Monthly Archives: March 2018

How Do You Deal With False Starts During A Business?

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Most business owners don’t start a company with a plan to exit the business and transition it to the next generation.  Fortunately many owners do spend some time working on a plan to transition the ownership to the next generation as they begin to think about winding things down.  But there can be many false starts along the way that are common challenges but can be avoided or minimized.

One big mistake we see is where the current owner takes the “osmosis” approach of telling the next generation to just follow them around for the next 6 months and do what they do.  Another is the the individual parties are too focused on themselves vs. the other involved parties and the business itself.  Nothing will stall discussions and plans faster than folks focusing too much on themselves when it comes to a transition.  Yet another common false start is when it becomes apparent that the next generation isn’t quite ready to take over yet.  How do you get them up to speed so that you as the exiting owner feel comfortable stepping back and eventually stepping away?

It is a good idea to get input from folks who are outside your business.  If nothing else those folks tend to be more objective and less emotional than those in the business.  A big stumbling block can be talking with too many outsiders because they will often give different opinions and advice which can often be conflicting.  Plus more information isn’t always better.  Another common stumbling block is engaging the wrong outside advisors who are more skilled with the nuts and bolts of structuring a transaction vs. the transition of day-to-day management fo the company.

One of the things we do in our coaching business is to facilitate lots of discussions between the interested parties which include a lot of “what if” scenarios to help the parties talk through the good, the bad, and the ugly.  Plus we do it in plain English vs. some other professionals who will be speaking their own language!  Don’t let the false starts stop your business transition.  Focus on getting the plans together that are based on MVP’s 7 Keys to Success (http://maximumvp.com/7-keys-to-success/).  Get some inspiration and ideas from our show today!

 

People, Companies and Resources We Mentioned in the Show

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How Do I Handle An Employee Quitting Unexpectedly?

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Most of us as business owners have been there.  Things are going along great, we finally have what appears to be the right team in place.  And then boom!  One of your key people comes in and gives their 2-week notice.  What’s a boss to do?

Often the initial reaction to a good person resigning is that you want to do whatever it takes to make them stay.  The pain of them leaving is almost too much to bear at this point.  You know that as the owner it is likely that you’ll have to be the one plugging the gap to make up for what they were doing.  Who has time for that?  Plus you’ll have to go through the process of finding, interviewing, hiring, onboarding, and training someone new.  So what’s an owner to do?  Well, it depends.

There’s no one right answer to this situation.  It really depends on why the person is leaving.  We recently had a client where this happened with a key employee who decided to leave so he could make more money.  Another client had someone resign because some of the job duties they were given weren’t something they were comfortable doing.  Yet another had someone resign because they got an offer from another business.

We provided different guidance for each of these clients because their particular situations were all different.  For the one who was leaving to make more money, despite the owners’ desire to try to work something out to pay this person more, we advised them to let the person go.  For the one who was leaving due to the job duties going beyond their comfort zone, we advised the owner to go back with a paired down job description that would focus on those things this person was experienced in and liked doing.  What do you do when this happens?

People, Companies and Resources We Mentioned in the Show

 

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How Do You Find Money For Your Business?

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We’ve boiled down the focus of our coaching business to what we call 7 Keys to Success.  One of those Keys to Success that can dominate all the others is #6 on our list, Cash Flow Forecast.  If you have cash concerns a a business owner, nothing else will matter until you have that cash issue figured out.

The “cash” issue can come up in a lot of ways.  It could be vendors pressing you for payment, payroll coming due at the end of the week, or the impending tax bill.  Whatever is causing the cash pressure, until you find an answer to solve it, you won’t be able to be the leader of your business that your team needs.

In tonight’s show, we provide some insights and ideas into ways you can find cash for your business.  We start with some pretty basic ones that most people think about and have tried, banks and/or investors.  But we then get into some more creative ideas about ways to utilize competitors and/or vendors to help fund your business.  We even touch on ways to tap into some of the assets on your balance sheet to find alternative ways to raise money including the sale of some assets or even looking into factoring your receivables.  You could even look online and set up a crowdfunding page (e.g. GoFundMe) or tap into your personal IRA.

Whatever cash pinch you might be feeling now or anticipating, tonight’s show will give you some ideas and answers for how to find money for your business.

People, Companies and Resources We Mentioned in the Show

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How Do You Know If You Can Afford That New Hire?

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We recently had a client who had an opportunity present itself in the form of a potential employee who was a “rock star” by all accounts.  The issue was our client wasn’t actively looking to hire someone yet and he was cash poor at this point in the year due to a recent investment in some inventory.  So he was asking us how he determine if he could afford to higher this person or not.

During our discussion we took our client through a couple of things.  First, we talked about the Functional Organization Chart he was working on because we wanted to use that to frame a potential job description for this “rock star”.  We knew if we couldn’t get the role laid out for this person then there was no need to move forward.  In this case we were able to figure out the role pretty quickly.

Next we talked about looking beyond the annual salary for this person and focusing on what they would cost the business for 90 days.  That way we’re looking at a decision for $15,000 or $20,000 vs. $60,000 or $80,000.  We look at it that way because if this new hire isn’t working out within 90 days then you will part ways with them.

We also talked about plugging this new person into the Profit Plan for the next 12 months to see what impact they would have on the profitability of the overall business.  We know most owners don’t have a “budget”, or as we refer to it as a Profit Plan, so it’s imperative to get one set up where you’re forecasting your sales and expenses by month for the next 12 months.  It gives you great visibility on any decision you make for your business and the resulting impact you expect.

 

People, Companies and Resources We Mentioned in the Show

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How Do I Make My Organization Better?

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Most business owners spend a good chunk of their time on people issues.  Finding them.  Training them.  Inspiring them.  Retaining them.  Firing them.  You get the idea, lots of time on people stuff!

We hear too often the pushback phrase of “I don’t have time” when we talk with small business owners about the importance of training new employees. If the owner doesn’t train them then someone else will, usually it isn’t the way the owner would train them or want them to be trained.

How about finding and paying good people.  “How can I afford to pay them” is a common question we’ll hear from owners.  Good people are hard to find and when you do you need to grab them with both hands and not let them go.  Often a big obstacle to bringing on good people is the owner’s lack of understanding for how to pay these folks, but you can only answer that by plugging them into your profit plan.

One of our favorite games with our coaching clients is to play the game “let’s pretend” because it puts us easily into a situation.  For instance, “let’s pretend your business doubles tomorrow.”  Would your current systems hold up?  Would you be able to process and produce all those additional orders?  Can your people and systems handle it?  Would you be able to fund that growth?  Getting your company ready for scalability is a key role for the owner of a business.

 

People, Companies and Resources We Mentioned in the Show

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