Ever have one of those moments when you unexpectedly find a little bit of cash? Maybe it happened when you were taking clothes out of the wash and saw a few coins lying on the bottom. Or maybe it happened when you were looking for the remote control for the TV and when you put your hand inside the back of the couch you felt some loose change. My favorite is when I put on a pair of jeans I haven’t worn for a while and come across some paper money — a $20 bill if I’m lucky.
So all of us have some cash lying around the house, hidden in places we don’t expect. Wouldn’t it be better if we knew where it was so we could use it? I know I always find the hidden money AFTER I have a need for extra cash.
It’s the same way in business. Your company probably has lots of hidden cash tucked away in little nooks and crannies, and if you found all of it, you’d probably be surprised at just how much it was. I’ll post a series of articles that take a look at where some of this money may be hiding. Let’s start with personnel expenses.
Employee expense is often the largest, or one of the largest, expenses any company incurs. You have a couple of options here. Of course, the quickest way to get more cash is to fire a bunch of people, but letting people go simply for the sake of saving money is almost never a good idea. You may save some cash now, but most of the time it will cost you much more in the future. Reducing staff is something that has to be done strategically. Consider moving people around instead of letting them go; maybe one department has too many people and another area doesn’t have enough help. Could you earn more revenues and profits if you shifted your human resources to another area of your business?
Keep in mind that you can manage your personnel expense by cutting staff or by not hiring additional staff. If you are thinking of hiring additional people, first take a look at your internal processes. Can they be streamlined so they can be done by fewer people, thus freeing up some employees to work in other, revenue-producing areas of your business? The answer is probably yes; typically, any process in use for some period of time is a good candidate for revision or modification.
Take a look at your benefits plan and related tax benefits. Is there a way to restructure your plan so you achieve additional tax savings while your employees receive the same or greater benefits?
Do you use a recruiter to hire staff? If so, consider offering employees a bonus if they refer someone that you eventually hire so you don’t have to pay the recruiter’s fee. Also, remember that the bonus does not have to be all cash—it can be part cash, part tickets to a play, a night in a hotel where you have a corporate account, etc.
Speaking of bonuses, consider offering a bonus to employees if they come up with viable ways to save money. After all, your staff is doing the job day to day, and is more likely than you to know how your company can save money in a given area.
Use This Job Candidate’s Checklist in Your Hiring Process
Here are 10 more factors that can cause a job candidate to be eliminated from an interview process, the second half of a list provided by Lois D. Meyer, Senior Partner, of the Lucas Group. The list is intended for job candidates but I thought it is just as useful for employers to use as a tool when evaluating candidates. Some of the items may not be new, but it never hurts to review the basics.
Did the job candidate:
- Fail to express thanks for your time?
- Ask few or no questions about the job, which indicates either a lack of interest in the job or stupidity, both of which are fatal mistakes?
- Give indefinite responses to your questions, which make the candidate sound evasive?
- Appear to be overbearing, over aggressive, conceited with a superiority or “know it all” attitude?
- Demonstrate an inability to express himself or herself clearly, i.e., used poor diction, bad grammar, slang, mumbling, speaking too low, etc.?
- Show a lack of planning for a career, with no purpose, no goals set
forth?
- Appear to lack confidence and poise, i.e., was nervous, ill at ease, and tense?
- Fail to participate in the interview, for example pay no attention to what you are saying, let his or her eyes wander around the room, etc.?
- Make it clear they were unwilling to start at the bottom, and appear to expect too much too soon?
- Make excuses and hedge about unfavorable factors in their career record?
You Don’t Have the Cash Until You Have the Cash
There is a direct relationship between a sale and the cash in your pocket. If you have the cash, you have a sale. If you don’t have the cash, you don’t have the sale.
So many things can occur to prevent you from getting cash when you expect it, starting with the buyer’s payment process, continuing with your receivables collection process and ending with your bank’s deposit receipt processes. Consider these examples:
Buyer’s Payment Process
- Items must be received in good order and checked against the purchase order and your invoice.
- What if items are missing or damaged?
- What if the buyer receives the incorrect number of items?
- What if the buyer receives the right item but the specs are wrong (you sent 1 inch widgets instead of 2 inch widgets).
- Purchasing must instruct Accounting to pay the bill.
- What if Purchasing delays in approving payment?
- What if the person who writes and/or approves the checks is out sick?
- What if management, in an effort to improve cash management, decides to delay sending the check?
Your Receivables Collection Process
- The invoice must be prepared and sent to the buyer.
- What if the invoice is incorrect as to amount or quantity?
- What if the invoice gets sent to the wrong address or wrong person?
- What if you miss the deadline for submitting the invoice to the buyer so you can be paid this month?
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- You must collect the money.
- What if the buyer sends payment to the wrong address?
- What if the buyer delays payment, claiming an error when you know the invoice is correct?
- What if the buyer, unknown to you, is having financial problems and cannot pay?
The Bank’s Deposit Receipt Process
- Your deposit has to be credited to your account.
- What if the bank credits someone else’s account because the teller transposed the numbers when entering your account number?
- What if the bank refuses to accept the check for deposit because it is a third party check?
- What if the check bounces a few days after you deposit it because the buyer’s bank account has insufficient funds to cover the check?
- You must have good funds, available for use
- What if the bank places a hold on your deposit?
- What if you are paid by wire transfer, but the instructions are not correct, so the money never gets to your account?
- What if you are paid by ACH or wire transfer and, though the funds are sent today, they will not arrive into your account for a day or two?
Some of the preceding hypotheticals may seem outlandish but I assure you that either me or my clients have experienced at least one of them. Assume nothing, and don’t rest until you know you actually have the money in your possession.
Use This Job Candidate’s Checklist in Your Hiring Process
I received an email from Lois D. Meyer, Senior Partner, of the Lucas Group, which contained common mistakes job candidates make that eliminate them from job consideration. I thought it is just as useful for employers to use as a tool when evaluating candidates. Some of the items may not be new, but it never hurts to review the basics.
Does the job candidate:
- Arrive late for the interview?
- Have a poor resume that contains errors in spelling and/or grammar? Did the candidate send a thank you note? Did the thank you note have poor grammar and/or spelling?
- Have a poor personal appearance, i.e, need a haircut, suit was unpressed, fingernails were dirty,wear white socks or mismatched clothes?
- Show a lack of interest and enthusiasm, or have a passive and indifferent attitude? Did the candidate have a slouchy walk, lounge in the chair, etc?
- Fail to look at you when talking to you and when you were talking to them?
- Avoid answering the questions asked, or respond to questions with vague, rambling answers?
- Condemnation his or her past employers, using such terms as bad boss, unfair treatment, etc?
- Appear to be the high pressure type – Domineering manner, “vise-like” handshake, etc.?
- Use a limp, weak fishy handshake instead of a firm and friendly one?
- Over emphasize the money aspect of the job, only show an interest in how much they will be paid, with little or no interest in other aspects of the job?
Keep Your Ego in Check to Achieve Your Goals
Why do people have to be so difficult? If they just did what they are supposed to do (in other words, what you want them to do), your job and life would be so much easier and less stressful.
You might as well just ask why someone doesn’t just give you a million dollars. Some things are just the way they are and there’s nothing we can do about it.
If you get angry at the other person for standing in your way, you will soon find yourself in a battle of wills that no one can win. All that will happen is that feelings will get hurt, nothing productive will be accomplished and, worst of all, time that could have been productively spent trying to achieve your goal has been wasted, never to be recovered.
I try to remember what my mentor used to tell me. Everyone acts the way they do because they are human, not necessarily because they are mean or stupid. Where people differ isn’t so much in how they react to an event, but how much they react. Some people can let things go, other people can never let things pass.
So keep this in mind and make a commitment to yourself that, starting today, before you get mad at someone for standing in your way, you will first try to see things from their point of view. After all, if you think they are an obnoxious fool, it’s possible, even likely, that they think the same thing about you.
Always keep your end game in mind. Does it really matter if the other person needs their ego stroked, is a jerk, or is just bent on being a pain if, in the end, you accomplish the goal you set for yourself?
It really isn’t about you–it’s about achieving your goals. Zig Ziglar said “You will get all you want in life if you help enough other people get what they want.” Wise words, indeed. Keep them in mind. Put them to use.
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?»
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