Sunday, December 27, 2015

Business Management

Is Time Management an Issue?




Do you feel the need to be more organized and/or more productive? Do you spend your day in a frenzy of activity and then wonder why you haven't accomplished much?

Time management skills are especially important in small business where owners often handle many responsibilities.

Here are a few tips to increase productivity and to stay calm and cool throughout the day.

1. Manage
No matter how organized you are there are only 24 hours every day. Focus on managing yourself and what you do with that time.

2. Time wasters.
It is easy to be side tracked and waste time “surfing the net”, reading emails, interruptions. Track your personal time so you can see where the focus of efforts are and how to improve time usage.

3. Plan.
Develop a plan to focus on changing behavior not changing time. Start with eliminating personal time wasters like taking personal phone calls at work. This will help improve productivity and reduce stress.

4. Prioritize.
Start the day with prioritizing tasks and benchmarking performance. If you have a list of 20 items, how many must be done that day?

5. Delegate.
Every effort should be made to have others share the work load. A review of activity will help determine what can be delegated or outsourced and allow you to focus on priorities.

Remember, time is one of the resources business owners have that is scarce, cannot be replaced once spent, and it cannot be borrowed or purchased. Manage it judiciously.

Sunday, December 13, 2015

Business Management

Do’s and Don’ts for Managers


It has often been said that employees rarely quit companies. Instead, employees quit their managers or supervisors by leaving the company. Increasing positive and reducing negative managerial behavior will go a long way towards improving employee engagement.
When your talented employees are engaged, they are able to perform better and improve your business. Here are some Do’s and Don’t’s to consider in order to get managers and supervisors started in focusing on ways to and improve manager’s performance.

1.  DO what you say you are going to do when you say you are going to do it.
There is no better way to communicate the message that you are accountable for your promises and that everyone in your company should be accountable as well.

2. DO be responsive (return phone calls, emails).
As a manager, your team can be considered to be your customer.
You want your sales team to punctually respond back to customer requests, so you should do the same.

3. DO admit your mistakes ...
...and take the blame for failures.

4. DO recognize your team.
"You can never underestimate the power of simple recognition for a job well done."

5. DO ask and listen.
"The manager of the future will know how to ask rather than how to tell." (Peter Drucker)

6. DO smile and laugh.
Have some fun. But, be genuine; programmed fun and faked laughter is worse than doing nothing.
When appropriate, laugh at yourself; it will humanize you.

At the same time………
1. DON'T get angry.
"Getting angry is easy. Anyone can do that. Anger does not belong in your managerial kit bag.

2. DON'T be cold, distant, rude or unfriendly.
Especially in difficult times, employees take cues from their immediate supervisors and need to hear from them. The team will judge managers by their action, moods, and behaviors, not by their intent.

3. DON'T send mixed messages to employees so that they never know where you stand.
Keep your message simple, focused and prioritized. Too many messages and initiatives just confuse and alienate people.

4. DON'T BS your team.
This includes saying things that you don't believe in. This includes hiding information and just plain lying. By the time each of us is in our early 20′s, we have all developed very well-tuned BS detectors
.
5. DON'T act more concerned about your own welfare than anything else.
Your success will come through the success of your team.
"Self-serving detectors" are also very well-tuned in most employees.

6. DON'T avoid taking responsibility for your actions.
You are the boss. As such, you are accountable and the buck stops with the boss. You are trying to develop accountability throughout your company. So, lead by example.

These are just a few ideas to help structure a positive working environment. I hope you share these with your team. Let me know what you think. gerry@polarisgroupmc.com



Sunday, November 29, 2015

Know your Competition




In order to compete effectively and outperform competition you need to know their strengths and weaknesses. Your product or service has to be unique or stand out against prime competitors.
To test your competitive intelligence; ask yourself:







1. Product mix
What products do you offer that competitors don’t offer? Is there a market void you can fill?

2. Training
Are your employees as well trained to service customers as your competitor? Can your employees answer questions about your competitor’s products? Can you identify competitive weaknesses? Are you vulnerable in any way?

3. Promotion
Are you familiar with competitive messages? Check their websites, brochures and promotion material to understand their positioning and how it affects you. Does your competition spend more advertising and promotion that you do? How does that affect how you compete?

4. Supply lines
Do you know your competitors customers, suppliers and distributors? You need to know how strong their relationships are to know how you can compete most effectively.

Understanding your competition not only allows you to understand where you compete best but may offer the opportunity to collaborate in areas in which you do not directly compete. A competitor may be willing to refer customers to you if you offer a particularly unique product or service. This can only happen if you know your competition and develop a relationship of trust between you.
In the end use this knowledge to strengthen your own position and build your strategy and a place in the market.

Sunday, November 15, 2015

Business Management

Conserve Your Cash



Conserving cash flow can create benefits in economic conditions facing business today. When business is in a low or slow growth pattern, cash is very important and if you don’t have cash when you need it the most operations can be constrained.

Conserving cash flow may not be easy for those businesses that have been used to having the money to spend at any time. However, when the time comes that some belt-tightening would be necessary, some practical cash flow conservation methods may be prudent.

Here are a few tips to conserve cash:
Spend wisely. Make sure that purchases are made for need to have not nice to have items. Items should have a good use in the business producing revenue where possible.

Hire only when necessary. Employee salaries are a significant cash drain so efforts to maximize productivity from current employees are paramount.

Lease equipment. Leasing vs buying can be an important option since equipment purchasing can be a serious cash drain. 

Plan ahead. Make sure you forecast financial activity. A plan outlining expected revenues and expenditures is vital to understanding cash needs. You certainly want no surprises on cash flow activity.

Renegotiate leases. Rent is often a sizeable fixed cost that can be negotiated. Speak with your landlord; there may be an opportunity to downsize or even temporarily obtain rent reductions. Landlords often prefer to accept lower income than losing tenants.

Go to the clouds. If your business is large enough to have in-house servers you are aware of the maintenance costs. If business is increasing this may be a cost effective way to create additional capacity without buying expensive new servers.


Business owners should share their cash flow objectives with other key managers to ensure every opportunity to maximize cash savings is realized.

Sunday, November 1, 2015

Networking = Improved Results





Having a network of business peers and associates can be invaluable in resolving business issues, sharing relationships and helping each other in a group.




Network opportunities can provide:  

-     -    A setting to meet new contacts in a casual, less business, more social environment.

-  - A way to volunteer in organizations and gain visibility while giving back to those who may help you.

-      -  Ways to meet people across different business streams that may have resources that can help you achieve your own goals.

-       -  An opportunity in group discussions to pose open ended questions that can provide additional information you seek and stimulate responses that show your interest in the group.

-     -    An opportunity for you to be a discussion leader and that adds respect for you and a chance to be perceived as a leader.
         

      If you extend efforts to become more involved with a variety of networks there can be a significant payoff in terms of support you achieve in developing your new business opportunities and contributions you can make to others without jeopardizing your own business goals.

      Look for groups to join that can expand your knowledge base and your business. Take no opportunity to network lightly – strive for excellence.

Sunday, October 18, 2015

Business Management

How Good is your 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 areas to avoid in planning.






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. Cash Flow insensitivity.
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.

3. Planning fear.
Preparation of business plan is not that hard. This is not a doctoral thesis or a book that has to be written. Help can be secured from books, small business development centres, local university business schools and planning software from the internet.

4. Undefined goals.
Plans should omit vague undefined goals that are just hype. The purpose of the plan is to define specific goals that are achievable and measurable and provide focus for the managers. Follow guidelines for specific milestones and hold people accountable for results.

5. Overly optimistic projections.
Revenue projections that accelerate too quickly create a false impression and unrealistic expectations. Generally more conservative projections are easier to defend with bankers or other potential sources of financing and also may prevent the owners from overspending with the anticipation of generating income that may not occur.

A good business plan presents an overview of the business -- now, in the short term, and in the long term. However, it doesn't just describe what the business looks like at each of those stages; it also provides a roadmap to follow.


Saturday, October 3, 2015

Business Management

Reap Benefits of Strategic Planning 








Strategic Planning is a process to produce innovative and creative ideas which serve as the core framework for the company and designing its’ future. It provides a road to follow for success.
Strategic planning can have an immediate impact on the business; here a few benefits than can occur.

1. Make your future happen.
It is the difference between being proactive or reactive. Not every situation can be foreseen but you can make decisions and react to changing market conditions with the end in mind.

2. Establish direction.
Clearly define the purpose of the organization and establish realistic goals and objectives which can be clearly communicated to employees.  Provides a base from which progress can be measured, employees compensated and boundaries established for effective decision making.
 
3. Make wise business decisions
How do you distinguish between a good idea and a great idea?  Without a clear vision of what you want to achieve, and a mission or purpose for doing it, everything seems like a good idea.  What project do you invest in?  How should you prioritize?  Having clarity about what you want to do, who you need and how to get there will focus limited financial and people resources.

4. Increased profitability and market share
Focused planning and strategic thinking will uncover the customer segments, market conditions, and product and service offerings that are in the best interest of your business.  A targeted approach to markets and opportunities will guide your sales and marketing efforts, distribution and other business decisions which ultimately may mean more profit to the bottom line and a stronger market position.

5. Unique differentiation:  avoid “me too”
Companies often get used to looking at their competitors and their best practices and then trying to duplicate them that it becomes harder to tell the companies apart.  They all start to look the same with less distinction in unique value.  Strategy means having a unique differentiation that sets you apart from your competitors.

6. Increased job satisfaction. 
Consistently one of the top reason for leaving a firm is the lack of job satisfaction.  People need to have a motivation to come to work and feel like part of the team.  Employees are often the greatest source for innovative ideas.  The purpose and meaning of work gives a new focus and reason to show up each day if they participate in developing the Strategic Plan.

I hope these ideas provide some clarity on the benefits of developing an overall plan.

Sunday, September 20, 2015

Business Management

Sharpen Business Communication




Communication is at the core of all our relationships, both business and personal. Business communication needs to keep pace with the warp speed digital communication that bombards us with messages we often did not ask for and are irrelevant to our business activity.
Here are some important tips to improve communication and break through all that digital noise and allow us to reach the intended audience.

Pitching for Business?
- Ask the right questions by understanding your customer’s needs.
- Communicate professionally. Make sure written communication is proofread and has an appropriate signature. Make sure phones are answered professionally and people speak clearly.
- Schedule and prepare well. Make sure you provide potential clients with adequate uninterrupted time to speak. Prepare an agenda and share it before the meeting so all parties can prepare.
- Communication is a two way street. Express your ideas clearly but be sure to listen. Silence can be a powerful communication tool.  Ask good questions to show your interest and involvement with the customer.
- Follow-up in writing. Give your customer an overview of the meeting and ask for feedback.

Customer Service
- Quality products should be supported by equally strong communication with customers.
- Make your customers feel they are a priority in your business.
- Make sure if problems occur they are addressed and fixed.
- If miscommunication seems to be the source of the problem use a different method; make a phone call to replace email. If the issue requires more than a few sentences to explain, call and speak with the customer personally.

Networking
- Communicate confidently. Firm handshakes, eye contact, and smiles are important communication signals.
- Have a 30 second “elevator speech” that presents an effective first impression.
- Speak in a relaxed way that makes your audience comfortable.

Work on refining these communications skills to maximize your opportunity for success. That is my take on the subject. What is yours? Please let me know. gerry@polarisgroupmc.com

Tuesday, September 8, 2015

Business Management

Manage for Success




Let’s look at some key factors that contribute to business success. The role management plays is critical and management must focus on and achieve the goals and objectives set for the business. This can be facilitated with a number of key management functions.

1. Planning: 
The key to your success is having a business plan in place. Whether you're about to launch a start-up or you've been in business for years, your business' direction is guided by your business plan. To begin the planning process, you'll need to do some critical analysis; business planning is about realistically forecasting where your business is going.

2. Organizing: 
Organizational design is the way in which you set up your company (employees, information and technologies) to best meet your business objectives. How you structure your business has a major impact on how well it functions. There is no single best organizational design for all small businesses. Each business structure is as unique as the organization it represents.

3. Leadership:
An effective leader has a vision, a drive, and a commitment to achieve beyond that vision. The leader must then also have the skillset to enlist the support of the organization to achieve the stated goals.

4. Controlling:
Many small businesses lack proper control systems because they are focused on production or service issues.
Having a control system allows you to monitor, measure, and adjust your organisation’s performance, whether it is sales, production capabilities, or general efficiencies. In other words, the purpose of business control is to identify unfavourable business performance so appropriate actions can be undertaken.

5. Communicating:
Communication is essence of management. The basic functions of management as shown, planning, organizing, leading, controlling cannot be performed well without effective communication. Business communication involves constant flow of information and receipt of feedback. This is essential for the growth and success of the organization.

In the end, management will determine the success or failure of a business. Success surely cannot be attained without the appropriate skillset to manage.

Sunday, August 30, 2015

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.

Monday, August 17, 2015

Business Management

Build Cash Flow








In times of a slower economy and when growth is difficult to sustain it is important to stay on top of the company’s finances and to preserve cash.

Here are some ideas to maximize cash availability in the business.

1. Track Cash
Track your cash as it comes in and goes out throughout the month. That will help you stay on top of problems and make adjustments, such as delaying discretionary payments.

2. Work with customers and suppliers.
You can increase cash flow by offering discounts to early paying good customers and preserving cash by having suppliers help by extending payment terms.

3. Protect working capital.
If cash is tight don’t pay for long term investments in equipment. It is better to use debt to finance these projects. Debt can be used to re-finance fixed assets to free up capital.

4. Cut waste.
Make every effort to improve productivity, eliminate inefficient equipment and other sources of waste. Engage staff to get involved in developing solutions.

These are just a few suggestions to improve that most vital business tool – cash flow. I hope you agree.
gerry@polarisgroupmc.com

Tuesday, August 4, 2015

Management

Are the right managers in place?


It’s important to motivate and reward your best people, but is promotion really the right call? Promoting your best people into management roles seems like a quick fix to show employees you recognize their hard work. Unfortunately, many companies find out the hard way that not every great employee is management material.

Before promoting your best people, here are some thoughts to consider:
1. Is the role correct?
Too many companies have a flawed methodology for selecting people into management. How? They base hiring and promotion decisions on an employee’s past experience, and then reward them by giving them an entirely different role.

2. Managerial talents
Management candidates should have a broad set of skills including:
Ability to motivate employees
Take initiative to resolve problems
Support a culture of accountability
Are able to develop trust among employees
Can make well-reasoned unbiased decisions that benefit their team and the organization.

3. Alignment with Company Goals & Vision
A manager will be representing your company in a more visible way. They’ll be interpreting company goals for a team and ensuring organizational objectives are achieved. It is important the employee in question is strategically aligned with company goals and culture. If your company culture says, “The customer is always right,” then managers should embody this mission statement. Just because an employee excels at the day-to-day work of an organization, however, doesn’t mean they’ll be great with big picture initiatives.

4. Are they Communicators?
Communication is important, but listening is essential.
Managers need to listen up and down the organizational chart so they can clearly communicate workflow to their team. They need to not only listen to what is being said, but understand what is unsaid among the employees they manage. If a manager is more focused on their work than their workers, this could spell bad news in a management setting.

5. Do they want to manage?
Not every superstar employee wants to become a manager.
Your top-notch sales rep might have become invaluable because they really love the work they’re doing. You want to reward them by giving them a manager position, but what you’re really doing is taking them away from the work at which they excel.
If the candidate doesn’t seem motivated to manage, find another way to recognize and reward their hard work and find someone more suited to the management lifestyle.

Bad management can truly hurt your company, kill employee morale, and bring down your bottom line. Before promoting someone to a management position, ask yourself these questions in order to ensure you’re making the right decision.






Monday, July 6, 2015

What is the State of your Capital Needs?


Finding a supportive financing institution or bank is the start of one of the key relationships in the life of your business. Understanding how potential financers look at a business can increase your chances of success in landing the financing needed.
Outside views will take an objective look at your business that might not be consistent with your vision.

Sometimes entrepreneurs think they should receive more money than the fundamentals of their business merit. They also often underestimate the riskiness of their project.
At the same time, entrepreneurs shouldn’t forget that banks and other financial institutions are in business too and need to find and keep clients. That can make them an invaluable resource for new business owners.

Whether your plan is to start a business or expand your existing company, here are some key factors to consider when seeking financing.

1. Types of financing
There are two types of financing: equity financing and debt financing. When looking for money, you must consider your company's debt-to-equity ratio. This ratio is the relation between dollars you've borrowed and dollars you've invested in your business. The more money owners have invested in their business, the easier it is to attract financing.
- If your firm has a high ratio of equity to debt, you should probably seek debt financing. However, if your company has a high proportion of debt to equity, experts advise that you should increase your ownership capital (equity investment) for additional funds. That way you won't be over-leveraged to the point of jeopardizing your company's survival.


2. Your financial capacity
Having a solid credit history says a lot about your trustworthiness and ability to run a successful, profitable business. A willingness to put a significant amount of money into your business will show your lender that you are committed to the project and willing to share the risk.

The lender will also want to know how you are going to use the money, when and how you are going to repay your loan and whether there’s any security that can be pledged against it such as equipment, buildings or personal property. It might take two or three meeting to sort everything out.

3. Know your break-even point
- Breakeven analysis is a tool used to determine when a business will be able to cover all its expenses and begin to make a profit. For the startup business, it is extremely important to know your startup costs; you need to understand the level of sales revenue needed to pay the ongoing expenses related to running your business.
- A startup business owner must understand that $5,000 of product sales will not cover $5,000 in monthly overhead expenses. The cost of selling $5,000 in retail goods could easily be $3,000 at the wholesale price, so the $5,000 in sales revenue only provides $2,000 in gross profit. The breakeven point is reached when revenue equals all business costs.

The lender wants to see that you have built your plan based on a sound analysis that takes into account the market, the competition and the economic context. Do your own research and show that you know the trends, the opportunities and the risks when you present your plan. This boosts your credibility and a simple, concise presentation of facts and figures will back up your statements and business plan.
Good luck with your planning, I hope this brief outline helps.
gerry@polarisgroupmc.com

Monday, June 15, 2015

Succession Planning

Are you ready to pass the baton?











How much time have you spent recently preparing your organization for the future with a succession plan?

Too often owners of business have given no thought to how their business continues past their time or even who should be in line for succeeding others in key positions.

There is a fine line between structuring an organization so strong back up is available for all key positions and being top heavy with management staff. While it is important to develop and maintain an organization chart that identifies potential replacements for key positions it is a plan that must be kept confidential among only a few very senior managers. Clearly if the succession plan was broadly known the group of subordinates would constantly be chafing at the bit to move up the ladder. 

The succession plan should be updated regularly. Performance of employees change, new stars arise and training of key individuals to broaden their experience becomes important elements of the plan to maintain.

In small family organizations succession plans may be even more important. The owner may have family members who she/he would wish to carry on the business but are they qualified? Are there competing siblings who vie for the role of president and how does the current owner resolve that issue?

A well-developed plan not only provides for a smooth transition when needed but also can be a critical tool in situations that result from an untimely injury, illness, or death of the owner. You do not want a vacuum created from the absence, for any length of time, of leadership in the business. A prolonged absence of an identified leader can destabilize the business and lead to losses and in extreme situation lead to the collapse of the business.

The owner or president of the business has the fiduciary responsibility to be proactive and protect the business and ensure survival is optimized. That means an active role in preparing for his/her exit and change in other key management positions. 

You never know when there will be a need to pass the baton.

Monday, June 1, 2015

Financial Monitors to Focus on


You don’t need to be a math wizard to understand which numbers can tell you how well or how poorly your business is doing.
But you do need regular financial updates and the discipline to sit down and check the key performance indicators that matter most: sales, profit margins and cash flow.

Modern accounting software makes it easy to generate financial statements so you can perform some quick calculations to check the financial health of your business.
Here a few key areas that should be monitored monthly to enhance the opportunity of success.

1. Growth
Are your sales and profits increasing or decreasing year-over-year? Is there a trend?

2. Gross profit margin
Indicates the profitability of the business and reflects your control over cost of sales and pricing. You may want to compare this ratio with prior financial periods or industry data.

3. Inventory turnover and Customer Base
Measuring the number of days it takes to sell inventory allows you to adjust your pricing or marketing. A low number means stock is being sold quickly. In addition to profitability, a growing customer base is a sure sign that you are effectively reaching your target market, and reaching your target market is what your business is all about. The long-term growth of your company is tied directly to your ability to not only reach your customer base, but to expand it to accommodate your long-term goals.

4. Liquidity
The most common liquidity ratio is the current ratio, the ratio of current assets to current liabilities. This ratio indicates a company's ability to pay its short-term bills. A ratio of greater than one is usually a minimum because anything less than one means the company has more liabilities than assets. A high ratio indicates more of a safety cushion, which increases flexibility because some of the inventory items and receivable balances may not be easily convertible to cash. Companies can improve the current ratio by paying down debt, converting short-term debt into long-term debt, collecting its receivables faster and buying inventory only when necessary.

These are a few of the measures to check regularly. I hope the comments help.
gerry@polarisgroupmc.com

Monday, May 18, 2015

Struggling to deal with a crisis management plan?




 Is your organization struggling to deal with a crisis or plans to ensure the business exposure to a crisis is minimized?  It is not uncommon to see this paralysis because managers often prefer not to deal with the situation.




Here are a few steps that can be taken to help build a safety net.

1. Maintain sensitivity for even minor or seemingly insignificant events. Some could have the potential to develop into major issues that could be a blow to the business.

2. Plan ahead with a look to long term strategies as a guide. Work out best and worst case scenarios to help prepare for unseen events.

3. If a crisis arises act quickly; procrastinating rarely improves the situation.

4. Create a crisis management team with a mandate to trouble shoot, identify potential problems and empower them to recommend and enact changes to protect the business.

5. Provide strong and effective training to key employees and take steps to eliminate small issues so they don’t erupt into major problems.

6. Explore optional solutions and look for new ground to operate from if standard solutions prove inadequate. Think outside the box for solutions.

7. Don’t panic in a crisis situation. As the leader employees want strength. Keeping a cool head may facilitate focussing on the issues and getting a solution right.

The key to avoiding or minimizing the impact of crises that may arise is to be proactive ahead of adversity. I hope these tips provide insight into ways to fight through any situation that may arise with minimal damage to your business.


Monday, May 11, 2015

Business Management

Key leadership traits



Are you a leader just because you own and operate a small business? No. Effective business leadership demands a captain of the ship not someone just standing at the helm. Leadership is active, not passive. Leadership is a combination of traits and the ability to think and act like a leader. Leading and directing the activity of others for the overall benefit of the organization.


Here are a few traits of strong leadership:


1. Leaders Plan
The core of business leadership is being proactive rather than reactive. Leaders are good in crises - but that doesn't mean they sit around letting crises develop. Leadership involves identifying potential problems and solving them before they reach crisis proportions. Good leaders analyze and plan and adapt their plans to new circumstances and opportunities.

2. Leaders have Vision
Vision provides direction and without direction, there’s not much point to all that planning; your small business will still flail about. So if you don’t have one already, take your first step towards business leadership by creating a Vision Statement for your business.

3. Leaders Share the Vision and take charge
Sharing your leadership vision helps your vision grow and your business leadership develop. As you share your leadership vision you will strengthen your own belief in your vision and strengthen your determination to make your leadership vision become reality. Other people will start to see you as a person who's "going places". Your business leadership skills will grow as you and staff recognize you as a person with leadership skill.

Whether it's implementing a plan to improve your bottom line or responding to a crisis, you, as the leader, are the one who makes the decisions and sees that the appropriate actions are carried out. You can't just "talk a good game" to be a leader; you need to act and to be seen as taking effective action for the good of your small business.

Learning to be a leader isn't easy because it takes a conscious commitment and consistent effort to develop one's business leadership skills. I hope these tips help develop that skill and contribute to greater business success.

Sunday, May 3, 2015

Business Management

Keys for Success with your Business



What Any Organization Needs To Survive and Succeed




Essentially five things or factors are needed by any organization wanting to succeed:
Key Managers  – those who facilitate operations
Vision – a reason d’etre for organization
Processes – activities which the people undertake to fulfill the business purpose
Physical Resources – a place to work, the right equipment, finances to operate and the appropriate staffing.
Customers – people outside the organization who are willing to pay money in return for the products and services the organization.

But it’s not just the existence of these five basic factors that enables success -it’s what you do with them. The 5 Key Success Factors Of Business

1. Managing and developing people:
 People today want some direction and structure, but they also want freedom and encouragement to develop their skills and knowledge. Effectively managing people requires balancing providing direction, structure, organization, with encourage personal growth, development and creativity. Effective managers do not manage all people the same, except for some basic rules. They manage each person according to what he or she needs as motivation to do their best.

2. Strategic focus
 In today’s rapidly changing world, it’s not just enough to have a purpose for existing. Leaders have to focus the organization’s resources on the greatest opportunities to fulfill the company’s vision. Priorities may change from time to time so it’s necessary for leaders to keep focused on the desired end results such as increased sales and profits.

3: Operations:
What the people in your organization do day in and day out to create value for customers, to earn or justify income, strongly determines whether you succeed or fail.  You can’t separate operations from strategic focus which gives direction, people which do the work, customers who pay the money and physical resources to do the work. Effective operations ensure that customers get exactly what they want at the right time, the right price and the right quality. Strategic focus is largely externally oriented, operations largely internally oriented. Both need to be totally in sync with each other – not something that happens automatically but rather requiring constant effort. This is why communication is the true lifeblood of a successful organization – a high flow of information so everyone and everything is connected. Easy to say, hard to do.

4. Resources and Cash Management
Finances, facilities and equipment are the big 3 physical resources. If you don’t have adequate financing you can’t start or sustain the business. A large focus for capital is providing adequate facilities and equipment for people to work in and with. Cash flow is king. It matters little what A/R total, it’s when the money is collected to use it to sustain the organization that matters. Failing to manage cash flow is the No. 1 reason for business failure.

5. Customer relations:
Customers generate money, so in many ways this is the most important success factor. Getting customers involves marketing – indeed this success factor includes all kinds of marketing and sales. The key to successful customer relations is to give them what they need, not just what you want to sell. It is key to develop customer loyalty and thus keep competitors away. Tracking competitor actions, analyzing changes in the market environment, and adapting accordingly will help the business succeed.

Use some of these principles to improve your opportunity of success.

Tuesday, April 28, 2015

Business Management

Is there a killer loose in the business?



There are a number of business attributes that can be secretly dragging down the value of your company. If you do an assessment of what the business is worth there could be factors silently dragging down the value of the company. In many cases, fixing the problems is relatively easy as long as they know what the problems are.





Here's a list of some of the most common "silent killers" that are decreasing the value of businesses when you may be considering a sale.

Customer Concentration
A business should strive to have a diversified customer base so that no one customer makes up more than 15% of your revenue.

Declining Gross Margin 
If gross margin is declining as growth occurs a potential buyer may conclude that your competitive advantage is weakening and you have to compete on price to win customers.

Supplier Over-dependence
Seek to have a variety of sources for your raw materials. If you are forced to buy from one supplier the negotiating leverage over you can drag down your company's value.

Sloppy Financials
Keep your books clean. Nothing scares off a buyer faster than shoddy, inaccurate bookkeeping.

Management Risks
Strive to ensure that your company runs well when you are away. After all, for a business to be valuable to someone else, it needs to survive when you are gone for good. If you have key employees, make sure they are locked into some sort of incentive plan that rewards them to stay beyond the sale of your business.

These are a few suggestions that can easily be repaired and can enhance the overall valuation as you prepare the business for sale.

Sunday, April 19, 2015

Does the Business Fit?


Making an acquisition can be a great way to grow your business. After all, you're buying an established operation with staff, assets and customer relationships.
But be careful to buy a company that's a good fit for your business and makes sense in terms of your strategic plan. You also want to buy it at a price, and with a financing structure, that doesn't put your personal or business finances at undue risk.

Here are a few suggestions to help decide if there is a good fit with current operations.

1. Is it the right business?
Go beyond financial statements and ask questions about the business. Start with the most basic: Why is the current owner selling? Is there a hidden problem or is the industry headed for a cliff? Is the company overly dependent on a few customers or suppliers? Is the business dependent on personal relations the owner has with key customers that could disappear with a change of ownership? Do the brands acquired fit and strengthen the current portfolio?

2. Is it the right price?
Carefully explore the history on what businesses are selling for in the industry and region. It's important to be disciplined about how much you pay, even if your bankers are willing to lend you more. Overpaying will reduce you're financial returns, lengthen payback period, and increase your risk of default.

3. Is it a good fit?
Make sure the business you're buying has a culture that's compatible with your own. Issues with management styles, operational philosophy, and how the business can be integrated with the existing business must examined carefully before moving forward.

4. Are adequate resources in place? 
The financing of an acquisition should maximize repayment flexibility. Besides a loan secured on assets of the company, you could seek financing from the existing owner. Vendor financing usually comes with a reasonable interest rate, flexible repayment terms and no personal guarantees.
Management resources need also be in place to handle transitional issues to ensure an efficient integration of the business.

If you are in an acquisition mode, don’t hesitate to call on experts to assist in the deal. This could be a well-placed investment that could reduce overall risk of a bad deal.

Sunday, April 12, 2015

Use Incentives to Retain Key Managers




There is a role for incentives in managing and retaining key executives for the company. Here are some reasons for and examples of how to structure effective incentive programs for management.


1. Stability
You want to retain key management personnel for a number of reasons. High turnover destabilizes the company and can have severe effects on moral of employees and the bottom line. You want to retain high performing managers to enhance your own company’s growth potential and to keep key people from wanting to look at other opportunities.

2. Bonus-Goal Setting
Good managers don’t expect a bonus without achievement but don’t set the bar so high as to be unachievable. That becomes a disincentive to achieve. Set goals that help improve your bottom line; just achieving new sales records is not a priority if the costs exceed the benefit. Sales executives should be just as concerned about profitable sales as the CFO.

3. Share Profits
Pay executives for overachieving by sharing profits. As profits goals are exceeded rewards can continue to be major incentives if shared fairly. Reward contribution. You don’t have to give everything away in this process. Be competitive but unique and allow key employees to participate in goal setting. When they are part of setting the goals they are more likely to increase efforts to reach the bar.

4. Review - Communicate
Conduct periodic reviews to ensure all incentive participants know where they stand. Let’s not have surprise results announced at year end….good or bad. Be completely transparent. If goals are profit based show actual revenue/profit results so that there is a clear understanding of achievements.

5. Look Longer Term
Roll plans forward and allow incremental bonuses for achievements in consecutive years. That’s a great way to keep a key person from leaving; that extra bonus for additional achievement may be too juicy to walk away from.
Stock options are often used as a tool for key employee retention. The chance to be a part of ownership can be major motivator. However recent issues in corporate governance have tended to dilute and weaken some incentives. Try to strive for balance without risking responsibilities to shareholders.

Incentives are important tool to maintain a motivated and dedicated management team and a well-designed plan can bear fruit over the long term. I hope these are useful ideas for your organization.
   

Sunday, March 29, 2015

Business Management

Should you borrow?




Most business owners eventually reach a point where they have to decide whether to borrow money for their company. It may be to plug temporary cash flow gaps or meet short-term working capital needs. Maybe it’s to take advantage of a growth opportunity by purchasing equipment, inventory, or raw materials, or maybe even buying another business.

So should you borrow money for your business, or shouldn’t you? There’s no simple answer. Used wisely and under the right circumstances, debt can be a valuable management and growth tool. Of course there is a cost to borrowing money, and too much debt or debt that isn’t structured properly can quickly become a noose around the neck of an unsuspecting business owner.

Here are thoughts to consider:

Uses And Structure Of Debt
One of the primary uses of debt is to finance capital items, such as a plant, equipment. It often makes sense to finance these purchases even if you have enough cash to pay for assets outright. Financing capital items via a bank term loan saves your operating cash for the day-to-day expenses incurred in running your business.
You’re usually better off dedicating your operating cash to working capital expenses, such as salaries, rent, utilities, and supplies, rather than using it to pay for long-term assets. Also, the term of the business loan should match the useful life of the asset being purchased. You shouldn’t finance computer equipment that has a three-year life with a five-year term loan.
There may also be times when it makes sense to borrow money to help fund daily operating expenses. A working capital loan or line of credit can help cover temporary cash flow gaps caused by a lag in accounts receivable collections. This scenario is common among manufacturers who must buy raw materials up-front but may not receive payment for finished goods until months later.

Prepare a cash flow analysis
Before assuming any kind of loan, construct a cash flow model that will help determine whether your business will be able to generate enough cash to service the debt. This model will show your projected monthly cash position so you see any potential shortfalls and plan ahead for how to meet them.
If you believe you do need to borrow money for your business, whether for capital items or to fund working capital, start by talking to your banker. Bring your business plan and current financial statements with you, along with your cash flow model, and be prepared to explain in detail how you plan to use the money. Your banker will help you decide if a business loan is feasible and if it is, what kind of loan and structure is best for your situation.


Tighten your belt
Perhaps you need not borrow at all. Look for cash that’s already in your business that you haven’t uncovered yet.
The best place to start is by scrutinizing your credit and collections procedures. Are you enforcing your credit terms and aggressively pursuing past-due receivables? What about payables? If your suppliers are offering 30-day terms and you’re paying within 15 days, you’re lengthening your own cash flow cycle. Shortening your cash flow cycle by 10 or 15 days by accelerating collections and stretching out payables could eliminate the need for working capital financing altogether.

I hope these suggestions provide some insight to options worth considering. Please let me know your thoughts. gerry@polarisgroupmc.com

Sunday, March 22, 2015

Business Launch

Starting-up? – Hazards ahead




Starting a business can be exhilarating and wildly fulfilling. However, it can be quite complicated, and may challenge you in ways you had not imagined. Knowing the challenges and problems you may encounter in your start-up can help you to prepare for the unexpected, and possibly help avoid common pitfalls.


1. 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.

2. Money Problems
The majority of small businesses that fail do so because of lack of cash. Often, this is because owners borrow based on their ideas of a successful business, instead of borrowing for a worst-case scenario. A start-up business owner needs to be optimistic, but often is too optimistic about seeing profits. Without adequate cash flow, slow sales or a downturn in the market can end the business before it has a chance to gain momentum.

3. Managing Work and Home
A business start-up requires a tremendous time commitment and a strong will. Add to this the financial stress of a fledgling business. Start-up business owners often have problems balancing the overwhelming demands of the company with the needs of a family. If the stress of the workplace spreads into the home, the business owner may feel pressure around the clock.

4. Trying to Do It Alone
A common problem for most entrepreneurs is the belief that they can handle all of the start-up’s operations by themselves. It may be a cost-effective way to run the business, but operating the entire business on your own may not be a wise decision or the best use of your time. Many small-business start-ups may not require full-time employees. But it's a good idea to have at least two teammates, a lawyer and an accountant, ready to help. With experienced, reliable assistance, you can avoid other common business mistakes. When it is time to hire staff, be careful in your choices. Employees are a crucial component in the success of your business.

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

Sunday, March 15, 2015

Business Management

Benefits of a mentor




As a small business owner or entrepreneur, you have a lot on your plate. And whether you’re busy trying to establish your business or developing a growth strategy for your existing operation, it can be valuable to get an expert opinion from a mentor.


1. Expert Advice
Above all, business mentors have “been there, done that.” They can offer you expert advice and guidance based on actual experiences — successes and failures included.
The insight that business mentors can provide because of what they’ve been through with their business ventures, and over time, is tremendously valuable from a practical standpoint.

2. A Different Perspective
Consulting with a business mentor can be a great way to gain a different, fresh perspective. It’s easy to get caught up with your ideas to the point of questioning, confusion or second guessing – and having a sounding board in a business mentor is a great way to work through some of those kinks and broaden your own outlook.

3. Networking
With all that experience likely comes a vast network of industry connections. Your mentor can help open doors so you can meet people – potential partners, customers and decision-makers in your target market.

4. Skill Development
If you find that you’re struggling with a particular task in your start-up activities or are facing an issue with employees, bookkeeping, etc. in your existing business – a mentor can help.
Many business mentors have a particular area of advanced skills, so you can further your technical abilities while you gather bigger-picture insight.

If you’re just getting started down the path to business ownership – or have been there for some time – and are looking for some guidance, consider reaching out to a business mentor to help you along the way.
You’ve got nothing to lose – and a world of business insight to gain.

Please let me know your thoughts: gerry@polarisgroupmc.com

Sunday, March 8, 2015

Stress management



The all-too common response we hear a lot these days when asked how things are going is, “busy!” Most small business owners are balancing a multitude of tasks to the point that sometimes it’s easy to forget what day it is, let alone how long it’s been since your last vacation.

Here are a few thoughts that may help reduce daily stress:

1. Learn to Say “No”
When you commit to 10 percent more than you can actually accomplish, it “feels” like you’ve got 50 percent more, thereby creating even more stress. By not taking on more of a workload that you can reasonably carry, you create more time for meaningful activity and therefore less stress.

2. Delegate, Delegate, Delegate
Taking on more than your fair share of the responsibility for getting things done leads to fear of things “falling apart” when you take a day off. Giving more responsibility to your employees and contractors–and trusting that they’ll get the job done–can take a huge weight of stress off your shoulders.

3. Track Your Time
Here’s a huge secret: 90 percent of time management is simply tracking how much time you’re spending on each type of task. Knowledge is power. Once you realize what’s eating up your time it becomes absurdly easy to decide what’s high-priority and what can be eliminated or delegated.

4. Unplug
Every entrepreneur knows that success is only possible through self-discipline. Well, here’s where theory meets practice. Exercise the self-discipline to turn off your phone and computer when you’re asleep and for at least two hours while you’re awake. For maximum stress reduction, spend that time with friends and family.

I hope these suggestions are helpful. Please let me know what you think gerry@polarisgroupmc.com

Monday, March 2, 2015

Management

Small Business Management Issues













Cash
Finding it and managing it. There is never enough. Fast growing companies can outgrow available resources. Underperformers can’t acquire cash.
Leasing vs purchasing can lesson stress while commercial loans, credit cards and overdrafts are expensive. Care is needed to protect the business’ overall credit rating.

Lack of a Clear Plan
Many businesses don’t know how to plan. Lack of a plan aggravates the cash problem by wasting cash chasing tempting diversions; it is wasteful to throw money at problems hoping for a quick fix. Equally important is revising your plan according to changing economic and business conditions and to ensure your survival in a recession.

Ineffective Leadership
This issue takes many forms. It is frequently in the form of depth of leadership. The owner of the company is too hands-on and a) does not concentrate enough on his primary role as a leader rather than a manager; and b) fails to enlist support of competent managers and staff or through recruitment and outsourcing. This may cause the company to stop growing and eventually could lead to failure.

Sales/Marketing Competence
This leads back to planning and leadership. Many businesses have not defined what their USP is. Don’t try to compete in conflicting areas, such as lowest price and highest service. One lowers revenue and the other adds to costs. Part of the planning process for a product should include a clear answer to one question, “why should they buy from me?”

Lack of Execution
This may be the largest issue facing small business. This lack can be in a number of forms including:
- Poor execution of strategy
- Failure of new product development
- Owners spend only minimal time on strategy
- Poor communication of strategy to employees
- Lack of performance measures and little performance analysis

These are some of the problems from my viewpoint. What do you think?



Sunday, February 22, 2015

Business Valuation

What is the business is worth?



Corporate valuation is not a perfect science.  Indeed, value is perception.  Nevertheless, valuation exercises are done with the objective of maximizing the growth of shareholder wealth.  Here are a few reasons to ensure you optimize business value:

One of the benefits of corporate valuation exercises is to determine how best to raise capital.  The best financial solution is one that minimizes the cost of capital or increases the value of equity. The ensuing financial structure can provide for expansion purposes, mergers, acquisitions, divestitures and restructuring.  For private companies, valuation exercises are also important for estate and tax planning.

While a valuation exercise may help in determining what the best financial strategy to adopt is, it will only give an indication of what the value of the company is given the economic, financial and market conditions at that point in time.  For a publicly traded company, the value of equity is also dependent on several factors, including but not limited to, the liquidity of the stock, the control structure and who the target buyer is.  For a private company, other factors will include family employment, additional benefits, the control over the bonus and dividend policy and the mix of asset ownership.

There are several valuation methods.  Asset valuation is a good starting point beginning with book value and then moving on to replacement value, market value and in the case of a company that is no longer a going concern, liquidation value.  Assessing the market value of the company as a whole requires access to market data bases whereby a complete comparison of similar companies is done through ratio analysis and industry rules of thumb.  The most straight forward, effective and efficient method is the earnings approach, either using a Capitalized Cash Flow or a Discounted Cash Flow (DCF) method whereby the present value of future cash flows is calculated.
This method uncovers the intrinsic value of companies, particularly in the case of highly cyclical situations, avoids the issues of interest rate environment because the rates used in the model are long term rates, and provides a risk adjusted appraisal as it uses expected rates of return.  In short, it is a sound quantitative method on which to base discussions around financial strategic planning.


The bottom line… know your bottom line and what your business is worth. Fiscal planning will be a lot stronger.

For help with the project I recommend you contact:

 
                                       
                                   
Federica Nazzani,

Capital Assist Valuation Inc.
Cell: 226-347-8100
Email: fnazzani@capitalassist.ca

Sunday, February 15, 2015

Is the time right?


One of the more interesting and challenging questions as a business owner is “when should I be thinking about exiting this business? There are many factors to be considered but here are a few thoughts.

1. Business Health
Is the business operated from strong principles of strategy with a clear vision? Can that vision be expressed and understood by those who manage the business or potential buyers? If you the owner cannot clearly state the purpose or reasons that you exist don’t expect new owners to invent it for you.

2. Maximize return
In cases where management/ownership is dominated by a single individual it is important to maintain a high degree of confidentiality so that employees do not become insecure and unsure of the stability of the company or their jobs. This instability can easily be communicated to a potential new buyer and create a poor impression.

3. Need change?
Factors that may support your decision to leave can grow out of many conditions. The most common is an age derivative. A long career leading to a desire for more personal time; reap the rewards of your career. Age may not be the prime driver but longevity at the job could be creating burn out. Time to move on.
Another good time chosen is driven by a need for change. You may feel you have achieved all that can be achieved and you wish to quit while on top of the game. This may also provide a high rate of return if the business is at a high level of performance. Selling now may produce the equity needed to finance a new opportunity.

4. Exit from strength
Look for opportunities to exit from positions of strength. A well trained and competent management group may provide the opportunity to offer management buyout.  Managers may be able to pool resources to fund the buyout, you as owner may offer to finance all or part of the buyout or there may be an option to use company assets to finance the loans needed for the buyout. This is often referred to as a LMBO – Leveraged Management Buy Out. It also provides good opportunities for maintaining stability in the organization.

5. The market
The marketplace may facilitate determining the right time to exit. Poor economic conditions or competitive activity can have a huge impact on if or when you should exit. Positive conditions too might bring a competitor to the door with a buyout offer.

So the options are many but not always easy to sort through. Timing is critical, business life changes, choose wisely. These are my thoughts, care to share yours? gerry@polarisgroupmc.com

Sunday, February 8, 2015

Business Management

Managing Your Time





Time is one of the resources business managers have that is scarce, cannot be replaced once spent, and it cannot be borrowed or purchased. Here are a few tips to help manage it.

1. Prioritize Activity
To help you determine what needs to be done immediately and what can be tackled later, ask yourself questions such as: "How much time do I have to make this decision, contact this person, or complete this assignment?"

2. Take time. Before making calls take 5 minutes to determine what results you expect to attain and review results after to see if the goal was achieved.

3. Calls and email. Try not answering the phone every time it rings or reading an email just because it shows up. Few issues in business require an instant answer and you will be more efficient if you schedule time to return calls and email inquiries.

4. Evaluate your capacity for stress 
Start with the most worrisome task; this will reduce your anxiety and stress levels for the next tasks and in many cases improve your performance. Take breaks if you feel you are about to overload. Even a short period away from the desk is effective.

5. Plan the unexpected. It is inevitable that the unexpected will occur so leave open time in the morning and afternoon schedule to deal with “fires”.

6. Plan Strategic time. Plan ahead for weekly, monthly, and quarterly business reviews. It is important to continuously review and understand the business issues and if you fail to block off time some emergency may pre-empt the time and your plan will be postponed or eliminated.

7. Downtime. Casual time over lunch can be useful for strengthening relations with employees, customers and suppliers. Use that time judiciously.
Remember that it is difficult to get everything done and best results are achieved from those priority activities that are the focus of the business and future growth.


Thanks for allowing me to share your time with these tips. Gerry@polarisgroupmc.com