What Is The Biggest Problem With Running A Small Business?

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Is it possible to pick just one?  The “champion” of the problems when it comes to running a small business.  Who gets the most votes?  Is it the lack of cash?  How about trouble finding good people?  Or a basic lack of business knowledge?  Or poor leadership by the owner?

During tonight’s show we had a good discussion of the top challenges when it comes to owning and running a small business.  I’m guessing we covered some of your top challenges.  Take a listen to find out if we were able to agree on the top problem!

People, Companies and Resources We Mentioned in the Show

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How Did Jack Buy His First Company?

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If you’re an avid listener of Dirty Secrets of Small Business, or if you know us off the air, you’ve heard some of Jack’s story about his first acquisition of Cleveland Armature.  But until now, you haven’t heard the full story…or as Paul Harvey used to say, the rest of the story!  Well, tonight’s show is for you.

If you are dancing thoughts of finally getting into business for yourself or if you’re looking to grow your business by acquiring another business, tonight’s show has something for you.  Jack shared details about how he found this first company,  his unique due diligence process, some of the nice surprises he found while cleaning up the company, and some keys for how he was then able to sell the company only a couple of years later after getting things fixed up.  This show is guaranteed to make you laugh out loud and provide some guidance and inspiration on your search.

People, Companies and Resources We Mentioned in the Show

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How Come We Can’t Communicate?

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How come most companies, large or small, have trouble communicating?  In our business coaching practice we mostly deal with companies that have less than 25 employees, but we have a few who are larger and we’ve both worked in muiti-billion dollar corporations.  In all of these cases we have witnessed and experienced communication issues.  Somehow and somewhere the communication is breaking down.

In the first meeting or two with a new client, and for many meetings afterward, we’ll talk about communication challenges and breakdowns within the company.  Would you believe that the fix to this “communication” issue is pretty simple?  Most of our clients don’t believe the solution initially either.  But the simple answer is meetings.  Well run and regular meetings.

I know, you’re thinking “Noooo, not the ‘M’ word” as in meetings.  “I hate meetings,” you say, “they’re such a waste of time!”  Believe us, we know how you feel.  Most meetings are poorly run, go over the allotted time, only cover about 10% of what was on the agenda (if an agenda even exists), and we spend a lot of time just listening to other folks chat and problem solve.  What am I doing here?

Well, we’re here to tell you that well run meetings can get your business into a great rhythm and the communication problems will melt away.  But you have to do it right.  The meetings need to be consistent and scheduled out for the year.  You have to have an agenda and stick to it.  It needs to be made clear if this is a status/update meeting or a working meeting (and don’t mix the two).  Would you believe most of our clients have come to love and even ask for more meetings?  We shared a lot of the stories and secrets during tonight’s show!

 

People, Companies and Resources We Mentioned in the Show

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How Do I Start A Small Business and Succeed?

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Just about everyone, at some point, has danced with the idea of starting their own company. Of being the boss. The one in charge. But so few actually do it. How come? Can it really be that difficult and confusing to start a company? Do I know a lot about business or very little? Does it matter?
While it’s easy to dream and talk about starting a company, the knowledge for how to actually do it is where most folks run out of steam. Where do you find ideas for the type of company to start? How do you decide what type of corporate structure should be set up? Where do you find money? How do you know if you need money to start, and if so, how much money do you need? When are you officially “in business”?

In tonight’s show we shared some steps for you to take to get your business going and answered the above questions and a lot more. The new American dream is to own a business and it’s becoming the dream of many others worldwide as well. Tonight’s show will help you avoid the common false starts!

People, Companies and Resources We Mentioned in the Show

  • Inc. Magazine’s Inc. 500 and Inc. 5000 List (https://www.inc.com/inc5000/index.html)
  • Lake-Geauga Fast Track 50 (https://www.news-herald.com/business/eastlake-company-captures-no-spot-on-lake-geauga-fast-track/article_bf550ca8-dd55-11e8-8a27-6376a8d9e3f0.html)
  • Weatherhead 100 List (https://weatherhead.case.edu/events/weatherhead100/)
  • Local Chambers of Commerce
  • Local Incubators (e.g. Braintree Business Development Center, http://www.braintreepartners.org)
  • Most Businesses Fail Within 10 Years (https://www.fundera.com/blog/what-percentage-of-small-businesses-fail)
  • The Matrix (https://www.imdb.com/title/tt0133093/)
  • Joe Tye No BMWs (https://www.valuescoachinc.com/joe-tye)
  • MVP’s 7 Keys To Success (http://maximumvp.com/7-keys-to-success/)

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How Do I Avoid Common Pitfalls of Working With My Spouse?

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As far back as I can remember, my parents always worked together in their business. So growing up, I thought this was a pretty normal thing. It wasn’t until I got out into the business world that I truly gained an appreciation for everything my parents did to not only have a thriving business for 40 years but also a wonderful marriage that is approaching 50 years.

We’ve coached dozens of clients over the years where both spouses are directly involved in the business. We always caution our clients and encourage them to think long and hard before bringing their spouse into the business as there are several potential pitfalls they will want to avoid.

Some of these pitfalls are more obvious than others. For instance, most business owners understand that they shouldn’t bring personal stuff into the business. So that dumb thing your husband did last night that caused all the fuses to blow out in your house, keep that at home. But what about abdicating the financials to your spouse without any oversight from you? I mean, your spouse wouldn’t steal from you, right? We’ve seen lots of things you wouldn’t believe!

During tonight’s show we share a lot of “Do’s” and “Don’ts” when it comes to working with your spouse. So whether you currently work with your spouse, you are considering bringing your spouse into the business, or you know some spouses who already work together, tonight’s show is for you!

People, Companies and Resources We Mentioned in the Show

The War of the Roses

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How Do I Make Time To Plan My Business?

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One consistent theme we hear from small business owners is that they don’t have the time to pull together a plan for their business. As we’ve often said, this “time” pushback is code for folks not understanding why something is important enough to pay attention to so that they’ll make the time for it. Owners will justify not pulling together an annual plan because they know it will be “wrong”.

Well, the point of pulling together an annual plan for your business isn’t to get it “right” but instead to get your best thinking pulled together and provide a beacon of light to guide everyone in the organization. It’s more about the mentality of looking ahead and trying to make things happen on purpose vs. constantly reacting to what the outside world is throwing at you.

Keep in mind that when we’re talking about a plan, we aren’t referring to a 50+ page business plan. We are referring to MVP’s 7 Keys to Success. One of the first things we do with all or our coaching clients is to pull together what we call a Profit Plan (you may refer to it as a budget). The Profit Plan is where you give your best shot at forecasting sales and expenses for the next 12 months. This is more than simply an exercise of plugging a bunch of numbers into a spreadsheet or QuickBooks.

Chances are you won’t be able to do this Profit Plan alone. So that means you’ll have to engage some other members of your team. This is perhaps one of the biggest, and often missed, benefits of pulling together a Profit Plan. What better way to get a sense of your team and how they think and work together than to have them pull together some plans for the business. Don’t worry, you won’t have to tell them how much money you or any of the other team members make, but you’ll want to be open with just about everything else when getting your plans pulled together.

During tonight’s show we provide some good guidance for how to get this plan started and how to use it throughout the year. We also share several stories about clients of ours who wound up being better forecasters than they ever thought they could be, even though the plans didn’t go exactly as they thought! There’s no better time to start pulling together a plan for the next 12 months than now!

People, Companies and Resources We Mentioned in the Show

MVP’s 7 Keys To Success ()

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Photo © Frank Schulenburg 2016

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Why Should I Get Involved In Politics As A Business Owner?

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A collective sigh of relief as our latest elections are finally finished. We can certainly understand why you might be looking to have a timeout from any more political talk and advertisements. Good news here is that we want to highlight some of the key takeaways for business owners from the 2018 midterm elections and also give you some ideas for why and how to get involved.

We’ve spoken with just about every one of our business coaching clients about the importance of getting involved in politics. As you might guess, we get a lot of pushback from our clients. The top pushback is “I don’t have time to get involved in politics.” As we say all the time, when some tells you they “don’t have time” that is code for “you haven’t convinced me why what you’re telling me is important enough for me to MAKE TIME for it.”

Well tonight’s show is geared to help you understand why getting involved is the lesser of two evils when it comes to the impact on your life. We shared several stories of clients of ours and how the government got in their way and what to do about it. We also shared several personal stories about getting involved in politics. Not only did we share several reasons why you should get involved but also how to get started.

People, Companies and Resources We Mentioned in the Show

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How Do I Get My Team To Take Ownership?

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Being the owner of a small business can often be a lonely place, even when you have several employees.  One of the things that takes away from that loneliness is when you have good people stepping up to take ownership of different parts of the business and different projects.  The challenge is how do you get people to step up and do this?  We work with most of our small business owners to help them do exactly that with their teams.

One good guiding principle to keep in mind is that people tend to take ownership of ideas that are their own.  As the owner/manager, it’s key for you to make sure the idea belongs to your team as opposed to coming from you all the time.  One way to do this is to focus the team on presenting solutions vs. simply identifying problems.  Too much of a focus on problems can go negative real quick and won’t lead to the changes you’re looking for.  Get people listing ideas on a white board or flip chart to get their best ideas out and discussed.

Another thing to keep in mind as the business owner is that you have to get out of the way!  Have your team present their plans for how to handle a situation or start and project and then let them go once you’ve had some input.  Let them stumble and even fail.  Your job is to help remove barriers and ensure they have everything they need to succeed.

People, Companies and Resources We Mentioned in the Show

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How Not To Lead Like Hue Jackson

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Being in Cleveland, we have a lot of sports talk.  This time of year we have lots of football talk.  Specifically Cleveland Browns football.  When things don’t go well everyone wants changes and has opinions on why things aren’t going well.

Some of the smartest and successful people I know have an uncanny ability to learn from other people’s mistakes.  This is key as it saves them from having to make all those mistakes themselves.  In tonight’s show we share some lessons of what not to do as a leader of your business based on the leadership of the Cleveland Browns head coach Hue Jackson.

Anyone who knows my partner Jack Mencini knows that Jack is not fond of Hue, but we thought it would be good to try to take some positives out of a not so great situation.  Here are a few of the leadership lessons we shared in tonight’s show:

  • Instill Confidence: few things are more important as a leader than to instill confidence in other people. Unfortunately Hue does a lot of things that damage people’s confidence in him, not the least of which is his incessant habit of talking in platitudes and cliches.  If you listen to or read the transcripts from Hue’s interviews you’ll be confused trying to figure out what he’s trying to say.  This is part of a bigger problem in terms of Hue’s overall communication style and ability (at least what he’s demonstrated publicly). A big part of what should be communicated is problems identified and then potential solutions.
  • Better Not To Say It Than Say The Wrong Thing: one subtle part of communication that is lacking for Hue is his ability to not say something. It often appears that he’s just speaking from the hip and not being as conscious as he should be of not saying the wrong thing. He’d do well to just simply skip questions vs. say these wrong things.  He has to realize that he doesn’t need to have all the answers, but instead needs to articulate the next steps.
  • Don’t Rely On Your Title: if I have to hear Hue tell us one more time that he is the “Head Coach of the Cleveland Browns” I think I’m going to puke! This is a very sensitive trump card that you as the leader better use very sparingly.  Things like “hey I’m the boss so do what I say” or something similar.
  • Praise in Public and Correct/Criticize in Private: nobody appreciates being called out in public. When I screw up I usually know that I screwed up.  You don’t need to scream it from the rooftops, not if you want to get the best out of me and my loyalty and best effort.  A little humility goes a long way as a leader as well so don’t always be touting your own abilities to the detriment of the team around you.

There’s a lot of other good stuff in tonight’s show and at the end of the day we can all learn something from Hue’s shortcomings.  Here’s to hoping even Hue learns from his own leadership mistakes and rights this Cleveland Browns ship!

 

People, Companies and Resources We Mentioned in the Show

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Do You Know Where All Your $ Is Hiding In Your Business?

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We have found that most owners don’t have a good handle on exactly how much money they are taking out of their business.  It’s not that they don’t care.  It’s more a factor of there being so many ways people get value out of there business.  Some things have been going on for so long that many owners simply forget about them or simply take them for granted.

One of the exercises we go through with many of our business coaching clients is helping them get a sense for the value of their company.  One of the most common ways a potential buyer will value your company has to do with placing a multiple on something known as “owner discretionary cash flow”.  I know that sounds like a fancy pants word but the idea is to capture all the cash that the owner has control of and to show the true ability for the business to generate cash.

The starting point to figure these things out is your Profit & Loss statement (“P&L).  You want to start at the bottom line (i.e. net income) and add back cash items that are outside the normal operations of the business.  Some categories to consider looking into for these add backs include:

  • Owner as Employee Expenses: for the owner this includes things like salary, employment taxes, healthcare, 401k and/or other retirement accounts.
  • “Personal” Stuff: when you own a business there are often blurry lines between what’s considered a business vs. personal expense. Some examples would include things like cell phones, vehicle leases, dinner/lunch, gas, rent and travel.  Many owners have never personally paid a bill for Verizon because the company has always covered their cell phone bill.
  • Professional Services: chances are there are some professional services you have engaged to help you grow and get better as a business owner that are outside of the basic requirements like having an accountant file your taxes. Perhaps you’ve brought in a consultant or coach to help with a project or to do some training.

In addition to all of these P&L items, you’ll also want to look at your Balance Sheet to see what other things might be paid for but aren’t showing up as expenses on the P&L.  This could include things like auto loans and distributions to cover tax payments or to simply take additional funds out of the business.  There are also “non-cash” things like credit card points and airline miles and hotel points.  Lots of stuff to consider here but certainly worthwhile to help reinforce for you exactly why you continue to do what you do when running your business!

 

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