ATTRIEVE Success Blog

Tips for working ON and not IN your business


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Leadership Series: 10 Immutable Tenets of Leadership (Part 2)

Tenet #2: Be Consistent

Consistency is key to great leadership. Moody managers and managers who play favorites will never become leaders. Favoritism is the easiest way for a leader to fall from grace. But being a consistent leader is also an easy way to gain respect and confidence among your subordinates.

Consistency is not easy. It requires you to put aside your personal feelings, personal life, and your general human tendencies to show favoritism.

When I was the Director of a contact center, we had over 200 employees. Not only did I have to be consistent myself, I had to instill consistency in all 14 of the management staff. This was tough as most of them had risen through the ranks rather than being brought from outside like I had been. I was asking people to put aside their feelings about co-workers and to create an atmosphere of consistency. We definitely struggled with this, but the best way we got it across to them was that I had to have that consistency myself (refer to Tenet #1, Lead By Example). leadership #attrieve

It’s very easy to get sucked into favoritism. You have an employee who always puts forth the extra effort and shows up early, and at the end of the day you want to reward them for that performance, but if you show them additional favoritism, or laud them too much, you begin to set a lesser standard for the others. They begin to say, “why should I try harder when Jimmy always gets the special attention?”  This can spread like a virus throughout the staff.

If you allow someone to be held to a lesser standard, for example, allowing them to take an extra sick day, or not to meet performance standards, you have both allowed them the opportunity to lower their standards of performance and conduct, but also set up everyone else who observed to lower performance since they see someone else doing it.

Consistency of Mood

Consistency of mood is important as well. Leaders don’t have bad days. The key to instilling consistency in those around you is to be the same every day and the same leader to each person. If you feel yourself starting to have a change in mood, then take a moment, close your door and listen to a piece of music that lifts you. As you gather more followers you will realize that your mood becomes their mood. It is important to realize this. People look to you for guidance and direction, and you have to have that consistency if you expect it of them.

This doesn’t mean that you don’t find the individual motivating factors that each person desires in order to inspire them, but it does mean that you treat everyone equally and that the rules apply to everyone equally. Your mood becomes the constant to which others hold themselves, and becomes their constant.

As I stated before, if you do feel that you are having a moment, it really helps to remove yourself for a moment and find your “center” if you can. Yes, it all sounds touchy-feely, but you must find that one activity or exercise that brings you to your consistency. Mine is a piece of music called “Die Moldau” by Smetana. Basically this piece of classical music is about a babbling brook that becomes a river, and as I listen I try to grasp the vision of standing near the water on each turn it takes. After a few minutes I find myself back to the center and ready to take on the challenge. Find your trigger and you too will find a way to get that consistency.

The next topic will be Tenet #3: Say What You Mean and Mean What You Say. Stay tuned.

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Daily Financial Dashboarding

Attrieve

Cash is King!

Cash is king.

We’ve all heard that saying.  Well, in small businesses, cash flow is king. Most small businesses don’t build up operating or capital reserves, and many operate so thinly that unforeseen expenses can cause a panic. But it doesn’t have to be that way. Most business owners go through each day without knowing their true cash position. If you were able to see your current cash position each day, could you can make decisions that drive the business with much more confidence and efficiency? YES, I say, yes. (Try your best Foghorn Leghorn voice)

We teach our clients how to develop a Daily Financial Dashboard (DFD). Whether a spreadsheet template or just written on a post-it note, you should know some basic data as you start each day. We use a spreadsheet that shows our daily cash position in the office. Each day the adjustments are made depending on what we paid or collected the previous day, and our bank balance. We then adjust our 15-day forecasts (which we will explain below) to match up. We go a step further and make comparisons against previous periods so we can track growth. All of this was really was to set up in Excel so that we enter numbers and the sheet tells us the answers we need. Email us and we would be glad to share with you our generic sheet. media@attrieve.com  We also have a client developing business software that will include the DFD in the dashboard. Vretzel.com will be live in late 2012 for small businesses.

So how does Daily Financial Dashboarding work in real life?

The other day we were deciding whether to buy some new office equipment. The discussion was around whether to upgrade several levels to account for growth or to keep the costs low. We were able to quickly determine by looking at our DFD to see that we had a increase on our 15-day forecast that was well above our average and projected but our expenses were static. Based on our growth pattern and the fact that we knew that we had room we decided to upgrade to plan for growth. This will help us greatly because it allows us to skip several small upgrades in the future. Ultimately, we will save around $2,200 in the next year. That’s nothing to laugh at for a small business trying to operate leanly.

“Enough blabberin’ already, show us the numbers!” (Again, use your Foghorn voice for effect)

Ok, so here are the 5 numbers you need to know every morning:

  • Current balances: the current cash-on-hand in your bank accounts as you start each morning. Almost every bank has an online system you can check from anywhere now. Use the app for your bank on your smartphone, or just check in your browser, but make sure you know this number each morning. Make sure you apply the rules that your bank may have for pending transactions, holds, or unfunded ACH draws, etc. You need to decide if you include savings accounts that you use for emergencies or small capital purchases, but NEVER, ever, add your operating reserve and payroll accounts. Those monies are either earmarked or for careful determination to be used. Leave them out of Current Balances.
  • AR Now: Pretty much self explanatory. What invoices are due right now today, include those that are overdue. Make it a point to follow up on them today. A note about past due accounts: as small business owners we tend to get wrapped up in our day-to-day and our staff does as well, and we let some things slip and get behind and next thing you know we are trying to collect from our clients and pay someone a percentage to do that for us. Keep on top of them, find out where they are in getting our payments to us. Show them you are willing to work with them. OFFER AN EARLY PAY DISCOUNT if you can. One standard you may see if the 15/5; if they pay within 15 days you will offer them a 5% discount. If you can make that work within your margins, or some variation thereof, you will see an uptick in on-time receivables.
  • AP Now: payments that you will make in the course of the day. Include both those that are due from billing statements and those that you will incur from petty cash, etc.
  • AR-15 (Money owed to us in the next 15 days): what invoices do you have out right now that are due in the next 15 days, you can use a list or you can just have the total figure, but know how much you need to collect in the next 2 weeks.
  • AP-5: (Payments due in the next 5 days): Same drill, the total amount you have to pay out where you have received invoices or bills, those that are regularly due, and any expected expenses in the next 5 business days. If you have a budget (that’s a whole other blog post we’ll get to soon) then include those budgeted items.

 

If you have cash sales that will clear during any of the time frames, add those in each day for the day they clear.

The Daily Financial Dashboard is not a budget. The budget is separate and is something you should do periodically that affects your business as a whole. We will talk about budgeting soon. The focus here is to get to the figures that you need each day to make sales, discounting, and expense decisions for your business to grow.

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Ok, so now you have the picture, but you can take it one step further and help you determine the amount of sales activity that you need each day. We all think in terms of sales as monthly or annual figures, but what if you knew EXACTLY what you needed to bring in today. Hmmm, makes you think, huh. Next Friday we will address how to determine the exact amount of sales you need to generate to make your budget and your DFD match.

As always, if you need clarification, contact us.


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Leadership Series: 10 Immutable Tenets of Leadership (Part 1)

US SubmarineThe Attrieve Leadership Series addresses the trials, tribulations and triumphs of Leadership. This series of 10 short posts will address Leadership in its rawest and rarest form.

So without further ado…here’s the First Immutable Tenet of Leadership

Tenet #1: Lead by Example

People will find it hard to follow you if they feel that you are not willing to do the work or make the decisions that you are asking of them. And if we really think about those people in our lives that we consider leaders, we truly believe that they had gone through something similar or had done exactly what we were doing that fostered that respect.

Leadership isn’t easy, it’s advanced management. Just merely being a good manager doesn’t make a leader. If you are new to a leadership position you have to find the path of least resistance to earn respect – that path is to lead by example.

Followers respond to action, showing the willingness to be where they are and do what they do will inspire them – and sometimes even keep them on the right path…but it’s the WILLINGNESS that counts most. Don’t be afraid to roll up your sleeves and dig in. We teach that leaders need to be practice FILO. First In, Last Out. Be at work before everyone else and be there when they leave. this is a way to show people that you are committed to them.

You don’t have to be the at best the task you ask of others, though that helps, but you have to be willing to try what they do. A great example of this is the TV show “Undercover Boss.” I like the show, but more demonstrative of this tenet is that my wife loves the show though she only understands about 65% in English (I sometimes have to pause and translate for her – that’s my second job nowadays).

Even though she may not always understand what they are saying on the TV, she loves the fact that the leaders are willing to get into the jobs in their companies and make a go of it. And chances are the employees really view those leaders differently after that experience – not because they did the jobs well, but because they tried and were willing to do them.

A long time ago on a submarine far, far away…I was doing my job working in 12 hours shifts (12 on, 12 off) when my counterpart fell ill. Since there were only 2 of us, I had to fill in almost continuously. The first day at about hour 18 I was getting tired and our Lieutenant, we’ll call him “Stitch” for this story, tapped me on the shoulder. “Hey, I used to do this too, why don’t you go to the galley and grab a bite, then hit the rack (sleep) for a few hours. I’ll send someone down to get you in 6 hours.”  And he did. for 3 whole days he filled in for me like that. That action elevated Stitch as my leader forever. That he understood the situation and was willing to step in solidified him as a true leader. To this day I still remember that moment. Stitch was a true leader.

Lead by example is the first tent for a reason. It’s the basis of everything we discuss here about leadership. Just merely showing up is not enough, you have to work at it, and you have to show it.

The next post in this series will be Tenet #2: Be Consistent. Does favoritism ruin leadership…find out.

The Attrieve Leadership Series are excerpts from our bonus chapter in our upcoming e-Book “Attract Growth, Achieve Success” We expect to publish in the fall. Follow this blog and get on our mailing list and be one of the first people to be notified when it is ready.


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Business Plan or Executable Business Strategy?

Do You Really Need a Business Plan?

Whenever someone searches the internet on how to start a business, or talks to their banker, accountant, SCORE, or other resources, they always seem to walk away with the same answer: “You need a business plan.”  But do you really need one? The Answer is…not unless you want a loan or investment. Even then, your format and content depends on the outcome you desire.

How about a Business Strategy…

 The words “business plan” seem to connote long hours, often in the middle of the night, where an entrepreneur is pounding away at the keyboard. But if you are not seeking a loan or investors, you might want to consider a more pointed option: an Executable Business Strategy.

An Executable Business Strategy (EBS) is a short form business plan designed to outline the strategies and tactics that the entrepreneur should employ to get the business going, or for existing businesses – your action plan. It doesn’t have to be convoluted or have loads of research, it just has to define the goals and the tactics and strategies to reach those goals. The typical EBS for our clients tends to be 4-7 pages long and more bullet points than paragraphs. The reality is that the business owner can quickly make adjustments and updates on an ongoing basis. The EBS becomes the roadmap for the business and not a document that sits in a binder gathering dust.

Existing businesses should update their EBS at least quarterly. This is a great time to have a staff meeting with your managers or advisors as well so that everyone is on the same page as to your action plan.

Here are the elements we have our clients write:

Summary of Defined Goals: Set these out in specifics. More than just revenue, think about profit margin, hiring, equipment purchases, growth pattern, and maybe even a time-released products and services schedule.

Timeline: Set out a timeline for how you want the business to look for the next year. Include all the milestones you think are necessary; include client acquisition figures, etc.

Product/Service: What is it you sell, why would someone want to buy it, what is the price you sell it, and how much does it cost you.

Differentiation: What differentiates your product or service from everyone else? Be VERY specific and diligent in finding differentiating factors. The things that set you apart are the reasons for people to buy from you instead of the others. Make these the cornerstone of your marketing and your elevator pitch

Target Market: Who will pay for your products or services. Be specific and have fun with it. Name your target sectors if you want. We have a client who performs residential solar panel installations. They call one type of client the “Judy Jetson,” the lady in the neighborhood that wants to have the latest everything in fashion and technology; and solar power just adds to her “wardrobe”. Another target is the “Granola,” the person that has to have solar power to go with their electric car, composting, and organic garden. Find your own way to define your market, it will make it easier for you to eliminate wasted time by focusing in on the people most likely to buy from you.

Competition: You need to have at least a basic understanding of your direct competition, their capabilities, and pricing. Knowing your place in the market will help you solidify your offerings. We will address a good “Competitive Analysis” in an upcoming blog post.

Staffing Needs: Whom do you have on board now? What roles and functions do they cover, and who will you need during this period until you evaluate your EBS again. Include yourself!

Overall Management: Describe your management team, what roles do they play, and how is the decision making tree defined. This is where you begin to think about delegation.

Pro Forma Projections: Take your operating projections out 12 months. Be realistic.

This should get you on your way to your EBS, now just apply it to your business and grow!

Bill Maltbie is the CEO and Founder of Attrieve Business Advising Centers. He is a serial entrepreneur and a recovering Chief Operating Officer. Attrieve assists owners of small and medium businesses to work ON their businesses and not IN their businesses. All of Attrieve’s current clients are experiencing growth and increased profit margins. bmaltbie@attrieve.com


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WELCOME TO THE ATTRIEVE TIPS BLOG

Welcome to our new blog. This will be the forum where we are able to tie in all of our media outlets. This blog is for our members, clients, partners, but anyone can use the information we provide here.

The ultimate goal of Attrieve putting our small business advice out to the world is to see a renaissance of main street business once again as the backbone of the economy.

Feel free to participate in the dialogues created here, add your thoughts and experience and help create a useful forum for all things small business.

You can find out more about Attrieve by clicking the About Us link on the blog, or go to the Attrieve website and get the full story.

Good luck, happy hunting, blah, blah: just get out there and grow your business!