Sunday, June 18, 2017

Business Start-up

Avoid those killer start-up errors



Are you planning to start a new business?  There are many hazards that might be faced and avoiding these can help improve the chances of success.

Here a few hazards new entrepreneurs should try to avoid.


1. Under financing: lack of sufficient funding is probably the most common reason new businesses fail. Many entrepreneurs fail to assess the burn rate of the capital they have. One costly step is hiring too many people. Try paying people with equity rather than salary, you will end up with a much more committed team and preserve cash. Don’t overspend on equipment and technology you really don’t need to get going.
Also, many start-ups fail to realize that few customers pay promptly; this can severely impact cash flow.

2. Starting without a plan: enthusiasm over a good idea is over-rated. An idea is only an idea and without a well-developed business plan chances of success are minimal. It is also very difficult if not impossible to raise financing without a plan.

3. Fear of Failing
It is natural to have some fear that the business will not succeed and certainly problems will arise and challenge your business acumen. However, if the concept is strong and validated you should not let fear of failing stop you from trying to live your dream.

4. Inflexibility: with start-ups you have to be prepared to change on the go. Rarely does the plan get executed without a hitch. Marketplace dynamics, competitive behaviour and economic conditions can dramatically impact the plan. Ability to react and change plans may be a key to survival.

5. Assess your Strengths/Weaknesses: an honest evaluation of your skillset can be critical. Look for partners who my share the burdens of start-up by supplementing the skills you lack. Focus on your strengths and let others fill the void of skills you need. Chances for success will improve.

These are some hazards you may face in starting a business. There are others but avoiding these may help improve your chances of a successful start in business. I hope this helps you get underway. Let me know.
gerry@polarisgroupmc.com

Sunday, June 4, 2017

Business Management

Are you a Procrastinator?



Think the time you spend answering e-mail, composing IMs, and trolling Twitter doesn’t have an impact? Think again. Procrastinating in making business decisions generates enormous costs from time wasted and decisions delayed.


There are several approaches that may be considered to eliminate this waste.
1. Don’t delay.
Any time you put something off the problem usually gets bigger leading to more stress and possibly more procrastination.

2. Focus.
Reduce the issue to small tasks and work in short bursts to complete each portion. This focused activity for short periods allows you to get the feel for accomplishment. It gets you started.

3. Prioritize. 
You may never get caught up with everything you need to do. To be an effective leader you have to prioritize and decide what’s important and manage your time effectively.

4. Tune out. 
Turn off distractions. If necessary turn off email, stop answering the phone; give 100% attention to the task at hand.

5. Plan.
Create a daily plan. At the end of each day spend 3-5 minutes setting up the next day’s schedule. It may save an hour the next day while you try to determine where to start your work activity.

6. Be accountable. 
Make yourself accountable to someone for what you want to accomplish. This could be an associate, friend, or business mentor.

A task can more easily be tackled if you visualize it completed. Remember the “Law of Expanded Time”. Work will fill the time available to complete it. By making less time available to complete a task, you will spend less time completing it.

JUST DO IT.

Sunday, May 21, 2017

Business Management

Make Better Decisions




Decision-making is a crucial part of good business. The question then is ‘how is a good decision made? One part of the answer is good information, another part is experience in interpreting information.


Managers can be trained to make better decisions. They also need a supportive environment where they won’t be unfairly criticised for making wrong decisions. A climate of criticism and fear stifles risk-taking and creativity; managers will respond by ‘playing it safe’ to minimise the risk of criticism which diminishes the business’ effectiveness.
Decision-making increasingly happens at all levels of a business. The Board of Directors may make the strategic decisions about investment and direction of future growth. Managers may make the more tactical decisions about how they may contribute most effectively to the overall business objectives. But employees are increasingly expected to make decisions about the conduct of their own tasks and responses to customers. As a result careful recruitment and selection, good training, and enlightened management are important supports to good decision making.

How do you make the best possible decisions, knowing they will have an impact on your company's future?

There are strategies you can use to hone your decision-making skills.  Making better, faster decisions will help you take advantage of business opportunities.
1. Review the problem/decision in a broad context to include as many perspectives as possible. But don’t procrastinate just to get another opinion.

2. Make decisions as much as possible on facts rather than emotion. It is good to challenge your gut instincts; use objective data to reinforce decisions.

3. Don’t hesitate to challenge the status quo. Staying in your comfort zone in order to be comfortable may lead you on the same path. Change does not necessarily take more effort.

4. Be open to others opinion but trust your own ability and ability of employees to make a well-reasoned decision.

5. Recognize that some constraints may influence the decision; financial constraints, practicality, and lack of resources to implement the decision may influence the path taken.

Decisions are not taken in isolation and the effects of any decision will depend on reactions of others. Competitive behaviour should be anticipated and can influence choices. In the end, the review process needs to be completed with minimum delays and decisions finalized. Respect for action taken with a firm unwavering approach or allowing responsible employees to decide will earn respect from the organization.
I hope this helps improve your decision making in the business. Please let me know your thoughts.
gerry@polarisgroupmc.com



Sunday, May 7, 2017

Business Valuation

Maximize your business value


If you’re seriously evaluating your exit strategy, managing the process through a professional may help. Having a third party involved to represent your firm often lends credence by serving as an indication that you're serious about selling.
Depending on your size, you may choose a business brokerage or an investment bank. Both help you accurately gauge market interest, bring potential buyers to the table and create a bidding process to get you the best offer.
In addition, such an intermediary will be able to guide you through the process – from signing a nondisclosure agreement (NDA) with a prospective buyer to help in structuring a transaction.
When preparing for sale here are some thoughts to consider for maximizing the value of your business.
1. Get Your Books in Order: Financial statements are the best indicator of the future performance of a business. Buyers evaluating your company will generally require at least three years' worth of financial information. The more formal your statements (accountant-reviewed or -prepared vs. internally generated), the better the impression you'll make and the easier the due diligence for a buyer. Audited financial statements are ideal. Having a top-notch business plan to accompany your financials will increase your credibility with potential buyers.

2. Grow Your Business to Sell It: It is always easier to sell a business whose sales are growing than one in a downward trend or even flat. Buyers generally want to invest in a company that will provide them with a good return, so they’re willing to pay more for a business that has a positive trend and outlook.

3. Valuing Your Business – Taking Intangible Assets Into Account: When pricing your business for sale, intangible assets – such as people, knowledge and market position – can be even more important than tangible property. Customer awareness that underpins a prominent position within the market is a key ingredient in many companies’ success. A strong brand and a loyal customer base can be distinct assets. Other distinct intangible assets include copyrights or trademarks that let a business sell its products for a higher price or in greater quantity than its competition

4. Get a Business Valuation: A professional valuation will give you a basis for gauging offers. It will give you an idea of what you can expect to net from the sale. It will also tell you your company's market position, financial situation, strengths and weaknesses (which you can address prior to putting it on the market). Valuations can be obtained from a number of sources, ranging from local accounting firms to business brokers and investment banking firms. In this area, Capital Assist (Valuation) Inc, headed by Federica Nazzani is an excellent option.

5. Concentrate on Core Competency: A company with a strong focus around a core business generally tends to be more appealing to a buyer than a company going many different directions. Make sure that the focus of all members of the management team is aligned in this direction and that your firm’s products and services add to the value of your core business.

6. Plan for Management Succession: If you're absolutely vital to your business, who will a buyer be able to turn to for help running things after you leave? Efforts should be made to gradually delegate key responsibilities to various members of the senior management team. A buyer's primary concern is that the business can operate successfully in the absence of the current executive.
In addition, review your incorporation papers, permits and licensing agreements. Make a good first impression. Insure that when prospective buyers visit, they see an orderly operation instead of one that is chaotic. And no matter what, keep your eye on the ball. Don't let your business performance decline because you're too focused on the sale. This will only give buyers additional negotiating power to lower their offers.

I hope these tips support your efforts to maximize your business value.

Sunday, April 16, 2017

Business Management

Do you Have an Effective Business Plan?

Business Plans are a useful tool in managing and growing the business. The complexity of the plan varies with the size and nature of the business but here are a few ideas to improve your plan and areas of focus.





1. Don’t delay.
Too many business owners only create a plan when banks or investors insist on it. Find the time even if you are too busy getting things done. The busier you are the more you need a plan. Don’t spend all the time just putting out fires; the entire business may be lost if you focus on one burning issue.

2. Shorten the planning horizon. With the speed of change today the 5 year plan has become obsolete. Shorten the timeline to 3 years. You can have great vision and well developed strategy but unless you can connect the dots between where you are today and where you want to be you will fail.

3. Manage what you can measure. Knowledge is power. Monitor the right information and your plan will have a greater chance of succeeding.

4. Be Cash Flow sensitivity.
Most business owners seem to focus on profits instead of cash. The reality is that businesses spend cash to operate, not profits. Understanding cash flow is critical. If you only get one report to manage the business make sure it is a cash flow chart.

5. Support a strategic exit
Finally, at some point, the owners of the firm may decide it is time to exit. Considering the likely exit strategy in advance can help inform and direct present day decisions. The aim is to liquidate the investment, so the owner/current investors have the option of cashing out when they want.
Common exit strategies include;
Initial Public Offering of stock (IPO’s)
Acquisition by competitors
Mergers
Family succession
Management buy-outs


Investment decisions can be taken in the present with one eye on the future via a well-thought-out business plan. Given that valuing firms is notoriously difficult and subjective, a well-written plan will clearly highlight the opportunity for the incoming investors, the value of it and increase the likelihood of a successful exit by the current owner.

Thanks for your interest. Let me know your thoughts. gerry@polarisgroupmc.com

Sunday, April 2, 2017

Business Growth

Benefits of Networking





As an entrepreneur, networking is a key activity that is not only fun, but critical to your personal growth and business development.
Small business is all about networking, building relationships and taking action.
Building a successful business takes a lot of time and drive, so it’s good to have a network of friends and associates to draw energy from and keep you going.

Here are some of the key benefits of expanding your networking activity:
1. Shared Knowledge
Networking is great for sharing ideas and knowledge. Whether it’s asking for feedback or discussing your point of view, it will help you expand your knowledge and allow you to see things from another perspective.

2. New Opportunities
It’s natural that networking will result in opportunities. The thing you will not know is when or how they will materialize. Whether it’s a referral, offer partnership or request for your service or product, it is important to be ready to seize opportunities when they come along.

3. Connections
Remember you are not just gaining exposure to the people in the room, you are building connections with their network too. If someone they know has a need that matches your business, if you have made an impression, you will likely get a referral.

4. Raising your profile
Being visible and getting noticed is a big benefit of networking. By regularly attending business and social events, people will begin to recognize you. This can you help to build your reputation as a knowledgeable, reliable and supportive person by offering useful information or tips to people who need it.

5. Friendship
This one is more personal related rather than business related, but is a big benefit none-the-less. Many friendships form as a result of networking because you are all like-minded business owners that want to grow your businesses, and you meet and help each other regularly, so naturally strong friendships tend to form. Some of my strongest friendships have been started from networking.

I trust this was of interest and helps remind you of the benefits of reaching out to others as part of your growth strategy. One never knows where the next great idea may originate.


Sunday, March 19, 2017

Business Management

Leadership – How do you stack up?



Great leaders may sometimes be born that way, there are certain traits that great leaders share in common that anyone can practice and adopt to become more effective.
What qualities are those? Well, to be a highly effective leader, you must ...


1. Inspire Action
Paint a vision of the future that inspires your people to do whatever it takes to get there. The best leaders also remove organizational roadblocks that constrain employees’ natural creativity and initiative.

2. Be optimistic
We all want to work with and for people who lift us up into the clouds instead of dragging us down into the mud. Make sure to seek out the positives in your people, helping them overcome their own feelings of self-doubt and spreading optimism throughout your organization.

3. Have integrity.
The top thing that employees want from their leaders is integrity. Be honest, fair, candid and forthright, and treat everyone in the same way that you yourself would want to be treated.

4. Have Confidence
Highly effective leaders know deep down inside that they and their team can accomplish anything they set their minds to. Failure is not an option. Tentative leaders make for tentative employees. If you’re confident, your people will be too.

5. Communicate
In any organization, knowledge is power, and great leaders ensure that every employee, from the very top to the very bottom of the org chart, is provided with complete and up-to-date information about the organization’s goals, performance, successes and failures. To achieve this level of connection, you should also provide ample channels for two-way communication between employees and managers, actively soliciting their ideas for improvement and rewarding employees for submitting them.

6. Be Decisive
One of the most basic duties of any leader is to make decisions. Highly effective leaders aren’t afraid to be decisive and to make tough calls quickly when circumstances require it. Once you have all the information you need to make an informed decision, then don’t hesitate--make it. And once you make a decision, then stick with it unless there is a particularly compelling reason for you to change it.

No matter what type of organization or industry you're in, it's possible to become a more effective leader, inspiring your people to give their very best every day of the week. I hope these ideas provide insight into ways to improve this facet of managing. Please let me know your thoughts. gerry@polarisgroupmc.com