Should You Use a PEO?

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For HireWe often discuss the challenges that entrepreneurs face that don’t have anything to do with why they got into business in the first place.  Important but not necessarily thrilling topics like deciding between cash and accrual accounting or which financial ratios are best to understand your business don’t often move the needle for most entrepreneurs.  If HR is another one of those non-desirables topics for you, it might be worth investigating if a Professional Employer Organization (PEO) makes sense for your business.

A Co-Employer

You might have seen HR software that helps with a lot of the necessary paperwork that comes with having employees.  A PEO takes that one step further, by essentially sharing liability with you as a co-employer.  PEOs are most frequently used by small to medium sized businesses with as few as ten employees to as many as 300.  A PEO can handle:

  • Onboarding
  • Benefits administration (health, investing, etc)
  • Payroll and employee tax compliance
  • Leaves of Absence/PTO
  • Standard employee paperwork, like
    • Workers’ compensation
    • Unemployment insurance claims
    • OSHA compliance
    • COBRA

PEOs have to constantly keep abreast of new state and federal regulations so that’s something else you won’t have to worry about.  By actually being the employer of record for your team they are able to use economies of scale to get good deals.

Some PEOs even help you with sourcing and hiring talent.  This frees you up to focus to just:

  • Create job descriptions and determine pay
  • Manage and develop your team

It is said that companies that use PEOs have 10-14% less employee turnover, though that stat does come from their national association, so take it for what you will.

Cost and Downsides

Less paperwork?  Sounds wonderful!  Where do I sign?  A few things to consider first.

Cost

There are hundreds of PEOs operating in the US at the moment and there’s no consistent pricing but some estimates offer:

  • 2% of salaried and 6% of hourly workers’ gross pay per month
  • $40-$160 per employee per month

Downsides

There’s not a lot of flexibility within PEOs for customization.  They choose the third parties they deal with (again, benefitting from their economies of scale) and if you don’t like the choices you have in health care or investing, you don’t have alternatives other than going to another PEO.

It’s also inconvenient to cancel working with a PEO during a calendar year as you will then trigger multiple W-2s and tax forms as you move away from them as the employer of record and start with another PEO (or revert to your company being the employer of record).

There’s also the cost of a PEO itself, but often people move to one precisely because it’s less expensive (and less concern) than having a full-time HR person.

What to Consider

There is obviously a lot to consider in essentially partnering with a company to handle HR functions, but there are four issues we think are most important:

  1. Ask for references, particularly in your industry.  You want to know what the experience of someone in your field has been like with this particular PEO.
  2. Find out if the PEO you are looking at has independently audited financial statements.  There’s a lot to keep track of when your business is managing employees in multiple businesses across multiple states.
  3. Speaking of states, make sure that the PEO meets all the requirements your state has in place for such organizations.
  4. If you want to get really fussy, there’s a self-identifying IRS certification that only a small percentage of PEOs attain.  People who voluntarily do more paperwork for the IRS?  These are not people afraid of paperwork!

Are you thinking of using a PEO as part of growing your business or getting it ready for a sale?  Want a second opinion as to whether it makes sense for you?  Give us a call!

Crowdfunding Basics

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CrowdfundingWhile we have been speaking about SBA and PPP options to get businesses through the challenging period of Covid-19, there is an additional type of funding that might interest some business owners who are looking to grow in the months and years ahead: crowdfunding.

While most people have become familiar with the principle of donation crowdfunding via websites like Kickstarter and Indiegogo, and debt crowdfunding via Lending Club and Prosper, many are unaware that the 2012 Jobs Act signed by President Obama got the ball rolling for equity crowdfunding.

Equity Crowdfunding

Equity crowdfunding is exactly what it sounds like: giving up equity in your company to people from the general public who are interested in funding you.  While the legislation was passed in 2012, it wasn’t until 2015 when the SEC adopted final rules for equity crowdfunding that platforms eager to help business owners could really get going.  

By making sure that crowdfunding backers were actually purchasing securities, the SEC de-risked both sides of the equation: business owners couldn’t just put up any project to get funded, and potential investors were given full risk disclosures so they couldn’t complain later on that they didn’t know what they were getting into.

Pros

Using equity crowdfunding, business owners can obtain funds they need for no credit or collateral.  They will sometimes get enthusiastic ambassadors for their company in the persons of the investors.  Studies also show that equity crowdfunding tends to skew local and regional, so that also means there’s often a community connection with these backers.

Investors have the chance to invest in small and medium sized businesses without having to earn the title of “accredited investor.”  They get to be involved, even if it’s in a small way, with a small business, and they have many different industries they can choose from.

This doesn’t mean there aren’t downsides to raising money this way.

Cons

For investors, the wait for a return on their investment can be longer than they are used to, particularly if they have mostly spent time in the stock market, where ups and downs can be more easily tracked and, sometimes, understood.  The securities are also illiquid, as there isn’t (yet) a secondary market for these shares.  Finally, investors can still get quite diluted, especially if the business decides to go on for angel or venture funds after a successful crowdfunding raise.

There are downsides for business owners too.  Firstly, a crowdfunding campaign is precisely that: a campaign.  You’ll need to put together media, collateral, and a clear message as to why you need these funds and what kind of return can be expected.  That takes time and money.  Of course, too, there’s the reality that you are giving up parts of your business, which, even if you’ve only made it a small percentage, will still come with certain legal compliance costs.

Platforms

The equity crowdfunding market is still pretty new so there is no Google or Amazon in the space yet.  Websites like WeFunder and Localstake offer minimum investments in projects as low as $100 and $250, respectively.  Localstake even has some sophistication in their equity crowdfunding, offering revenue shares, convertible debt, or preferred equity as options.

Other sites, like Crowdfunder and Fundable, are simply advertising platforms and don’t serve as a medium for transactions.  Investors make nonbinding pledges and transactions happen offline.  Fundable even offers help (paid, of course) with your pitch construction and prospectus.

Choice 

While we’ve spent most of this article discussing equity crowdfunding, the reality is that businesses are still free to use donation crowdfunding instead.  Those businesses can gauge customer interest in a new product by creating a crowdfunding page for it and if existing or potential new customers “vote” enough for it by prepaying, you can have the confidence to move forward, as you’ve essentially created a fully funded purchase order.  

Crowdfunding isn’t for everyone, either on the investor or business owner side, but there have been some good success stories so far.  This book chronicles twenty case studies if you’re looking to learn more about the field in general.

Are you unhappy with your banking relationship or are you looking for some alternative funding options?  Give us a call: we’d love to connect you with the right people.

Are You Charging Enough for Your Goods and Services?

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Competitive PricingOne of the themes we often discuss in these articles is the failure of most business owners to think appropriately about the selling price of their businesses.  Very rarely do we meet a business owner who is aligned with reality when it comes to what their business will fetch in the marketplace.  But that might be part of a larger problem: pricing in general.  In this article we’ll revisit what you should keep in mind as you price (or reprice) your products and services.

Cost-based Pricing

Many businesses use cost-based pricing.  They take the cost they pay for something and add a fixed number or percentage of the cost on top and voila, you’ve got the price.  There’s a lot to like about this:

  • It’s simple – no complicated formulas
  • It ensures profitability – you know that you aren’t losing money on any product
  • It helps with bidding on projects – when asked to put forward a proposal one part of your calculations will be straightforward

Value-based Pricing

There are companies that base their pricing not so much on their costs, but on what the customer is willing to pay.  An Hermes bag or an Aston Martin car are the most obvious examples, but it’s not just luxury firms that use value-based pricing.  There are two keys in value pricing:

  • A product or a service that is clearly differentiated from the competition – there must be at least one aspect that is difficult for competitors to emulate well
  • A focus on customers that allows improvements or features to be added based on their desires – this implies open communication and strong relationships with customers

A Hybrid Approach

McDonalds is one of the most successful businesses in the world, not just in its corporate profits but at the individual franchise level.  They use a combination of cost-based and value-based pricing.  For example, the margins on burgers are fairly low or sometimes, during promotions, non-existent, as the burgers may be loss leaders.  Where the margins are unbelievable are in beverages, specifically coffee and sodas, and in their famous fries.  

As the single largest buyer of potatoes in the United States, McDonalds can almost, in a way, engineer the final price of their fries.  Sitting together in an Extra Value meal you have products with wildly different margins.  McDonalds has used research to extract the maximum price out of each item, but you can see the philosophies of cost-based and value-based pricing operating in the background.  Many places offer burgers, so McDonalds has to offer those burgers at competitive prices, but they have poured so much marketing into their fries that McDonalds fries command a premium: people are willing to pay more for McDonalds fries than for another brand, even if they know that ultimately we’re just talking about fried potato sticks.

Are You Charging Enough?

If you have a business which uses cost-based pricing, are you looking in your blind spots?  Are you examining opportunities to curb costs not just with individual products but with the system in general?  Are you monitoring the marketplace and in particular, your competition, to see what you’re up against?  Complacency kills.

If you have a business which uses value-based pricing, you are dealing with a smaller customer base, hence, are you making sure you are reaching your entire total addressable market (TAM)?  Also, are you missing opportunities for cost savings simply because you have been doing things in the same way for a long time?  Are you continuing to innovate so that you aren’t just sitting on your laurels, thinking that no one will ever be able to replicate what you do?

We’ve said before that it’s the small tasks that add huge value to businesses, and there’s no need to leave a lot of money on the table for a future buyer to scoop up just because you weren’t willing to do the work to make sure you were charging enough for the hard work of you and your team.

Remember, pricing isn’t a decision you make once and leave alone.  It’s one of the key drivers of value in your business, and needs to be tended consistently.

Do you think you might be leaving money on the table by not charging enough for your products and services?  Would you like a second set of eyes to help you look at the numbers?  Give us a call.  We’d love to help!

6 Reasons You Should Consider Hiring a Business Coach

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6 Reasons You Should Consider Hiring a Business CoachThe top performers in many fields, from the arts to sports to finance, use coaches.  They don’t just have coaches in order to be the best: they want to stay the best.  It’s no different for business owners.  If you want to be playing at the top of your game, you should consider hiring a coach to get you there (and keep you there).  Let’s talk about some of the reasons why.

1.  What Got You Here Won’t Get You There

While it would be nice to imagine the business building journey as mostly an upward trajectory from zero, there are many bumps along the way.  At some point you may find that your sales have stalled or your margins have eroded.  You’ve gone as far as you can go on your own and all the signs point to needing help.  A business owner has to have the humility to ask for help and the willingness to grow beyond his/her current capacity.  A coach can help you take a hard look at what is missing and offer solutions to fill that gap.

2.  Accountability

We’ve discussed how an advisory board can help you stay accountable and grow your business.  But they can’t meet with you every month.  A business coach can.  He/she can help keep you accountable to goals and tasks you set together.  We know it can be easy to break promises to yourself.  A coach doesn’t let you do that.

3.  Objective 3rd Party

While your spouse, business partner, or even a key employee may be able to help you with some of these issues, they aren’t objective parties, and adding this dimension to your relationships with them can cause unnecessary strain.  A coach isn’t emotionally or financially tied to your business, hence he/she can offer more objective advice.  They aren’t within your organization, so they aren’t influenced by forces and emotions that can sometimes make it difficult to see and diagnose issues.  Outside perspectives matter.

4.  You Have Specific Issues

There are many tasks that a business coach can help you with:

  • Exploring different directions for the company
  • Calibrating marketing and pricing
  • Hiring a new key employee
  • Examining company culture and retention
  • Giving a second set of eyes to your financial statements
  • Advising on exit strategies 

As each month and quarter ends, you’ll be able to deal with issues as they come up instead of resigning them to that mental pile of “I’ll deal with that later” (“later” here can often mean “never”).  A coach can help you work step-by-step through what seems to be large and complex issues: breaking down the elephant, one bite at a time.

5.  You Feel Stuck

Things could be going well for your business, but you just feel that you need to grow in areas that you aren’t world-class in.  This could be negotiation, management, or leadership, just to name a few areas.  Of course there are plenty of great books and courses out there these days to help, but a coach can give the sort of personalized and focused attention that they can’t.

6.  Steam Valve

Let’s be honest.  Sometimes as entrepreneurs we just want to blow off some steam.  Perhaps it’s a vendor who hasn’t been paying on time lately, or a business partner who hasn’t been communicating well, or a troublesome employee.  Whatever the challenge may be, we sometimes just need a way to let off some steam.  Coaches can help you do that.  But even better, once that steam has been vented, they can help you navigate to the root of the problem and try to solve it.

Need a business coach but don’t know any?  We happen to know a few, and some that we’ve used for our own businesses.  Give us a call and we can connect you.

The Value of an Advisory Board

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Advisory BoardEvery day, small business owners face challenges that they need help solving.  Sometimes their teams can assist, but other times these challenges may be in areas in which everyone lacks expertise, or simply lacks experience.  At these moments objective and experienced voices can help small businesses to solve problems, grow, and thrive.  Those voices can and should be part of your business’s Advisory Board.

What is an Advisory Board?

Don’t be scared by the term “board.”  This is nothing like a board of directors, with formal legal and fiduciary responsibilities.  This is simply a group that meets on a regular basis to “advise” on matters that you need help with.  

What is it For?

An Advisory Board is a toolbox with many different tools inside.  Typical activities at an advisory board meeting could include:

  • Examination of current financial statements
  • Critique of a planned marketing initiative
  • Postgame of a new product/service launch
  • Discussion of a challenging team member

The advisory board allows business owners to speak their minds: there’s no employment relationship here so there’s no reason for any of the parties to hold back.  

How to Build One?

If you aren’t a hermit and are regularly circulating through your business community, you probably already have the contacts necessary to build a board.  You’ll want to keep it small, somewhere between three and five members altogether.  While it would be ideal to have at least one person with some background in your industry, don’t be afraid to have board members who have never had anything to do with your industry: outsider perspective is valuable.

You may also want to avoid tapping family or close friends: we all know the dynamics of interpersonal relationships can sometimes lead to people failing to say what they should in any given situation.  Business is no different.  

What’s the Plan?

Before you invite anybody to do anything, start with why.  Why are you putting this board together?  Perhaps you are frustrated with your growth rate and aren’t sure why things are stagnating.  Maybe a part of your business is really broken and you don’t know how to go about fixing it.  Maybe you’re completely happy with your business and you simply want to make sure you’re doing all the right things and covering every angle.  Again, keep it focused: don’t write down every single reason you want an Advisory Board: one to three will do.

Once you know your why, think about when.  How often would you like to meet?  Monthly is a bit too frequent, and annually is not really that helpful.  Quarterly or every six months is best.

Finally, think about how you’d like to compensate your board members.  Very often people will be honored to be asked to help you with your business and won’t expect or demand compensation.  That said, it’s important to honor someone’s time and the compensation can be as simple as food at the Advisory Board meetings and occasional gift cards or thoughtful presents throughout the year.  These people are giving you their valuable time and expertise: respect that.

How Does a Meeting Run?

Like most meetings, you might want to just have some time for people to arrive and relax, and of course at the very first meeting, people will need to introduce themselves and their connection with you.  After that social time, you can start the business part of the meeting.  Deal with the “must cover” topics first but also leave time for other less important topics. Be okay with disagreement, even passionate disagreement.  Let everyone know from the start that it’s not about winning arguments but about sharing ideas.

Ideally you, the business owner, should be taking notes.  This forces the meeting to slow down while you articulate in your own words what you are hearing and make sure that everyone agrees.  Those notes should be shared after the meeting and in between meetings you may want to offer a periodic short update on a particular matter.  The Board should not only be hearing from you when you summon them to a meeting.

Last Things

You’re going to be dealing with sensitive company information, so each of your board members should sign a basic NDA.  Also, don’t be disappointed if someone you ask to be part of your board declines: instead, ask if he/she might know someone who would be a good fit.  Finally, check your ego at the door before and after every meeting.  These people are here to help you, not attack your baby.  Don’t take things personally: strive constantly to see things from their perspectives and hear them out.  You just might learn something.

Want to build an advisory board but feel like your network is a little thin?  We know a LOT of people.  Give us a call and see if we can’t help you fill those seats.

KPIs Every Business Owner Should Track

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KPIs Every Business Owner Should TrackWhile business owners can be tempted to keep their eyes on every aspect of their businesses, there are a few key performance indicators (KPIs) that are the most important to know. In this article, we’ve collected those key KPIs and the reasons they should matter to those who want their business not just to survive in 2021, but to thrive.

Financial Statements

Most business owners know the health of their business by gut feel. Ask them any time, any place, and they can often give you answers that are scarily close to the actual numbers. But great businesses aren’t built on gut feel. You need to know your numbers, and you need to know them regularly.

Now we aren’t just talking about financial ratios (though you should know them too), but you should be measuring and tweaking:

  • Inventory turnover
  • Customer lifetime value (LTV)
  • Revenue per service/product

If you know these KPIs, you can improve your effectiveness, productivity, and cost savings in each area. You’ll also be in a better position to make the decision to stop selling a product/service (or put more money into a product/service) since you’ve been closely monitoring its performance.

Marketing

There are so many ways to effectively track the ROI of your marketing efforts. Armed with this information, you can find out what your customer acquisition cost (CAC) is and if you’re happy with it. While we might always like lower CACs, sometimes the market dictates that we are paying “about right” to get new customers.  

Apart from knowing your CAC you should know key metrics from whatever analytics you have installed on your website, including:

  • Mobile (what percentage of your customers access your site on mobile vs desktop)
  • Channels (how are you getting your traffic)
  • Navigation (what path does the customer take on your website)
  • Site speed (how fast are your pages loading)

You don’t need to know the exact statistics here, but you need to know the trends and how to address challenges. For example, if your site speed is slow, you need to get with your tech team and address that. You know from your own experience, but statistics also affirm that if a website doesn’t load within three seconds, more than half of potential customers will hit the back button or move on. These same principles apply to whatever reports are available to you on social media platforms apart from the engagement that you can measure on the surface via likes, shares, retweets, etc.

Human Capital

We’ve seen a great migration kicked off by the dawn of widespread remote work. That migration is still ongoing and it’s changing the dynamics of workplaces everywhere. The KPIs of the past were “attendance” and “productivity” and while those have their places, they are really lagging indicators. Better KPIs would be:

  • Engagement – how tied are your team members to the mission of the business?
  • Happiness – do your team members feel valued?
  • Drive – do your team members seek to move forward or grow with the company?

A business owner should know the answers to these KPIs for at least all of his/her direct reports. Businesses run on people, and those people can’t be an afterthought.

Customer Satisfaction

There are a plethora of tools available today to find out how your customers feel about their experience with your brand. There are online reviews across various platforms, comments on social media, surveys via email, and feedback from phone calls, just to name a few. The information you learn from these KPIs can help you determine the health of your business and which way you need to steer it. They can also alert you to blind spots in your product manufacture or service delivery.

Characteristics of KPIs

You can drown yourself and your team in KPIs if you want to: we don’t think that’s a good plan. KPIs should be:

  • Actionable (now that we have this data, we can do something to improve our performance)
  • Evolving (changes in the marketplace or business situation can force us to change expectations)
  • Simple (don’t make someone jump through hoops to provide relevant data)
  • Limited in Number (focus on a few key things instead of all of the things)

Feeling unsure what to do about some of the KPIs you’re unhappy about in your business? Give us a call!  We happen to know some great people who can help.

Use a Crisis to Better Your Business

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Crises Management2020 saw many businesses pivot to different ways of operating in order to keep revenue coming in.  Denny’s, the quintessential American diner, not only started offering free delivery, but in California and Oregon, also offered some grocery items to add to those orders as well.  If such an established brand as Denny’s can imagine new ways to serve customers in a crisis, surely your small business can use a time of great stress in order to build a better business.

Where to Start?

In the earliest days of the pandemic we discussed various ways business owners could be looking at marketing, finances, and administrative tasks.  But a year on, the emergency cuts and savings have long been made, and there’s been plenty of time to make adaptations to what the law allowed for and what the market was interested in.

Audit and Adjust

Prior to 2020, year-on-year financial reports helped you see the general direction of travel for your business.  As 2020 rolled on, those comparisons might have only served to depress business owners in seeing how far “off the pace” they were.  But that wasn’t a fair way of thinking about those numbers.  2020 couldn’t be compared with 2019 because businesses in 2020 often had to fight to stay afloat with their hands (and sometimes their feet) tied.  

As the 2021 numbers start to come in, better measurements are possible.  You’ll be able to see how you are doing a year on, month-by-month.  It’s reasonable to expect to be doing better, as last year you were responding to something unknown, and this year you’ve had a year of experience under your belt.  You should still be relentless about cutting costs wherever it makes sense, but now that you’re out of damage control mode, you can ask yourself tougher questions: 

  • Why are we staying flat in that line of revenue?
  • This particular category continues to underperform.  Is it time to let it go?
  • Why aren’t we growing this service at a faster rate?  It helped save us in 2020!

In a sense, despite ongoing uncertainty, it’s a good time to demand answers to tough questions.  If you continue to stay in “damage control” mode, you may miss the opportunity to grow your business.  You cannot wait for “normal” to be restored to be “normal” in how you examine and audit your business.  This, right now, is normal.  Adjust.

Remote or No?

ChangeAt this point you will have probably had the chance to observe your team work both remotely and in-person during the crisis.  You should be able to intelligently comment as to whether your staff works remotely the same, better, or worse than in person.  

If they work better remotely, this might be a time to start examining your office space and making long-term changes that you didn’t expect (with the corresponding savings that you’re free to re-invest).  If your staff performance is significantly down because of remote work, it might be worth reconfiguring the physical office to allow for appropriate measures to be taken so that all can feel safe while still participating in the benefits of in-person interaction.  This may mean replacing those who insist on working remotely and refuse to come into a physical office.  As with the financial statements, you’re no longer “new” at operating a remote business.  If it’s not a good fit for you, it’s time to make some tough decisions (which might include a sale).

Forge Ahead

Ongoing uncertainty can be paralyzing.  But it doesn’t have to be.  You now have experiences navigating a pandemic and the data to back it up. No excuses not to make 2021 better than 2020 in every aspect.

Want a second set of eyes on your business?  Our broker team has hundreds of years of experience looking at financial statements and navigating tough times.  Give us a call; we’d love to help!

Entrepreneurial Tips from Sara Blakely

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Sara Blakely

Photo Attribution: Gillian Zoe Segal / CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)

A couple of decades ago, Sara Blakely was selling fax machines door-to-door. Today, she’s the billionaire founder of Spanx, with the occasional appearance on Shark Tank as a guest Shark, as well as most recently, a release of a Masterclass about her journey and her mindset and tactics to build a company in any field. We can’t cover everything she talked about in the 3.5 hours of classes, so we decided to pick three of our favorite ideas to share with you.

Build a Support System

Very early on in her entrepreneurial journey, Sara joined a small mastermind of business owners so that she would have people she could trust to bounce ideas off of. Many years later, she is still part of this group with the same members. Entrepreneurs need to have people they trust who can give them impartial, unemotional advice about their business as well as the way they are conducting their personal lives in relation to that business.

While this can be helpful in one-on-one situations, like a good relationship with a business coach, a banker (something we harp on all the time), or with an accountant or attorney, it might also be worthwhile to build up a small advisory board that can meet quarterly or biannually. You might look at financial statements, ask about marketing strategies or sales ideas, or simply pour out any challenges you have that you can’t share with your employees. You’ll be surprised at how many people in your network would jump at an opportunity to help you in this way.

Let Your “Why?” Define Everything

Sara heard “No” a lot early on. When she went to manufacturers she was dismissed as a nobody with no financial backing (she started Spanx with $5,000 and has managed to retain full control until the present day) but she persisted because she noticed that everyone in the supply and manufacturing chain were men. These men would never, ever wear undergarments for females. She firmly believed that her company would make products for women that considered the wants and needs of women, so she pushed through the Nos because she had a powerful Why.

This is a bridge many entrepreneurs have to cross not just early on but even late in the journey. We can be made to feel like we are crazy or delusional and if we have a powerful why that animates what we are doing we will work through those voices telling us to stop. If we don’t have a why, we can get stopped in our tracks.

Redefine Failure

When she was young, Sara’s dad would ask her and her brother at the end of each week, “What did you fail at this week?” If Sara had nothing to say, her father would be disappointed. When she did have a failure (or two) to share, he would give her a high-five and told her, “Congratulations!” By reframing what failure looked and felt like, Sara’s dad was removing the fear of failure. By recognizing what she wasn’t good at, owning that, and even admitting it to her dad, Sara was inoculated against some of the hardest trials of entrepreneurship: self-doubt and fear of failure.

This didn’t mean she avoided difficult things. It meant that she understood from a very early age that failure was a natural part of any successful journey. It is not to be feared but to be embraced, learned from, and when appropriate, celebrated.

We’ve got a few of our own entrepreneurial tips we’ve picked up along the way, not just from our buyers and sellers, but as brokers building our practices. We’ll be happy to share some with you anytime. Just give us a call!

Business Owners Must Act: Strategy, Finances, Marketing and Administration

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Use a Crisis WiselyAny crisis can cause paralysis, and understandably so. People are focused on processing what is happening and they immediately think about the future and what could come in the days and weeks ahead.

Business owners don’t have that luxury to process and grieve: they have to act and do so decisively. Many business owners have done precisely that, but as the Coronavirus crisis threatens to linger even more strategic and surgical action can be taken by business owners across every aspect of their companies.

Here are a few ideas:

Strategy

Once the urgent questions of staff and their working conditions are dealt with, owners can coldly and soberly look at their options.

What does their business plan and forecast look like with a 15 day interruption? 30 days? 90 days? New products and services need to be brought online quickly that can be useful and desirable in the marketplace to counter the ones that are struggling or dying in this environment. A fresh SWOT analysis, updated for the current situation, can help offer direction over the next three to six months.

Finances

We’ve long touted the benefits of a quality banking relationship. This is one of those times such a relationship really shows its worth.

Check in on your payables and see if you can negotiate some longer terms (if you need them). The same spirit of compromise has to be there with your receivables, where the shoe is on the other foot. Where can you preserve long-standing relationships but still make sure you’re being fiscally responsible yourself? Are there any cuts you can make, temporary or permanent to current or forecasted spending?

Marketing

Strangely enough, a time when everyone is home and the internet is the biggest facilitator of daily life, it’s a great time to continue to be in front of your community and potential clients. Local ordinances may require that your physical doors be closed, but your digital doors need to stay open.

Three types of messages you need to be addressing via both email and social media channels:

  • Ways in which your specific customers are affected by shutdowns. Will they be able to continue to get your product or service? Will you be offering any assistance with payments?
  • Ways the local community can be helped. Share the names of your preferred vendors and/or ask your customers on various social media platforms to share businesses that need support and ways that they can be helped.
  • Offering some kind of free or low cost education in whatever you might be specialized in. Traditional cooking schools have moved their offerings online. Restaurants that never offered takeout before have quickly pivoted to add that aspect. You can use the opportunity to share valuable content that might normally be part of your paid services but is a chance to give back at a time when everyone is hurting while also being genuine guerrilla marketing: leading with value.

Admin

If you don’t have an operating manual for your business or it needs a massive update, there’s no time better than a government-mandated lockdown to get a project like that done. It’s a key part of any future exit so why not use this time wisely.

Also be patient with transitioning your team to remote work, especially if you’ve never worked remotely as a company. Your team will need time to adjust, though there are many free resources out there providing tips and strategies to get the most out of a remote working situation.

In all of these departments, and others, focus on solutions that look at the current crisis realistically, neither planning for the worst nor expecting the best, while knowing you’re already making progress in the fight because you’re not panicking, but preparing and pivoting.

We can help you take a look at your business to help make some suggestions on adjustments you can make during this period. Give us a call!

5 Signs You are Burning Out (and 10 Strategies to Fix It!)

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Productivity

There’s a fair amount of content available these days on burnout. Far from our future of flying cars that The Jetsons promised us, we’re tapping out email responses while “making a visit” to the one place where most of us have to go at least once a day.

Alas, burnout is not just confined to employees. It’s something that can (and often does) persist in the ownership levels of business. How can you spot these signs of burnout and make the right adjustments? We’ll discuss that in the article below!

1) You’ve got health issues

We can all face the fact that health issues may predate your business ownership journey, but if they have recently appeared, very often there is a link to what is going on at work. This is your body’s way of pushing back on your insistence that you can keep going. Listen to your body.

But additionally:

  • It’s important to manage your diet and have some kind of minimum exercise routine. Your body can’t do everything by itself.
  • Consider taking some time off (as little as a week) to reset and institute some better habits for yourself. Your body and your business will thank you.

2) Your business performance is dropping

We’re not talking about the ebbs and flows of the market and economy. We are talking about the ecosystem of your business. You’re not accomplishing tasks that need to get done and you’re not maintaining or developing the relationships that your business needs to thrive.

You have to get re-centered, and you can do that by:

  • Having a clear set of goals. What does success look like for your business in the short, medium, and long term. Keep in mind that “making more money” is not really an acceptable answer. Be specific, not arbitrary, in setting your goals and you’ll be amazed at how much more attainable they become.
  • Having mentors and/or coaches in your life. We may start a business journey alone, but we’ll never complete it successfully that way. Are you willing to be humble enough to admit you need help, and to seek it out? You’ll be amazed at how insights from others can re-energize and refocus you.

3) You seem to always feel tired

Closely tied to the point above about health issues, proper sleep is a common trait of many top performers. Block out the time you need for a proper night’s rest.

Aid yourself in that way by making sure you are:

  • Delegating enough. Remember that anytime you are performing a task in which you are not the best person in the company at, you are costing your company money. Remove everything from your plate in which you are not the best in the company at performing.
  • Blocking out personal time. Schedule “do not disturb” parts of your day and week in which your mind and body have time to relax. Athletes know that the overworked muscle tears. It’s no different for the “sport” of business.

4) You never feel caught up

We all have to-do lists that will always be added to. That’s not the question. The question is that nagging concern that you’ve forgotten something and that it will lead to a catastrophe in your business. 

Fight this feeling by:

  • Having systems in place. Systems don’t only reduce your to-do list, they also make your business more likely to sell.
  • Say “No” more. People often mistake saying “no” as something negative, but the reality is that we are finite beings with finite amounts of time. Saying “no” means saying “yes” to the other commitments you already have. Failing to appropriately say “no” means multiplying your to-do list beyond your control.

5) You dread work

The whole point of “being your own boss” was to ensure you didn’t hate work, right? So this is an unacceptable place to be. Dreading work can be a prelude to disaster in your business.

So, first:

  • Go back to why you started or bought the business and ask yourself if you are aligned with that. If not, why not?
  • Celebrate victories. We often don’t remind ourselves of those important milestones: getting or keeping a key client, hitting a revenue high, or introducing a new product or service. Celebration is healthy for you and healthy for your team.

Burnout is a danger, but it is not a necessary rite of passage. Indeed you too can be a successful business owner without burning out! Be wary of these warning signs and take the necessary countermeasures and you will be glad you did!