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If You Want Suggestions, Act Like You Mean It
So you have decided to get input from your employees on how to improve your company’s operations. You call everyone in to the conference room and ask for opinions. Do your employees give you useful suggestions, or any suggestions at all? Do they even believe that you actually want to hear what they have to say?
The answer depends on how you act during the meeting. Do you come in with nothing more than a cup of coffee? When people offer an idea or advice do you quickly rebut what they say, explaining why their idea won’t work? Through the way you respond, are you conveying the impression that you think you know more than anyone else and you aren’t really interested in what they have to say? After all, you are the one managing the company, so how can someone at a lower level have a useful idea?
If you ask a question, but then argue about the answer, soon no one will answer you. It’s simple human nature: if an action consistently produces negative results, we simply stop doing that action.
Let your actions show that you are really interested in what people have to say. Come in to the meeting prepared with a pad of paper and a pen so you can write down ideas. Ask probing questions so you can truly understand why someone is making a suggestion. If it is your opinion that an idea won’t work, don’t just say “it won’t work” or “I’ve already tried that.” Instead, take a collaborative approach; explain why it hasn’t worked or what the problem is, then ask if anyone has ideas on how to solve it.
Just because your employees don’t have your macro perspective does not mean that they won’t have good ideas. They are, after all, on the front line every day. They see and hear things that you do not. It is possible that they see a way to make one small change in how you operate that will produce significant results.
The effectiveness of your communication process is critical to the success of your company. In the end, as the manager or owner, it is up to you to ensure that the process works correctly; you must ensure that employees understand what is expected of them. You make your thoughts known through your actions; if your directives aren’t followed, employees are disciplined or terminated. Just remember that employees make their thoughts known through their actions as well, and you can’t ignore them. If you don’t listen to what they have to say, they eventually make their point through reduced performance or by quitting.
To Raise Money You Must Prove Performance
Raising money is a selling process. Think about it. When you try to sell a product or service, your ultimate goal is to have someone give you money that you can use in your business to hire employees, pay bills, buy assets and so forth. And when you try to get money from investors or lenders, your ultimate goal is to have someone give you money that you can use in your business to hire employees, pay bills, buy assets and so forth.
So trying to raise money is not unlike selling a product or service. You have to appeal to a third party in a way that motivates them to turn over their cash to you. But there is a crucial difference. When you sell a product or service, the customer will focus is on whether or not your product or service will perform as expected. When you try to raise money, the investors will focus on whether or not you can perform as expected.
So we have the question of performance—your performance. Can you actually make your plan happen? Do you even have a plan? If you can make your plan happen, can you actually earn revenues and profits? Just as important, do you have the proper systems, controls and procedures in place to monitor your activities and your progress towards reaching your goals?
So remember, if you cannot convince investors you can perform, then they will seriously question the likelihood of getting their money back. If that happens, they are just as likely to pass on your deal and look for something else that provides a greater level of assurance of repayment.
Why You Do Have Buyers and Don’t Have Sales
- You advertise a good price on a product that you don’t have in stock.
- You don’t invest in training for your sales staff.
- You deliver products that are damaged.
- You deliver products that do not meet customers’ specifications.
- Your commission program is not structured to motivate your sales staff to excel.
- You micromanage each sale instead of giving sales people specific goals and enabling them to use their creativity to meet those goals.
- You hold your staff responsible for events they do not have the authority to control.
- You do not have or consistently promote a clear brand identity.
- You do not solicit feedback from customers to ensure that you are selling what they want and not what you think they need.
Don’t Try to Solve a Problem That Doesn’t Exist
What is the mission of your business? To solve your customer’s problem, right? Isn’t it your goal to provide your customers with a product or service that makes things more convenient, easier, less stressful?
It is critical that you are very clear and specific about the problem that you are trying to solve. This is especially true if you are trying to raise money to start or expand your business. Unfortunately, over the years, I have been witness to too many instances where my client thinks they have the perfect solution, the very thing the market must have, only to have absolutely no success at all. Why does this happen?
Continue reading «Are You Pushing a String Uphill?»
Presentation is Essential When Asking for Money
Imagine for a moment that you have had a very long day and you are driving home, hungry and tired, fighting the rush hour traffic. You do not want to cook dinner, your spouse will not cook dinner, your kids do not know how to cook dinner. Going out to eat is definitely not an option. So you decide to stop at the grocery store and just pick up something to eat. A frozen dinner sounds like just the thing.
Now, everything we buy at the store has a nutrition label that tells us the ingredients, how much fat, carbs, protein, etc. That label tells us everything we need to know about what is in the package.
But when you are hungry and just want to get something to eat, is the nutrition label the first thing you look at? Of course not. You look at the picture on the front because it shows you exactly what the product looks like and, to encourage you to buy that package, the picture is designed to get you salivating over the salisbury steak, pizza, lasagna, or whatever else in the box.
You need to apply the same principle when you prepare a financing request for presentation to lenders or investors.
Continue reading «Are You a Nutrition Label or a Picture?»
Financial management is about your performance, the results you produce, and the numbers you use to quantify your activities. As the financial manager of your company—whether you are the CEO, the CFO, the VP-Finance or Treasurer—you are going to interact with all other areas of the business: operations, personnel, marketing, production, and administration.
You will play a key role in setting goals and measuring progress towards achieving those goals. If the company fails to meet its corporate objectives, you will be called upon to help understand what went wrong and to suggest solutions to fix the problem.
Continue reading «The Financial 14 Checklist»
 Imagine for a moment that your car is really dirty, so you’ve decided to wash your car, and you’re going to do it by hand. You gather everything you need–soap, bucket, sponge, chamois cloth–and head out to the hose. You squirt some soap into the bucket, turn on the hose and start to fill up the bucket with water. When the bucket is full, you turn off the water, take the bucket over to the car and start to wash away the dirt.
You start by cleaning off the trunk and, when you have washed all the dirt away, you go to dip your sponge in the bucket of water, only to find that the bucket is empty! It was full just a minute ago–what happened?
Well, unknown to you, the bucket has a hole in it. The hole is not easy for you to see, but it’s large enough to cause all the water to drain out in a short period of time. What do you do now? Your car is still dirty and you don’t have any soapy water to clean it with.
If you had taken the time to inspect the bucket before you started, you would have noticed the hole, and you could have fixed it or bought a new bucket before you started so you wouldn’t be left without any soapy water when you wanted to wash your car.
Let’s take this lesson and see how it applies to your business. Perhaps you want to buy a new piece of equipment, or buy some extra inventory to take advantage of supplier discounts. You’ve had some pretty good sales lately, and by your reckoning, there should be a healthy balance in your cash account. So you make all the purchase arrangements and, on the day payment is due, you go to the make out a check for the payment. You open your checkbook and–wait a minute–where did all the money go?
There should be a lot of money in the account. After all, you’ve been steadily filling up the account with cash from sales, just like you filled up the bucket with soapy water. But, just as the water disappeared from the bucket of soapy water, when you went to use the cash, it was all gone. What happened? Looks like you had a hole in your cash account. You couldn’t see it, but it was large enough to cause the cash to drain out when you weren’t looking.
What do you do now? You still need the equipment or inventory, but you don’t have any cash to pay for it.
If you had taken the time to inspect the cash balance on a regular basis, and if you had proper accounting controls in place, you would have noticed the hole, and you could have fixed it before all of your cash was gone, and you wouldn’t be left without cash when you needed to buy more assets for your business.
The point is that there are a lot of ways to lose money. When we consider overall financial management, we typically think of a loss as something that occurs when our costs exceed our revenues. But you can also lose money–and a lot of it–if you don’t have proper accounting controls in place, and if you don’t do an inspection every now and then to make sure the controls are working.
So, if you haven’t done so lately, call your accountant and ask them to come over and take a look at your internal systems, procedures and controls. Make sure you don’t have any leaks and, if you do, plug them up right away. That way, the next time you go to pay for an asset, you can be certain that your account has exactly the amount of cash that you thought it did.
And who knows? If you get a really good deal on that purchase, you can use the savings to take your automobile to a car wash so you don’t have to clean it by hand.
To so many people, finance seems to be a very complicated subject. In reality, the basic concepts are not that hard to grasp, and once you understand the basics, financial products and topics are much easier to understand.
The problem is that most financial types don’t speak plain English.. They tend to rely on jargon and buzzwords that only those who deal with finance on a daily basis are familiar with and understand. Fortunately, Michael Fischer has set up a website that has many short and easy to understand videos that explain an impressive array of financial topics. Best of all, Michael explains the subject in plain English. Watch the video below, which explains the concept of financial leverage, and see if you don’t agree.
Continue reading «Finance Made Easy – Website Review»
- Identify the key people or talent groups you need for your strategy to work.
- Adopt the practice of questioning and challenging the analyses and findings of groups that have worked in an area for a long time.
- Think like your competitors. If you were to compete against you, what would you do?
Continue reading «10 Tips for Creating Strategic Advantage»
Here’s an interesting idea I just read in a recent issue of Tips From the Top, the newsletter published by The Advisory Board, a small business management consulting firm. The tip was suggested by Randy Smith, of FORUM Systems Group in San Antonio, Texas:
Continue reading «Take New Jobs for a Test Drive»
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