Back in the day, as I am told I say way too often, a full-blown business plan would be necessary to get funding, and some may say to have a successful business.  Today, times have changed and that 20-plus page business plan has become somewhat obsolete. What has replaced it? A three-year financial projection with eight to ten pages describing how The Boss is going to execute to achieve the Pro-forma numbers.  One of my past careers, I worked in an entrepreneurship center where we helped entrepreneurs launched approximately 170 new businesses over four years. What I saw were many of these new businesses going out of business in about eighteen to twenty-four months after launching.  After closer investigation we noted that the new business could not cash flow after the start-up funding was used up, causing the businesses to fail. That old adage is true, “You can have profits without cash flow and go out of business, but you can have cash flow without profits and fight another day!” If you want to know your business intimately, create a three-year operating budget with a very detailed first-year and two following years of projections.  At the end of the first […]

A frustration of mine and many of the business owners I work with is understanding when to yell “Uncle”.  In other words, when to ask for help. I often get calls from The Boss explaining a situation they have gotten themselves into and asking what I can do to help them cope.  Most often these calls come when The Boss is experiencing cash flow problems and their stress level is high. With hindsight being 20/20, The Boss realizes their error and wants help strategizing to minimize the fallout. One such call was cash is tight, but The Boss gets wind of “a deal” on a piece of equipment and goes ahead and purchases it without talking to the finance department.  Now to make things worse, the equipment cannot be used for several months as it is a seasonal business. The finance staff must find the funds to purchase the equipment and keep the day-to-day cash flow flowing!  As you would expect, this causes strife between The Boss and the frustrated finance staff. This is when I get the call to help relieve the tension. The root cause is communication issues especially when the finance department learned of the new equipment […]

I was working in a business that was having efficiency challenges, I requested the managers of the various departments meet to discuss potential solutions. We had people from finance, production, sales, customer service, human resources, and the service department in a room and The Boss began the meeting by defining our goals and asking for their full participation. I come into a business without emotional connections and without a silver bullet or magic wand. The solutions are most often found within the business, offered up by the organization’s employees. It did not take long before The Boss and I noticed many of the managers did not understand their peers. I studied the situation briefly and realized that each department was speaking a different language. The finance manager using “accounting speak”, production was using words that the human resource manager did not understand. The customer service manager and the sales manager thought they knew what each other were trying to explain, but after the exchange of several questions, they soon realized they were not on the same page. The service manager was not talking at all, when asked why not, he said he didn’t understand what was being said so he […]

There are times when I first engage with a business that I realize the business model that has worked for many years is broken for whatever reason and my goal is to work with The Boss to repair or “fix” their long-standing business model.  As I begin to work with The Boss to assess the challenges of the organization, I often find myself working closely with the key employees of the organization. As we begin our work together, it becomes apparent what needs to be improved and what is working well. Often, I come to this assessment through the insight of the key employees.  In short, the answers to the problems the business is experiencing are often offered up to me by these seasoned employees. Why then does The Boss not know how to fix the problems? Once the business model is broken and The Boss cannot fix it himself or herself, they may become frustrated because The Boss feels they should have all the answers, it’s their business after all.  The real answer lies in poor communications and The Boss has not engaged these key employees, who are the “subject matter experts”, to help to solve the issues. Ever-so-often […]

My son was playing basketball in our driveway one summer day and my wife made the comment that his friends were so nice and courteous. I assured her that our son was just as nice and courteous as those other boys. How did I know this? Watch your kid’s friends when they come to your house to spend time with your son or daughter. I would notice how our kid’s friends would act, the words they would use, or if they played fair and were courteous. I believe this is how our son or daughter behaved when they visited their friend’s houses. I told my wife I believe that when our kids host friends at our house, our kids are on their best behavior because we are there, and they know we are watching what is happening. Their friends aren’t as worried about what we think because we were not their parents. When our kids went to their friend’s house, I am sure they would act as their friends do at our house. Why do I think this? Because we hang out with people we like. We choose our friends because we have things in common and share many of […]

Did you know that in today’s workforce we have four to five generations of workers?  This made me think of the businesses I know that truly understand how to manage the various challenges that come with a diverse workforce.  I get into many organizations and have the privilege to talk with many business owners on a daily and weekly basis. In recent discussions with some organizations, I hear their main concern is retaining the employees they have and stopping the employee turnover they are experiencing.  From other organizations, this topic does not come up unless I bring it up. I was curious why some businesses have huge retention issues and others do not.   In my opinion, there are many reasons for this, one overarching reason for poor retention is The Boss’s lack of understanding of the several generations in their present-day workforce.  Here are a few points to think about; First, I have been carrying an AARP card in my wallet for more than a decade now.  In my generation, I was trained in an autocratic management style. If you didn’t like what The Boss said and didn’t comply with The Boss’s demands, you would often hear, “My way or […]

In a recent manager’s meeting I attended, there was a discussion regarding a poor performing employee who was disrupting co-workers and exemplifying very poor customer service.  The Boss’s initial knee-jerk reaction he said, “Fire her!”. The employee’s supervising manager was lobbying The Boss to keep her on duty until he could hire a replacement to take her place.  This is a service business already operating in an understaffed position due to a low unemployment environment and lack of qualified applicants. A position that most employers are experiencing in today’s economy.  As I listened to the discussion, I began to hear The Boss’s position change as he was being sawed by the supervising manager. After a while, I began to ask a few questions to get their attention.  What does it cost to lose a customer? How hard is it to gain a new customer?  We already know how challenging it is to find good workers in today’s world. I continued, in my experience when a company retains a bad employee, it is hard for the very good employees to justify staying with the company.  The good employees leave not because they cannot do the job, they leave because they do […]

I recently began to work with a company that had a problem with employees not showing up for shifts and/or often leaving shifts early.  We called a meeting of the management team and began to discuss the problem and how to correct this type of damaging behavior.  I asked The Boss if the company had a disciplinary policy and the proper forms for the managers to use to correct these types of activities.  The Boss said no, the company never had anything like that.  The Boss said in the “old days” he would just threaten to fire any employee the next time “stuff like this” happened and that would be enough to correct the problem.  Today with the unemployment rate so low, The Boss says he is afraid to discipline anybody because of the worker shortage and as The Boss says; “We got to get shit done and we can’t afford to lose anyone!” As we continued our discussion, The Boss was not comfortable saying anything to the employee because he was afraid to lose another worker.  I stressed the fact that at least disciplining the employee or even letting the employee go would be the best action The Boss […]

In my work I have often been approached with these questions; “Do you think this is a good idea” and “should I go into business?”  I usually asked them to further describe their business idea for me.  They begin by speaking calmly and at an average pace, then, as they begin to get excited, their voice tone starts to rise, the pace of their speech increases and they often become animated.  This is a great sign since it shows they have a true passion for what they are describing.  Passion for what you’re doing is one of the critical ingredients for success as a small business owner. Next, I ask them to describe their competitive advantage.  If they respond with, “What’s that?”  I tell them not to quit their day job; end of discussion. Having and identifying a competitive advantage is so important that if a business owner cannot describe their competitive advantage then I believe they are destined for failure. As the owner of your business, you must identify or develop your company’s competitive advantage.  Once you’ve done that, you have to teach your key management and employees how you plan to use your competitive advantage to outsell the […]