4 Things Every Business Owner Should do to Have a Financially Happy New Year

Will 2015 be your year? The economy is slowly gaining speed, and according to the National Federation of Independent Business’ small business optimism index, owners are also becoming slightly more optimistic about the future. But optimism without planning and strategy is just a pipe dream. If you really want to achieve a banner year in 2015, you’ll need to attend to some basic financial aspects of your business. Here are four resolutions you can make to improve your chances of having a financially happy new year.

 

  1. Get Slow Paying Customers to Pay Up

 

 

Regardless of how great your sales are in the new year, you need to collect on those sales or you won’t have the cash flow you need to run your business. One of the first things you should do is dust off your past due accounts receivable files and make a serious effort to collect what’s due. You’ve probably already tried the usual tactics — sending out reminder notices, calling and emailing the customers repeatedly, and offering them a discount to pay now. If you’ve tried all of this and you still have money sitting on the books, it’s time to get serious. Here are a few more options:

1. Pay them a personal visit. It’s easy to ignore phone calls, emails, and letters, but when a creditor comes calling, it gets people’s attention. Remind them in a friendly way they owe you money and you expect to get paid.
2. Ask for a payment schedule. Sometimes people want to pay but simply don’t have the means. Call your clients and ask them if they can pay their balance in smaller installments. If they agree, put it in writing and make it clear that if they don’t follow through, you’ll be forced to turn them over to a collection agency.
3. Have your attorney write a letter. People tend to take letters from lawyers seriously. Have your attorney send a letter to all of your non-paying clients and demand what’s due.    
4. Sell them. If you simply can’t collect the debt, sell the invoices to a factor. You’ll only get a portion of their value, but if you don’t expect the customer to pay, a small portion of the invoice value is better than not getting paid anything at all.

In addition to cleaning up all of your old accounts receivables, you should create a new credit policy that drastically reduces past due invoices in the future. For example, you should run a credit check on new customers and do the same once a year on existing ones. If you notice a customer is paying late consistently, insist on cash-on-delivery payments until they have financially recovered. 

2. Get Serious About Cash Flow 

A business can’t run without sufficient cashflow — period. And if you’re like most small-business owners, you’ve already tightened your belt and increased your sales efforts. But if you want to start the new year off right, you’ll have to find a way to keep the cash flowing. Here are a few ideas:

1. Ask for payment upfront. If your business provides products or services, create a new billing system that offers clients a discount if they pay in advance. For instance, if you run a pest control business, ask your quarterly clients to pay a year in advance to receive a discount. It will be an incentive to them and put immediate (and risk-free) cash in your till.
2. Adjust your billing and payment cycles. Contact all your suppliers and negotiate additional discounts for shorter payment cycles. An additional 5 to 10 percent off your purchases can make a big difference in your cash flow. Another tactic is to ask suppliers to extend their payment terms, while shortening the payment cycle of your customers. This allows you to use the incoming customers’ money to pay your suppliers.
3. Have frequent sales to move your inventory, and reduce the amount of stock you keep for items that sell infrequently. Whatever you can’t sell, place online at sites like eBay and Amazon, or, if possible, return it to the supplier. 

3. Set Your Sales Goal for the Year 

Zig Ziglar famously said, “A goal properly set is halfway reached.”  Your 2015 sales goal should be more than a number that you pull out of the sky. It should be a number you can realistically achieve, and it should be based on real numbers and trends. To reach your goal, you can forecast your revenue and work toward that figure all year. Or, you can work toward your goal backwards. Here’s how to do it:

1. Arrive at your sales figure using last year’s sales with adjustments or projections.  
2. Determine the primary thing that needs to happen before you can reach the sales target. For instance, based on your average salesperson’s yearly numbers, you may find that you need to hire new salespeople to reach your goal.
3. Now figure out what needs to happen before that. You might determine that you need to transition your salespeople to work-from-home arrangements because you don’t have enough room to add more people.
4. Continue to work backwards until you identify the first milestone that you have to take in order to reach your goal. Now, set a time frame for each milestone. 

4. Turn Your Marketing Plan on Its Head
 

If phone book and newspaper ads are still a major part of your marketing plan, it’s probably time to throw it out and start over. Much of today’s successful marketing is centered around the internet, even if you run a brick-and-mortar business. Successful business owners reach out to their customers in a variety of ways. Before you rewrite your plan, make sure that you can answer the following questions:

• What do you offer your customers? In other words, what need do you fill in your customers’ lives? Hint: it’s the reason they buy from you.
• Who are your ideal customers? Most businesses have a core group of repeat customers. Who make up your core? What are their characteristics and traits?
• Who are your competitors? You need to understand your competitors — what do they do better or worse than you. What is their pricing strategy? Where do they advertise? 

Once you have a clear understanding of these things, it’s time to decide where you will try to reach potential customers. Your new marketing plan may involve all or some of these avenues:

• Internet marketing. This includes your own website, social media activity, running a blog, content marketing, pay-per-click advertising, links and backlinks to and from complementary businesses, and online press releases.
• Local marketing. To appeal to your local community, you can sponsor local events, form partnerships with non-competing local businesses, use a street team, signage, and other traditional forms of advertising such as billboards, flyers, and coupons in the local paper.
• Mobile marketing. More and more people are relying on their mobile phones for almost everything. Savvy business owners are finding ways to reach them there. You can optimize your homepage for mobile devices, create an app and then reward customers for using it with discounts and freebies, and use permission-based marketing with text messages. 

So go ahead — pop the champagne cork and start celebrating. With a sound strategy in place, you’re sure to have a financially happy new year.
 

  Courtesy National Federation of Independent Business.


Other CEBI Blog Articles... 

Kevin Minton
CEO
Chief Executive Boards International

http://www.chiefexecutiveboards.com/

KevinMinton@ChiefExecutiveBoards.com

What’s Your Business Investment Strategy?

Now that we’ve kicked off a new year have you given thought to developing or updating your business investment strategy to supplement your strategic plan?  Your business investment strategy is your plan for deciding how and what to invest in to meet your long-term goals.  It's a natural extension of the original company vision you outlined when you wrote your first business plan.  Knowing your long-term goals will help you decide where to invest your funds.  For example, if you're hoping to create a recognizable brand, your investment strategy will be heavily focused on ramping up your marketing department. 

There are a myriad of growth strategies you can invest in.  Do you want to develop a new product that complements your existing product in the same category?  Do you want to enter a new category in a new market?  Do you want to expand territorially?  Do you want to expand into a related business?  Do you want to diversify and invest in many types of businesses?  Do you want to pursue a merger or an acquisition?

Whatever direction you choose, it's critical that you support the initiative with the proper resources.  More often than not, that means human resources.

If you want to be innovative, you have to have the human capital to do this.  New ideas are not created by artificial intelligence; they're created by human intelligence.

It's tricky to set a strategy for when it's time to add new staff, however. The fact is, virtually all organizations are resource constrained. You don't have the finances to staff as much as you'd like, and a lot of time you don't have a choice to add staff until after you need them.  Still, I would rather have a backlog of customer orders rather than the opposite.

The flipside is even trickier.  Your investment strategy should also indicate how you will reduce resources when times are tough.  The key question to understand is how much will it cost you to replace an employee, especially if you have to replace that person in three months when customer demand returns.

Ultimately, you can't forecast when market conditions will change or how new technology will affect your existing market. (Look no further than the demise of Polaroid as a cautionary example.)

As such, you can really never quite finish your business investment strategy.  You have to tweak it as you go.  You've got to have some sort of process set up that regularly evaluates what you're doing, where you are, and what you need to do.  You can't just do this every year or every couple of years—you have to constantly be evaluating.

 

 

To forward this to a friend, Click Here  

Other CEBI Blog Articles... 

Kevin Minton
CEO
Chief Executive Boards International

http://www.chiefexecutiveboards.com/

KevinMinton@ChiefExecutiveBoards.com

11 Ways To Position Your Business To Last

How do you build a business that will stick around for the long haul?  With very few exceptions, the answer is the same for almost any business, whether you’re looking at it from a near or long term perspective. There is a common saying; "don't let the tail wag the dog."  Take control of your company's future health and direction by establishing a sound business operating structure.  

I've seen many public companies operate shortsightedly, pumping up their quarterly numbers to boost their stock prices, with sometimes disastrous long-term results. A business with an owner who measures growth and progress over the long haul and not simply month to month or quarter to quarter is a much easier ship to steer.

There are basic elements to increasing your chance for achieving durability in the years to come--assuming, of course, there's a demand for the products or services you're offering.

• Establish financial controls. This may sound obvious but having a grasp of the numbers provides insight into reducing your risk of theft or fraud. Put simply, until you have a firm handle on knowing how your dollars are being spent, your business is missing a solid foundation.
    
• Minimize distractions. As a business owner and an outside observer, I've seen firsthand how an owner, mired in the minutia, suffers from the inability to effectively chart an effective course toward success.
   
• Hire good people or outsource those distractions that alter your ability to steer the ship.
   
• Increase the top line. While apparent, increased sales creates wiggle room and reduces risks associated with a lack of scale.
   
• Diversify. Providing additional products or services and establishing new customers and geographies minimizes the impact of a significant loss while opening new channels for potential growth.
   
• Streamline and document processes. The distinguishing feature of strong companies is the ability to repeat operating processes. Once the processes are simplified, successful and repeatable, the fun journey of growing the business can flourish. If your dream is to become a bigger company, start acting like one.
   
• Improve efficiencies. Companies that waste money bleed profitability.  Becoming more efficient typically leads to improved EBITDA, thereby increasing the value of your company to its owner or a prospective buyer.
     
• Define what makes you different. The ability to separate yourself from the herd is where margin opportunities live.
   
• Maintain and improve assets. Maintain liquidity that can be used to take advantage of technological improvements, expand operations and keep everything in running order.  Idle assets equals idle cash.
   
• Build a stable workforce. Investing in your most important assets (your employees), while demonstrating respect, fairness and inclusion pays off.
   
• Compete on value instead of price. Competing simply on price can lead toward a vicious death spiral.  Help your customers to buy from you because of your value and differentiation from the herd.

Creating sustainability requires effort but the results can be rewarding not only to you but also future generations.
    

To forward this to a friend, Click Here 

Other CEBI Blog Articles... 

Kevin Minton
CEO
Chief Executive Boards International

http://www.chiefexecutiveboards.com/

KevinMinton@ChiefExecutiveBoards.com

Having a Record Year? Raise Prices

Many members of Chief Executive Boards International and many small businesses in general will have record years in 2013.   Many of those follow record years in 2012.  Does that include you?  So, what would you rather do in 2014, work harder for more earnings or work less for more earnings?  Not a hard question, but how would you make more by working less?   Raise prices.     

Yes, raise prices.  During times of easy money, economic growth (yes, don't look now, but the economy has been growing for sixteen of the last seventeen quarters) and positive economic indicators on all fronts, a price increase is your best strategy to increase your income.   Best part of this strategy?   Not one additional employee, no increase in working capital and no additional fixed assets required.  You just make more money for doing the same things -- or doing less.    

Here's how powerful this proposition is.  Let's say your business is doing $10 million in revenue at a 10% net profit on sales - a net income of $1 million.   To make another 10% ($100,000) on the bottom line, there are two different possibilities: 

1. Send your sales force out to find an additional $1 million of the same kind of business.  Hire 10% more people and bring in 10% more inventory.  Ship 10% more product and deal with all the aggravations and complications thereof. 
      
   OR
       
2. Raise prices one percent.  Ship the same amount of stuff using the same people and same inventory.  The extra one percent ($100,000) drops friction-free to the bottom line.  No overhead.  No additional shipments, collections or returns.  

A 1 percent price increase will be imperceptible to your customers.  Do the math on 3% or 4%.  In fact, one CEBI member raised prices six percent across the board last year and just pocketed the increase in profit.   Didn't make one more part - just cashed the bigger checks.    

Think about it.   Would you rather build wealth by working harder or by charging more?  If you have some price increase experiences to share with others, click on "Comments" below.  

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

Advisor

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

Is Your Success Intentional or Accidental?

"It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things."  

                                                                                          Leonardo Da Vinci

I've recently begun using a word I learned from CEBI member Adam Landrum:  

Intentional  

Not that I didn't know the word - just that I had never before applied it to personal and business strategies.   Then there's its antonym:  

Accidental   

I started watching for examples of Intentional vs. Accidental strategies in business and in life, and I found a lot of them:   

• Investing -- Intentional investors, those who have a clear-cut set of investing strategies and policies, have continued to build wealth, even through a deep and long recession.  Accidental investors (the average retail investor) panicked and sold low, then missed a 140% run-up in the market.  They're now re-entering the market (buying high) and will again sell low upon the first major correction. 
     
• Sales Lead Generation -- Intentional strategies generate sufficient numbers of leads to fill the sales pipeline, and those companies enjoy long-term, steady and predictable revenue growth.  Accidental strategies include the fabled "word of mouth" - an idea which by definition fails to create a steady, predictable flow of leads.  Companies that say they get new customers by word of mouth are really saying, "We get our new customers accidentally." 
     
• Volunteer Membership Development -- In my volunteer life, I watch some Rotary Clubs grow, while others decline in membership.  The difference?  The growing clubs have an intentional strategy by which they do things to identify prospects, acquaint them with Rotary and bring them in as members.  Declining clubs use accidental strategies, such as, "Bring someone to a Rotary meeting if you happen to think about it."  
     
• Personal Relationships -- Intentionality applies here, as well.   Couples who plan time for themselves are happier, stay together longer and live longer.  Maintaining touch with friends and business associates requires an intentional, rather than accidental strategy.    
• Health -- Intentional strategies for health include regular checkups, exercise and weight control.  Flossing daily and wearing your seat belts won't hurt, either.
    
• Exit Strategy -- Perhaps the most accidental event of all for many business owners.  Failing an intentional strategy, many business owners are not ready for an exit when something happens in their life or their family and have to exit unexpectedly.  They lose a huge amount of value as a result, not to mention the emotional disappointment of exit under duress vs. exit on your own terms and timing.  

How can you tell the difference between an accidental and an intentional strategy?  If you can give a clear-cut explanation, including both actions and outcomes, when asked, "How do you......",  or "How do you plan to......", you have an intentional strategy.   If you want your business to be whole lot more valuable, start writing down your intentional strategy for each of your mission-critical business processes.   When you get writer's block (can't figure out what to say), you've identified an accidental strategy that needs some work.    
  
If you discover some accidental strategies that need work, or if you have some really great intentional strategies, click "Comments" below to share them with others.   

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

Advisor

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

It All Begins Upstream

Perhaps you remember a time you tried to swim or paddle against a strong current; the times you walked against the wind after first feeling it at your back; or watched a paddler seemingly effortlessly run a class V rapid with only a few shifts of their oar.

Isn't it great to have the force of the current as your friend?

To fully leverage that current, experienced paddlers remind us of a simple but powerful rule:

It all begins upstream

Experienced paddlers know that fighting the current for position and outcome in the heat of the battle takes too much of their precious energy.   More importantly, options disappear once you are in the grip of the rapids, limiting the chance of a successful run.

Instead,  they set everything up above the rapid - reading the current, positioning the raft -  so that they can execute a clean run.   When approaching a rapid, the river demands our attention, forces us to plan our route, to set up for the run and have the physical strength to keep our course.

Working upstream to select the best options, to set up for the best position, put your boat in the right current allows you to ride through the whitewater with only minor adjustments.  

Successful owners and CEOs approach their business the same way…plan, prepare and execute upstream and the profit will not be as difficult to earn.  It's more fun, as well, riding the rapids rather than struggling against them. 

If you have (or have not) created an "upstream" (read:  strategic) plan for your company, please click on "Comments" below and share your experiences with others.  

 

Just Say "No"

It's tough to learn from a prodigy.  Uniquely gifted people are impossible to emulate.  There's only one Mozart, only one John Lennon and only one Steve Jobs.  

I've tried hard to learn from Jobs, and it's not an easy thing to do. On the other hand, Jobs may be able to teach us ordinary people something about focus - both what it is and what it's not: 

"People think focus means saying "yes" to the thing you've got to focus on. But that's not what it means at all. It means saying "no" to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying "no" to 1,000 things."

The problem is, people don't like to hear "no" -- especially employees and customers.  Jobs wasn't particularly hampered by a need to be liked.  That appeared to be the furthest thing from his mind.  Perhaps there's a way to both be liked and to say "no" to good ideas that aren't the one big thing.  That's for you to work out.  For the good of the enterprise, you may have to subordinate your need to be liked, and say "no" more often than you'd like.  

As member Adam Landrum taught us at a CEBI Summit, "Saying "no" to one thing is saying "yes" to something else."   Jobs goes further - he says it's about saying "no" to 1,000 things so you can say "yes" to the one big thing.   

Have you said "no" to something lately that turned out to be a really good choice?  Click "Comments" below and share that experience with others. 

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

5 Reasons to Outsource Non-core Activities

A member at a recent Chief Executive Boards International meeting asked his Board for some opinions about possibly "insourcing" his Information Technology support.  He's presently using an external provider and paying enough that he could perhaps hire an internal resource to replace that function for about the same money.  A few members favored the idea, saying they'd rather have someone on their staff over which they would have more "control".   A number of members challenged the idea that an internal resource would be better, and actually made a decent case for how it might be worse.  Here are some of those viewpoints:

1. Maintaining current know-how -- A person in the IT outsourcing business is eating, sleeping and reading about IT all the time.   He's in a community of knowledge that keeps him current, and he has experience with multiple other clients to add to his knowledge base.   An internal employee can quickly get cut off from that knowledge stream, finding his current technology awareness slowing considerably when he comes on your staff and is asked to do lots of things other than IT (yes, that's likely to happen - see #3 below).    
       
2. Availability -- From an outside IT resource, you'd expect 24/7 availability - if not the person generally assigned to your account, an equally qualified person.   That way you're covered for holidays, vacations, sick days, and other times when your in-house person won't be available.  Not to mention what happens if your in-house person quits (IT professionals are not known for long-tenured employment).    
       
3. Cost -- There's a false economy in staffing your IT support internally.   In most cases, it's not a 40-hour work load.   What happens during those other hours?   Tech mischief that costs you money.   They think of seminars they need to attend or certifications they need (for you to pay for).  They think of upgrades and enhancements you'll need to spend money on.   Their slack time experimentation will cost you network reliability.  Many times "better" is the enemy of "good" as far as networks are concerned.   You might be surprised at how your IT budget will go up, not down, when you insource IT support. 
       
4. Alternate utilization/opportunity cost -- Another member asked "What is your revenue per employee?"  Answer:  "$300,000"   "So, if you're going to add someone to your staff, might it not better be someone with skills to drive or support another $300,000 in revenue?   Why add headcount to do something you're successfully buying now from the outside?"  This is a classic "alternative investment" question common in MBA courses. 
       
5. Distraction -- IT is the core business of few CEBI companies.  When you take on non-core activities, the core business gets less attention.  You'll end up hiring and managing another person who's not a direct contributor to the core business.   

The bottom line was delivered by a member who is a demolition contractor.   He said, "We don't do anything in-house that's not our core business.  If wrecking is not involved, we don't do it."   I'll remember that one for awhile.  

If you have had experience (good or bad) outsourcing or insourcing non-core functions, click "Comments" below and share them with others.   

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

No Intentional Actions? Expect Unintentional Results

 
In a recent Chief Executive Boards International meeting, a member was complaining that he wasn't making progress on some strategic wishes.   I say "wishes" because when challenged by his Board members (they do that - it's part of the deal) he couldn't come up with any intentional actions he or anyone on his staff were committed to, relative to those wishes.     

Another member said, "If you're not taking intentional actions, you're going to get unintentional results."  

The root cause of this dilemma usually lies in the lack of a written strategic plan.  It could also easily be said, "If you don't have intentional (written) strategies, you're likely to be executing unintentional strategies."   Saying "no" to one thing is saying "yes" to something else.   See:  If It Isn't Written Down, It Doesn't Exist  

The big excuse for this "no man's land"?  "I don't have the time to plan."  I've heard that a thousand times in a thousand ways.  Let's have a look at that.  You somehow have the time for all kinds of other things, like those things you're filling up your day with, important or not, right?  If you were serious about improving your business, not just working harder in it, you'd be saying "no" to those day-to-day things that aren't your highest and best use, and saying "yes" to some serious heads-down time creating strategies and action plans that you could then intentionally pursue (or, better yet, assign to someone else to intentionally pursue).  

See why Working Harder is Not a Strategy.  In fact, it's a downward spiral that's likely to make things worse.   Or consider The 20% CEO.   Doesn't your company deserve a 100% CEO?

So, if you're getting unintentional (undesirable) results, take a look at the intentionality of your actions.   If you don't like what you see, step back, stop doing what you're doing and try something else.   Perhaps a CEBI Board could help you with that.   At least they'll keep you honest.   

If you've found a way to stay focused on intentional strategies and action plans, click on "Comments" below and share them with others.  

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

When You're on the Wrong Road, Turn Around

Pam and I spent the July 4th weekend in New York City, one of our favorite venues.  We saw the musical Kinky Boots, a virtual documentary on a family business.   Great cast, great book and great fun.    

Charlie Price's dad dies early in the first act, leaving him with a multi-generation family business -- an English shoe factory -- near bankruptcy due to cheap foreign imported shoes.  Charlie is beset by guilt, realizing that if he shuts down the factory, not only his family's legacy will be dissolved, but dozens of employees in the English Midlands will be out of work.   

So far, a pretty common family business story.  Add to that a fairly common scenario - Charlie has no passion at all for men's shoes, the staple of the company's product line.  Actually, Charlie doesn't give a damn about men's shoes, and would like to be as far from the shoe factory as he could get.  Sound familiar?

Charlie remembers his dad's admonition, "When you're on the wrong road, turn around."  He just can't figure out where to turn around to. 

In a peculiar scene, Charlie is involved in a brawl in an alley and becomes acquainted with a London drag queen.  Yes, strange, but fortunate (this is theatre).  In classic entrepreneurial fashion (DNA counts for something), Charlie realizes the stylish, "kinky" boots preferred by drag queens are made for women, and won't hold up under the weight of men.    

He challenges his technical team to come up with a steel-reinforced high heel that will handle the weight of a man and also hires Lola, the drag queen, as his designer.    

Fast-forward through the big shoe fashion show in Milan where Price and Sons' "kinky boots" are all the rage.  Having found a defensible niche, the company is saved, Charlie has his own legacy, and dozens of employees have jobs.   It's the perfect strategy - a specialized, defensible product niche with a price-insensitive customer base.  

Charlie heeded his father's advice, as have many companies who reinvented themselves - sometimes out of necessity -- "If you're on the wrong road, turn around."   

If you have a company reinvention or defensible niche story, please click "Comments" below and share it with others. 

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

1-Step Time Management

A member in a recent Chief Executive Boards International meeting was lamenting his ability to get the "important things" done. He said, "I find myself at the end of a day realizing that the one thing I really needed to get done didn't get worked on at all." I had an easy time personally identifying with that. It's so easy to get distracted by phone calls, email and employees, that sometimes the big stuff (particularly big stuff that seems either hard or distasteful) doesn't get the attention it deserves - or any attention at all.

Another member said, "I use a variation on the Napoleon Hill goal card idea - the one he shared with Andrew Carnegie." What he does is carry 3"x5" cards in his shirt pocket. Before he goes to the office (or the night before) he writes one important thing he wants to get done on each of three cards. In the morning, he lays those three cards out on his desk, beside the phone, and works on only those three things. When all three are done, he works on other things. Or, he said, "I've found out that if I get those three things done, I may as well go home - my day is complete and I feel good about what I did."

Try this out. You'll find the 3"x5" format gives you places to put notes and ideas, and they also can become accumulators for another day's important things - things that don't need to get done right now, but you want them at the top of the list some day, along with some background thought you've put into them.

Andrew Carnegie, the richest man in the world at the time, reportedly sent Napoleon Hill a check for this idea.  If you have a particular time management strategy that works for you, click "Comments" below and share it with others.

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

2 Final Selling Stages - Proposal and Closing

What's the essential business process you have to own in order to grow your business?   A selling system.  A documented, explainable process that keeps your pipeline full of suspects, prospects, proposals and closed orders.   In my experience fewer than 25% of businesses have one. For the rest, each month's revenue is a surprise -- some ok, most below target.   

Here’s an overview of a selling system.   Last month, we explored Qualification – sorting out the “best few” prospects from the many you might spend time chasing.

Today we’re talking about two final stages in a completed selling cycle – Proposal and Closing.

The fact is, the proposal itself may not be all that important, particularly if you don’t get there too early in the game. Inexperience creates many more proposals than necessary, as inexperienced sales people tend to think they propose first, then “sell” the prospect on the contents of the proposal.

Try turning that around. Do all the selling first. Make sure you’ve uncovered the pain or what’s missing in the prospect’s ambitions. Then make sure you’ve addressed all those wants in your conversations with your prospects. Agree in advance what he needs and, more importantly, what he wants.

Probe for any objections. Look hard for a reason the prospect might balk. Trial closes are important.  “Is the budget number I gave you within your budget?” “Is there anyone else who needs to OK this purchase?” “Are you ready to go ahead with this?”

“So, if I bring you a proposal that summarizes our conversations, are we set to do business?” That’s when you rev up your proposal machine. The proposal is just documentation of everything you’ve already agreed upon with the buyer, including his agreement to buy what you’re proposing.

The last step is closing, which is all but done – it’s a review of your proposal and a final approval. You start that conversation with a restatement of everything you’ve agreed upon, and use confirming probes to make sure you’re still in agreement. “That’s what we agreed upon, right?” Then you open up the proposal and read it to the prospect. Yes, read it to him. Put a copy in front of him and follow the text with your ballpoint pen, making sure he’s staying on track with you.

Every now and then, stop and confirm, “That’s what you wanted, right?” or “Sound OK?” When you get to the end, it’s pretty much time for him to act. Then, make it easy for him.  Don't say, "Sign here".  That's frightening.  Instead, say, "If you'll just OK this for me, we can get started."  Curiously enough, that’s when the balk may set in – when it’s time to actually give you the order.

Then it’s back to discovery.  Ask, “So, what’s getting in the way?” Review your points of agreement along the way – has anything changed?

The balk should be the exception – if you’ve done the selling first, then proposed on already-agreed-upon products, services, pricing, terms and conditions, you likely have an order.  More next month on Farming those prospects who aren't ready to buy right now. 
To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

10 Bad Money Habits to Break in 2013 - Behaviors Worth Changing for the New Year

I'm astonished at how little time and study business owners give to their personal financial lives.   Many have little or no net worth outside their businesses and many of those who do haven't a credible strategy for managing that personal wealth.  This incongruity is surprising, considering that when most people stop working full time, perhaps in their 60's they'll have about 25 years of life expectancy during which their only means of support will be the wealth they've accumulated and invested over 40 years of earning. 

A good friend and writer Shanda Jeffries published something in her newsletter that I thought was huge, as it captures in 10 categories the mistakes I most often see among my business coaching clients and CEBI members.   Here's her article in its entirety:  

Do bad money habits constrain your financial progress? Many people fall into the same financial behavior patterns year after year. If you sometimes succumb to these financial tendencies, the New Year is as good an occasion as any to alter your behavior.

1. Lending money to family and friends - You may know someone who has lent a few thousand to a sister or brother, a few hundred to an old buddy, and so on. Generosity is a virtue, but personal loans can easily transform into personal financial losses for the lender. If you must loan money to a friend or family member, mention that you will charge interest and set a repayment plan with deadlines. Better yet, don’t do it at all. If your friends or relatives can’t learn to budget, why should you bail them out?


2. Spending more than you make - Living beyond your means, living on margin, whatever you wish to call it, it is a path toward significant debt. Wealth is seldom made by buying possessions. Today’s flashy material items may become the garage sale junk of 2025. Yet, the trend continues: a 2012 Federal Reserve Survey of Consumer Finances calculated that just 52% of American households earn more money than they spend.(1)


3. Saving little or nothing - Good savers build emergency funds, have money to invest and compound, and leave the stress of living paycheck-to-paycheck behind. If you can’t put extra money away, there is another way to get some: a second job. Even working 15-20 hours more per week could make a big difference. The problem is far too common: a CreditDonkey.com survey of 1,105 households last fall found that 41% of respondents had less than $500 in savings. In another disturbing detail, 54% of the respondents had no savings strategy.


4. Living without a budget - You may make enough money that you don’t feel you need to budget. In truth, few of us are really that wealthy. In calculating a budget, you may find opportunities for savings and detect wasteful spending.


5. Frivolous spending - Advertisers can make us feel as if we have sudden needs; needs we must respond to, needs that can only be met via the purchase of a product. See their ploys for what they are. Think twice before spending impulsively.


6. Not using cash often enough - No one can deny that the world runs on credit, but that doesn’t mean your household should. Pay with cash as often as your budget allows.


7. Gambling - Remember when people had to go to Atlantic City or Nevada to play blackjack or slots? Today, behemoth casinos are as common as major airports; most metro areas seem to have one or be within an hour’s drive of one. If you don’t like smoke and crowds, you can always play the lottery. There are many glamorous ways to lose money while having “fun”. The bottom line: losing money is not fun. All it takes is willpower to stop gambling. If an addiction has overruled your willpower, seek help.


8. Inadequate financial literacy - Is the financial world boring? To many people, it is. The Wall Street Journal is not exactly Rolling Stone, and The Economist is hardly light reading. You don’t have to start there, however: great, readable and even entertaining websites filled with useful financial information abound. Reading an article per day on these websites could help you greatly increase your financial understanding if you feel it is lacking.


9. Not contributing to IRAs or workplace retirement plans - Even with all the complaints about 401(k)s and the low annual limits on traditional and Roth IRA contributions, these retirement savings vehicles offer you remarkable wealth-building opportunities. The earlier you contribute to them, the better; the more you contribute to them, the more compounding of those invested assets you may potentially realize.


10. DIY retirement planning - Those who plan for retirement without the help of professionals leave themselves open to abrupt, emotional investing mistakes and tax and estate planning oversights. Another common tendency is to vastly underestimate the amount of money needed for the future. Few people have the time to amass the knowledge and skill set possessed by a financial services professional with years of experience. Instead of flirting with trial and error, see a professional for insight.

Shanda Jeffries may be reached at 864-968-2319 or sjeffries@flynnwealth.com.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or a recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations:

1 – business.time.com/2012/10/23/is-the-u-s-waging-a-war-on-savers/ [10/23/12]
2 - www.creditdonkey.com/no-emergency-savings.html [10/9/12]

Thanks to Shanda for this well-written and timely guest article. 

To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com

5 Essentials of Prospect Qualification

What's the essential business process you have to own in order to grow your business?   A selling system.  A documented, explainable process that keeps your pipeline full of suspects, prospects, proposals and closed orders.   In my experience fewer than 25% of businesses have one. For the rest, each month's revenue is a surprise -- some ok, most below target.   

Here’s an overview of a selling system.   Last month, we explored Opportunity Development -- that discovery process where we determine whether a suspect (not yet a prospect) has a real need for what we do.

This month, we're talking about Qualification – sorting out the “best few” prospects from the many you might spend time chasing.

This eludes many cub sales people. Why? Because they’re humans. And most have a plethora of fears. Fear of rejection, fear embarrassment, fear of failure and other fears, the root cause of which is low self-esteem.

The fatal symptom of a salesperson’s low self-esteem is spending time with people who will see them, rather than people who are ready and able to place orders. The classic euphemism for this?  “We’re building a relationship”. When you hear a sales person talking that way, what they're really saying is, "I'm not asking for an order."  What’s the best way of actually building a relationship? Do some business together – just get an order, and show them what you can do!

What are the essentials of qualifying a prospect? Or, more importantly, disqualifying one?

1. Accepting that not everyone is going to buy – For many reasons beyond your control, some prospects just aren’t going to buy from you – at least not now. As soon as you realize that, move on.
      
2. Enough suspects – Implicit in disqualifying (discarding) prospects is that there are some left over. A broken selling system (not enough Lead Generation) causes poor prospects to be retained, simply because there isn’t anyone else to talk to.
    
3. A clear-cut vision of your Ideal Customer – Exactly what does that person look like, sound like or act like? Think of a “customer muse” – a visual representation of the customer you’re looking for. Not a silly idea, actually.
    
4. Assessment of "fit" -- The fit between your company and your way of doing business with the prospect's company and way of doing business. Are you a premium provider, and the prospect is all about price? Not likely to work out well.
    
5. Recognizing that a prospect is a person, not a company -- People buy from people, and despite a prospect company’s apparent need you have to find the person who has the emotional need, authority and readiness to buy. Is he the "MAN"? Does he have:
• Money -- Is there actually available budget to buy anything, any time soon?
• Authority -- Can this person really buy from you, or is he really a “recommender”?
• Need -- Does he actually have a pressing need - a want or a fear that needs a solution right away?

The answer you’re looking for? “NO”. Yes, “NO”. That’s the signal you’ve found a prospect to disqualify, so you can move on to the next one without wasting any more time. If you get a “Yes, but not now”, put that prospect into the “Farming” step of your selling system (more on that in a future article).

Does your selling system have a good disqualifying process? Do you regularly downgrade prospects and quit spending time with them? Do you get to “NO” often enough, or do you just wear out? Take a look in your CRM and see how many opportunities have been downgraded in probability. How many have been written off entirely? If that's not a sizeable number, you have either some false hopes in your opportunity list or you may have sales people spending time on deals that won't ever happen -- for you or anyone else.

Actually, I believe that's the worst kind of deal to lose -- the deal that doesn't happen at all. If they didn't buy from you or anyone else, it's a pretty fair bet that the deal should have been disqualified far earlier in the game and that time spent with a qualified prospect who will eventually buy from someone.
More next month on Proposals and Closing  
To forward this to a friend, Click Here

Other CEBI Blog Articles... 

Terry Weaver

CEO

Chief Executive Boards International
http://www.chiefexecutiveboards.com/

TerryWeaver@ChiefExecutiveBoards.com