I was asked by The Boss of a family-owned business to help him control his employee turnover. I reviewed his financials and found a mediocre profit, but everything looked to be in order. The next step was to look inside his organization. I spent time with his department heads and, after some time, I began to understand the root cause of the problem. It often takes a little time for me to get the real stories from the employees because, at first, they see me as an extension of The Boss, I have even been told that I am “in The Boss’s back pocket”. After a few conversations, this myth is dispelled as I tell all my clients from The Boss down that I do not work for The Boss, I work for “The Company”. If I must tell The Boss he or she is wrong, so be it. This encourages more candid and honest conversations with the employees, who by the way usually know the problem and have a good idea of what a solution should be. In this organization, The Boss had family members working in the business. In the eyes of the employees, they have special privileges and […]

Recently I have been in several discussions with business owners revolving around leadership.  In general, we have concluded to many organizations are continuing to experience inefficiencies in production, a disproportionate amount of waste, uncontrolled employee turnover, or any other issues that are a result of poor leadership skills.  In most of these discussions, The Boss agrees that in their organizations they have very good workers, good to adequate managers, but they are lacking leaders. The question is often raised, “Are people born leaders?”  If so, then business owners must identify and hire born leaders if they want to improve leadership in their organization.  As the conversations mature, I often see The Boss begin to think that some people are “born to lead” and have the natural talent to lead. This is different than being a “born leader”.   What I see are talented employees in a growing organization, and The Boss identifies them as a “leader,” and therefore that person is promoted and expected to lead. Often these people are great workers, very good managers, and then promoted into a leadership position in which they underwhelm The Boss.  Why does this happen?  Did The Boss make a poor decision by promoting […]

I was invited to present at a self-employment in the arts conference where my audience was artists, musicians, and other self-employed artist types. My topic was “Financials and the Arts”. I have experience presenting financial literacy to executive directors of nonprofits, so I had a sense of the relationship between understanding the mission of an organization and understanding the financials of an organization. These artists had a very strong sense of mission, but not much of finance. I began by explaining the three financial statements. The profit and loss statement is like your paycheck. If you worked 40 hours a week at $10 an hour, your take-home pay was not $400. It was less due to taxes, insurances, and other deductions. This is how the profit and loss statement works. Your revenue minus your expenses and then you get to take home the difference in the form of profits. Your cash flow statement works like your personal debit card. If you have money in your account, you can draw funds from your debit card or pay bills with it. You don’t have to put money into your debit card account every day in order to use it every day. When […]

I have to say up front that this newsletter is one of those, “Do as I say and not what I have done most of my career!” newsletters. When business is good The Boss is almost always in a good mood and it’s good to have him around. But when times are tough, The Boss can be a real pain! I had a client who was a specialty machine shop that made custom machine parts on demand. The Boss #1 was the founder of the company and was transitioning the business to his son, The Boss #2. My job was to coach The Boss #2 through the transition until The Boss #1 was convinced his son could run the place. Now the only thing more frustrating than having one boss is having two bosses, especially for employees who are trying their best to do their jobs in stressful times. So, coaching the employees through the transition was an added responsibility I did for the business’s sake. The transition went as smoothly as you could imagine and afterward, The Boss #1 did retire, sort of – the most a founder can retire, which means he only visited a few hours a […]

I received a phone call from The Boss who was struggling with a problem customer. I asked for more details and found out the rest of the story. The Boss’ company sells electronic equipment and provides technical support through the internet. Their salesperson sold a big job with a lot of parts and manhours. The customer paid for half of the job in advance — the standard for this industry. After a few trips to the customer’s location, the job was not completed because the technicians discovered several problems. Some were caused by the wrong parts being quoted for the job, and some were due to poor internet connectivity. The customer wanted the equipment pulled out and her down payment returned. The Boss wanted to keep the down payment and was asking my opinion. I asked, “Was it possible to turn this negative into a neutral or positive experience for the customer?” I understand that a positive experience was a long shot, but a neutral experience could be had if The Boss got involved. My advice to The Boss was for him to meet with the customer at her company and explain all that his employees had done, which was […]

I was approached by one of my competitors who thought I would be interested in buying his business.  Anyone who has ever had this happens knows that a business owner just doesn’t want to sell their business, something is not working well, and they want out.  They may not have a relative or business partner to buy their company so they go soliciting potential buyers so they can exit the company.   They are looking for a succession plan! I agreed to do a walkthrough of his company.  If you would ask my wife, she would not have been surprised, as she often points out to me it was not “either this or that”, most likely, I would see things as “this and that” and away we go!  As I asked questions and walked through his company, I notice his breakroom floor.  It had a very nice-looking new ceramic tile floor.  Now anyone who has ever worked in a manufacturing company would tell you that having a ceramic floor in the breakroom was an anomaly.  So, I had to ask why? The owner said that he did a job for a tile company, and the tile company wanted to barter […]

I was reviewing the monthly financials with The Boss in advance of sending them to his banker, one of the services I offer is coaching The Boss how to manage a banking relationship.  I was challenging The Boss with a few questions regarding the change in his backlog.  The backlog for the previous month was close to a million dollars and now for this month it is next to nothing, and the revenues did not reflect the million dollars in sales.  We took a step back to analyze why and search out the root cause of the miss-information.  Come to find out the production manager, who was only a few months out of the field and now in a management position, had made an error when estimating the backlog. It didn’t take long to determine that the production manager was never taught how to calculate the backlog.  Fortunately, in this case, we caught the error and adjusted the information prior to sending the financials to The Boss’s bank. After we found the problem, The Boss and I had a few conversations about how to fix the situation so it did not reoccur. What I explained to The Boss, who was […]

Imagine going to your local car dealer and ordering a brand new Chevy. When you go back to the dealership to pick up your new car, the dealer insists that you take a Cadillac home with you at the Chevy price. This does not make sense and you can’t imagine that it would ever happen this way. But I see this kind of thing happen in businesses more often than you would think. Why would The Boss allow this? The Boss stresses high quality in everything the company does. Without proper direction from The Boss, employees may tend to sell Chevy quality and deliver Cadillac quality for the Chevy price. When I see this, I will bring it to the attention of The Boss and I may hear “Our company is driven on top quality, we advertise top quality, and we deliver top quality!” I will begin the conversation by saying, if the customer pays for Chevy quality, they are expecting to receive Chevy quality. When you deliver Chevy quality, you have met the customer’s expectation and you have done your job well. If the customer expects Chevy quality and your company delivers Cadillac quality for the Chevy quality price, […]

It’s true that as business owners, we are gamblers.  We are willing to take those mitigated risks that our employees are not willing to take.  We are willing to bet our savings and, oftentimes, our homes on a new second location, an expanded master franchise agreement, or new capital that allows us to enter a new market.  Whatever the reason for the risk, we are the ones who say; “Yes, I got this!” Not always will those risks pay off, and sometimes it can cripple you and your company. That is when we need help.  But when do we, as risk-takers, feel we can no longer beat the odds and ask for help?  Often, it is when the pain we feel is extremely high and the initial risk has developed into a full-grown problem. As The Boss, you have grown to become pain tolerant.  The normal day-to-day issues cause you slight pain as you struggle to make payroll or look for funds to fix that old piece of equipment again.  The bigger pain points are the larger capital investments you chose to make.  It is as if you look over the cliff and say to yourself; “That doesn’t look that bad and I believe […]