Cool Stuff Coming Soon!
But you’ll have to be patient to see it!
For those who think I’ve fallen of the Earth… not so! Good things take time:)
Do what You Want to Do!
You know, I have written much lately about budgets, variance reports, analysis and the like. Today I’m writing from my back deck, while relaxing in my shorts and flip-flops. The thought occurred to me that perhaps some readers may not be enthused about business strategy - because you have lost the passion for what you do. Well, if this fits you; then you had best be looking for a way to rekindle the passion - or else another line of business!
I have told so many clients (and potential clients) that, “If you are in business for the sole purpose of making money then you are doomed to fail”. I stand by this philosophy. To be sure, there are some who have been successful in a business venture, even though it was not truly their passion. However, in most cases they opted to do this in order to make room, time, or money for something that WAS their passion. In a sense their efforts were poured into their passions; although from an indirect approach. If you believe you fit into the latter category, it is critical to be able to make a specific link between one thing and your business. Having money to “do whatever comes up” is not a substitute for passion.
Some people have more difficulty than others defining the goal of their passions. It should also be stated that your passion focus can (and should) change over time. It is reasonable to assume that as you grow older, your circumstances, friends, and involvement may change. Your values may also change. This is not to say that you become more or less ethical, but rather that the things into which you place value will become different. If you are one of those who find difficulty in assigning hierarchy to your values, then by all means, you should make this your first passion. When you are able to determine those things upon which you place the most value, then linking your business efforts to these things will become evident, or at least easier.
What are Your Employees Doing for You?
This past week I had a fellow in attendance at the BNI chapter, of which I serve as President. He did a very fantastic job of communicating the services of his employer, and I was ready to sign up for some of what he was selling. A good start wouldn’t you think? Then, after the meeting, I had an opportunity to meet with him briefly, and learned that he is considering bailing out of his company and wants to launch his own thing - in a completely different arena.
News Flash for you… this fellow is in the fractional percentage of employees who are able to effectively work on your behalf, while pursuing other opportunities. I commend him for his diligence and honestly, yet warn you that if you aren’t doing a good job of communicating with your employees regarding what they want out of life - you are missing the boat. I have had countless other encounters where the employee hated his job, and didn’t mind conveying his negative attitude to everyone he contacted!
So, what does this mean? Are you to bear the responsibility for ensuring life, liberty and the pursuit of happiness to your employees? Well, yes and no. Let me offer a loose translation from C.S. Lewis: “You can’t really study people and figure them out… you can only get to know them”. Therefore, you do have a responsibility to get to know your employees; at least to a point that is mutually beneficial for your growth together. If you believe that the money you exchange on Friday is sufficient to hold the bond between you and your employee, you are sadly mistaken. In the worst case scenario, you will have abdicated a portion of your business and livelihood to someone who may very well turn out to not share your interest - because he has lost interest, and doesn’t care about you. All of that could be avoided by getting to know him.
Too often, people think of their place of employment as a sterile entity. The “company” becomes a means of supplying needed income. At the worst, it’s just a place we go to kill time and draw a paycheck… a pretty dismal existence for both, and an absolute drain on the company owner. What we should be considering is that the company is, in reality, just a group of people who are bonded together for a common cause. The fact that we are able to draw sustenance from it is only a result of it being healthy. Its health then is derived from the health of the individuals who make up the company. Doesn’t this analogy make it seem a little more important to get to know your people? I’m betting you would like the results of the effort!
Are You Stupid?
Don’t get excited about the title today – my thoughts are well meaning and not intended for calling you out. For those who have been readers for awhile, you know that on Wednesdays I often write something a little from the hip – today is no exception, and I’ve got a bone to pick – though I will attempt gentleness in my approach.
You cannot possibly imagine how many times people ask me to describe what Adaugeo Development does. How exactly do we “help good companies become better”? Honestly, the question often dumbfounds me; until I consider it in terms of today’s title. Follow this link to get a quick low-down on the definition from Merriam-Webster. Now that you’re back, did you notice how, particularly, definition 1B talks of unintelligent decisions or acts… and then definition 4B offers some synonyms for perplexing and exasperating situations? I submit to you that often 4B is a result of 1B. Simply put, Adaugeo Development exists to help 4B never occur by ensuring that 1B is remedied!
No, I’m not calling anybody stupid. However, if you realize a situation within your business and don’t know exactly how to fix the problem; then respond by doing nothing – may I submit that you are acting with unintelligent behavior? Maybe you don’t realize a situation, but you have an intuition suggesting that things should be better than they are, and you aren’t sure why. You see the word unintelligent suggests a very negative feeling, when in reality it merely means uninformed… you lack the necessary information to effect a good and clear decision. The mere fact that you would sense an intuitive thought, yet not know the cause is proof enough of an uninformed state of mind.
Okay, so maybe I called you out a little. If the shoe fits… you should consider finding a source for helping you uncover the source of your intuition. That’s what we do!
A Language We All Understand
The language of numbers is (or can be) one that is universal in nature - something that communicates effectively to all concerned parties. I’ll borrow a line from Stevie Wonder: “Music is a world within itself; it’s a language we all understand”. The same is true of numbers, if we are diligent about asking the proper questions from our accounting methods.
I chose this topic for today, because I realize fully that most small business owners do not view their accounting procedures as a communication tool. Most will view the “bottom line” as secret place where only the Owner (and partners) will venture; and all others are expected to keep doing what they do, in an effort to enhance the bottom line. Can you see the fallacy, even in the words of the above sentence? If I am on your team, and I don’t really understand what we are trying to accomplish; much less how we are progressing at the task, do you suppose that I will be motivated toward that end?
Do you believe that your margins might increase, if your employees took personal responsibility for their actions, as related to the profitability of the company? Well, I can tell you that it is true; whether you believe it or not. Given that this is a fact; would it not seem prudent to employ a method of effectively communicating your goals to the team, while simultaneously implementing a method of accountability for all players? You bet your life it is prudent, and that accountability is critical!
This is what budgeting is all about. You are communicating, as an Owner, to all of your team regarding your expectations. Once in place, it’s rather like having your “words” etched in stone as a measuring tool for the next 12 months. It is the criteria via which awards are validated, or heads roll - literally. Now beware, that the budget applies to ALL the team members; even the Owner, General Manager, or other higher ups. But no tool is more effective for communicating teamwork.
We recently did a week series on building a budget, and provided some good template tools and instructions for how to go about establishing the basic criteria and structure. There are downloads available, which you can easily tweak to your needs. You can find the series (steps 1 to 5) by searching for “step” in the search box above.
Bad, Good and Ugly
When I consider all of the people we deal with at Adaugeo Development, they generally break-down into categories, which I have assigned via today’s title. Obviously I don’t really think that any of our clients are bad or ugly; however, the fact remains regarding the way in which some view their business strategy.
On the one extreme, we have clients that begin their journey by meditating on their business as viable and successful; and generally launch each day with a clean slate. They may utter statements like: “I don’t really have a plan - I just wake up each day, work as hard as I can; and feel good about it at the end of the day”. Sometimes these type individuals are successful in spite of such a nonchalant attitude. I would wager that this strategy cannot survive in the long term.
Another group, on the opposite end of the strategy spectrum, wake up each day and study their projections like a manual for doing brain surgery. They struggle to make decisions without first pouring through mounds of paper or other financial data. They exist in a type of paralysis; hoping to always make the perfect decision, and never error.
Both are living in an arena that will likely yield less fruitfulness than their optimum potential!
Business is like life, in that it is a journey of sorts. While it pays to be prepared, we cannot always predict what will be around the next curve. Just about an hour ago, I was traveling to a piece of property I am considering purchasing. Suddenly a white four door sedan comes swerving around a corner; running me completely off the road! I had to steer my truck down a 10 foot drop off and through several large oak trees. Joyfully, nobody was hurt, and my truck is none the worse for the experience. Had I known this was going to occur, I probably would never have made the trip… on the other hand, had I not been prepared (by driving proactively) then I probably would be dead.
If you find that you are not sure where you are in relation to your business, then it’s probably time to seek some input regarding your position and methods. Never assume… ask for input.
How Classy are You?
One of THE BIGGEST mistakes that I witness in small businesses is the fact that the owner looks at revenue versus expenses as one pipeline where money flows into and out of the company. Honestly folks, it is rare that a company is genuinely that narrow; such that they really only have one product or service. Even if you do only have one service, it is again likely that you serve it to a variety of customer types - some of which are more profitable than others. In addition, you may have greater advertising costs associate with one type of customer versus another.
So what’s the point? If you browse to our home page, you will see a question asked: “Should you drop a segment of your business for something more profitable?” Well, if you don’t have your budget and finances segmented (on paper), then you don’t really know whether one is more profitable or not. Many folks tend to think of profitability in terms of revenue generating power only… Big mistake.
Take the time to follow the link for the answer to that specific question, in more detail. However, for the moment, know that it is very important for you to be separating your businesses into “classes”. If you are using QuickBooks or some similar software package, you will find this feature available to be toggled on and off. Turn it on, and also check the box to ensure prompting for a class. This will force you to enter a specific itemization for every transaction that you do. In my own business I do this, as well as for my personal finances. I also insist it be used for every business with whom I partner for coaching. It only takes a day or two to get accustomed to the one extra step in entering transaction data, and soon becomes second nature.
This one tip could save you a bunch of worry and heartache - not to mention money!
Got Budget? Use It!
Last week we did a mini series on some major steps involved in creating an effective annual budget. I know it’s April, but if you don’t yet have an annual budget - better late than never. So, when you get it completed; then what do you do with it?
Here’s an idea of what not to do: Go to your kid’s toy box and dig all the way to the bottom. You will likely find a bunch of stuff that was a “must have” six months ago, but now is pretty much forgotten. Don’t be like that! Once you have invested the time necessary to create a budgeting tool for yourself, you must then use it constantly to measure the effectiveness of your efforts. You see, the purpose of a budget (combined with a variance report) is NOT to limit you, or force you; but rather to measure your efforts.
The monthly variance reporting is essentially this: Take any budget line item and divide by twelve (months), then multiply by the given month you are in - then compare to the actual expenditure of that line item. You may think of it as your bathroom scale, as related to your diet. If you never step up on the scale (or compare how your clothes fit) then how do you know if you’re actually losing weight?
From A to B… Easily
If you’ve got goals and plans of any type, then essentially you desire to go from one point to another. Sounds pretty simple right? However if you want to make this journey, you must know two vital pieces of information before taking the first step: First, where are you; and second, where do you want to go!
SO MANY people and businesses make the mistake of thinking that the end goal is the only thing that matters. I’m telling you straight up, that if you don’t have a complete and full understanding of where you are starting from - you have virtually no chance of ending up where you want to be. Think about that fancy navigation system in your automobile. When you punch up a destination and hit “go” it won’t do anything until it communicates with the satellite, in order to determine where you currently are! It’s exactly, precisely, absolutely the same with your business situation.
In fact, your current situation has more to do with your destination (and route to take) than probably anything other thing. You must evaluate the present, which is a product of the past, in order to make course corrections for the future.
If it sounds like I have repeated the same thing five different ways - this is my intention. It cannot be overstated as to the value of this fact - know where you are, to determine where you’re going! If you aren’t exactly, precisely, absolutely sure… then contact Adaugeo Development for some help.
What do You Want?
It really doesn’t matter I suppose. The assumption would be that you desire some act or tangible good to improve your situation, or that of another on their behalf. Obviously we would hope to pursue healthy desires - in the sense of positive influence - not necessarily exercise and diet. It seems rather odd to me that individuals often have tremendous difficulty and even fear regarding disclosing their needs and desires. Why is this do you reckon?
You guys know that I relate many things to spiritual analogies, so here goes again. Let’s assume the position that Christ was God embodied, as He claimed to be. Given this assumption, He should accordingly possess infinite knowledge about all peoples with whom He had contact (and even those He didn’t). If true, then why do you suppose He began most of His miracles by asking for information? Below are a few examples, just to get your thoughts going - I’ll spare you all the references.
“What would you have me do for you?… Do you believe that I am able to do this?… Do you want to get well?… How long has he been like this?” When speaking directly to an evil spirit - “What is your name?”
Surely the requested information was not actually necessary to enact the desired outcome. However, it would seem that from OUR perspective it was necessary; else why would the questions be posed?
Unfortunately, I don’t possess supernatural ability to effect change in your life; however, each of us here does possess knowledge and expertise available to help each other. It seems to me that the biblical references cited suggest that change is put into motion via the catalyst of desire. It would further seem logical that the desire must be expressed tangibly to enlist the agent of change. So, perhaps marketing is in fact the oldest profession?
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