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Posts Tagged ‘business owner’
Phil’s Profit Point 26 Podcast – Innovation
Wednesday, October 19th, 2011
Growing Pains
Friday, October 14th, 2011A good friend was explaining the daily challenges of growing his business.
“Why does it feel like my face is in a fire hose?” he asked.
“Well, there are people running multi-billion dollar companies, with the same 24 hours in a day we have,” I replied, not sure if he was asking for advice or venting.
“Yes, and they have people they can delegate to,” was his response, and then he heard the wisdom of his own words.
“So, there’s your answer,” I suggested, realizing it was simple but not easy.
The key factors in growing your business are resources: time, people and money.
Money, which comes from profit, allows you to hire great talent, to whom you can delegate. The critical path starts with having a profitable business model. If your business isn’t as profitable as it could be or should be, then you need to evaluate your business model from the customer’s perspective.
How much value are you providing to your customers?
Another entrepreneur asked “when should I hire extra help around the house while I’m juggling parenting, running the house and building a business?” As soon as possible!
It comes down to the opportunity cost of our time. If we can delegate or outsource tasks that we don’t like, that we don’t need to do and that aren’t important to our roles and relationships, then we should do so. This applies to both our professional and personal lives.
What can you delegate, outsource or stop doing in order to create more capacity for important things in your life?
Copyright Phil Symchych 2011. All rights reserved.
Phil’s Profit Point 25 Podcast – A Good Accounting Department, Part Three – The Fortune Tellers
Wednesday, October 12th, 2011The worst job in the world: owner/manager
Monday, October 10th, 2011I recently spoke to a business owner who wanted to maximize short-term profits and increase long-term capacity in the business. It’s very difficult, if not impossible, to do both at the same time because they are in conflict. However, I hear the question often, and here’s why: The person isn’t thinking clearly, they are thinking like the owner/manager.
The worst job in the world, in fact, is ‘Owner/Manager’ because the two roles are always in conflict with each other.
Are you the owner, trying to achieve a return on investment from what should be a passive investment?
Or, are you the manager, trying to maximize revenues, profits and growth while consuming resources and spending money on training, advertising and other things that may not have an immediate payback-things that reduce short-term returns desired by owners?
Are you in conflict with yourself?
Just imagine what your role looks like to your employees? Are we maximizing profits today by cutting expenses because the owner is worried about a dividend or are we building for the long-term by increasing expenses and investments?
To help you sort out your roles, here are questions to think about.
Questions for owners:
- What is my return on investment?
- What is my return on equity?
- How can I build equity in the company?
- How can I protect my equity?
- How can I position my investment for eventual sale?
Questions for managers:
- How do we make our customers happier, improve our competitive position and grow revenues?
- How do we beat our budget and forecast (you have one, right?)?
- How do we allocate resources to increase our capacity and speed?
- How do I attract and retain key talent, regardless of what the economy is doing?
- How do I develop my people to replace me so that I can move up in the organization?
If you’re thinking about your wealth, you’re thinking like an owner. If you’re thinking about growing the company, you’re probably thinking like a manager.
Which hat are you wearing? Which hat should you be wearing?
If you’re not sure, here’s my recommendation: “You’re fired!”
Fire yourself as manager, build a management team, and give the team your performance targets that will meet your ownership returns of investment and equity. Then, get out of the managers’ way.
Copyright Phil Symchych 2011. All rights reserved.
