Category: Management

Thoughts on Starting a Business

~ C.O.R.E. Beliefs ~ Leave a comment

Happy Tuesday.  I had an awesome weekend.  Brendan and David had 3 friends over Friday night for video games and movies.  We watched Monty Python’s “The Holy Grail” and it was so much fun watching 5 tweener’s laughing at comedy written when I was a child.  Naturally, the boys were awake until about 4am when they started passing out from sheer exhaustion.  But mornings around here start early on Saturday and we had them up and “zombie-like” by 9am where we went to Esther Short Park to play some Football.  It is great fun to play some touch football with half-asleep 11 year olds!

One of the most enjoyable moments I have is when I get to meet with someone who wants to start a business.  They have an idea, or are tired of making someone else a profit or just want “freedom”.  I look at it as my solemn duty to help the budding entrepreneur understand the risks and benefits of starting a small business and am proud of my track record.

Part of the process is understanding the truth about starting a business.  First,  “The Idea”.  This might sound cynical but there is some truth to what I am about to say… There really is no such thing as an original idea in business.  Think about this, chances are your business idea already exists in some fashion somewhere.  What you have is a belief that you can do it better, faster, cheaper, with different colors, in a different part of town, etc. than anyone else who has tried this before.  And, if by chance, you can’t find a direct competitor, ask yourself why an established business hasn’t tried it before?  The odds are someone has tried it and it didn’t work out; and there is a lesson there as well.

Next, “Keeping the Profits”.  If you have read my other blogs about revenues and expenses and the balance sheet, you have a good idea that there is a lot to consider to get to a profit.  Remember, first you must have the equity to invest upfront to create your business and then you must reinvest your “profits” back into growing your business.  A healthy business is a growing business.  You will likely never know when you have excess “profit” to distribute out of the business – until it is time to sell.  And selling the business, that is, your exit strategy, is when you really are going to keep your profits.  if you have set your business up right.

Finally, “Freedom”.  No one in the world works harder than an entrepreneur.  80-100 hour weeks are common, divorce is high, heart attacks, strokes, and general burnout are the norm.  Most small business owners have no freedom, they have a job they cannot quit and cannot pay anyone to do.

Now, keeping these things in mind, can you set up your new business to address these issues and actually reach these goals?  Absolutely!  It requires you to think hard about the more important parts of the business that are typically not considered until you are overwhelmed.  I created a Pro and Con worksheet I am happy to share with you if you would like to have a yardstick to measure starting a new business against.  Send me an email and I will forward it to you.

To succeed, realize your idea has likely been thought about before and is likely even in operation somewhere.  It may not be exactly the same, but something is close to it.  Try hard to find it, think about what works and what doesn’t.  What strengths do you bring to the table to deal with those things which may not work right?  Where is your plan for automation and scalability?

To succeed, realize that you need to design your business to ultimately be bought by someone else so you can receive the real compensation you have worked so hard for.  Pay yourself well for the work you do, but don’t try to do everything.  Hire the right people, train the right people and help them succeed.  You can command a good price for a business with a solid and dependable system – you will get next to nothing for a business that relies solely on you and your skills and knowledge.  If you don’t think so, ask a lawyer how much her practice is worth when she goes to retire.  then ask Mark Zuckerberg.

Finally, to really succeed, you must focus on your processes so your business can take “you” out of the system.  Yes, you will have to work hard and be chef, cook and bottle washer for a while, but you need to develop a system and an organization that you start hiring for.  Think about what positions your business needs to succeed, design those positions and start to fill them.  Your small business then does what it needs and you can focus your energies on more important things – like living.

None of this is easy but it can be rewarding if you look at it through the lenses of these three areas.  If you have questions, I strongly encourage you to speak with your current accountant and ask her to help you with thinking about how to succeed in starting a business.  If you do not have an outside accountant or would like a fresh set of eyes, contact us at Currie & McLain to schedule your free no obligation consultation.

Have a great day.

 

New Customers

~ C.O.R.E. Beliefs ~ Leave a comment

Happy Friday.  In a few hours I go get Brendan and David and they are evening have a few friends over this weekend.  4 young boys playing X-box, drinking soda’s and eating gummy worms.  Pizza night is being replaced by spaghetti.  We generally do our own individual pizza’s over the barbeque but I even making a big pot of spaghetti too!

One area I think we often overlook, especially in small business, is prospecting and new customer development.  It isn’t that small business owners don’t care, it is that they are focused on bringing in business – any business, to help pay the bills.  And then, one day, you wake up and your whole world is consumed by “bad customers”.

A few years back, I went to a seminar and the speaker presented the fact that there is no such thing as a “bad customer”.  What there is, he said, was poor training.  My biggest takeaway from that presentation was this:

You train your customer or your customer trains you

With this new thought bouncing around in my head, I revisited how I went out and did prospecting.  How do I let prospects know that the firm will be training them on how to do business with us?  How do I ensure that the new client respects the rules of our relationship without it seeming overbearing?  I created what John Jantsch in his book “Duct Tape Marketing” called the New Client Orientation Kit.

We actually followed his prescription to the letter.  The kit laid out how the process was going to work from beginning to end, including asking for their participation in quarterly and annual client workshops.  We explained how we were going to bill them, when to expect the bill and how important it was to pay the bill on time.

In short, we trained new clients on how to work with us.  And we started that training in the prospecting stage.

By clearly stating what we wanted from the relationship and how clients could benefit from this approach, we left them with the “Yes” decision.  In this stage, I was no longer saying “Yes, we want to work with you”, it turned into the client saying, “After hearing all this, yes, we want to work with you.”

Instead of bringing in 20 new $250 tax returns, we were now bringing in 1 new $5,000 small business client.   The marketing approach pivoted and we got far more “No’s” than ever before, but we ended up with new clients that met our expectations and who wanted to work the way we envisioned it.

Can you do the same in your small business?  Absolutely.  You don’t even need to read “Duct Tape Marketing” (although I strongly recommend it) and you don’t even need to create a New Client Orientation Kit.  Although I found it much more effective to have it in writing.

First Make sure  your marketing literature is targeted to your ideal customer.   Yes, that means be very clear with yourself on who your new ideal customer is!  Throw out the pulse and checkbook approach!  If your target market is a single mom in the medical field, then identify that mom and find out what makes her want to do business with you.

Second, once the prospect gets to “Warm acceptance” explain your expectations.  Your expectations are “This is how you will get the most from working with us”.  If you are picking up that mom’s dry cleaning, then the expectation is “You will have your dry cleaning in the bag we will provide and it will be at the front desk at 3:30.  Our courteous driver will be there to pick-up and drop-off between 3:30 and 4:00.”  Oh, and don’t forget, “We will charge the credit card on file for the items dropped off on Friday morning.”

Third, make sure they know who to call with questions, comments and referrals.  Something else I learned the hard way, you do not have to take every phone call!  You have an amazing staff (or you soon will), let them do the job you hired them to do.  Which means you explain that if you are going on vacation, call the 800 number and press 3 to speak with dispatch.  Call the 800 number and press 9 if there is a question on the bill, etc.

Fourth, ask if they have questions about the process.  And finally, ask them if they can see themselves being successful in this process.  The answer is “Yes” or “No”.

I know I make it sound easy.  Trust, me, this part is very easy once you believe that the process you offer is what adds value to your customer.  The hard part, is wanting to take a hard look at how you are currently doing business and asking “Can we do it better?”

Have an awesome weekend.  John (my oldest) and Andrew are both in town this weekend and are coming over for our Father’s Day “Grill and Chill”.  I am looking forward to a great time with the boys.

BTW 840 works and 44 minutes.  (I was editing too much today)

 

 

Managing by the Numbers

~ C.O.R.E. Beliefs ~ Leave a comment

Good morning!  On the downward path towards the weekend.  The younger two are having their last day at school today and tomorrow starts their weekend with Kubae and me!  And then there is Father’s Day, where I will be grillin’ and chillin’ with all 4 boys and Kubae.  Life is awesome.

Does your business often seem out of control?  Do you think you are running around from one crisis to the next?  I used to find myself in a similar situation before I took my vacation from public accounting.  One thing I wish I had started earlier was managing by the numbers.

I don’t mean your accounting numbers, at least not totally.  I mean establishing goals and objectives, quantifying them, and then managing to those numbers.  Let me give you an example.

The first thing I have is my personal calendar.  My “Work day” starts at 7am writing this blog.  First, I plan my articles a week in advance.  I schedule 45 minutes each day to write and edit and I am shooting for under 800 words.  When I am done, I adjust my calendar for how long it actually takes me to complete the task and how many words I wrote.

My articles get written, I know if I am getting out of control and I do not stress out over it.  By setting the “numbers” I give myself freedom to perform to my highest standard and then measure, over time, how close I am to my objectives.

I also have targets for Number of views, number of readers, pingbacks etc.  I use all this feedback to plan future articles and how long I should allocate to research and writing.

My work day is also planned.  I schedule out on my firm calendar what work I anticipate doing and approximately how long I should spend on it.  The Firm has a great practice management system which tracks our time in minutes so I am able to see how long a task actually took me.

By tracking every aspect, I get feedback and can make adjustments to how I work or even what I work on.  This is an incredible tool for not only me, but the firm.  Because the goal is not to keep me (or anyone in the firm) busy, it is to get free time to start working on other things of value to our clients.

So, if your day seems to be a constant firefighting drill, I strongly encourage you to start planning.  Do it simply at first – use Google calendar and start blocking out time during the day for specific activities.  For instance, perhaps set the first hour of your day to be “respond to emails”.  Then, measure the actual time you spent working on it by either changing the calendar time or making a note.

Planning and feedback.  It works the same way in your business.  First, set your goals and objectives.  Do the work and track how it is going.  Then measure how well you are doing against the plan.  Based upon your measurement, consider modifying work processes to either reduce time or complexity.  Then roll out the new plan. If this sounds familiar to you, it is because it is the standard Lean Six Sigma approach of PDCA – Plan, Do, Check, Act.

If shipping on time is important, then set a goal that 95% of all shipments go out on time.  If having your construction team get to the job site on time is important, set a goal of 95% of jobs start on time.  Plan.

Every day, have a list of orders that needs to be shipped out that day.  Track how many actually got out the door.  Have your construction superintendent send you a text when the crews are swinging their hammer. Track the times.  Do.

Keep a running record of the plan and the actual.  Monitor the differences. Think about how to get closer to your goal or, if you are actually beating your goal, consider new goals and new ways to get to the goal.  Measure.

With your new plan and goals in place, train your team to carry out the work the way you planned it.  Yes, track everything.  Act.

As a small business owner, your time is absolutely precious.  There is so little of it and there are so many demands.  Only by planning can you get control of your time and perhaps get back to the real reason you started your business – to have the life you wanted.

If you are wondering how you can get started, I strongly encourage you to talk with you accounting professional.  We have been trained since the beginning of our careers to measure and we track time in exquisite detail.  If you do not have an accounting professional or would like to learn more about Currie & McLain, feel free to contact us for a free no obligation consultation.  We are here to help you get back the life you wanted when you began your journey.

Have a great Thursday.  FYI Under 900 words and 35 minutes.  🙂  I love managing by the number.