Seriously Speaking: Accentuate the Positive (Part 4)

Mediocrity is failure in slow motion

This is the last installment of the “Accentuate the Positive” series. As you will recall we have been using the Lyrics from the old Johnny Mercer song. Here they are again, just in case you don’t recall.

You’ve got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
And don’t mess with Mr. In Between.

Last time out we talked about how to focus on finding and eliminating negatives in your business. This time let’s focus on eliminating the Mr. In Between”. This is my personal pick for reasons a business may be struggling. Yep, good ol’ “Mr. In Between”.

This injurious dynamic may infect your business. It can be characterized as: Lack of commitment to a plan, inability to give answers, can’t or won’t give direction, etc..  In essence: the ship is drifting. The dynamic here is that the “Leader Doesn’t Lead”.

There are all kinds of “rules of thumb” that get thrown around by “experts”.  Do this, don’t do that, etc. We follow them because we read something by some industry guru that knows my industry better than me. And that’s Ok. It’s a start. However, these rules of thumb may be outdated or they may not be relevant to YOUR business. They may even keep you in the middle of the pack. “Mr. In Between”. You won’t be in the bottom 20% but you won’t be in the top 20% either.  You end up squarely in the middle 60% of businesses like yours. That makes you Mr. In Between, just mediocre. That is not ok.

Mediocrity is simply a failure in slow motion. You might get on the team for a short while but you will never get in the game. Eventually, you will be cut from the team, never having experienced real success.”

Here are MY rules of thumb for avoiding Mr. In Between and mediocrity:

Rule 1: Take “rules of thumb” with a grain of salt. Make sure that they make sense for your business. Many times when we latch on to these rules of thumb they may be from a market or an area that is very different than the one that we are actually in. Costs, selling price, labor costs, etc, may be very different where my business is, as opposed to the “averages” that usually get tossed around.  Make sure metrics that you follow are for your area, business type, business size, etc.

Rule 2: Differentiate your business: Ask these questions: Is my business in a typical market for the industry? Is my business unique in my area? Are my products or services the same as others around me? Are my employees (Am I) capable of creating a difference between my business and others in the area? It is highly unlikely that you can be the best in everything. First, start out by striving to be the best in ONE thing. If you can’t compete on price then have better products, or better service, or…

Rule 3: Engage with the people “of” your business. I use the word OF because your customers, your vendors, and your employees are a part of your business. Make them feel like it. When decisions are needed make them. When answers are required give them. Stay engaged with the people of your business. Talk to them, reward them, get feedback from them, and thank them.  They will be part of the history of your business. Hopefully, that history will be a success story written over many years.

Rule 4: Own your Brand, your quirkiness, your uniqueness. Here in Louisville, there was a restaurant named Lynn’s Paradise Cafe. Now, this was a unique place. It was quirky. People came in pajama’s, it had weird (in a good sense) decor, and the food wasn’t ordinary. They were different and they owned it. People loved it. The place was always packed. And now that it is gone… the people of LYNN’s miss it.

Will your business be missed when it is gone?

Rule 5: Make sure that the systems you have in place allow you to SEE your business: Do you get reports that let you see what is working in your business? Can you see what your cash flow is? Do you get Cash Flow Statements along with P&L’s and Balance Sheets on a timely basis?  Make sure you have a cash flow forecast for at least six months. How can you know where to drive the car unless you know how much gas you have to get there? It is the same with cash. Know it. Talk to your CFO (if you have one), Controller, Accountant, Managers or Employees.   Are they too busy to get it all done in a timely manner? Are they focused on the right things? You don’t have to “hire” people but you may need to get them some help.

Remember to Accentuate the Positive, Eliminate the Negative and don’t mess with Mr. In Between


 

 

You’re Too Close to Where You Got In

Ok, let me see if I understand your plight.

You are a small business owner. When you started your business you were full of enthusiasm, things were working and customers were coming out of the woodwork (or at least you had enough to sustain you).

But now, now you are struggling. The excitement is gone. Now there are not enough customers to sustain you. The numbers are just not favorable for  you staying in business.

When working with clients in this situation I am reminded of a story. I am unsure of the origin. The story goes like this:

One night, a mother heard a loud thump come from her son’s room. She immediately jumped out of bed to see what had happened. “What happened?” she asked her son. “I don’t know. I guess I stayed too close to where I got in.” You have to love the pure honesty of children.

I find this happens with business owners too. When you start your business, it is new, full of excitement, full of hope, and you are finally working for yourself. Or, maybe you just took over the family business. It’s been successful for years.

But now, those things aren’t true. Nothings changed with the business. You still have good stuff to sell. You still provide excellent service. You just aren’t getting the customers that you once did. Oh sure, you have your regulars that come in. You love them but, they aren’t enough to sustain you.

One very likely possibility is that you, like the little boy in the story, have stayed too close to where you got in.  Before you know it you feel a bump, you look around, and barely recognize your business. You are not alone. This is a common trap. And one that I believe causes a lot of businesses to fail. You see, when you opened up, the customers that came were found in the following ways: had seen an advertisement, found you by accident, sought you out for a specific product or service, or (and this is always good) someone referred them to you.

Unfortunately, most of these customers have moved on. We are inundated with messages from lawyers, restaurants, retail stores, doctors, dentists, Real Estate Agents, etc. Guess what? We have a short attention span. We practice selective blindness and selective hearing. We tend to fall into the habit of doing business with whom we hear/see most often. This behaviour does not favor the small business. You see, curiosity will get us into your business, but we will quickly fall into our old habits and shop “the names”.  Only two things will change this.

  1. the experience (product, service) is so exceptional that we connect with you the very first time, and then every time thereafter.
  2. your business pops into our mind when we think of something that we need, great rolls, that awesome massage, the unique gift, etc. This really only happens if you have “connected” with us most recently.

The first one you’ve got covered. If not, or if you are not sure, let’s talk.

The second one may be a little bit more elusive for the reasons I have outlined above. You have likely tried ads, flyers, maybe even radio, and some have even had TV spots. You have even tried things like Groupon and RetailMeNot. All of these can be costly. And, unless you have a large, very large that is, advertising budget you will not be able to “connect” with us enough to break the hold of the big guys by using these methods. You just can’t stay “in front” of us enough.

Now, I am not telling you to stop all of that. Remember, you may find some customers in those ads, or even in those “coupons”.  But how much will you gain vs. how much will you give up? My experience tells me that advertising salespeople are very good at providing statistics about how many people they reach. But, do they actually reach us soon enough before we buy to influence us. All I am saying here is: be very, very selective.

Maybe it is time to try something brand new and exciting, and successful and…  Continue reading “You’re Too Close to Where You Got In”

Seriously Speaking: Accentuate the Positive (Part 3)

This is the third installment of Accentuate the Positive. As you will recall we have been using the Lyrics from the old Johnny Mercer song. Here they are again, just in case you don’t recall.

You’ve got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
And don’t mess with Mr. In Between.

Last time out we talked about how to focus on finding and creating positives in your business. This time let’s focus on eliminating the negatives.

Eliminate the Negatives

Generally, I find that negatives in your business can be classified into two categories: Attitude and Performance. These will ultimately result in negative results.

Attitude

We all know them. Those people that suck the life out of you. You know, Debbie Downer, Negative Nancy, and Paul Problem. Not occasionally but all the time. The sky is always falling. These people can rob you of your creativity and your energy. Why is important to deal with the negativity? Estimates of the number of employees with negative attitudes about work are up around 25 million and it is likely that the cost to businesses is in the $350 Billion range.

So, what can you do to keep these employees from stealing your energy, passion and productivity? In his book, “The Energy Bus”, Jon Gordon suggests that you not waste time trying to convince negative people to get on your bus. He further states: “and if negative people do get on your bus, it’s essential to remove them as quick as you can”.  A manager once told me that he didn’t want to hear anything negative out of his managers unless those utterances came with an alternative solution. If you have negative people on your team, talk to them and try to figure out where the negativity is coming from. If they can’t change then they will have to be removed. Do not just ignore the problem… it will spread like a virus and infect your entire team.

Another form of negative attitude is known as “triangulation”. This is when one employee complains to another employee who can’t do anything about the problem or issue. This robs your business of both time and energy. Train your employees, especially your managers,  to avoid triangulation by talking directly with the team member that can help or that they have an issue with.

Performance

Let’s face it. We have all been on teams where someone isn’t doing their job properly. Many of you may have been that somebody. Sometimes it is because they lack energy, passion, and motivation. Are they following your lead?

The truth is that our teams will feed off of our energy and passion. Make sure that you show your enthusiasm for work and share it with your team. They will feed off you.

If one of your team members is not pulling their weight it is imperative that you correct the issue immediately. First determine if it is due to a lack of training, directions, etc. Correct those issues if possible. Make sure the employee understands the situation and they are needed on the team only if they are able to perform. Share with them your enthusiasm about the work and the part that they play in the process. Give them a chance to correct their performance but if they don’t they will have to be removed from the team.  It is not fair to let them linger.

Make sure that your team members feel appreciated. Recognize them for their accomplishments and contributions to the team. I see managers and business owners avoid this because they feel the it will lead to employees “wanting” more. It might but it may also keep key members of the team from leaving. There is no excuse for your employees not knowing that you appreciate their contributions. Make sure that your team knows what their mission is.  They will perform better, have more fun, and you will instill a sense of positivity in your organization.

“Protect your enthusiasm from the negativity of others” – H Jackson Brown Jr.

 

Seriously Speaking: Accentuate the Positive (Part 2)

In my last post (which you can find here) I talked about the old Johnny Mercer song, Accentuate the Positive, and what using the lyrics of the song for guidance in changing the dynamics might mean for your business.

As you will recall the Lyrics of the song are:

You’ve got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
And don’t mess with Mr. In Between.

In Part one I talked about some dynamics and concepts. In part two we are going to talk about using the first line of the chorus as guidance for improving business dynamics.

Accentuate the Positive

Accentuate the Positive? What a concept. But how do you go about that in your business?  While there is no way to give in-depth advice and step by step instructions in the space that I have in this article, I will do my best to provide a short list of things that you can do instill a positive dynamic in your business.

  1. Take a step back. It is very hard to identify positive things when you are hip deep in problems. Stepping back will allow you look at your business with some clarity.
  2. You must break your business down into functional areas. This will help you to identify things that are positive in your business. These functional areas may be sales, shipping, billing, production, etc.
  3. Look at each area and identify things that are happening which are as good or better than you expected. For example: Is your sales volume as good or better than budget? Is selling price as high as budgeted? Are your accounts receivable current? What about your costs? Is your purchasing department (or person) buying at prices that are acceptable?
  4.  When you uncover positive things happening, examine them. Really examine them to see if there are things that can be done to do even better in those areas. Sometimes, when we see things going good, we fail to look further at those areas for fear of making things worse. It is true that you be careful not to make things worse but that is why you “examine” very closely. What you are looking for here is the “why”. Why is what we planned working? Why are prices holding? Why did volume go up? Why are we getting customers that we couldn’t before?
  5. When you find your employees doing something right, make an example of them. Let them know. Let them know that you appreciate it. Charge you managers with the same task. Sometimes just a thank you is in order. Other times, a small gift card, or some paid time off, etc. are in order. This is how you go from having employees to having a team. This is not something that you start and stop. This is also not something that you can exclude part of the workforce from. Once you begin, keep it going.

This is a really simplified version of what you have to do. But, if you can take a step back you may be able to change the dynamics of your business by making what is good even better. Don’t merely accept good. Strive for excellence a little bit at a time. If you can’t take a step back, you will need to get help. The simple truth is that sometimes you can take what is good and make it better by doing little things. Don’t merely accept good. Strive for excellence. Remember, good can become mediocre very quickly unless you know what positives to focus on.

In the next installment of Accentuating the Positive, we will look at ways to eliminate the negatives in your business.

“Yesterday is not ours to recover, but tomorrow is ours to win or lose” – Lyndon B Johnson

Seriously Speaking: Accentuate the Positive

Making Your Business Sing (Again?)

The other day I saw heading for a short post from Success Ventures about “accentuating the positive”. It reminded me of an old song that I first heard my dad or my mom sing. It was written in the 1940’s by Johnny Mercer (Winter Wonderland, Jingle Bells, and for you Disney fans, Zip-A-Dee-Doo-Dah). The song has been performed by such greats as Bing Crosby, Perry Como, Louis Armstrong, and one of my all-time favorite singers, Sam Cooke. If you are interested you can listen to the Sam Cooke version here.

The song, which was published in 1944 while WWII was still raging, provides some sound advice on taking control of your life. Most of you reading this post would not have been born at the time it was written (and probably for many years later) and may never have heard the song or seen the lyrics. For those of you who do not know me personally, I was not yet born either. Think about what was going on at the time. Husbands, sons, mothers, daughters engaged in the war efforts and some would never return to their previous lives. Pretty bold to put out a song talking about “Accentuating the Positive” at this time in our country’s history. But that IS what they did in those times. They found ways to lift each other up. Look at the lyrics, listen to the song. It was purposely upbeat, in that old big band style that makes you want to get up and move, put on those dancing shoes, and hit the dance floor. Imagine what would happen if you could apply this to your life. Maybe, if we are all lucky, you can lift someone up with your new found positivity.

Well, since this is a blog for business people, I suppose I should address why this old song is the basis of this blog. Well,  the song actually provides some pretty good advice that can be applied to your business as well. So, let’s get acquainted with the song.

The chorus of the song goes like this:

You’ve got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
And don’t mess with Mr. In Between.

Over the next few weeks, we will take each line from above and show how following the advice from this song might help your business sing. During that process, we will talk about how we might identify some of the underlying dynamics that may be the root cause for the presence, or lack thereof, for any of the above situations in your business.

PART ONE

The basics

Before we get down to the nitty-gritty, so to speak, we need to talk about some basics involved in this process:

  • Dynamics – in this context they are the underlying forces that operate within your business. They can move you forward or backward. Obviously, we want to identify the ones that are moving you in the right direction. The dynamics of your business are what will provide the driving force on your business concepts. Examples of these dynamics that are providing “motion” to your business could be: Company Culture, Current Economic Condition, Vendor Relationships, Governmental Regulations, etc.  So, what are the dynamics that are impacting your business?
  • Concepts – for our purposes here, are those ideas that are being acted upon within the business. They may have been provided by management, they may have developed by stakeholders independent of management input, and they may or may not be in concert with the chosen, approved and expected direction the company wishes to move. Are your ideas and directions being carried out? Are someone else’s ideas being carried out? The answer to these questions don’t necessarily prove the existence of sinister forces at work. More often than not they reveal a disconnect between reality and perception. A disconnect that if left unchanged can have disastrous consequenses.
  • Action vs. Adaptation – some dynamics that are at work in your business, as well as those providing “force” from the outside are not changeable in the near term and will require adaptation. Others, are changeable and will require action in the near-term to effect meaningful change. It is important to know the difference. Actionable items are just that. They are dynamics within the business that can be acted upon within ninety days (90) that will have a measurable impact on your business.
  • Commitment – to make a change in your business requires your commitment. It can’t be a passive activity that you start, then you stop because it gets tough, or your not sure or, or, or. Change is not easy. Doing what is best for your business is not easy. This should NOT be like so many of those goals and objectives that come up at the managers meeting. Everyone agrees its a good idea, nothing happens, and we talk about it next time around. Like the shampoo bottle says: Lather, Rinse and repeat.
  • Examining your business, in my experience, is most successful when working with a guide. Even with my experience, it was difficult to dissect all the parts of a business with clarity while trying to carry on with the required day to day tasks. What I am going to do, within the pages of this blog, over the next few weeks will be just the bare minimum amount of guidance to get you started thinking about changing your dynamics. It will not be a complete roadmap for the entire process.

Next time… “Accentuating the Positive” in your business.

To be continued…

Seriously Speaking: Why should I hire a CFO, I am just a small business?

I am somewhat amused when someone tells me that they are “just” a small business. I guess that is because it is often said in the most apologetic of tones. They should be screaming: “I OWN A SMALL BUSINESS!!!”

Unfortunately, most people think of large businesses when someone is talking about the economy, or the government should do this or do that.  The risk takers, those brave souls who have the guts to start a business deserve more than just a cursory mention when it comes to discussing actions that are being taken to help “business”. So let’s do that now.

ALL HAIL TO THE SMALL BUSINESS OWNERS OUT THERE!

To be considered a small business you must have less than 500 employees. Here are some facts about small business:

  1. As of 2013, there were 28.2 million small businesses according to the Small Business Administration (SBA). 28.2 Million!!! Let that sink in for a minute. There were only 18,600 Large businesses. The people running small businesses, the owners and/or their managers will never make millions in salary for a year. Some may not make millions in their lifetimes. I will address that a little later on in this article.
  2. The small business provides 48% of all private sector jobs in the US. That’s right. On average nearly half of the jobs in your community are not provided by the “big guys”. For those of you who like numbers, that is just shy of 60 million jobs that are provided by the “I am just a small business”.
  3. • Do you know that 33.6% of the value that is exported is from firms that are considered a small business?  The value of those exports is estimated to be around $500 Billion. That’s billion with a capital B!!!

I could go on and on about the value of the small business in the economy but that will not answer the question at the start of this article. But, let’s agree that value that you provide as part of the small business group is just as responsible for the successes in the economy as well as much of what is good about the country overall.

So, Why hire a CFO?

I don’t want to scare you but: 20% of businesses fail in their first year. 50% are out of business before year five and only a 33% will make it ten years. If your business is older than that you have beaten the odds. But, what if one of these scenarios applies to you:

  • Maybe you survived but are just barely eeking out a living and you have become frustrated with your business and aren’t sure what to do to make it deliver on the promise it once had.
  • Or, and there are millions of you out there, you are the Baby-Boomer business owners whose business is pretty successful but your kids don’t want it and it is time to “dress her up and take her to the dance” known as selling your business.
  • Or maybe, and I hope you aren’t in this group, you are like the business owners that I have worked with that is having cash flow problems, the bank is on you to make changes or they will call your loan, your vendors are not being paid and your customers aren’t paying. If you ARE in this group you better check out my contact information below.
  • Or, maybe YOU ARE the CFO and you are buried. You don’t need someone full time but you need someone who understands your pain, who will have the knowledge to do the things that need to be done and in a timely manner. Someone who isn’t after your job! Someone who might be at a higher rate than that temp but brings significantly more value.
  • Or, and Lastly, you have a CFO or a controller but you would like some oversight or additional reporting that they can’t seem to get you, or you need someone on an interim basis until you can hire that CFO or Controller, or (you fill in the blank)

In short: You hire a CFO for the same reasons those big companies do: To get results that move you along toward your goals.  The only difference is you can’t afford to pay the same thing as those big guys pay for a full-time CFO. You don’t need to. You still deserve the service though. That’s where firms like Conceptualized Dynamics come in. By engaging the CFO on a part-time basis you can take advantage of their expertise at a fraction of the cost and at an amount that will fit within YOUR budget. Who knows, by working together you might just become one of those CEO’s that earn those seven figure salaries.  Some of these are: Increase profitability, improve cash flow, raise capital, Establish benchmarks (KPI’s), Manage Banking Relationships, Facilitate Reporting to the Board/Owners, help manage growth (including Merger and Acquisition activity)

What should I expect from my CFO?

  1. Honesty, integrity, and respect. No one, and certainly no CFO, has all of the answers. On day one they should be listening to you about your goals, your objectives, and your business. They should ask questions about your business that will help them craft a plan for doing what needs to be done, what kind of help you need and how they are going to bring value in excess of the amount on the invoice that they will hand you on a regular basis.
  2. Your CFO needs to understand your business. Whether you are a restaurant, a manufacturer of widgets, fidgets or gadgets, there are aspects of your business that will be unique. Some of these things may be your culture, your style of dealing with the customer, vendors, etc. Your CFO can’t and shouldn’t be giving advice until they understand YOUR business.
  3. Your CFO should be able to have an impact on the following areas of your business:
    • Your CFO will monitor cash, make cashflow forecasts, and work with your lenders and your banks to ensure that you have adequate funds to operate and grow your business.
    • Systems and processes – your CFO should be able to make suggestions for improvement
    • Financial Statements and Data Presentation – your CFO should be able to discuss financial statements in a manner that makes them understandable and the data should be presented in a manner that makes it actionable. What is the point of presenting data if you can’t or won’t do anything with it?
    • Your CFO should understand the relevant measurements of your business. They may be referred to as KPI’s, Industry Benchmarks, etc. They should be able to develop them if none exist. These will provide a baseline for measuring performance going forward.
    • They must be able to provide actionable guidance on managing the balance sheet of the business. This will likely include advice about decreasing the payment gap between receivables and payables, capital expenditure recommendation and/or justification, debt structuring that is cost-effective, etc.
    • Last and most importantly, the CFO will have an impact on profitability. This may come in the form of helping you avoid costly pitfalls, cost containment and negotiation of supply contracts, contract review, review of bid numbers to avoid costly calculation errors, etc.
  4. Your CFO will be able to, in conjunction with you, develop budgets, forecasts and a long-term growth strategy for your business.
  5.  Your CFO must be able to communicate with you in a no-nonsense and courageous manner even when delivering bad news

 

ABOUT THE AUTHOR 

Patrick Cowan has over thirty years experience in financial and business management, public accounting (licensed CPA in California – inactive). He has experience in multiple business types and industries including construction, manufacturing, retail, contracting, telecommunications, etc. He is the founder and owner of Conceptualized Dynamics, a CFO services firm offering affordable guidance to small to medium-sized businesses. Conceptualized Dynamics offers business owners in the Louisville, Kentucky area a free no-obligation assessment of their business and he may be reached at patrick@concepdyn.com or by phone at 502-664-0546. Patrick is available for engagement on a contract basis in other areas of the country if a cost-effective agreement can be reached between Conceptualized Dynamics and the Business Owner/ Manager. This usually equates to one or two full days a month on-site with much of the work being done remotely.