different time in their life.

Money

What do you think money is all about? Is it to bring you financial freedom? To change your relationships with people? Question your belief system about money. If money means the ability to have a mountain home, make it part of your plan. If it means buying a Mercedes, make that a goal.

I wanted to drive a Mercedes and made it a goal. Six years later, I had a roadster and the largest Mercedes sedan. I cannot say it brought the pleasure that I expected. I had a conversation with a man who said that, when he was on his way up, his goal was to have a Cadillac. Once he did succeed, he realized it did not mean anything. Then, he bought Chevrolets, because he was proud of not having to worry about having a Cadillac.

Pick no more than five material things that are important to you, and make a goal to obtain them. There is nothing wrong with it. Whether they bring you lasting pleasure or not, they may help you to see, once you get them, what actually is important to your feeling of personal success and happiness.

Non-Monetary

If money was not a factor, imagine yourself in the future. Say you won $10 million in a lottery. How would your life change? Right away, everybody says, "I'd buy this or that," but what about your family involvement? What about your spiritual life and your hobbies? There is no right or wrong answer but there must be honesty.

How often have you heard successful entrepreneurs and professionals say that, if only they had it to do all over again, they would take more time for themselves? Of course, it is much easier wishing you had taken the time to smell the roses during the climb to business success once you have achieved your goals — but those who are still on the road to success should take note. Get to know your passions and start planning for tomorrow.

Allen Fishman is the CEO and founder of The Alternative Board (TAB)®, an international organization that provides peer group meetings and coaching for business owners. During monthly board meetings, members discuss their challenges and opportunities and receive advice from their fellow TAB board members and TAB Certified Facilitators. TAB members in each TAB board run businesses in non-competing fields. For more information about TAB, visit www.thealternativeboard.com.

Create a Planning Team for Decision-Making

noreply@blogger.com (The Alternative Board) — Mon, 07 May 2012 21:25:00 +0000

Jason P. Zickerman

In a small or medium-sized business, it’s common to be the only one making decisions about every aspect of your company—thus the saying, “it’s lonely at the top.” No matter how large or small your business is, being the sole decision-maker for the company can be difficult and may impede your company’s success. It can become challenging for one person to constantly think of better ways to improve the business or make sure he or she has the most innovative ideas. Having the contributions of a planning team will help your company grow and become more successful.

Planning teams are comprised of your company’s top executives from each of your functional departments. The goal of the planning team is to have candid discussion on all business planning and action items essential to moving your company forward—from resources to operations to company strategy. Our corporate planning team follows the Strategic Business Leadership^® (SBL) process and has experienced great success utilizing it. SBL provides a structured and organized framework for our team to productively discuss and plan the strategic direction of the company. Remember: always make sure your planning team stays in alignment with the owner’s personal and business vision.

Once you decide to implement a planning team, it is imperative to have established guidelines before the first meeting and to continue to follow these guidelines at each meeting. Reviewing them before meetings will help keep your planning team focused on the group goals. For example, we use “TABenos” as our communication guideline. TABenos represents communication defined by honesty, respect, trust and openness with yourself and the other planning team members. This specific guideline enables each member of the team to experience an environment conducive to idea sharing and exchange.

Here are a few simple guidelines to keep in mind when forming your planning team.

Stay focused on the main issues
Avoid solving/micro-managing
Avoid interruption as much as possible
Inform the employees who are not on the planning team about plans and progress, as well as the necessity and importance of having planning team meetings
Never cancel your planning team meetings unless absolutely necessary
Meet as frequently as you can. Our team meets weekly, but at a minimum, you should meet once a month. If you can’t meet on a monthly basis, you should always schedule meetings, at the very least, once per quarter
Occasionally invite other project managers to the meetings to update the planning team on various projects, as necessary. This gives team members a sense of contribution in the company.

To ensure each planning team meeting is productive and time-efficient, revisit the rules and guidelines often. Also, spend time with individual planning team members to make sure they understand the value of a planning team and how their individual contributions help to foster a positive planning team experience. When conducted effectively, a planning team can be and should be inspiring and liberating for the business owner and team members.

Developing Your Company's USP

noreply@blogger.com (The Alternative Board) — Fri, 27 Apr 2012 22:00:00 +0000

The most basic element of every successful company’s marketing message is their Unique Selling Proposition, or USP.

In running any successful business, it’s important to clearly differentiate the business in the eyes of potential customers and to continually focus on the unique need that is provided by the business’s products or services.

A well-defined USP constructs a memorable message of these unique qualities and very clearly answers the question, “Why should I do business with you instead of one of your many direct competitors?

Many business owners, including a significant portion of the hundreds I have personally interviewed for TABmembership, answer the above question with “good customer service.” Unfortunately, there is nothing unique about good customer service—all of your competitors probably feel that they offer good customer service as well!

Good customer service is the implementation of a USP and is a key strategy in keeping your customers—a well-written USP defines how you get customers! If you cannot clearly define the uniqueness of your product or service (and create some enthusiasm for customers to buy), you probably don’t have the basic foundation for a successful company.

A great example of one company’s USP is “fresh, hot pizza delivered in 30 minutes or less, guaranteed.” Domino’s significantly changed the pizza delivery market with the implementation of this USP and they didn’t even promise that the pizza tasted good.

Here’s another… “positively, absolutely delivered the next morning by 10:30 am.” Federal Express literally created a market for overnight document delivery and became so good at it that the word Fedex was added to our daily lexicon as a generic term for all overnight document deliveries.

One of the quickest ways to go out of business is to attempt to market a product or service that hardly anyone wants, needs or understands. When developing your USP, focus on the factors that are most important to the buyers and end users of your product or service, especially the ones that are not easily duplicated by competitors. Be sure to develop adequate marketing tools to communicate your USP including media advertising, direct mail, packaging and sales personnel.

The simple test of determining whether you’ve developed an effective USP is whether it sells for you. If it sells your products or services, your USP is meaningfully different.

A Gathering of Captains

noreply@blogger.com (The Alternative Board) — Tue, 10 Apr 2012 21:20:00 +0000

Donald Scellato, CMC
Jack Byrnes, CMC

The captain of a ship, like a small business owner, holds a lofty and lonely position. His decisions about strategic and tactical issues impact the financial results of each voyage along with safety and security of the people and freight on his ship. While the Captain has resources at his disposal on the ship and on shore to participate in important decisions, he ultimately bears the responsibility for every decision his crew makes. He must be in control and use his resources well in situations that are often grave. He may have doubts and even be fearful in these situations, but he can’t let his armor slip or he loses the respect and credibility of his crew.

In the mid 80’s we were working ashore for a major ocean carrier who was designing new ships. The company realized that the ship’s captains and chief engineers could contribute important information about the design of new ships and invited all who could to attend three days of design meetings to draw on their collective experience. The meetings were a huge success. The company’s marine architects received important design ideas from those ships officers who attended. In addition the company received an added benefit during breaks and meals in the form of the captains discussing different types of problems encountered in the course of a voyage and the solutions they employed to solve them. For the first time each captain was able to let down his armor and openly discuss issues of common concern. Each captain went back to his ship armed with new ideas and the ships began to operate more efficiently and safely than they ever had before.

The company was so impressed with the results that it held annual meetings for their captains to obtain additional input on port operations, cargo handling, ship navigation, ship safety, and other matters important to the company. The company and the group realized and capitalized on the power of sharing collective knowledge and experience to improve the seagoing side of the business. This approach leaked over to the rest of the business and significantly improved the bottom line of the company.

The small business owner’s decisions are similar in impact to his company, its employees, and customers. Like a captain the business owner has a staff conduct day-to-day activities and carry out his wishes about the business. Also, like the Captain he personally directs the course of his company. Unlike the captain his vision for the voyage of his company is more personal than the captain’s voyages which are dictated more by the company he works for. Wouldn’t you like to share your burdens with others who are willing to help you move forward?

Take some time to appreciate how a large company benefited from bringing a group of peers together. Think about how you, as a small business owner, can benefit from working with those who are experiencing problems and doubts similar to yours. Peer groups offer a safe forum to air business problems and personal doubts to a group of non competitive business peers (company captains) who will help develop solutions and approaches based on their collective experience. You will gain strength and purpose and improve the bottom line from such gatherings of captains.

Clarity Essential to Achieving Success Through Accountability

noreply@blogger.com (The Alternative Board) — Tue, 03 Apr 2012 20:38:00 +0000

by: Kent Gregoire, CEO & President of The Alternative Board-TAB Metro Atlanta

A business benefits in many different ways when each member of the organization exhibits a high degree of personal accountability. Overall results improve when each member of the team takes personal responsibility for the organization’s success. Employees derive greater satisfaction from their work, feel less stress, and perform better. Managers make better decisions faster by having the ability to confidently tap into the collective knowledge of their teams.

Yet cultivating an environment characterized by high levels of personal responsibility takes more than new training programs or executive proclamations. The organization’s leaders demonstrate ways to motivate individuals to take a proactive and responsible approach to their tasks. Leaders must show the members of their team, by their own example, how they will personally benefit from becoming more accountable, and provide them with the effective tools they use to translate their own newfound understanding into new behaviors they would like to see throughout the organization.

Put It in Writing

Eliminating doubt and confusion represents the first step toward creating a climate of accountability within an organization. Lack of accountability usually results from an individual failure to define projects, tasks, ownership, and deadlines clearly enough to prevent misinterpretation or uncertainty.

Rather than relying on verbal agreements or assumptions, organization members can rely on written agreements to minimize the potential for misunderstandings. Compiling expectations and requirements into a clear document requires everyone involved in a project or initiative to sign off on his or her ownership and tasks before the endeavor gets under way.

Make Alterations When Necessary

When participants have exhausted every effort to fulfill original clear commitments, those involved can renegotiate initial agreements. Project leaders are able to bring everyone together with ease to determine what portions of the original agreements need adjusting, and seek everyone’s insight on how to develop a new agreement that they find mutually acceptable.

Hold Everyone Accountable

With clear agreements comes accountability. Where self-accountability is lacking a team can experience holding each other accountable as a serving way to improve interpersonal relationships and organizational performance. Effective conversations associated with holding someone accountable focus on facts and goals that were mutually agreed upon in the beginning. To make it a win-win scenario for everyone involved, the person initiating the conversation can invite suggestions about how to improve the situation and clearly spell out the consequences that result from failure to meet agreements.

By taking these steps, a higher level of accountability will begin to grow within each member of an organization. And as the engagement level of each individual grows, the organization will enjoy greater success than ever before.

Kent Gregoire is CEO & President of The Gregoire Group, Inc., which independently owns and operates The Alternative Board® – TAB MetroAtlanta and Responsibility-Centered Leadership serving clients throughout the U.S.

In more than 20 years as an entrepreneur, he has founded and held leadership roles in business start-ups, fledgling organizations, and growing companies. He is widely respected as an executive coach and consultant and is recognized as a passionate, authoritative, and captivating speaker whose energetic facilitation style helps clients get aligned around creating the culture needed to achieve key organizational results.

Solving Family Business Conflicts Before They're Out of Control

noreply@blogger.com (The Alternative Board) — Tue, 27 Mar 2012 15:14:00 +0000

Allen E. Fishman

The strong personalities and wills that make family businesses successful are also the roots of family conflicts. Too many of these conflicts have been allowed to grow out of control and have wound up in litigation, causing major rifts in families as well as in the businesses. They usually cause major strain on family relationships through one party buying out another or by family members continuing to work with each other in an atmosphere of tension.

Often I have heard comments such as, "My sister wants to keep our company small and is fighting a controlled growth," or "Dad won't let go of the control," or "My brother and I are paid the same and he doesn't carry his weight."

Family members usually have different levels of involvement and will rarely agree on what those levels are, or how to set fair compensation for different levels of involvement. Are the perks reasonable? What about the children of the non-active family member? Should the business be required to give them good jobs as well? Can it afford to? These conflicts get much worse if a divorce takes place.

One way to avoid lawsuits is to agree to binding arbitration. This means that you let a third party decide who is right after the party hears arguments and sees evidence from both sides.

Another alternative dispute resolution approach is the so-called "rent-a-judge" method. Family members hire a judge who gives a binding or, depending upon the wishes of the parties, a non-binding opinion.

Some family disputes are being solved by using a confidential-non-binding process in which the attorneys representing the family members give condensed arguments to an expert advisor. This process, called a mini-trial, lets family members look at the strengths and weaknesses of both sides and facilitates a settlement through the exchange of information.

Of course, the best solution is always to try to avoid disputes of this scale altogether, by structuring the ownership and responsibilities in a family business to suit the abilities and personalities of the family members involved. The sad reality is that these disputes are inevitable. When they do occur, the key is to acknowledge and address them right away, usually through an objective third party. The sooner you can act on a problem in your family-run business, the better your chances of avoiding the knockdown drag-out family feuds that cause the downfall of many businesses and the disruption of many families in business.

Allen E. Fishman founded The Alternative Board® (TAB), the world’s largest franchise system providing advisory board and executive coaching services to business owners, Presidents and CEOs. TAB’s worldwide business advisory network operates in over 1,000 cities in the United States, Canada, the UK, and Venezuela.

Fishman is also the author of several books in which he shares his business insights to help business owners, including two best-sellers: 7 Secrets of Great Entrepreneurial Master: The GEM Power Formula for Lifelong Success (McGraw-Hill, 2006) and 9 Elements of Family Business Success: A Proven Formula for Improving Leadership & Relationships in Family Business (McGraw-Hill 2008).

Eight Simple Ways to Increase Referrals

noreply@blogger.com (The Alternative Board) — Tue, 20 Mar 2012 14:27:00 +0000

When asked what your best source of new business is, most business owners and managers answer resoundingly, referrals. Do you have a process for managing referral business? Many businesses have a process for sales but referrals just seem to be a by-product.

Many businesses have referral programs, but are they really part of a managed process? There are numerous effective ways to increase your referrals, but simply establishing and managing a defined process will have the greatest impact. Here are some suggestions to get you started.

1. Target referrals as you would target sales prospects. If you have an effective sales process, then you understand the value of developing relationships with prospects. Why not develop relationships with those that can refer business. Better yet, target your current relationships for referrals. Does your doctor or Dentist know what you do? Make your business known to everyone you come in contact with.

2. Giveback to your community. This doesn’t mean make donations; it means donate your time. Make it known that you are looking to serve on a committee or board of a worthy association or charity. You will find you can develop relationships that enable you to make it known what you do. The more you give the more you get.

3. Ask how you might refer business to others. Instead of asking for a direct referral from a new relationship, ask how you can refer business to them. Ask them about the type of client or customer they are looking for. You may not know anyone to refer to them but they will be more likely to consider a referral to you.

4. Write to the local newspapers or editors of local publications. Consider writing opinion pieces or articles that are non-promotional. Provide value to others based on your experience.

5. Follow-up with the referring party. Its expected to receive a thank you note, gift or referral fee, but to update someone on the continuing value of that referral can bring more referrals. Keep them on your mailing list; make sure to schedule to send a personal note updating them on the referral they gave even if it didn’t turn out well.

6. Track your referral progress. Develop a simple system for tracking the number of referrals, set targets to obtain referrals and track your success. If you write sales reports, make sure referrals are part of the process and part of the sales quotas for your sales people.

7. Become an active middleman. Actively find ways to match up others in businesses unrelated to yours. You’ll find that favors do get returned. Take an interest in your customers by helping them find professional services, other suppliers or even a dentist. Offering value with nothing expected in return will always have people speaking positively of you.

8. Request referrals everyday. Request referrals at every opportunity, simply ask, “Do you know anyone who might find value in my service, product, or knowledge?”

These are only a few suggestions and they may seem obvious. Some of them you may already engage in. The important thing is to make them part of your business process just as answering the phone, logging sales calls, or reviewing monthly financial reports. Simply adding the process will accelerate your new business development.

Five Keys to Controlled Growth

noreply@blogger.com (The Alternative Board) — Mon, 12 Mar 2012 16:19:00 +0000

Jason P. Zickerman

President and COO, TAB Boards International, Inc.

When you first decided to start your own company, you most likely did a lot of research using various outlets such as reading books on becoming an entrepreneur, taking a few classes about starting your own company, talking to other successful entrepreneurs, etc. Now that your company is established and you are growing, you are probably concerned with one question, “How do I stay on top of my growing company?”

When I first started at The Alternative Board^®, the company was experiencing pressure to stay on top of being in high demand. I was chosen and brought in to take control over company operations and capitalize on the company’s growth. By following industry best practices and doing a little “housekeeping,” the company prevented a potential downfall and is now able to handle a thriving environment.

There are many lessons I’ve learned and employed to get TAB where it is today. As your company is experiencing high growth, keep these five lessons in mind:

Keep track of your budget. Never let go of the concept and importance of strong budgeting. Without the process of checks and balances, you could find yourself being very wasteful on where you spend your money. This most often happens during periods of strong growth, when you make more extreme financial decisions because you are bringing in more money.
Know your competitors. What are you doing that differentiates your company from your competitors? You need to make sure your value proposition provides a strong value to your clients while continuing to contribute to your company. Stay on top of what your competitors are doing. Are they currently doing something you never considered, or are they doing something you know your company could do better? Do you need to enhance any of the products you offer to clients, or do you have the resources to develop new products? Consider their mistakes as well—how can you learn from your competitors’ mistakes so your company can avoid making them?
Always market. Evaluate your marketing plan on a regular basis. Often times you are gaining a lot of growth due to an integrated mix of marketing tactics, but there may be some tactics that may be wasteful or less effective. Stay on top of what is working and what is not. By having key performance metrics, you will be able to measure the specific tactics that are showing results.
Communicate with and reward your employees. Reward your staff for helping to bring about this time of strong growth. Make sure they are well aware of how vital their daily contributions are to the company’s success. Also, make sure you are communicating with your staff about how they feel during this growing period. Are they comfortable with handling a larger workload? Are they feeling overwhelmed or stressed out? How does your team feel about existing in rapid growth—do they enjoy it as much as you do? What can you do to help them with the additional stress that inevitably comes along with strong growth?
Resist the urge to become complacent. When you are experiencing times of strong growth and things are going very well, it is easy to let yourself or your top executives sit back and become “fat and happy.” Once you start believing your own press, it’s easy to start spiraling down in the opposite direction. Your journey to the top never stops growing. Just because your company is doing well right now doesn’t mean it always will.

Employees First!

noreply@blogger.com (The Alternative Board) — Sat, 25 Feb 2012 00:02:00 +0000

Why Great Customer Service Starts with the Employee

By Rob Oglesby

The life blood of any business is dependent on the relationship it has with its customers and suppliers. Most mission statements include something about how customer service is either the highest priority, or certainly high on the list. Clearly, this is an admirable ideal. As a business owner or leader, there is no doubt you recognize the critical nature of both acquiring new customers and maintaining solid relationships with those you already have. Presenting a “customer first” mentality to the external world is absolutely the right thing to do. The question is…how do you KNOW it’s real? How do you KNOW you are delivering a consistent, quality experience with your customers? Do ALL of your employees see the urgent need for this in the same way?

As a business leader, great customer service starts with the behaviors and actions taken by those closest to the customer. The best way to impact these behaviors is to work on improving the attitude of that same group. You may have seen an inverted pyramid in business books where the top of that pyramid is the customer, and right below them is the front line employee who deals with customers each and every day as the primary function of their job. The key is to serve the employee and they will in turn serve the customer. Truly a win/win situation will evolve.

How do you put the employee first? This is YOUR business, after all, right? While it is true, small businesses, and especially family owned ones function differently and for different reasons, a common thread is the need for the sustained financial success of the business. Here are a few ways to engage your employees into deeper feelings of pride and ownership in what they do for your company:

1) Communicate – make sure they understand the company vision and how you plan to achieve that vision. Make sure they see value in that vision for themselves as well

2) Involve – give your employees a chance to participate in your planning. That breeds a sense of ownership and a desire to see the plans succeed

3) Opportunity – give your employees opportunity to grow. Yes, you are the owner and as a result the ultimate decision maker; however, great people are attracted to situations where ceilings don’t exist

4) Performance – make sure each employee understands their expectations. This is done with clear job descriptions and performance goals. When they meet those goals, reward them, when they fail, find out why—making sure to enforce consequences if necessary

5) Empower – once you’ve established the trust and ownership, you’re able to empower your employees to help your customers and suppliers. They’ll do the right thing, and your business will flourish as a result

6) Monitor – customer service surveys are commonplace. Employee surveys less so. BOTH are critical to understand and make course corrections

A company with strong employees who understand the direction of the organization and feel not just a connection to that, but a sense of ownership in it will have stronger ties to its customers. The stronger your relationship is with your employees, the greater the company’s relationship will be to both your customers AND your suppliers. By addressing their attitude towards the business, the actions they take will be positive and will create a winning environment. Use these techniques to adopt an employee first and watch the external relations improve the success of your business!

Understanding the Value of Peer Boards

noreply@blogger.com (The Alternative Board) — Fri, 17 Feb 2012 16:46:00 +0000

An Indispensible Resource for Business Owners

You may feel your business has reached a growth plateau. Where do you turn to help improve and better manage the business? Perhaps you consult family members, an accountant or lawyer—or worse—make important business decisions alone.

A recent article by USA Today’s Ask an Expert, Steve Strauss, details the history and importance of “Mastermind groups” for business success. Mastermind groups channel the power of peer advice, a tool that has been growing in popularity with business owners. The business owner meets with peers who have been in similar situations, allowing them to tap into each other’s past experiences, mistakes and expertise. Peers act as a group of advisors who help the owner work on their business, preventing mistakes and learning new techniques to help their business become more successful and profitable.

The result is objective and candid advice created by a “think tank” atmosphere owners cannot create by themselves. The board provides a safe, confidential place for owners to air problems. Advice received during meetings saves time because the business doesn’t have to reinvent the wheel.

Another major benefit of peer advice is that the business owner finds practical solutions to problems and learns how to approach new opportunities. Their peers hold them accountable for following through on ideas and goals for their business and become an extension of the business’s management team who cares about the success of the business.

Monthly meetings allow board members to bond, develop relationships with similar-sized companies and get to know one another’s business. Essentially, the board members motivate each other to accomplish goals and solve issues discussed at meetings.

Business owners face human resources, sales productivity, marketing strategies and making payroll issues, all of which are typical topics at a peer advice meeting. Boards are made up of non-competing members so no member is locked into industry thinking, which helps open members’ eyes to new ideas and possibilities because the areas of expertise include those in which a member normally wouldn’t have access. Peer advisory groups are not comprised of individuals that all think the same way. Rather, they provide insights to areas where the owner may not have experience, training or expertise. These boards are generally large enough to be effective, yet small enough to work on each member’s specific needs.

The support received from becoming a part of a regular peer meeting also allows the owner to set goals for long term planning. The long term planning takes the owner out of managing day-to-day tasks so they can focus on more important strategic goals for the company. On their own, owners may find themselves involved in fixing individual problems or planning using the “idea of the week.” Peer advisory boards can help the owner organize and lead the business to improved growth and efficiency.

Members of groups must be willing to make the time investment, put his/her business issues on the table and share his/her knowledge with other members. The valuable advice given in peer advisory meetings is real-life—not theory—and shows the power that is created when business owners work together.

Can You Find Your Future in a Failing Business?

noreply@blogger.com (The Alternative Board) — Fri, 10 Feb 2012 23:20:00 +0000

By Allen E. Fishman

Most entrepreneurs, unless they possess the special skills to turn around a troubled business, do much better starting a new business. However, for that special breed of aggressive entrepreneur who has some expertise in "finding" assets in troubled businesses and turning them around, buying a flagging business can bring both profit and excitement.

What motivates these individuals to take the wheel of someone else’s sinking ship? Certainly, one can enter the market for turnaround opportunities with fewer assets and far less competition, though in these situations the risk at stake is often far less than the risk taken. Motivation often comes from the risk itself—the love of the challenge. These risk takers see possibility where others only see problems. They have a vision few can see, yet they walk with their feet on the ground. Often, these gutsy individuals leave safe, high-paying jobs to pursue their ideas for bringing a failing business up to speed in the current marketplace.

It takes some degree of understanding a business to be able to determine whether your ideas for its potential are valid. Possessing the ego power and confidence to make a winning play in what has been, up to now, a losing game is essential. Many highly successful entrepreneurs are renowned for their “rescues,”—not all are brilliant entrepreneurs. Instead, they surround themselves with people who possess the needed skills, and then get out of their way.

When considering taking on a failing business, take into account the following. Does your particular experience, ability or drive give you an advantage over most others? Can you attain something greater from that unprofitable company than you could by using a safer route? Can you afford to make an investment in something that might fail?

If the idea of courting the uncertainty of risky business brings out the thrill seeker in you, always exercise good judgment, accept risk and seize upon the quest for adventure and the thrill of high-throttle stakes. Above all, believe in yourself and the potential of your ideas, and you have taken your first steps towards success.

Where to Go When the Bank Says “No” Part II: The SBA 504 Loan Program

noreply@blogger.com (The Alternative Board) — Fri, 20 Jan 2012 22:56:00 +0000

Allen E. Fishman, TAB Founder and Chairman

In a recent survey of small- to medium-size business owners, the availability of capital was ranked in the top 3 risks for small businesses in 2012. So, what can we do when the bank says, "No"?

Entrepreneur.com reported that in 2010 the SBA provided U.S. small businesses with over $50 million in loans per day. I especially favor the SBA 504 loan program. The 504 is a lending partnership between a bank of your choice and a certified development company (CDC). The SBA sells a debenture for 40 percent of the total loan amount to the CDC who in turn loans it to the borrower. The 504 provides a long-term, fixed-rate financing option to acquire real estate, construct buildings or purchase major equipment.

The obvious question is, “How much can I get?” The SBA typically finances from $1.5 to $2 million to qualifying businesses. In addition to meeting the SBA size guidelines for small business qualification for the 504 includes meeting a public policy goal of creating or retaining at least one job for every $50,000 the SBA loans. The key word here is “retain”; if a business is forced to relocate, jobs may be lost and the guidelines would not be met. In addition, the SBA can finance up to $4 million for manufacturers.

Typically, the 504 loan package features 40 percent financing through the CDC, 50 percent financing through a private lender, and an investment of 10 percent from the small business borrower. In many situations, especially when moving, additional government assistance can be obtained to help with the business owner’s investment requirement.

Because the CDC takes a second lien position, a private lender is often more willing to provide financing since their 50 percent investment is secured by 100 percent of the assets. The SBA portion of the loan has a fixed, low interest rate and the maturity is usually between 10 and 20 years. In most cases, SBA authorization will take up to 30 days after lender commitment.

Call your CDC and talk to a loan officer to discuss your project. There are about 270 CDCs nationwide and each covers a specific geographic area. You can find the CDC in your area by visiting http://www.sba.gov/gopher/Local-Information/Certified-Development-Companies/. Then, find a bank that wants to participate, meet with the CDC loan officer and structure the deal. The CDC application will generally require the same materials you would submit to your bank.

Fishman is also the author of several books in which he shares his business insights to help business owners, including two best-sellers: 7 Secrets ofGreat Entrepreneurial Master: The GEM Power Formula for Lifelong Success (McGraw-Hill, 2006) and 9 Elements of Family BusinessSuccess: A Proven Formula for Improving Leadership & Relationships inFamily Business (McGraw-Hill 2008).

Where to Go When the Bank Says No - Small Business Investment Companies

noreply@blogger.com (The Alternative Board) — Fri, 13 Jan 2012 22:22:00 +0000

Allen E. Fishman, TAB Founder and Chairman

What if the amount of money you need is more than what the bank will lend you, even with an SBA-backed loan? Licensed and regulated by the SBA; Small Business Investment Companies (SBIC) fill the debt and equity investment niche between straight lenders and venture capitalists. Investments by SBICs have fostered the growth of companies including Federal Express, Intel, America Online and Outback Steakhouse.

SBICs use their own capital, plus funds borrowed from the federal government to provide small companies with long-term, fixed-rate loans that are guaranteed by SBA. To qualify, your company must have a net worth of less than $18 million and average after-tax earnings of less than $6 million for the past two years.

SBICs tend to have greater flexibility in terms of financing options, which results in loans tailored to the needs of the individual’s small business concern. In addition, SBICs are more risk-tolerant than banks or traditional venture capitalists. To offset this risk, and since the nominal interest SBICs charge is competitive (and often less) than other lenders, SBICs attempt to earn this extra return by sharing in the equity of the borrower.

This often takes the form of indirect ownership in the form of warrants to purchase common stock or notes that are convertible into common stock. In other cases, SBICs will acquire a direct equity interest in the common stock of the borrower. Through this equity participation, most SBICs seek to earn a rate of return on investment somewhere between the interest rate charged by finance companies or SBA loans and the very high target rates of return sought by traditional venture capitalists.

SBICs are restricted from owning more than 49 percent of one company and it is rare for an SBIC to have that large of an ownership. This allows a small business the benefit of interested equity investors without relinquishing control.

Most SBICs are interested in all types of businesses, while others like to invest in specialized industries. Remember, like other funding options, you will need a strong business plan to approach SBICs. You can find a directory of SBIC licensees at www.sba.gov/inv.

Fishman is also the author of several books in which he shares his business insights to help business owners, including two best-sellers: 7 Secretsof Great Entrepreneurial Master: The GEM Power Formula for Lifelong Success(McGraw-Hill, 2006) and 9 Elementsof Family Business Success: A Proven Formula for Improving Leadership &Relationships in Family Business (McGraw-Hill 2008).

Understanding Conflict in the Family Business

noreply@blogger.com (The Alternative Board) — Fri, 06 Jan 2012 21:17:00 +0000

Jacquelyn Gernaey, Independent Owner, The Alternative Board TAB^Ò, President, HyTech Consulting from Balancing Act: When Family and Business Intertwine

Many articles on the subject of conflict contain an acknowledgement that conflict is a normal part of life. Webster’s Dictionary defines conflict as “a battle, contest of opposing forces, discord, antagonism existing between primitive desires, instincts and morale, religious or ethical ideals.” Conflict results when two or more people oppose one another because their needs, wants, goals or values are different. Most recognized experts on the subject of conflict would say that conflict is not necessarily bad. While all this may be true, family-owned businesses, like most businesses, understandably tend to focus most of the attention on the negative aspects of conflict.

What is the first thing that comes to mind when you hear the word conflict? If you are like most people, it will remind you of a less than happy experience or time in your life. That is because conflict is almost always accompanied by feelings of anger, frustration, anxiety, fear, resentment and hurt. Most individuals associate conflict with unpleasant life experiences. And the family business environment is no exception.

The ingredients of conflict include:

Needs: Needs are things that are absolutely necessary to a person’s well being. Conflicts often arise when one’s needs are overlooked, whether accidentally or not. It is important to remember that needs are not the same as desires (things that we would like to have, but are not imperative).

Interpretation: People interpret life around them in very different ways. They perceive differences in cause and effect, level of severity and consequences of a problem.

Authority: The manner in which a person defines and handles authority and the level of power associated with a leadership role is an important influence on the types and number of conflicts that arise. This key ingredient may also be the decisive factor in how conflict is managed.

Values: Values are ideals and principals that a person considers very important. Conflicts occur when people hold different values or when values are not clearly understood. Conflicts also arise when a person and/or group is not willing to accept that another person and/or group holds something as a value rather than a preference. Even when people are related, they can have different or opposing values.

Emotions: Many people tend to let emotion rule how they deal with the issue of conflict. Conflicts can also occur when a person’s feelings or emotions are overlooked. Other conflicts may arise when the level of emotion differs over a particular issue.

Conflict becomes even more complex, as there are many different styles for dealing with conflict, including competing, collaborating, compromising, avoiding and accommodating. And something that causes conflict for one person might not bother the other person at all.

The negative aspects of conflict can be a serious drain a family business’ financial resources, productivity and momentum, as most energies are directed toward resolution of conflict rather than prevention. Strategies are typically directed toward minimizing the negatives of conflict rather than promoting the positives. In fact, conflict can be healthy when effectively managed. The positive attributes of conflict can lead to:

Þ Growth and prosperity

Þ Innovative ways of thinking

Þ Improved management skills

Þ Increased motivation

Þ Awareness of problems

Þ “Clearing the air”

The key to turning conflict into a positive outcome is to view conflict from a future-oriented perspective and channel the conflict into viable goals. If conflict is understood, it can be effectively managed by reaching a preventative solution that simultaneously meets the needs of the family members, without losing sight of the business objectives. Developing and using skills such as effective communication, problem solving and negotiating with a focus on “interest rather than position” can manage conflict. In looking for solutions to conflict, it is important to focus on what needs to be changed rather than casting blame or reliving past wrongs.

Several important aspects of conflict management and understanding the unique differences among family members, are the use of peer advisory groups, assessments and executive coaching.

An End-of-Year Leadership Check Up: Get Your Business Back on Track

noreply@blogger.com (The Alternative Board) — Fri, 30 Dec 2011 17:00:00 +0000

Allen E. Fishman, Founder and Chairman of The Alternative Board

Anyone can be an entrepreneur, but not everyone can be an entrepreneur while also being a great leader. The biggest test to see whether you are a successful leader within your company is to take a look directly into the success of your company. Hint: The success of your company is a direct reflection upon your leadership skills—good or bad.

The characteristics of a great leader are endless, from being caring, kind and empathetic to detail-oriented, driven and ambitious. You’ll find all leaders have common characteristics that set them apart from others, but none are totally unique. Simply put, most people have the characteristics of becoming a great leader; it’s how they use them that will be the deciding factor.

Are you an effective leader within your company? Want to find out? The questions below have “yes” or “no” answers. What are your answers?

Is your company where you would like it to be when you first started the company, or is it at least moving in the right direction?
Do you have good relationships with your employees?
Do you feel confident knowing that you don’t need to monitor every move your management team makes?
If you had the opportunity and time to give your company an internal make-over (i.e. hire stronger/more motivated employees, re-write your company mission and vision statements, etc.), would you decide against it?

If you answered “no” to most of these questions, then you probably are not doing your job as being a great leader to your employees. Don’t feel bad, this is not uncommon. Luckily, you are on the road to becoming a better leader.

Most business owners have at least heard of strategic planning, and some might even think they are leading their businesses strategically. However, entrepreneurs, as well as small and medium-sized companies, have unique needs when it comes to strategic planning—needs that traditional strategic planning overlook.

Let’s compare strategic planning for entrepreneurial organizations to a bike. Imagine that the front wheel represents your personal life, goals, etc. and the back wheel represents your company goals, vision, etc. In short, the front wheel steers and the rear wheel gives power. Just like a bike, your company and life cannot move forward if one of them isn’t working.

I break down a strategicplanning process into the following steps. Each step has questions designed to make you think hard about your personal and business goals.

Step 1: Your Personal Vision and Your Company Vision

Step 2: A Look in the Mirror

Step 3: Your Personal Plans and The Business Plan

Step 4: Making it Happen

Step 5: Turning the Wheel

By going through each step two different times—once for your personal path (front wheel) and once for your company path (rear wheel)—you will learn how to better improve your company by learning to lead your company in the right direction.

Like most plans go, strategic planning for your company is not as easy as it looks, but it’s not extremely difficult either. Strategic planning does take time and careful consideration. Also, keep in mind that how you plan for your company at first might change in a year or two, so be sure to revisit your strategic plan on a yearly basis making any changes needed in order to grow and maintain your status as a leader.

You always hear people refer to the common saying, “They are a natural-born leader.” That is not always true for most people, but by learning how to be a leader and using those skills, you’ll see that the “sky’s the limit” on where your leadership skills can take you.

Fishman is also the author of several books in which he shares his business insights to help business owners, including two best-sellers: 7 Secrets of GreatEntrepreneurial Master: The GEM Power Formula for Lifelong Success (McGraw-Hill, 2006) and 9 Elements of FamilyBusiness Success: A Proven Formula for Improving Leadership & Relationshipsin Family Business (McGraw-Hill 2008).

Translating Social Networking into Real Benefits for Your Business

noreply@blogger.com (The Alternative Board) — Fri, 23 Dec 2011 17:00:00 +0000

Jacquelyn Gernaey, TAB Certified Facilitator/Coach

To social network or not, that is the question. We are not talking about the social networking your kids or grandkids might do, we are talking about making social networking an integrated part of you marketing plan. (You all have marketing plans, right?)

Ok, so for those who might not yet know what social networking is all about, think of it like regular networking in that you meet people, you join groups, you have conversations, you make and get referrals, you focus on giving rather than getting, and you benefit in the long run by helping others and by being an expert.

You are thinking, "if I take the time to do it, how does it benefit my business?" The first and most important thing social networking does is to build a deeper engagement with your customers. They are online already and talking about you or your competitors, voicing opinions and posting comments. Knowing what they are saying allows you to react and resolve issues, and to learn what they might like for future products or services.

Doing this online is far easier and cheaper than using comment cards or focus groups.

This is the minimum social networking every company should do. It requires monitoring posting sites, providing your customers with a forum for comment and ensuring your customer service policies empower your employees to resolve issues before they end up posted online.

If you want to use social networking to generate new business, it can help improve how people view your brand. It allows for unbiased references, which is especially important if you are in a service business (many sties allow you to review comments before they are posted). The 80/20 rule applies here. Focus on giving advice on a subject of your customers' interest, thereby setting yourself up as an expert. Giving advice or help 80% of the time gives you the right to sell 20% of the time by inviting potential clients to seminars or giving them coupons to buy.

Social networking can also help if you need to hire employees. You can tell people in your groups your needs, post ads on networking sites and research potential hires to get an insight into the real person before you hire

Getting a referral for a new vendor becomes a snap with social networking. Post your needs in a discussion forum or community. When you get a recommendation, read their reviews to help you make a decision.

There are 1000’s of social networking possibilities such as blogs (wordpress), sharing pictures of projects (flicker), and training videos (YouTube). It all begins with the conversation. When you put social networking in your plan, think long-term. The right choice for you is based on your goals, your manpower, and budget. Like any networking or other marketing tactic, make sure you calculate your return-on-investment. For advice on attracting more traffic to your Facebook page, visit this article from Entrepreneur magazine written by Mikel Belicove. As you begin, don’t forget all your company’s existing written, multi-media, and connection capital that you can exploit. Start small but do start!

Jacquelyn Gernaey, bestselling author of a business book with giants Brian Tracy, Mark Victor Hansen, et al, endorsed by Dr. Stephen R. Covey and Ken Blanchard entitled Create the Business Breakthrough You Want, is President and founder of HyTech Consulting, a management consulting firm based on Long Island, NY and founded in 1994 and Chief Executive of The Alternative Board, Suffolk County.

She has more than thirty years experience leading both entrepreneurial and large corporations and now focuses helping CEOs, presidents, owners and partners create, execute and exceed their personal and business success goals. This is accomplished through sales, marketing and management consulting, pre and post employment talent management assessments, executive coaching and facilitating peer boards of business owners.

Why Unsubscribes Can Be A Good Thing

noreply@blogger.com (The Alternative Board) — Fri, 16 Dec 2011 20:26:00 +0000

From Lyris: White Papers; The Role of DNS, Unsubscribes, and Bounces in Email Deliverability

Can unsubscribes be good? No sender ever wants to lose an address of course, but when one turns bad or a recipient asks to stop receiving mail, it can actually be a blessing in disguise.

Why? Because spammers work hard to make their mail look as legitimate as possible—in other words, to make it look like your mail. So aside from what you send, recipients and ISPs also recognize you as a good sender by how you behave. A clear, easy, and effective unsubscribe process is the perfect opportunity to distinguish yourself as one of the good guys, and this can really help if blockages or other delivery problems should arise.

Here are three more reasons to smile as you’re removing email addresses from your list:

1.) Unsubscribe requests keep your list vital and responsive

One of the strongest tenets of the federal CAN-SPAM law www.lyris.com/resources/antispam/canspam_faq.html) requires senders to honor all unsubscribe requests within ten days, and the Federal Trade Commission has proposed that the number of days be reduced to three. Rather than view this new development as a stricture, however, consider that this requirement is actually likely to work in favor of most marketing goals. By processing unsubscribe requests quickly, lists are kept populated with recipients who actually want to receive your mail—and traditional direct marketing wisdom tells us that such recipients tend to be the most interested and responsive to offers and other messages.

So, while there’s no doubt the sending environment is becoming more regulated, the legitimate email marketer should greet unsubscribe requests gladly and view them just as a gardener does pruning: as an opportunity to keep your list well-formed and fruitful.

2.) Removing bad addresses has long-term deliverability benefits

Some marketers have a hard time saying goodbye to bad addresses, rationalizing that there’s no harm in trying to send to truly undeliverable addresses if there’s a chance of getting through. But this strategy can actually do a great deal of harm to your overall deliverability. ISPs quickly lose patience with senders who repeatedly send to inactive addresses since processing erroneous mail uses their resources. In addition, sending to a high percentage of “dead” addresses can be interpreted by the ISP as an indication that your list may have been harvested and that you—the sender—are a spammer. So if an address bounces twice, sacrifice it to the cause of greater deliverability and overall ISP relations. Set your software or service to remove it automatically after a couple of failures—and don’t look back.

3.)Unsubscribes are infinitely preferable to the other way recipients can ask to stop receiving your mail

When recipients ask you to remove them from your list, it means that they’re choosing to follow your unsubscribe process, instead of complaining to their ISP that your mail is spam. In this sense, unsubscribe requests are a sign from recipients that they trust you to honor their requests. If there’s no easy way for them to unsubscribe, or if past unsubscribe requests have been ignored or failed, they’re much more likely to hit the “this is spam” button. When a recipient unsubscribes from your list, remember that you’re simply losing a single email address. On the other hand, when enough recipients click the “this is spam” button, your mail could ultimately be blocked ISPs, or worse—you could be added to blacklists.

Applying the 80/20 Rule to Daily Tasks

noreply@blogger.com (The Alternative Board) — Fri, 09 Dec 2011 21:14:00 +0000

by Blair Koch, TAB-Certified Facilitator/Coach, Denver, CO

One tried and true time management tool is the simple act of making a daily task list. As elementary as this sounds, list making helps busy people be more productive, experience less stress and frees them up to focus on business strategy. In observing entrepreneurs and business owners using lists in an effort to increase productivity, I’ve noticed two common problems they encounter. Applying the 80/20 rule – the theory that 20 percent of what you do generates 80 percent of the results – can solve both problems.

Problem #1: Putting too much on the list. My TAB members and executive clients are successful entrepreneurs. They’re full of ideas, energy and enthusiasm. As such, they often create daily task lists that are unrealistically long. I call this tendency "the curse of ambition". At the end of the day, instead of feeling pleased with what they’ve accomplished, they’re disappointed in themselves for not finishing everything. You don’t have to fall into this trap. When you make your list for tomorrow, think in terms of 80/20. Write your list as usual and next to each item jot down the approximate time each task will likely take, padding each estimate by 20%. Then reduce your list by 20% in terms of hours to be spent by prioritizing as outlined in Problem #2.

Problem #2: Failing to prioritize. Sometimes executives accomplish little or nothing from their lists because they spend too much time on “urgent” tasks instead of “important” tasks. As you review your list for the 20% that should drop off (because you know that some tasks will take longer than planned and unexpected issues requiring your attention will inevitably crop up), apply the 80/20 rule. Identify the 20% of tasks that have an 80% chance of improving your profitability. This may be something as simple as placing a phone call to a potential new client or spending an hour reviewing projections for next quarter. The goal is to make sure you’re spending your valuable time on tasks that will deliver bottom line results for your company. What about the items that need to be done but don’t fit these criteria? Delegate.

An effective daily list can increase your productivity by 20% or more. Use a list wisely, focus your time and energy on the 20% of tasks that will grow your business, and watch as your efforts trickle right down to the bottom line.

Blair Koch is the President of TAB – Denver West, has been on the front line, at the boardroom table and everywhere in between. Her experience includes business start-up, operations, development, sales and marketing, project and product management, strategic planning and facilitation. Visit Blair at www.TABdenverwest.com

Cash: A Common Sense Approach

noreply@blogger.com (The Alternative Board) — Mon, 05 Dec 2011 15:39:00 +0000

When you work for a large corporation you don’t spend much time worrying about cash. When I was a General Manager of a $100 Million Division for a large multi-national corporation that had over $1 billion in cash I never worried about where the money was coming from, I just spent it. When I started my own electronics company I ran out of cash within the first few months. I had to raise more money by selling more stock. After that time I didn’t run out of cash again for 14 years.

Some of the most successful companies in the world are those that grow at astounding rates. Sales soar, but so do costs in most cases and cash becomes the most important aspect of the business. Without available cash your company could be put on credit hold or cash-on-delivery for materials necessary to produce your product. You could also go bankrupt. One of my good friends grew a company from nothing to over $50 Million in sales in three years, but he ran out of cash and had to file for bankruptcy

One of the most important rules in business is to be able to meet the cash demands of your payroll. That should be your number one priority. If you miss payroll one time its not long before your employees are looking for another job in a company that can meet their cash needs. There were times when my partner and I waited a few days before we cashed our paychecks just to make sure we had enough money in the bank to pay all of our employees first.

How do you prevent running out of money?

1. Establish a line of credit with your bank long before you need it. Banks are eager to serve your needs when you have cash in the bank and you are successful.

2. Establish close relationships with your customer’s payables managers. I always took them to lunch at least every quarter so when I called they didn’t know if I was asking them to pay me or if I was calling to take them to lunch. When we did go to lunch I always got a check from them.

3. Talk to your customers about early payment. My company was one of the smallest doing business, but we gave them excellent service and we were thought to be one of their top suppliers. My largest customer paid me in 15 days. Be careful about offering discounts for early payment because some will take the discount and still not pay you for 60 days.

4. Know how much cash you are going to collect each week before you make out your checks to your suppliers. Project your cash requirements for at least 3 months in advance. Call your customers to find out if you will be getting a check from them when it is due. I met with my controller at least twice a week to see what checks we had received and if there were any problem payers. I had my controller set up a running cash analysis that looked like a household budget.

5. If you see that you are going to run out of cash in advance (remember it was 14 years later that it happened to my company) call your best customer and see if you can borrow the money from them. I had run out of cash because my best customer had not needed my service for 2 months, which was most unusual, so I did not have the receivables to collect from them. I called one of their board members and told him the situation. He told me to fly down with my cash flow plan and meet with him. I had a check for $100,000 in 2 days and had to pay back the note over a one year period of time starting in 6 months with no interest. All he wanted was a 1% discount on all products that his company purchased until the note was repaid.

Having enough cash is probably the most important aspect of a small business. Knowing how to get it is mainly common sense.

Will Your Family Owned Business Survive Without You?

noreply@blogger.com (The Alternative Board) — Wed, 23 Nov 2011 20:30:00 +0000

By: John Keener, TAB-Certified Facilitator and SBL-Certified Coach, St. Louis, MO

Family owned businesses comprise 80 to 90 percent of all business enterprises in North America. So it shouldn’t surprise anyone to know that family owned businesses account for 60 percent of the total U.S. employment. What may surprise you is that 40 percent of all family owned businesses will be passing the reigns over to the next generation in the next five years. It may also surprise you to know that only 40 percent will survive into the second generation, 12 percent into the third and three percent into the fourth.

So why is the mortality rate so high? Let’s take a look at the most common mistakes that perpetuate that failure rate.

Poor succession planning. In my estimation this is the primary reason companies do not make it through the next generation. Either the transition came about unexpectedly due to illness or death, or the owner did not make adequate plans for retirement. In either case, the best way to avoid this critical mistake is to have a transition plan in place regardless of your age. It can always be altered if necessary. Involve a business advisor, an estate-planning attorney and your CPA, and develop a written plan that includes all those involved. Be very clear and specific as to how you want the transition to evolve. Leave nothing open to question.
The next generation is forced into the family business. Every generation does not necessarily have the same passion for the business that you may have. Forcing a child into the business can have dire consequences because they will not have the same passion, dedication and enthusiasm. Plus, you will make your off-spring miserable. Determine well in advance if they want to come into the business. If the answer is “no,” develop an alternate plan (i.e. sell to employees, etc). If the answer is “yes,” put your plan together and work your plan.
Next generation is not and will not be qualified to run the business. This is one of the toughest things for a parent to admit to. But if you do not make an accurate assessment, you will be seriously damaging the business and putting your child’s well being at risk. If he or she is not capable of leading the company to the next level, it is not the end of the world. Employ a qualified family business counselor to discuss the many options available to you.

The bottom line is this: it is never too early to start planning your exit strategy. You and your family will prosper from it.

John M. Keener, of The Kelsey Group, St. Louis, MO, has spent over 30 years in senior and executive level management with Fortune 500 and small startup organizations. A vast majority of his experience has focused on sales and marketing including sales force organization, compensation realignment, strategic planning, profit enhancement and initial public offering experience. As president of two organizations, his experience extended into operations and product development. Mr. Keener earned a BS degree in psychology from Ohio State University.

Committing to a Written Annual Marketing Plan

noreply@blogger.com (The Alternative Board) — Fri, 18 Nov 2011 21:13:00 +0000

A lot of hard-earned money goes out the window every year because otherwise intelligent business people spend good money on bad marketing ideas. Why? Most often because he/she doesn’t commit to a written plan designed to achieve his/her expressed business goals. Small business owners in particular often spend their days reacting to the crisis or opportunity of the moment. While that’s sometimes necessary, having a solid marketing plan can increase the odds of making profitable decisions, whether or not under pressure.

An easy way to make the daunting task of writing a marketing plan more manageable is to work toward answering one key question: How will you communicate a meaningful difference about your product or service to those who might be most interested in buying it?

This question can be answered by breaking it down into five smaller questions.

Who is your target customer? Your market may be all potential buyers in a geographic area, but to whom do you sell most of your product or service? Segmenting your market allows you to focus limited resources on those customers most likely to bring in sales.

Who are your competitors? You need to understand their strengths and weaknesses, their selling strategies and their market position (category leader, follower, challenger, niche player) relative to your own.

What is your unique selling proposition (USP)? In a single sentence you should be able to articulate what makes your product or service both unique and desirable in comparison to your competition. Is it quality? Price? Service? Though you may be able to list several benefits, focus on the one or two that are most important to your target customer.

What methods will you use to communicate your USP to your target customers? This is the action stage of your plan. You must choose the communication channels that are most effective to reach your customers. It is crucial to do your homework and understand which methods will work best for your product or service, target customer, budget and business.

How will you measure the results of your marketing efforts? No marketing plan can be considered successful unless its results are tracked and evaluated against pre-determined objectives. Be sure to build this mechanism into every marketing tactic.

Finding Money IN Your Business

noreply@blogger.com (The Alternative Board) — Fri, 11 Nov 2011 23:30:00 +0000

Every company is in business to make money. There are only two sides to the money equation. Either you increase revenue or you can reduce your costs. Of course, the best of all worlds is to adjust both sides of the equation at the same time. There are several areas where a company can focus to increase their revenue, but where can they look to find money in their business? Here are some potential opportunities to help your bottom line:

1. Negotiate with vendors and suppliers. Due to today’s economy, everyone needs business and everyone is negotiable. Talk to your vendors about getting lower rates, investigate their competition, see if someone else has a better deal and at a minimum, use the competition as a negotiating tool. Also, talk to your vendors about getting better payment terms. If your agreement is to pay net 30 days, try and get net 60. Let your money work for you longer.

2. Evaluate your employees. Not many are comfortable approaching this topic since we’re talking about people’s livelihoods. The truth is that a company’s payroll can be their biggest expense. In tough times, it may be necessary to reduce your headcount. However, even in good times you should evaluate what your staff is doing and how they’re doing it. Get rid of poor performers and replace them with more motivated employees. Are there functions that can be done by a part-time employee instead of having someone on staff full-time? This may be a tough subject to address but it can’t be overlooked.

3. Barter. Look at your vendors, suppliers and even your customers—are there products or services you can use in your business? In essence, you’ll provide your product to someone at wholesale in return for something of value to your business. Of course, you need to make sure that value is equal or more than your cost.

4. Look at your business processes. Time and increased productivity is money. Make sure your business processes are documented and repeatable. Also, make sure you have some metrics in place to ensure the processes are being followed and they’re effective. If you’re not sure how to address your business processes, get some external help—many times this is where you can find the most money.

5. Leverage technology. Implementing the appropriate systems to help your business can translate to money dropping to your bottom line. Mundane processes can usually be done by using technology instead of higher priced manual labor. Look into using a Customer Relationship Management system (CRM) to better manage your sales process and improve your customer service. Can technology help your manufacturing process? The cost of technology continues to drop and this is an area where companies find money as a return on their investment.

These are only a few suggestions on how you can help your bottom line. Improving lease terms or looking at employee benefits are a few more. Some of these topics are difficult, particularly when they directly touch employees. It’s essential for every company to manage their costs and it depends on cash flow as to what degree a company needs to “cut to the bone”. Proper planning and execution is crucial to reducing expenses and improving profitability. Whether your company is healthy and profitable or you have hurdles that threaten your survival, seek the help and expertise needed to guide you through the process of “finding money”.

The Catch 22 of IT Management

noreply@blogger.com (The Alternative Board) — Fri, 04 Nov 2011 22:40:00 +0000

By: John F. Dini, TAB-Certified Facilitator
Visit John's Blog "Awake at 2 O'Clock"

Are you big enough for an “in-house” IT professional? With the rising cost of service by outside firms, many smaller businesses are trying to hire someone to take care of their technology needs.

Of course, many small businesses are still trying to ignore their technology needs. I am surprised at how many times I get a belated answer from someone that starts “Sorry, but our email has been down for a week.” Those companies are simply playing roulette with their business. I’m talking about the ones who are really trying to maintain secure, up-to-date systems.

Like any skill you bring into your business, you’re going to start with one person. You can’t make the leap from nobody to a whole department. So how do you approach hiring a single technology professional?

As with any other position, you could aim high or go cheap. Let’s say for a moment that any compensation within reason is acceptable. Do you pay, say, $75,000 for someone with certifications and extensive experience, or more like $40,000 for someone who is self taught?

Part of your thinking, of course, revolves around how much you are paying for outside support now. That support won’t go away entirely, however. No single technician knows everything about everything, no matter what he claims, but service-by-the-hour gets more and more expensive.

If you under-hire, there is the very real danger of your in-house tech getting into something over his head, or making a mistake. Then getting the outside firm to come in and do break-fix is going to be really expensive.

Do you remember the old joke about auto repair rates? I’ve seen this sign or one like it on the wall of a hundred shops (but then, I sold to auto shops for 10 years.) The times (and prices) have changed, but the sentiment remains the same. If you call a professional to undo the work of an amateur, you are going to pay a premium for that service.

So then the logical alternative would be to hire a top gun, right? That is where we run into the Catch 22 of today’s title. Computer technology is a rapidly evolving field. Staying current is a critical core competency for any professional. In a service company, the technicians are regularly installing the latest equipment. They see how many different configurations interface. They get a heads up on new problems almost daily.

But individual private companies don’t change their equipment frequently. The technician can expect to work on the same hardware for years. That is a problem that causes may of the most skilled to avoid one-man shops. The ones that accept such a position really start falling behind in their technical skills the day after they start.

Now you have an expensive employee with deteriorating skills. It should come as no surprise that his paycheck doesn’t decline with his market value. We see many companies who keep upgrading outmoded technology because “It’s what our IT guy knows.”

If you want to have the quick service and attention of an on-site IT employee, by all means hire someone to handle the help desk and general hardware/software support. Unless you plan on building a department, however, don’t try to run your business with an all-in-one-man (or woman) solution.

Trust Your “Gut”

noreply@blogger.com (The Alternative Board) — Fri, 28 Oct 2011 22:47:00 +0000

Rely on Your Learned Intuitive Skills

Making crucial business decisions in a timely manner without over-analysis or procrastination greatly enhances bottom line results. Using your learned intuitive skills and experiences, otherwise known as your “gut,” has become increasingly important when faced with the challenge of conflicting or inconclusive information. Your “intuition” is not all in your head, but instead, it is rooted in your body… your inner source, or, your gut. Our gut instincts are the sum total of the millions of experiences we have gathered in our lifetime that enable us to make many types of decisions with a high degree of success. Obviously, “gut calls” are better suited to functions such as corporate strategy and planning, marketing, public relations and HR rather than others such as production, operations management, accounting and finance.

Reflect for a moment on the many work and personal instances where your gut has served you well in making difficult decisions, or better still where you should have followed your gut instincts and didn’t. Examples where trusting your gut will pay huge dividends include dealing in a timely fashion with toxic, underperforming and poor attitude employees, low margin and/or high maintenance customers, inflexible and/or high priced vendors, declining and/or highly competitive markets, products/services/process that have lost their competitive advantage, problematic business or partner relationships and many, many more.

Combining available factual information with your gut intuition will enable you to make better decisions in a more timely fashion, thus avoiding procrastination. The great majority of our daily decisions that are non-financial, contractual or legal in nature can be quickly changed or modified, as necessary, if the situation changes or we simply made a wrong decision.

By applying the concept of ‘Trusting Your Gut” you will accelerate the quality and quantity of your decision making process which will help create a proactive can do company culture resulting in enhanced employee morale and improved profitability.

By: Don Schlueter, TAB-Certified Facilitator, TAB Chicago