Red Team Your Business

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Red Team Your BusinessFor those who don’t know, a red team is a group that plays the role of an adversary to provide security feedback from the perspective of an antagonist. While such an idea can be traced as far back as the “devil’s advocate” position created in the Middle Ages for canonizations of saints by the Roman Catholic Church, more modern applications have been seen by national security agencies post 9/11, and most recently, by companies looking to test their cybersecurity vulnerabilities.

So the security angle of a red team is obvious: have someone friendly to you try to find your weaknesses and then give you a report and recommendations afterwards. But there’s no reason to limit the red team concept to security only. Why not red team your business as a whole?

Challenge Assumptions

One of the challenges any business faces is the momentum of “we’ve always done it that way.” And, in some ways, that’s a good thing. If something works, there’s no need to be constantly messing with it. But on the other hands, technology and trends changes, pandemics happen, and while “we’ve always done it that way” has its merits, it can also be an excuse holding up necessary change. You can keep saying you’ve always done it that way as long as you add: “but we’re open to doing it better.”

A red team can help you challenge assumptions all across your business:

  • Products/Services: what are the best products/services we have and how could they be better? What are weaknesses that competitors are exploiting? Could our back office run better? How?
  • Workforce: what are similar businesses offering to their team members that we are not offering? What are the most important things for your team members in long-term retention? What would happen if my most important staff were to quit tomorrow?
  • Customers: Is the customer mix you have now what will carry the company into the future, or do you need to develop an entirely different customer base?
  • Industry: what are the larger trends in your industry and are you taking any of those on, or are you zagging the other way?

Remember that a red team is antagonistic. They aren’t looking to find out what’s good or right about your business. They are looking for what’s bad, what’s weak, and what can lead to a loss of market share or value.

Who Will Run the Red Team?

There are business coaches and consultants who have experience running red team analyses. If you can’t find one that you feel comfortable using for this exercise, consider putting together an internal team. The only drawback to an internal team is that they may find it difficult to think creatively, outside of the normal constraints of the company and the assumptions they are themselves trapped in, but as long as they treat it like the exercise that it is, stepping outside of their regular environment into one where there are no limiting beliefs, they can be effective as a red team as well.

Remember that like any exercise, you want clear KPIs. Examples, related to the questions we asked above, include:

  • What are aspects of our products and services that can be improved, and how much might those improvements cost?
  • How long would it take to replace the three most important employees at the company? And how much would it cost?
  • Which of our customers is most likely to leave us? Least likely? Why?
  • What are our competitors doing better and faster than we are?

Business owners don’t red team their businesses because they are afraid of something happening tomorrow or the day after. They do so because they have the long-term future (and value) of their business in mind and are willing to do the unusual and unexpected to keep their company and team operating at the highest level. A red team exercise is one of the more simple ways to do that.

Need some help coming up with a red team plan? We can help with that. Give us a call.

Hybrid Work’s Moment

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Hybrid Work's MomentOver the past three years we’ve talked about the rise of remote work and questioned the future of office space. Those questions have accompanied disruptions in business, including companies insisting they would never go remote (until they did) and that they would always retain office space (until they didn’t). Still, as old-school managers insisted on a 100% return-to-office policy, and employees with newfound leverage refused, hybrid work has emerged as a compromise of the moment. But can it last?

Pain Points

One of the reasons people don’t like coming into the office is a commute. Long commutes have been shown to lead to lower job satisfaction and productivity and a recent study showed that up to a third of employees would be willing to take a pay cut in exchange for a shorter commute (or no commute at all). Of that third, almost 90% would take a cut as high as 20% of their salaries.

But apart from the downside of a commute, aren’t there positives to in-person working? Definitely.

One of the challenges many companies shared, particularly those who did not previously have remote work as part of their organizations, was the difficulty of imparting culture, particularly in the onboarding process. Many were used to activities like job shadowing or the informal interactions that build trust and camaraderie that happen in hallways or at water coolers that just can’t happen in things like “virtual happy hours,” however well-intentioned such cringe events are.

Factors in Considering Hybrid

So what do companies need to consider if they aren’t fully committed to remote work as the no-turning-back future but also know something big has happened and demands of “everyone back to the office” are falling on deaf ears and leading to resignations of some of their top talent? While each company has different needs, these four factors are common considerations when deciding if hybrid work makes sense:

  1. Productivity — are your team members more productive at the office or working remotely? There’s been plenty of time to accrue data on this question.
  2. Physical Space — do you need the same level of physical space that you did prior to the pandemic? If a large amount of your team is now remote, they don’t need permanent work stations.
  3. Client Wants — are clients expecting to see you in person, and if so, are they expecting the sort of space that you had prior to the pandemic?
  4. Talent Acquisition — what are the employees you are currently recruiting asking for? Do they want to come into an office, or are they expecting at least some kind of remote arrangement?

The answers to these questions will determine whether a company should use a hybrid work environment to bridge differences in their staff, or fully commit to one form of work or another. While some advocates of hybrid work seem to point to this as a wave of the future, others see it as an uneasy compromise or necessary phase for companies to use in order to find their future path, which may lie in remote or traditional working.

How Does Hybrid Work?

Many companies are requiring 2-3 coordinated days in the office, usually in the middle of the week to offer people maximum flexibility with their weekends. The rest of the week is remote. On the in-person days leadership knows everyone will be together so certain meetings are prioritized on these days. With the emphasis on collaboration, often these days will not be times for the focused, deep work that remote work can empower, but for the sorts of casual drop-in interactions that can help drive team cohesion and understanding.

Companies are also offering more social interactions on these days, whether that’s lunches together or drinks after work, to maximize the shorter amount of in-person time people have, giving them some time with their colleagues that can help power the rest of the week and give them something to look forward to the week after.

There are no “rules” for hybrid work. Many companies are writing those rules now, for however long hybrid work remains a phenomenon. But perhaps what business owners should most consider is not so much what they want or prefer, but what their team members want. 

If they are building a business to sell, they need to look forward to how things will be done in the future, not on “how things have always been done.” A seller wants to take over a business in which the issues of how the company works have already been settled — whether by experimentation or practice — not something he/she is going to have to figure out after you leave.

Are you thinking about your work environment and how to prepare it for a future sale? We’d love to talk to you about it. Give us a call today.

7 Reasons to Consider a Chatbot for Your Business

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7 Reasons to Consider a Chatbot for Your BusinessIf you haven’t heard, the AI chatbot known as ChatGPT created a sensation on the Internet. It was the latest version release of a highly-trained AI that functioned in chatbot format. But underneath all the fun responses ChatGPT returned, an underlying message was clear to business owners paying attention: chatbots have arrived, in force.

ChatGPT Fun

Part of what makes ChatGPT fun for most people is the fact that it has a fun personality and some clear beliefs. But it’s usually going to try to accommodate what you’re asking for. Someone asked it to explain quantum theory to a child “Snoop Dogg Style” and another asked it for instructions on how to remove a peanut butter sandwich from a VCR, in the style of the King James Bible.

Chatbot Power

There are millions of dollars of funding behind the company maintaining ChatGPT, but there are plenty of reasonably-priced chabots available for business. There are two types of chatbots:

  • Simple: responds to certain keywords and queries in a specific, pre-programmed way
  • Smart: has the capabilities of the simple chatbot but with machine learning added in, allowing it to learn from queries

Chatbot Uses

It’s probable that you’ve run into chatbots already, be it with an airline, or credit card company, or even with a brand you love. There are many uses for this technology, but we’ll share seven we like.

1. Customer Service

A chatbot doesn’t go to sleep and doesn’t take vacations. It’s always on your website, or active in your app. If a customer is on your site outside of business hours and needs help with something, your chatbot, linked with your CRM, may be able to give a quick answer.

For anything very complicated, a human will be the best bet (and the chatbot can log the inquiry and promise a callback window) but most customer service inquiries can be answered fairly easily.

2. FAQ

Part of customer service is answering the same questions over and over. While different employees may phrase the answers to standard questions in a non-standard manner, a chatbot never does that. There’s a consistency in how it answers questions because it’s simply doing what it was programmed to do. 

Customers who don’t want to scroll through an FAQ can simply type in a question and get an answer.

3. Sales

Sales funnels always start somewhere, and as an inquiry starts on your website or app, the chatbot can be instructed to do exactly what a human would do in guiding a potential customer through a funnel. With a link to a CRM, these potential customers are also easily tracked all the way to closing.

4. 24/7 Coverage

As already alluded to above, chatbots don’t sleep, and they add a veneer of “always on” sensibility to your business without the additional costs of a human who would be up all the time.

5. Free Up Staff

Technology is at its best when it handles lower level tasks so that staff can be freed up for higher level or revenue-generating tasks. A chatbot can take away significant workload from not just one, but multiple employees (remember that a chatbot can have 100 simultaneous interactions — or more — but a human can only ever deal with one customer at a time). The resulting additional bandwidth given to team members for higher level tasks can often pay for the chatbot and then some.

6. Add Languages

With translation automation, your chatbot can take in multilingual inquiries and answer in those languages. While it will have the same imperfections as any automated language program, most people have used Google Translate enough to have appropriate expectations. More often than not, their questions and queries will be solvable, even in a language you or your team don’t speak, leading you to the satisfying possibility of doing business with companies you might not previously have had a chance to interact with.

7. Learn More About the Customer Journey

While you may have analytics installed on your website allowing you to see a “heat map” of how customers interact with you, a chatbot adds an element of action that didn’t previously exist, allowing you to refine and optimize your site. Why did a customer pause here, or why did he/she not click through to buy? A chatbot can even actively ask these questions when a customer has paused, if you program it to do so, asking something like, “Is there anything I can help you with?” Typing “I’m just looking” won’t happen, even if that’s true!

We’ve got enough brokers to field your questions, so if you call you won’t get a chatbot…yet! But we still have old-fashioned machine learning in place, via our experienced brains, and we’d love to share that learning with you. Give us a call!

Consider an Annual Company Watchword

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Consider an Annual Company WatchwordWe’ve talked about the value of annual meetings to help summarize the year that was and to look at the year to come. One of the tools you can use to frame an entire year is a watchword.

Some may already be familiar with watchwords as a tool for personal development. A watchword is a word or phrase that expresses a core aim or belief. For example, people might choose “family” or “fitness” or “love” to help them stay focused on a particular goal that year.

Now a watchword doesn’t do well on its own. It has to be tied to specific routines and KPIs in order to have an effect. If you claim your watchword for a given year is “fitness” and you have no fitness plans or goals, that watchword will become a joke, like “fit-ness whole pizza in my mouth.”

If you haven’t had a business watchword for the year before, the best time to implement it would be at the year-end meeting or something similar. Employees are then given a sense of what the next year will be about, and that word will be something to rally around all year.

How to Determine a Business Watchword

There are many questions business owners can ask themselves to determine a watchword:

  • What does the business need more of in the year ahead?
  • What does it need less of?
  • What one thing can the company do to be more successful next year?
  • What have we struggled with in the past that we want to finally beat this year?

Once you’re clear on a word, then you’ll want to frame a narrative around it.

The word doesn’t have to be fancy. It could be something as simple as sales. Let’s say your revenues have been flat or not growing as much as you would like. Setting “sales” or “revenue” or “add more revenue” as watchwords puts all departments on the same page: this is what matters this year. When, for example, operations is reminded that “sales” is the watchword for the year, it can not only think about ways to cut costs to make those sales stand out more, but also look for tools and aids to help the sales team do better.

Add KPIs

As we noted already, a watchword doesn’t mean anything without a plan and KPIs. Let’s stick with our example of “sales.” Let’s say that you want to grow revenues 7%. You’ll need to look at your existing lines of revenue first in order to make up that number. Add on any new lines of revenue you hope to introduce.

You can then create a plan to reach those KPIs as a finish line.

Setting an annual goal and setting a plan to reach it is nothing new for most business owners. But sometimes the way a goal is achieved is by psychological markers here or there that help nudge someone forward, particularly when they are feeling weak or demoralized.

The same is true of a business. Every fiscal year is a long slog for business owners and their team members. By having a watchword to guide the year, at least one particular focus will stay in front of everyone for the year, giving it that extra psychological boost, and helping coordinate team efforts around a single idea.

If your watchword for the year is “systematize” or “prep for sale” we’ve got you covered! Give us a call.

Using Real Estate to Boost the Value of Your Business

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Using Real Estate to Boost the Value of Your BusinessWe have often spoken about the importance of keeping any real estate connected to your business in another entity so that you have more options when you’re looking at an exit. In this article we’re going to take a closer look at the interactions between those entities.

It’s Hard to Buy Early On

When businesses are young, there’s not a lot of free cash to spend on acquiring the real estate associated with the business. Also, sometimes the first location is a “good enough” location as opposed to an ideal one, and that young business may very well outgrow that original space. In the early years, many business owners are reasonably just concerned with making the rent, not in being a landlord too. 

If You Can, Buy

Once a business has matured and there’s capital and a willing seller, a business owner should almost always consider buying the real estate associated with his/her primary business.

The simplest advantage is the changing of a liability — rent you are paying to a landlord — into income into another business entity you own. You’ve taken money that was going out the door to someone else and redirected it into a door that you are benefitting from. 

More importantly, when it comes time to sell, you have two businesses to sell, creating more options for how a transaction can happen.

That said, things continue to shift in the new world of work post-pandemic, and businesses are continuing to evaluate how much office space makes sense for their operations. This is yet another thing to consider.

Charge Appropriate Rent

Now, if you are your own landlord, there’s a fair amount of flexibility that you now have. But you must wield that flexibility wisely.

Scenario 1: Undercharge

A business owner may want to, for whatever reason, take more money out of his primary business, so he/she fixes a rent that covers the mortgage for the real estate business, but is below market rates for his primary business. This creates a number of problems:

  1. A future valuation of the business will have to take into account the true market rent
  2. The real estate business is not benefitting as much as it could
  3. A buyer will wonder what other irregularities are under the hood

Undercharging your business rent when you are the landlord may be a good short-term solution for various personal reasons, but it’s clearly a poor long-term solution.

Scenario 2: Charge Aggressively

Part of owning the real estate business is creating another vehicle with its own tax advantages. As such, you may want to “stress” your primary business a bit in order to reach some goals in your real estate business. 

This doesn’t have to be anything extravagant. It could be something like 10% above market prices. Or it could be as high as 25-30% above market prices. You can choose an amount that makes sense for your own goals.

But, to make sure that you have the best price for your primary business, you will want to ramp that price down to market rates 12-24 months before selling it. This will maximize seller discretionary earnings (SDE) and the valuation of your business. 

Many of our brokers have real estate licenses precisely because we often have to deal with transactions that have real estate attached. Give us a call to see how we can help you prepare for a future transaction.

Low Hanging Fruit for New Owners

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Low Hanging Fruit for New OwnersEven in the last decade we may have been astonished at the pace of change in technology just in our personal lives. Imagine what it’s been like for businesses, and even more so, for businesses more than ten years old. But in that change lies a lot of opportunity, and we often see a lot of prospective buyers’ eyes light up when they hear how “behind the times” a successful business is. That’s because being “behind” technologically signals a whole lot of opportunity. 

If a business is successful despite not having a website (or a good one), or the owner thinks SEO is some new band the kids like these days, or the 1970s is calling, asking for their branding back, that means customers like or need the products and services enough that they don’t care. 

But that also means that every effort into these areas will gain new customers and enhance links with the ones you already have. Bottom line? These changes offer a lot of upside with not a whole lot of investment. Here are some areas that buyers should be scrutinizing during diligence, to add to their “get this improved ASAP” list.

Bad Branding

Sometimes companies are long overdue for a brand refresh or even a rebranding. The logos and taglines were done ages ago when the company first started out and haven’t been touched since. This may have been because the company has been doing well and it hasn’t been top of mind. But that doesn’t mean that an improved brand won’t gain more business.

This is especially true if that improved branding is seen on window displays or vehicle wraps or other advertising venues.

Website

Websites have come a long way from the equivalent of hanging an online shingle. Today’s websites have to perform many key functions. Just a few of them include:

  • Brand representation — does your company look professional through a clean and easy to navigate website?
  • Consumer education — customers now come to websites to learn about the products and services you offer. Do you have content for them, in audio, visual, and written form, that they can consume in their preferred format?
  • Email capture — is there a way for website visitors to get on your mailing list so they’re getting your news, information and offers?
  • Call to action — now that they’ve found you and educated themselves, do you give them an opportunity to act, whether that means giving you their contact information or actually making a purchase?

No SEO

One of the keys for any business is getting found in search, whether that’s through traditional searching by keywords, or newer forms of search like voice through tools like Siri or Alexa. You can earn your search ranking through solid and persistent content or you can pay for your ranking. Either way, potential customers can find you, but if you’re not doing any SEO, you’re not even there to be found.

No Backoffice Tech

There are so many pieces of software out there that make life easier for business owners and allow them to collect data on their prospects and clients. But many businesses are still functioning with paper and pencil…and fax machines (seriously!) Again, there’s nothing wrong with that. These businesses have been successful for a reason. But without that tech assist, there’s a ceiling as to what they can do.

With communication tools like Slack or marketing tools like Hubspot or SEO research software like Ahrefs, the sky’s the limit as to how you can communicate with your team or keep customers in your sphere of influence or what you can know about the customer journey.

Final Thoughts

None of these changes will cost new owners a lot of money. In fact, they are all classic examples of low investment, high return. And remember, the reason these changes were never made is likely because the owner wasn’t aware of them, because they were too busy running a successful business. That’s a good problem to have, right? And it’s even better to, in a way, gift these easy wins to the new owners. 

If you’re looking for businesses that offer these early easy wins, we’ve always got new ones listing each week. But call us soon, as they tend to go fast.

The Magical Myth of the Absentee Owner

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The Magical Myth of the Absentee Owner“So, we’re a married couple that would like to keep our jobs, and we’re looking for an absentee business that can add another $50,000 a year to our income.” We’d love to say this is some fictional scenario but almost every broker in the office gets one of those calls at least once a month. For some reason, there’s a segment of the population that sees a business like a washing machine that you can program and leave and just periodically show up at for a check. Even better than that, in fact, because you still have to dry and fold your own laundry.

Yes, such absentee businesses exist, and yes, it’s possible for a business owner, in time, to create an absentee business, but having it seamlessly function that way from day one is an expectation that potential business owners should flush from their minds.

What Do You Want?

After we get the query we alluded to above and take a bit of time to hear out the potential client, we are generally going to follow up with, “What are you looking to get out of this?”

“Some extra income.”

Such an answer indicates a perspective that considers $50,000 a year of income as chump change compared to high-powered corporate jobs, so simply keeping that business going will be pretty easy, right?

But this is the perspective of an employee, not a business owner.

An employee thinks that he/she can show up somewhere for a certain number of hours and get a paycheck regardless of what happens to the business.

Business owners know that sometimes they can work 80 hours a week and still not get paid at the end of the month.

A business that can generate a respectable $50,000 of income a year requires a commitment of time and money and should not be thought of as a “part-time job.” We’ve seen relationships fall apart and marriages get tested because people bought businesses thinking they were simply part-time projects that could be done outside of working hours. 

That’s simply not reality.

One Shortcut: Industry Knowledge

While we still maintain that you can’t seamlessly take over an existing absentee business, one way that this would be even remotely possible is if you have deep industry knowledge.

For example if you want to buy a printing business and have previously owned a print shop or have worked in the printing industry for many years, you’re probably not going to have to spend a lot of time learning the lingo of the business, or finding out how the machines run, or considering who the best and most reliable suppliers are.

But, you’re still going to face the same challenge that all new owners face: meeting the employees, making them comfortable, and retaining them long term.

That’s not something you can do on the nights and weekends, not something you can do “absentee.”

It will take time, and only after that time has passed, at least 6-12 months, you might be able to transition the business into an absentee one.

Final Thoughts

There’s nothing wrong with aspiring to own an absentee business. We’ve bought and sold many in our time. But it’s wrong to think you can run a business as an absentee from day one as a new owner.

What makes more sense is sharing with the seller that this is a goal you are shooting for so that you can find out what steps and what timeline would be necessary to make that happen…from someone who would know.

If you’re looking for an absentee business so you can be an absentee right away, we can’t help you. But if you’re interested in putting in the work to make a business an absentee one in the future, give us a call.

4 Pillars of Employee Benefits

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Employee BenefitsEmployee benefits in the United States are costs that are underestimated by employees and employers.  Employees don’t often appreciate what an additional financial cost these benefits are above and beyond a salary.  Employers often miss just how much employees value (and brag about) these benefits.  Businesses that are built to last (and sell) have four key pillars of employee benefits in place and in this article we will speak briefly about each of them and share why those pillars provide a firm foundation for business owners.

Health Insurance

This is a well-known benefit that has had its ups and downs in the last decade due to changes in federal legislation.  But it’s routinely one of the most important benefits potential employees ask about.

Employers should realize that health insurance is just as much peace of mind as it is doctor’s visits and prescription drug coverage: employees know that in the near and medium term, one aspect of their life is “handled.”

Health insurance should not be underestimated as a key recruiting tool and differentiator.  Deeper and more comprehensive coverage that the basic level is not inexpensive, by any means, but employers should consider that it’s a benefit that can pay for itself, in many different senses of the word.

Small Business Health Care Tax Credit

Some small businesses can qualify for tax credits.  Broadly, all of the following conditions must apply:

  • Fewer than 25 full time employees (FTE)
  • The average employee salary is less than $56,000/year
  • The business pays 50% of the premium
  • The coverage is offered to all FTE  

The general rule is the smaller the business, the larger the credit on offer.  Learn more (and use an estimator) here.

Retirement

Post March-2020, more and more employees are thinking actively about their futures.  Offering some options that include company matching is a way for employees to check off another box on their life planning list, this time in the “long term planning” category.

A major mistake that employers make is giving employees many investment choices.  This is difficult enough in the cereal aisle, but it’s paralyzing to many given the life implications of retirement planning.  Do the hard work of coming up with two, maybe three choices for your employees, covering various situations and risk profiles.  This will simplify the process for them and make it more likely that they will participate.  Companies have to pay a charge for administering the program regardless of how many participate in it, so employers might as well get the mileage out of it that employees are hoping to get as well.

Depending on your company makeup and situation, profit sharing might be worth incorporating/offering as well.

Paid Time Off

American work culture tends towards overwork.  While there isn’t yet an English word for “death by overwork” (karoshi in Japanese) many Americans leave vacation time untaken (or would rather sell that time back), leading to an unhealthy imbalance between work and real life.

The extreme reaction to this imbalance from some Silicon Valley companies has been to offer “unlimited” vacation, though how this works practically is still very much a work in progress.

A more interesting solution is the Swedish one: employees get paid more during their vacation days, giving a financial incentive for people to actually take time off for themselves.  Like many of the Swedish work experiments, it’s been successful.

Encourage people to take off for themselves and lead by example.  You don’t need to go anywhere exotic, you just need to signal that you value people’s personal lives, which is one of the big reasons they show up for you in the first place.

Remote Work

Before March 2020 remote work may have been considered a luxury enjoyed by the few but as companies consider what to do with their office space long term they should consider the fact that a growing segment of Zoomer workers put a remote work option in the same hallowed category as health care or even above retirement benefits (what’s that?).

The last two years have given observant employers plenty of time to consider how their businesses operate remotely vs in person and those who insist on in-person employment will need to have considerable offsetting benefits to compensate for that perceived loss.

If you need help implementing one of these employee benefit pillars, we know some consultants who can help.  Give us a call.

Audit Your Expenses to Boost Profitability

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audit your expensesOne of the easiest ways to boost profitability is to cut unnecessary expenses or to save on the necessary ones.  The former might seem fairly obvious, but did you know that there are consultants out there to help you with the latter, and that they often don’t ask for pay unless they’ve returned results?  Let’s talk about how they do it.

Enter Cost Analysts

There are companies whose entire business consists of finding cost savings.  They don’t often don’t charge an upfront fee, but rather, take a percentage of the savings for a set amount of time in exchange for their work.

Generally what they are going to need are your invoices and any contracts or agreements you may have signed with various service providers.  They will then audit these invoices to make sure you’re getting charged appropriately and, if necessary, renegotiate for better rates.  Errors and overcharges happen all the time; most business owners simply don’t have time to put forensic-level attention on monthly bills.

Where Can I Find Savings?

There are lots of places to save, starting with a place you might not expect: your bank.  We’re the first to tell you about the importance of developing a banking relationship but sometimes a cost analyst can give you context you wouldn’t otherwise have.

In one case study we examined, a client had absolutely no desire to change banks but was told they were overpaying fees to the tune of $32,000.  When the client went to the bank with the report from the cost analyst, the bank offered to reduce the fees by $9,000.  The cost analyst then gave the client the report that showed the bank was not charging market rates given the existing relationship.  They changed their tune and came close to a $30,000 total reduction in fees.

Another well-known place to find savings is with shipping.  Freight auditors have long studied freight and shipping bills to make sure packages and shipments arrive on time and if those shipments did not arrive on time, to demand the refunds that are part of the shipping agreement.

The possibilities are endless: office supplies, cell phone bills, waste management, cleaning services, merchant fees, utilities, even your real estate leases.

Why Use Professionals?

Well, just like anything in life, you can opt to do something yourself, but do you really have the time or expertise to audit all your bills?  As we mentioned above, most of these types of businesses don’t charge an upfront fee and only take a percentage of savings as compensation for their work.  Once that’s repaid, you’re left with the savings and the experience to make sure that you continue to keep an eye out on all your commitments and contracts.

There are plenty of good firms out there but two that we’ve heard good things about are P3 Cost Analysts and Expense to Profit.  Both boast glowing customer testimonials and millions of dollars saved.

These are the decisions you can make now to make your business that much more profitable in the short to medium term, and that much more valuable when you decide it’s time to exit.

Looking for some help to get started identifying places where you can save?  We’d love to look over your financial statements with you.  Give us a call today.

This Year, Focus on the Essential

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PrioritiesOne of the drums we often beat in these articles is the importance of delegation but as a new year begins, it might be helpful to look at the question of delegation through the frame of what it costs a business owner not to delegate.

Where Do You Shine?

When starting a new business entrepreneurs wear dozens of hats, “chief janitor” almost always among them.  It’s an exciting time, and bootstrapping and being careful with spending in those early days pays off not just in cash flow but in knowing inside out the roles you hope to delegate.  But that delegation has to happen as soon as (or sometimes, even a little bit before) cash flow allows for it.  Because the key question is, “What’s your time worth?”

Whatever number you come up with, start going through the tasks you currently have on your plate and ask yourself if this task fits with the unique skill sets you bring to the table.  If not, the company is in all likelihood overpaying you.

The easy example is the “chief janitor” role.  Clearly there would be someone else who could handle such duties who doesn’t add the same value that the business owner does.

A more subtle example would be an email newsletter or a blog that a business owner refuses to delegate because he/she thinks no one else can do it.  But even if such business owners only value their time at $150/hour, and a writer charges $75/hour, the company is paying roughly double the market rate for these services.  Is it likely that the business owner writes twice as well as people who only write for a living?  No.  

Business owners have to be ruthless: every single task that takes up their time needs to be audited and held up to this scrutiny.  Don’t let the company overpay you for your services.  Stop with the chief janitor stuff, already.

Another Frame

One of the books we really love here at Apex is Marty Neumeier’s Zag. One of the points of a brand audit he proposes is to answer your company’s  “only _____ that _____.”  For example, “the only plumber that can be at your home in 90 minutes or less” or “the only sales coaching with a money back guarantee.”  You can apply that same frame to your task list.

Am I the best person at the company for _____ task?

Am I the only person at the company for _____ task?

If the answer to the first question is “Yes,” hopefully the task fits with your skill set, because it probably means that’s where your own company is getting its best value with you.

If the answer to the second question is also “Yes,” then this probably belongs on your list, unless that task is not an area in which you shine, in which case maybe it’s time to bring in someone who is better than you at that task.

When you start to realize that failing to delegate not just costs you time, but costs your company, and hence you, money, you might arrest the desire to put out every fire, fix every problem, and insist that only you can handle a task.  Business owners who don’t delegate don’t make their businesses attractive propositions for buyers, whose eyes can glaze over when these sellers list all of their daily and weekly tasks.  No thanks.  

Almost all entrepreneurs who have successfully exited their businesses have learned the lesson of delegation, and the sooner they learned it, the bigger their exit was.

Are you having problems delegating or identifying where you add the most value as a business owner?  We’d love to talk with you and help you figure that out!