Category Archives: Management

Sound Strategy Starts with “SWOTing” the Issues, by Gene Siciliano

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geneiciliano What you MUST tell your donors to avoid IRS challenges, by Gene Siciliano

Gene Siciliano, your CFO for Rent®

Every CEO has an idea where they want to take their company. In really good companies that idea is written down in some detail in a document so that everyone who can advance that idea can see it clearly and avoid confusing interpretations of verbal pronouncements. That document is called a strategic plan.  A good strategic plan outlines the company’s vision, mission, strategy and long term goals and objectives. A better strategic plan will have a detailed operating plan to support it, describing in some depth what will be done in the next year to move the company one year closer to the strategic idea in the CEO’s mind. For most companies that do formal planning, that’s as far as it goes. And that puts their companies in the top 10% in terms of best management practices.

Blog swot image-001
A great strategic plan, however, takes best practices a step further. It begins with understanding what challenges need to be overcome and what unique advantages the company enjoys to help it overcome those challenges. That understanding is best achieved – maybe only achieved – by performing a SWOT analysis at the very beginning of the planning process. SWOT, or Strengths Weaknesses Opportunities and Threats, helps the company’s leaders focus on what might get in the way of the goal, and what might help to achieve the goal.

For example, a solid distribution system for getting your products to market could be considered an internal strength, while an inexperienced sales force would be considered an internal weakness. A research breakthrough by a university that opens up a new market for your products could be seen as an external opportunity, while aggressive cost cutting by the competition could be seen as an external threat. Since challenges and advantages are both inside and outside the company, it helps to see it graphically, like the image above. The idea is to use the “Good” to best advantage and counteract the “Bad” as best you can with the resources available.

And then follow the plan. You’ll be wealthy, powerful and free in no time at all. Probably.

As always, I welcome your comments and feedback.

My close colleague, Gene Siciliano, CMC, CPA (our “CFO for rent®” ) is financial consultant, (and author and speaker) who works with CEOs and managers to achieve greater financial success in a dramatically changing economy.  His website is filled with resources and articles, and you can sign up for his newsletter and his blog.

Crowdfunding – the good, the bad & the ugly

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I was fascinated by this guest blog, Why I broke up with Kickstarter, in VentureBeat, not only for its rant, but for the broad array of comments posted (it is rewarding to read all of the comments on this post).

Essentially, designer Jim Clark is raving against Kickstarter for its model not being more than Kickstarter promised to deliver.  Beyond those objections (judge for yourself if they are valid, as do the commenters), he reveals his own lack of planning for the success of his Kickstarter raise.  The blog post in itself offers some insight into how others may plan for the implementation of their successful raises, e.g., delays in receiving funding, lack of follow up support, and other issues which may or may not be posted on the Kickstarter site.

I always tell my clients that “success can be your worst enemy,” especially when I am advising them to plan carefully, and to allocate their capital (are they raising enough?), and their time to market, adoption ramp (beware the Chasm), and their real costs and time to profitability.  This is a fine case study of missing those benchmarks.

The blog post and its comments tell a story with deep insight into entrepreneurship and what happens when it goes right, and when an early success can be big trouble.

Let me know what you think.

3 Tips to Design for Any Technology, by John Shiple

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This succinct short video shows how you can get your team all speaking the same language when initiating the design of technology, or of the business itself.  These are the first steps towards innovation.

My friend and colleague, John Shiple of FreelanceCTO, is a leading consultant, offering his services as a chief technology advisor to funded, early-stage and larger, scaling technology ventures. He has produced a series of short videos covering some of his expertise that he offers to technology CEOs.

 

2 Best Words for a Start-up Job Description Ever, by Margaret Heffernan

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thumbnail mheffernan002 4 Characteristics of the Ultimate Start up Hire by Margaret Heffernan

Margaret Heffernan

Next time you write a job description, take this hint from a U.S. Army Green Beret.

Last month I wrote a column about recruiting for start-ups. In it, I recounted my “green beret” speech, in which I warned aspiring employees just how tough an experience working at a new company can be.

In response, I received a thought-provoking email from one reader, Alex Brown. He wrote:

“As a former Green Beret Commander finishing up my MBA at Georgetown this spring I’m focusing on finding my place in the start-up community out in Boulder, Colorado. It’s been a challenge to convey my comfort with discomfort, and my love of ambiguous environments. Funny enough “find work” was a common phrase that I heard and spoke throughout my Special Forces career.”

The ‘Find Work’ Mentality

I love the “find work” phrase he uses to describe his proactive attitude about work. It encapsulates what every great employee does: rather than sit around and wait to be told what to do, actively scan the horizon searching for needs. I know I’ve been lucky to have worked alongside many such work finders; until now, I never fully appreciated that is what made them so great.

This might be a valuable phrase to add to the job descriptions you write when you’re hiring, if you use them. Another variant I’ve seen is: “If the ball’s falling, catch it.” The point is that in great companies, no one is waiting for instructions. Everyone is aware of what needs to be done and keen to do it–whatever “it” is. That the work is self-selected makes it more rewarding. And a workforce that looks for problems will always be smarter and more adroit than any leader or system can be.

The alternative is to load people down with rules and assignments. This gets the work done but it won’t give you the early warning system that the work finders provide.

One Requirement of a Work-Finder Workforce

That said, for a work-finder workforce to truly be effective, every single person has to appreciate the difference between real and unnecessary work. To be able to draw distinctions like that requires a clear strategy, crisply articulated. Which means, of course, that you had better have one.

This article first appeared in Margaret’s Serial CEO column in Inc. online.

Margaret Heffernan is an entrepreneur and author. She has been chief executive of InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. In 2011, she published her third book, Willful Blindness. @M_Heffernan

4 Characteristics of the Ultimate Start-up Hire by Margaret Heffernan

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Willful Blindness US cover

Margaret Heffernan

When you launch a company, each additional employee makes an enormous difference. Here’s exactly what you need to look for.

Working for a new business is completely different from working for an established one. You know this, but many job candidates don’t.

I used to give job applicants what my husband called my ‘green beret’ speech: If you don’t think it’s fun being scared all the time, staying awake worrying, not knowing from one day to the next what you’ll be doing, then please go now. (It went on longer than that, but you get the gist.)

I developed this speech after one too many people had asked what kind of guarantee I could give that my new company would be successful. The answer, of course, was: none.

What I learned to value in the many great people I hired were a few standout qualities:

1. Interstitial Instincts

At a start-up, your needs change constantly. You never quite know what you’re hiring for. So you have to find–and keep–people who are great at scanning the horizon, spotting a need, and filling it, whatever it is. They don’t ask for work; they find it. This requires a lot of flexibility. People like this are worth their weight in gold. And they’re also usually wildly underappreciated in traditional corporations.

2. Innate Mentors

You don’t have time to nurture everyone, but everyone needs to feel that he or she matters. So you want people whose natural tendency is to look after those around them. You do not want people who are competitive for credit and need a lot of your attention.

3. Specific Experience

Although start-ups are often full of very young employees with little track record, I find that people who have deep knowledge of a skill or discipline are more valuable than enthusiastic neophytes. They bring expertise into the business, know what is needed, and do it. Youthful energy is great, but know-how moves a business forward.

4. Nerves of Steel

New businesses are scary. Most fail. Worrying about it doesn’t help; solving problems does. You need people who don’t frighten easily and who (within limits) enjoy the sense of knowing that every single thing they do makes a difference. That’s the upside of fear.

This article first appeared in Margaret’s Serial CEO column in Inc. online.

Margaret Heffernan is an entrepreneur and author. She has been chief executive of InfoMation Corporation, ZineZone Corporation, and iCAST Corporation. In 2011, she published her third book, Willful Blindness. @M_Heffernan

How to Successfully Communicate with Nerds, by John Shiple

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All business owners must now communicate with their tech teams, as now there are always nerds as part of our companies, whether outsourced or in-house.  And often, business and technology use two different languages and live with different value sets.

John Shiple offers us a three steps to an effective approach to this communication, in this short video.

 

My friend and colleague, John Shiple of FreelanceCTO, is a leading consultant, offering his services as a chief technology advisor to funded, early-stage and larger, scaling technology ventures. He has produced a series of short videos covering some of his expertise that he offers to technology CEOs.

Working smart # 13: time & calendar management in 15 tactics

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Managing your calendar to support the efficiencies of your work life is a learned skill.  There are tactics for controlling your time, your calendar, your clients and your work/life balance.  You can learn them, adapt them to your own particular preferences, and then you have to apply enough discipline to maintain them.

In working with my clients recently, this topic has risen to prominence again.  They feel scattered and interrupted.  They waste time in traveling (especially here in L.A., where we are sensitive to long commutes and lost hours in the car).

So, here are some simple tactics you can adapt to your own needs:

  1. Create standing meetings with your clients at a regular, confirmed day and time into the future.  Allow the client culture to dictate how such meeting schedules will be created, but get them committed on all the relevant calendars.
  2. Respect your own “best-times.”  If you are not a morning person, do not be available in the mornings.  Notice when you are at your best, and schedule your client contact during those times.
  3. Cluster your client meetings into whole days devoted to meetings with several of them, so those days are spent in meetings and not expected to be spent on deliverables, prospecting, and other work commitments.
  4. If travel time is a consideration, schedule your travel times to meetings to avoid rush hour, and leave some buffer time in case the traffic delays you.  The stress of sitting in your car worrying that you are holding up your client or a room full of people will certain affect your excellent performance when you arrive.  Leave room for the unexpected.  This means you need to slow your pace a bit, to leave that time available.
  5. When booking multiple client meetings into a selected day, leave buffer time between meetings, not just for travel, but (also) so that you can pause after each meeting, make some notes to yourself or deliver some immediate follow up from the just-concluded meeting, and feel complete that you have handled the meeting and required follow up before moving on to the next meeting.
  6. Re-confirm all meetings the day prior, by noon at the latest.  This can be a simple email or text note (“Confirming ….Still o.k. with you?”), or an automated calendar reminder.   But get a response.  This means you must ask for re-confirmation directly.
  7. If you generally have significant follow up work after these client meetings, then cluster the client-meeting days with a “work day at your desk” day in between.  Otherwise, you will be working in the evenings to do what could be done during the next day-time.
  8. Design your availability for the kind of time you need and the kind of tasks and work-product you must deliver.  Again, you are the one who must design your availability.
  9. This design will respect the other issues in your work and life:  your non-work obligations (health, family, pro-bono work).  Block these commitment on the calendar as if they were client meetings.
  10. Respect your own work time as if you were your own client.  Leave long spaces of time to do deep work, client work, prospecting, marketing.
  11. If a client cancels a meeting with short notice, take control of the schedule:  write back the days and times you are available, with no apology (since you did not change the commitment).  Do not invade your own time that was sheltered for another client’s deliverable, or a family commitment.  Do not waste a “work day at your desk day” to interrupt that open flow of time to travel and meet with a client who changed the plan:  offer him other times that fit more closely with your schedule.
  12. Schedule phone meetings with clients or prospects when you know you will be at your desk.  Tell your caller (at the beginning of the phone meeting) how much time you have before you need to end the call or be somewhere else, so everything can get done, and so the agenda can be prioritized.
  13. Unless the person on the other end of the phone cannot hear that you are in a car (noise, distraction, etc.), do not hold important client meetings, or early prospecting meetings, from an environment that signals the listener that you are “fitting him in.”  You owe your clients and prospect more respect (and they will appreciate you for it). And you owe yourself more attention to your own safety.
  14. If you can, pick the best time for the tedium of unavoidable administration (with your assistant and for those tasks you must do yourself).  This is often Friday afternoons, or Monday mornings.  Set aside two hours that cannot be interrupted, and settle in to handle the administration that needs to be completed.  Otherwise it will nag at you on the weekends (watch that life/work balance!), or you will not be able to find some critical piece of information later in the week.
  15. Take a few minutes to enjoy the sense of completion that comes with a clean desk and an organized upcoming week.

Finally, try these tactics and adapt them to your own best practices, and then keep to the discipline they offer until they are second nature to you.  You will live a longer and happier life, and get more done with less effort.

Good luck.

Do You Know What Drives Your Profit? by Terry Corbell

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Terry Corbell, The Biz Coach

Terry Corbell, The Biz Coach

 

Who have the toughest jobs? Well, in my experience, single moms who work outside the home, have the toughest job of all. Entrepreneurs have the second-toughest job.

For profits, entrepreneurs must learn how to manage their financials and performance, which are difficult tasks. Savvy business owners know who their ideal clients or customers are.

Entrepreneurs realize financial benefits when their revenue from business exceeds their expenses and taxes. This results in a much easier task – deciding whether to save, spend or invest the profit back into the business.

Until employees and customers actually walk a mile in an entrepreneur’s shoes, they often think a small business owner is wealthy. That may or may not be true. In recent years, the odds are that many small business owners are struggling.

Smart, hardworking business owners enhance their chances for success — by completely understanding the critical factors that drive profits and they tirelessly focus on those profit-drivers.

Profit drivers

The four basic drivers of profit:

  1. Price
  2. Variable costs (variable costs change as a result of revenue from the cost of sales)
  3. Fixed costs (also known as overhead)
  4. Sales

Which of the profit drivers have the most impact on an entrepreneur’s success Price. That’s because increases in price immediately add to any profit margin.

Many entrepreneurs make the mistake of focusing on sales volume without regard to price. Especially, in a sour economy, business owners are focused on selling to alleviate ageing issues.

The dilemma, however, is that sales increases are tied to increases in variable costs, which lead to less profit.

Conversely, decreases in variable costs increase profit margins, but total revenue will not increase.

Many business owners fail to realize that cutting fixed costs do not affect revenue, which means it has the least effect on profits.

Entrepreneur mistakes

The three biggest profit-mistakes of entrepreneurs:

  1. Business owners are so focused on developing revenue from prospective customers, they fail to concentrate on their existing customer base.
  2. They fail to build their brand image so they miss opportunities to increase prices.
  3. When they cut good marketing and lay off employees to cut costs, most often they’re cutting their investments in their business muscle not fat.

To elaborate on mistake No.2 — missing brand-building opportunities to increase prices — successful entrepreneurs determine how much they can hike prices without losing profit.

True, you will most likely lose the 18 percent of customers who only buy products at the cheapest price. But depending on the amount of a price increase, you can still make a better profit.

Price-sensitive customers who do not appreciate value, most-frequently make the most-undesirable customers. They’re high maintenance, and demand the most service. They complain the most and most-readily return products.

The moral: Build your brand to maximize prices and target the best customers. That’s what leads to long-term profits – and success.

From the Coach’s Corner, here’s more: 8 Simple Strategies to Give You Pricing Power.

“I don’t want to do business with those who don’t make a profit, because they can’t give the best service.”

-Richard Bach

 

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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.

Exit Strategies: Getting ready for the sale, by Gene Siciliano

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geneiciliano What you MUST tell your donors to avoid IRS challenges, by Gene Siciliano

Gene Siciliano, your CFO for Rent®

I promised you some thought starters for those of you who want to get out of your business: retirement, diversification, bored, for whatever reason. Here’s the first list, for those of you who want to sell to someone you don’t already know today.

If you want to sell your business in the next year and expect to get top dollar for it – you’re already too late. Virtually every business needs some preparation to get the best price. The time to start planning is 2 to 5 years ahead of time. So you can:

  1. Beef up your balance sheet that has probably been ignored if the business is running smoothly. This is the first place a prospective buyer will look, because it’s a snapshot of the estimated value of your business.
  2. Strengthen your margins and create a trend that shows stability or improvement that can reasonably be counted on to continue for the new owners.
  3. Develop a management team that doesn’t depend on you to fill in the management gaps, unless you want to work for the new buyers.
  4. Show promise of future growth in top line revenues, unless you plan on selling only to a life style buyer who simply wants to make a steady living with what you‘ve built. Not the highest potential buyer, but still an option.
  5. Decide whether or not to engage outside help to prepare the business for sale – a consultant like me to improve the metrics, an investment banker or business broker to actually help you in marketing the business, etc.

That may not be good news for the over-anxious or under-prepared, but there’s a silver lining. The opportunities should continue for a couple years, so if you start now you could be just fine. If you wait a couple years before you start, good luck. You’ll need it.

My close colleague, Gene Siciliano, CMC, CPA (our “CFO for rent®” ) is financial consultant, (and author and speaker) who works with CEOs and managers to achieve greater financial success in a dramatically changing economy.  His website is filled with resources and articles, and you can sign up for his newsletter and his blog.

Three insights for evaluating your team’s performance & behavior, by John Shiple

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In product development, discipline is key.  In our rushed and agile marketplace, building a successful team always puts us under pressure.  John Shiple gives us a simple but effective approach (seed, feed, weed) to maintain the discipline required, in this short video.

 

 

My friend and colleague, John Shiple of FreelanceCTO, is a leading consultant, offering his services as a chief technology advisor to funded, early-stage and larger, scaling technology ventures. He has produced a series of short videos covering some of his expertise that he offers to technology CEOs.