Who wants to pay a million dollars in taxes?
I do, I do.
For a small business, that means that you had profit of about $2.6 million.
$1.6 million remains in your wallet. Not bad.
Minimizing taxes can cause you to intentionally or unintentionally reduce your profits. If you’re trying to sell your business and receive a multiple of earnings, you want those earnings to be as high as legitimately possible.
Copyright 2012. Phil Symchych. All rights reserved.
Are you comfortable holding your team accountable? What does that actually mean?
Do you need to micromanage and babysit and punish every little mistake? Of course not.
Holding your team accountable means that you need to ensure they are aligned with your company’s goals and objectives. If you strategy is to provide high quality (and charge higher prices for that, which you deserve), then you need to ensure that your people, processes and performance are focused on quality. If your focus is on quality, then you might need to sacrifice speed.
After all, a drive-thru restaurant hamburger is not going to be as good as a prime rib hamburger at the fancy steak house, but it will be fast.
Holding people accountable is easy and transparent if you do these things:
Holding people accountable is as simple as keeping score of the important things in your business. The fewer things that you track, the easier and more powerful the process will be.
Copyright 2012. Phil Symchych. All rights reserved.
My wife bought a training video from one of the trainer guys (his name rhymes with Bob) featured on a television reality show. Uh, oh! Somebody’s been watching too much TV, me thinks.
After five minutes of the intense fifteen minute workout, I pulled something in my back.
Apparently, working out needs to be done regularly to be effective. So, I’ve booked an appointment with the local gym for an assessment (or sales pitch) so that I can get back into the routine safely and, most importantly, frequently.
Why is it that we all know that we should exercise regularly but only a few, hearty soles have the discipline to sweat it out?
As a former (meaning 20 years ago) recreational triathlete and hockey referee, I’m pretty disappointed with my current lack of conditioning. I almost get tired driving the distances that I used to cycle. Fortunately, my ventilated and massaging car seats keep me up for the driving task.
I’ve worked out with a couple of trainers recently and the results were amazing. First, the trainer didn’t care about any excuses. Second, he and she (they took turns) showed me how to do things correctly. Third, they pushed me harder than I would have ever pushed myself. Fourth, they provided constant feedback, instruction, and, occasionally, motivation.
There are some parallels to working with a consultant, you know.
Consultants can help you to:
The best part of working out with a consultant is that you don’t need to wear a heart rate monitor and you won’t pass out from over exertion. However, mental work still seems to require some heavy lifting.
It’s time to hit the gym.
Copyright 2012 Phil Symchych. All rights reserved.
“It’s 3:00 on a Friday afternoon. I could be getting some real work done before the weekend. Why am I here?”
Most of us hate meetings, or, more specifically, we hate wasting time in unproductive meetings. However, a well-run meeting can dramatically improve morale, align your people, and generate great results.
Running a good meeting is a critical management task that all entrepreneurs need to master.
Agenda
Here are tips on how to run a good meeting:
Ineffective meetings waste time, waste money, deflate morale, reduce your credibility and hurt your company. Or, effective meetings can generate great ideas, hold people accountable and improve your company’s performance. The choice is yours.
Copyright 2012. Phil Symchych. All rights reserved.
Welcome to this issue of DUDS – Dumb Unilateral Decisions
Big companies are nickel and diming us and it’s getting ridiculous.
I receive my Rogers cell phone bill in the mail. How old-fashioned and environmentally unfriendly of me, as a paying customer, to demand an invoice?! It seems that my monthly fees for three cell phones and an iPad data plan are not sufficient to warrant Rogers sending me a bill without charge.
Or, perhaps, they are profit challenged and need to scrounge for cash from their (temporary) customers?
$2.00 paper invoice fee
Next on the DUDS list is Pitney Bowes, with whom I spend more on ink than postage because they have the most profitable (for them) ink cartridges in the world. I just renewed my lease (at a discounted rate because I threatened to not renew — always negotiate) and received a friendly letter advising that I now have two choices because I must insure their (now used) postage machine. That’s funny, no one mentioned this during the renewal process. Oh, it’s probably in the fine print…
The $2.78 insurance 'not insurance' plan
Pitney Bowes offers a convenient insurance for only $2.78 per month. Actually, it’s ‘not insurance.’ They, or their marketing or legal department, calls it an ‘equipment replacement/damage waiver program.’ If I don’t want to pay them monthly, I can contact my busy insurance broker and ask him to confirm, in writing, that 1. Pitney Bowes et al are named as insured or loss payee, 2. coverage commences upon lease commencement, 3. includes theft (really?), and 4. my lease number. Of course, my insurance broker, who is a good guy and an expert, would not be paid for this service.
I guess the finance people at these big companies are taking the economic challenges to heart. Instead of innovating and providing more value and services to their customers, they are charging us more for what they used to do for free or what we already have in place and are paying for, like insurance.
Big companies seem to be getting more disconnected from their customers every day. Rogers and Pitney Bowes, are you listening? I didn’t think so.
Copyright 2012. Phil Symchych. All rights reserved.
There is gold sitting in your financial statements. The trick is to mine it. Every month!
I advise business owners to sit down with their internal accountants and go through their entire financial statements — that’s the balance sheet, income statement, aged accounts receivable and aged accounts payable — line by line, every month.
First, this will force your accountant to explain the statements to you, the owner. You can ask the accountant questions…and…they probably won’t have all of the answers. That’s because they make certain assumptions. Ironically, you have the answers and, together, you can create an accurate set of statements.
Second, this will force you to explain transactions to your accountant. It’s amazing how discussing and thinking out loud can clarify what is going on.
Third, the review of accounts receivable will identify which customers need to be called or jobs need to get wrapped up so that the customer will pay. That will generate quick cash.
Fourth, reviewing the accounts payable will show which suppliers are treating you well and need to be paid quickly and also if there are any unresolved issues that need to be discussed.
There is lots of gold in your financial statements. You just need to sit down with your accountant, mine it, and turn it into cash. Every month!
Did I mention the ‘every month’ part? By staying on top of your financial statements, you will maximize your cash flow and prevent small problems from growing into large problems. You will also be utilizing your accountant more effectively. They’re not just data clerks, they’re gold miners.
Well, what are you waiting for? It’s the 7th of the month. Don’t you have your financial statements yet?
Copyright 2012. Phil Symchych. All rights reserved.
What’s the best motivator in business?
Fear means that you’re trying to retain existing clients and business. It’s like you’re trying not to lose and most sports teams know this is a lousy strategy that rarely works. You can’t score touchdowns when you’re trying not too lose.
Greed means you’re trying to grow and gain new clients and business. You’re trying to put points on the board. Furthermore, the natural desire of a living organism is to grow. It’s part of our DNA to grow. If you find someone who doesn’t want to grow or learn any more because they think they know everything, well, that’s not a healthy perspective. Isn’t that how you define arrogance?
Greed is a negative word, but who cares.In my opinion, greed is great. If you have to pick one….
Our goal in business should be to grow. If your business is in decline, I hope that position is not intentional or permanent.
Here are signs of a business (or a business owner) driven by fear:
Here are signs that a business or entrepreneur is driven by greed (remember, greed is great!):
Greed is great. How are you using greed to achieve more in your business and your life?
Copyright 2012. Phil Symchych. All Rights Reserved.
Did you know your banker stress tests your business plan? That means, they run scenarios to see how your business would perform if revenues were 80% (or less) of your projections, or if other things go wrong.
Do you stress test your own business plan? If you don’t, who does?
What would happen if revenues drop by 50%, like they did for many businesses in 2009? 50% may be drastic, but what about a 10% or 20% drop?
If sales don’t materialize, how will you fund your own business? Will you invest cash in your business? Your banker doesn’t want to be the only person with skin in the game, especially when it’s your game.
If you are growing rapidly, say faster than 20% per year, how will you fund your increasing working capital needs? Most businesses under-estimate how much cash they need for growth, even highly profitable growth.
What if your largest customer demands a price reduction or leaves you altogether?
What if your best sales person is unable to work or leaves your company?
What if the owner can’t show up for work for two or three months?
What if your main supplier increases prices dramatically or is acquired by a foreign company or goes out of business or tightens up your credit to cash on delivery?
These things might be keeping you up at night but they shouldn’t be. Sit down with your key people and hammer out some contingency plans if these things occur. Better yet, discuss preventive measures so that you are proactively monitoring these areas and can respond quickly at the first sign of problems.
Remember, if everything is running great, you need to work hard to maintain it. Taking success for granted just leads to predictable pain.
By stress testing your business, just like running on the treadmill at the cardiologist’s office, you can identify potential problems and work to prevent or reduce their impact.
Copyright 2012. Phil Symchych. All rights reserved.
If you run or work in a family business, then you are a very important part of the economy. You may even have great (family) employees who are committed to the business and are willing to go the extra mile on short notice, often without extra compensation or overtime. After all, what is family for, if they can’t help out?
Family businesses face many unique challenges that threaten their short term success and long term survival. Things like professional management, leadership development, performance and profits are critical to any business and even more important to a family business that may be reluctant to hire outsiders for key positions. Yet many family owned businesses grow to become successful global companies because their strong family values and long term perspectives prevent the financial weaknesses of focusing on quarterly earnings.
Ford, a family owned business, is the only major North American car manufacturer that did not declare bankruptcy. Cargill, another family owned business based in Minneapolis, is one of the largest companies that feeds the world. Both of these companies generate excellent results and have very strong brands in the market.
Regardless of the size of your family business, you can access help, advice and resources from other successful family businesses.
The best organization that I know of for helping family businesses is the Canadian Association of Family Enterprises, or CAFE for short. Their website is here.
CAFE has many local chapters across Canada. The fees for a family business to join are ridiculously low compared to the value received.
I’ve been a member for several years. CAFE provides value in several ways. My favourite is the Personal Advisory Group, or PAG, where a small group of people from different families/businesses gets together monthly for a couple of hours in a confidential and safe environment to discuss and share experiences. The process is structured and lead by the group’s moderator. My PAG has provided me with great perspectives and advice and helped me to be a better husband and father in addition to being a wiser consultant and business owner.
The local chapters run workshops and have guest speakers that educate the members and exchange ideas.
There is a bi-annual symposium coming up in Ottawa on May 23-25, 2012.
If you own or work in a family business, then I recommend that you consider joining. Running a business, even with family, can be a lonely adventure. Joining CAFE will strengthen your business and your family.
Copyright 2012 Phil Symchych. All rights reserved.
“The stove doesn’t work,” said my wife. “Uh-oh” I’m thinking, “kitchen stuff.” This wasn’t starting well and it wasn’t going to end well.
The largest, main burner on our cook-top stopped working. “We’re supposed to host Christmas dinner and I need all my burners,” exclaimed my wife. She called the warranty company – because the repair man told us to always buy an extended warranty on today’s electronically sensitive appliances – and this commenced a lengthy exchange. She provided the serial number and the warranty company needed to send out the local service representative to take a look. Two weeks later, the service rep showed up, made a diagnosis, and left. Then, nothing.
My wife called the warranty company back. They never received any information from the service rep. My wife called the service rep. He said that he faxed the information and will resend it. We waited, and waited. My wife called the warranty people, to whom she wished a “Merry Christmas” because the season was upon us and we, well, my wife, weren’t cooking anything on the main burner. The warranty company still hadn’t received any information.
We called the service company, again. Eventually, my wife helped everyone figure out that the service company had the wrong fax number and sent our information to fax purgatory. Finally, my wife connected the service company’s information with the warranty company.
This is why consulting is so easy, sometimes. Large companies lack management skills and processes and don’t test their own products and services. Small and medium business managers can run circles around any big company manager who has a single department specialty and is busy protecting his turf, but I digress.
Our local company sent the information for the third time. We appreciated their persistence. My wife was now on a first name basis with the warranty people and had elevated her concern to the supervisor. The repair was finally authorized, then scheduled and, finally, performed.
Total time: November 24 to January 17. Only 54 days to fix a burner.
