What Have We Learned From 1998? It’s Cyclical and Not All COVID.

As the challenges continue to pile up in business today, especially in staffing needs, I see organizations lowering their qualifications for new hires. This is done not because The Boss wants to but because The Boss has to! The latest unemployment numbers are telling us we have a 4.6% unemployment nationwide and in Wisconsin, we are looking at 3.2% unemployment. Those of us who are long in the tooth may remember doing business in 1998 when we were also at 3.2% and lower unemployment in Wisconsin. What does The Boss need to do this time around? Because organizations are hiring people who do not have industry experience and may not have the foundational skills desired by new employees, The Boss must do things differently to help these new hires to succeed. Training programs for their new employees and implementing a mentoring program will help the newcomers to assimilate into the company culture. Having a procedure for “onboarding” new people will also help. But above all, The Boss needs to establish SOPs in the workplace for those critical processes. Standard Operating Procedures (SOPs) are an investment The Boss can make in the business and investment in all the employees. Developing an […]

Don’t Let The Big One (Profit) Get Away!

I was in Canada fishing for muskies with my son and we were using surface baits when I saw this huge “V” heading for my bait. I immediately became excited and, in an instance, could see a large trophy size muskie hanging on my wall in the Man Cave. I watched the lure and asked my son to man the net. Then, in an instance, I pulled back the rod to set the hook and — nothing. In my excitement, I forgot everything I knew about the art of fishing and I set the hook before the fish bit the lure. I pulled the lure out of the water and my trophy catch was gone. It makes for a good story at the lodge, but I have nothing to show for my efforts. In the past few weeks, I have seen this happen to more than one of my client’s businesses. The Boss was working to land a huge account. He was getting excited and even planning what to do with the excess profits a large job like this could bring. The issue I saw in every case was the larger the job, the lower the profit margin. The Boss […]

Don’t Be So Frugal Today That It Costs You Your Company Tomorrow

I received a call from The Boss of a mid-sized company who wanted to talk with me regarding his cash flow challenges.  I was referred by his lender who noticed that despite the company’s good revenues and decent net profit The Boss was always experiencing cash flow issues.  I asked to see two years of financials and I did an indirect cash flow evaluation on his business along with calculating what I consider the top fourteen ratios I use to evaluate the financial health of an organization.   What I found was the company had good operating profit which meant the organization was generating a healthy sustainable cash flow.  I told this to The Boss who immediately asked me; “If I have such good operating cash flow, why do I not have money?”  The answer was in the ratio analysis.   When I calculated the Return on Total Assets, ROA, I found the ratio to be very high, too high for this type of business.  I began to ask The Boss a few questions regarding his building and equipment.  Now, The Boss was a very frugal man, in my opinion too frugal for the health of the organization.  The Boss would try […]

Control What You Can Control, Influence What You Can Influence

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 […]

As The Boss, Are You Developing Leaders in Your Organization?

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 […]

Artists, Musicians, and Financials, Oh My! Doesn’t Have to be Scary.

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 […]

Hey Boss, Disengage and Relax!

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 […]

The Boss Should Strive for Positive or Neutral, Never Negative!

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 […]

Bartering? I’m Not A Fan!

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 […]