photo by jared

As a business owner, it can be difficult to stay focused on any one thing – you are constantly being pulled in different directions.  You really need to hire someone but more importantly you need to get more clients in the door, you need be working ON your business and when you get some free time it would be great to spend some time with your customers and make sure they’re happy and spreading the word about you.

On top of that, most businesses are feeling a pinch these days (real or imagined) and a total layer of extra stress.

So how should you be focusing your efforts and your time?

The first step is to make sure you can carve out some time…every week that you use to really work ON your business – make sure you’re working hard on the right things.  You need to be creating systems and consistently doing longer term planning based on solid data.

Having said that, if you’re currently flying by the seat of your pants and hoping that you’re actually making money (because your checking account still has something in it) then you really need to start with cash forecasting.

Cash is King!

There are a lot of reasons to make your cashflow the top priority.  For starters, a lot of banks are reevaluating their credit policies and that line of credit that you’ve used in the past during some challenging times could get shut down at any moment.

How well would your employees handle it if you couldn’t make payroll?  If there’s a risk at all, you need to figure out a way to have the right cash reserves on hand to weather the storm.

The second reason to get a handle on your cash flow is that you may be sitting on some opportunities if you’ve got more cash than you really need (a little less likely and a nice problem to have, but wouldn’t you like to know…?).  If you can free up some extra cash, it’s a great time to be aggressive and try to either take some market share from your competitors or maybe even looking into acquiring someone.

Finally – a detailed cash flow can really tell you a lot about your business and can be used as a great way to predict your overall performance.  Again the key to doing that successfully is actually knowing what your cash flow looks like.

My accountant gives me statements every month

Although a balance sheet and income statement are important, unfortunately they don’t do much for you when it comes to cash flow.

The right thing to do is to pull together a cash flow analysis (a spreadsheet) that can give you a detailed view out to at least 90 days.  You can do this at a really detailed level on a daily basis, a weekly basis or even a monthly basis – for most businesses, weekly is probably the right level of detail.

The good news is that it’s not hard to do – here’s the breakdown:

1.  Start with cash on hand (your bank balance).

2.  Project out all of the cash that will be coming in over the next 90 days from all sources.

3.  Project out all of the cash that you will be paying out over the next 90 days to all sources.

Then the simple equation for every week is simply:

Cash on Hand + Cash In – Cash Out = Ending Cash on hand. 

If that ending amount is ever a negative number (or even if it’s close to zero) you have a problem.  Do you need to be more aggressive about collecting money that’s owed to you?  Can you let a couple of payments out slip a week or two?  Do you need to identify some access to cash sources (things like factoring where you sell your receivables at a slight discount to get the money up front)?

It won’t take long to do and once it becomes a habit you’ll wonder how you lived without it.

To make things easier to get started, download this simple spreadsheet that will get the ball rolling for you – you can download the spreadsheet here.

So how does your cashflow look?  Share your thoughts or questions here.

Shawn Kinkade  Kansas City Business Coach

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photo by nattu 

I try to make it to the gym most weekdays and it seems my schedule works out best generally late in the afternoon.

It turns out that Oprah is on from 4 to 5 and although I generally watch something like CNN or MSNBC, there are some days when Oprah has some pretty interesting stuff going on.  (I know I’m at risk of losing my man card, but there’s only so much Wolf Blitzer I can take since the election overload we’ve just gone through).

Today’s show was Oprah and Dr. Oz talking to the author of ‘The Blue Zones‘, a guy named Dan Buettner that’s spent the last 7 years researching people around the world that live well beyond the average life span and are healthy, active and vital (the areas they live in are called the blue zones).

In addition to the basic good health stuff like the right diet and exercise, there were a few common traits that Mr. Buettner uncovered that I thought were interesting.  Oddly enough these all apply to having successful and long lived businesses as well.

Unexpected Traits for Longevity

As with all of these kinds of studies, there isn’t a totally common thread – the people in Sardinia Italy credited their diet of wine, goat’s milk and cheese as a major factor for their longevity, but the 7th Day Adventists in Loma Linda California credit their success in part to being teetotalling vegans that don’t drink milk or eat cheese.

However there were some commonalities – here are the three traits that stood out to me (based on the discussion, not necessarily a set list):

1.  Having a purpose

The author defines this loosely as ‘Having a reason to get out of bed in the morning’.  For a lot of entrepreneurs and business owners, their business and their success are that driving force.  That’s both a good thing and a bad thing.  Good because you want to have passion for what you do, but bad if that’s really the only thing keeping you going – it’s not good to be too single threaded.

Making money may be your purpose for your business, but you are more likely to have long term success if you can build in some deeper purpose that you and your employees can really get behind.

If you’re interested in more on this – here’s a good article on Finding Your Purpose to Live Longer.

2.  Staying Socially Connected with friends, family and loved ones

I’ve seen a lot of discussion on the benefits of Online Social Networking – I don’t know that health and longevity fall into that category, but anything you can do to establish and maintain real (and positive) relationships is a good thing.

The examples they used on the show stressed the importance of having a routine – often daily of getting together with friends and family and relaxing (stress reduction seemed to be a common theme as well).

From a business perspective, creating and maintaining win-win relationships falls into this category.  Your chances for long term success go up a lot if you have business relationships you can count on for support, referrals and general help.

3.  Having a good optimistic outlook and a healthy sense of humor

I think it’s hard to overstate how important a good attitude is towards everything.  Your quality of life, how you view challenges and opportunities and your ability to keep swinging for the fences are all tied back to being optimistic.  Balancing that with the ability to laugh at yourself (and others) is certainly the recipe for success – in business and in life.

There were some other interesting things (i.e. 90% of the benefit attributed to red wine is really due to alcohol in any form, so two drinks of whatever on a regular basis is better for you than not drinking at all…).

What are your thoughts on living a long life or having your business for a long time?  I’d love to hear some other thoughts and opinions – share them here!

Shawn Kinkade   Kansas City Business Coach

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There’s a lot of people talking about how bad the economy is, how bad the impact on business is and how there are a lot of similarities between today’s current environment and the Great Depression.

It’s all really cheerful stuff.

However, it does inspire reflection and in my case a bit of a history lesson.

I ran across an article / post online that did a nice job making the case that the best defense is a good offense in difficult economic times.

The post was a response to a question about what industries and companies did well during the Depression and were there any clear reasons why?  You can find the whole discussion at Successful Companies and Industries during the Great Depression.

The gist of the response is that not only were there some relative winners during this period of time, but some of the most successful companies in the world actually got their start and really took off – many of them going strong 60+ years later.

How Radio Saved the day!

There were at least a couple of common threads that distinguished the winners versus the losers – the winning companies had enough cash on hand (CASH IS KING…!) to keep from going under and used that liquidity to attack the market and aggressively market their position.

Although print advertising went through changes during this period of time, the really new  innovation was the advent of Radio as a way to reach the masses.  Initially the format started out as an ‘infomercial’ type of approach – all about the great features and benefits of the product.  Not exactly something that listeners would go out of their way to tune into.

However during the 1930s, Proctor & Gamble took up the ingenious approach of sponsoring content that their target market would go out of their way to listen to:

The president of P&G at the time was Richard Deupree.  In spite of the fact that shareholders were demanding that he cut back on advertising, he knew that  people were still buying essential household products.  So he created radio programming that did not focus on a product.  Because of that, we now have a cultural attribute known as the “soap opera.” 

In 1933, P&G went on the air with its first “soap” – “Ma Perkins,”sponsored by Oxydol. P&G was so satisfied with the increase of sales, they went on to introduce “Vic and Sadie” for Crisco, “O,Niells” for Ivory Soap and “Forever Young” for Camay. By the time 1939 rolled around, P&G was sponsoring 21 radio programs and they doubled their radio advertising budget every two years during the Depression.

Obviously Proctor & Gamble have more than managed to survive – they are one of the largest consumer product companies in the world.  They made bold investments during difficult times and they changed the rules of the game.

What’s the take-away for today’s situation?

I don’t think radio dramas are going to make a strong comeback (although LonelyGirl15 on YouTube might kind of fall into that direction).  Instead, here are a couple of lessons that we should be learning from the past:

1.  When things get tight, you’ve got to go out and keep pounding the drum.

That doesn’t blindly mean pouring money into lots of different advertising venues, you have to be smart and you have to look for Return On Investment.  If you’ve got marketing that’s worked for you in the past, keep it up (maybe cut some other things and even consider increasing it).

Along those lines, if something hasn’t been working – stop immediately, even if you have to buy out of a contract.  Use that money on marketing efforts that do work and ideally that you can track in terms of effectiveness.

If you don’t have a clear idea of what works, then don’t shut down, instead run smaller ‘test’ runs over time and systematically figure out what hits your marketplace.

2.  Figure out how to latch onto the ‘New’ Paradigms of marketing

Just like P&G invented content sponsorship back in the 1930s drastically changing the way advertising and marketing worked and was delivered, we are currently going through a similar shift in today’s marketplace.  Social Media – interactive ways that your prospects and customers WANT to engage with you is the new twist that every business should be picking up on.

The brute force approach of hammering your prospects with unwanted calls, spam, mail or in your face sales calls is rapidly dying.  Instead people are looking for ways to engage with stories, brands and businesses they can relate to.

They want to Know, Like and Trust the people they’re buying from.

They want to interact, they want to be a willing part of the process…on their terms and in their time.

That means you as the marketer / business owner need to make yourself available, transparent and deliver quality experiences as well as quality products and services.  Deliver value with every contact – exceed expectations consistently and reap the rewards of not only customer loyalty, but customer advocates that do a lot of your marketing for you.

It’s not going to be easy, but there many businesses that will emerge stronger from the next couple of years than they went in.  Keep a close eye on your cash flow but keep pushing and investing…in the right ways.

I’d love to hear other opinions on this – share them here!

Shawn Kinkade   Kansas City Business Coach

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photo by balakov

Hard work is always going to be part of the equation for success for a business owner (or anyone else for that matter).  The picture above is a clever reproduction of a famous photograph “Lunch Atop a Skyscraper” from 1932.  I’m sure you’ve seen it before (see link) with a bunch of blue collar construction workers taking a break 69 stories above Manhattan.

It’s a great example about hard work during difficult times.

The problem as a business owner is that hard work by itself isn’t going to get you where you want to go.

Hard work without continually applying strategy and building systems into your business will lead you to burnout and eventually closing your business.

Alternatively you can channel that hard work into things that:

• You’re really good at  or
• No one else can do or
• Generate a maximum amount of profit or
• You really enjoy doing

But how do you get started?  How do you get out of the vicious cycle of constantly doing the work just to make ends meet?

Work smarter, not harder is cliche but true

The first hurdle is carving out SOME time to get the process started.  You’ve got to invest time and effort up front and find new ways to do things.  Remember:

The system you’re currently using is perfectly designed for the results that you’re currently getting.

That means if you want to get different results (i.e. you working on less hand’s on work), then you’re going to have to change your system.

***Recommendation***  Set aside 1 – 2 uninterrupted hours per week, no phone, no email, alone in your office just to work on upgrading your business.

If you have trouble making that happen, consider looking into a business coach or a peer group advisory board (end shameless plug…)

You’ve got to free up time and make a conscious effort to identify the changes if you’re ever going to actually change anything.

Everything is a system

You may not realize it, but everything activity you or anyone in your company does is based on a system.  Answering the phone, providing your service or product, paying a bill – you are using possibly dozens of systems and sub-systems to run your business.

Now those systems may be as simple as…step 1. Identify issue / request.  step 2.  wing it and try to solve the problem.  That’s not a terribly efficient system – but it may be an accurate view of how part of your business runs.

The goal for this next step is to identify and document at least a few of the most used systems – what are the top 20% of activities that drive 80% of your business?  Or if you want to approach it another way, pick out 5 major activities that you spend a lot of time on in your business.

You’re not trying to solve everything at once, the goal is to start taking new action and building on your success week after week.  It’s slow, but done right it will be a steady manageable change that can make a huge difference in a fairly short period of time.

*** Action Item *** Identify 5 processes / systems that you spend a lot of time on every week.

Document and improve

Now that you’ve got a starting point, the next step is to map your process step by step.

How is the process initiated – as an example, if it’s processing an order, the order comes into your system potentially via email, phone, in-person, you may multiple entry points into the process.  Once you’ve received the order, what is the next step?  Who performs it?

Document all of the key points in the process through to a logical end.  If there’s not a repeatable step (i.e. research issue to determine outcome) then note that point – that may become an opportunity for improvement.

Once you’ve got it documented, start reviewing the process objectively with a filter on how much value is added in each step.  If there’s not much value added, can you remove the step?  Look at the steps that you personally are doing – how can you simplify those or get them off your plate to someone else.

As you’re brainstorming improvements, start designing what you’d like that particular process to look like.  This isn’t normally a quick or easy thing to do, but if you make incremental improvement every week or every month, you will see huge gains fairly soon.

Obviously this is a high level approach to a what can be a difficult solution, but successfully implementing these kinds of systems is the difference between having a job or owning a business.

What system could you start putting into place this week?  The key is action – I’d love to hear what you could start on, share your thoughts here.

Shawn Kinkade  Kansas City Business Coach

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Everyone needs an Elaine.

Not Elaine Benes (from Seinfeld) – the Elaine I’m talking about came up in a discussion at the workshop I did this morning for the Overland Park Chamber on marketing to your existing customers.

The discussion was on the importance of employees carrying out your key marketing differences to your customers -really representing all of your best values and qualities to give ‘Wow’ service.

One of the participants was from Grandma’s Office Catering and she used the example of one of their caterers (Elaine) that was a perfect example of what we were talking about.  Elaine not only had a great attitude and made everyone smile, she was also reliable, on top of her responsibilities and a great ambassador for the business. 

Elaine gets customers to call in and rave about how much they like her, even when she’s just doing her job.

So how do you get your own Elaine?

Great Employees aren’t a dime a dozen

It’s no secret that great employees make great products and services – the question is, what makes them great and how do you get them in the right place to really shine?

Unfortunately some of it is just luck.  There are some people that just instinctively make everyone around them better, make them feel good and generally light up a room. 

I’m not sure that can be taught.

However…a lot of the time, that success can be duplicated – even with normal employees!  It’s not easy and it will take time, investment and some focused effort, but the payoff can be incredible.  Imagine having 10 employees working with your customers the way Elaine does?

Assuming that you’ve got a model employee to start with, here’s how you can make that happen.

Investigate

The first step is to talk to your customers and your employee and try to find out all of the positive reasons why they stand out.

Do they have unique or especially in-depth knowledge about your product or service?

Do they routinely go the ‘extra’ mile to make sure that the customer is getting what they expected?  (As an example, I know of a cable company employee that set themselves up on Twitter to be the first line of response for their customers even though customer care wasn’t really part of their responsibility).

Do they have a great attitude and they’re friendly all the time?

Ask the employee what their approach is – what do they do to make sure that customers like them.  Although they likely won’t want to brag, they have a process they use to make sure they’re getting stuff done the right way.

Find out what it is and get it documented.

Hiring

You may already have other employees but are they the right ones?  A lot of things that make someone especially effective in a customer facing role revolves around their inherent attributes.

Herb Kelleher – former CEO of Southwest Airlines often said “Hire for attitude, train for aptitude.”

Stop looking just at past resume achievements and skills and start interviewing to:

Find out if they can get along with others.

Find out if they want to be there (really, truly).

Find out if they live to excel.

Find out if they share your values (and the companies values).

At Southwest Airlines they emphasize – ‘You can’t train nice”.  You have to hire for it and train the other stuff.

Use Assessments

Even the best hiring and interviewing practices can make mistakes and a hiring mistake can be very painful to a small business – the impact in terms of productivity, training time, salary and lost opportunities can easily run into the tens of thousands of dollars for a bad hire.

On the other hand, there are a lot of great Assessments out there that might cost you a little bit up front but could really help save you from a bad decision.

Another cool thing to do with assessments is to have your ‘star’ employee take the assessment first and use their response as a benchmark for new people you’re hiring.  You can’t really clone your employee, but you can get the next best thing by finding somebody that shares a lot of traits and talents in common.

Training and Coaching

You know what’s working with your customers, you’ve got employees (new and old) that have the right attitude and want to excel, now you’ve got to train them and coach them to really get that training to become a habit.

I would recommend breaking the new ideas into small pieces and incorporating them into your operational processes gradually over time.

Hold regular meetings to talk about the new changes and make sure people are understanding them and getting them into practice (that’s the coaching aspect).

It may take a while, but you can have a whole group of Elaines creating a bunch of happy customers – just don’t let them dance…! 

 
If you can’t see the video – you can find it on Youtube here.

Do you have other suggestions on ways to create those ‘star’ employees?  Share them here.

Shawn Kinkade   Kansas City Business CoachSimilar Posts:

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