Pick a Number

As 2014 comes to an end, have you taken a few minutes to look over your sales and profit numbers for the year?  How did they turn out?  Better than last year?  Were your numbers as good as you had planned when 2014 started?  Wait… you didn’t have a plan for 2014?  Did you have a goal… a number you wanted to reach?  You say you just tried to do things better as the year went along?  How did that work out for you?

Okay, I’m sorry, but I’m trying to lay a little guilt trip on you with these questions.  I know that a large majority of business owners who read this post did not have a plan or even a goal for their business sales and profit levels in 2014.  Or any prior year that they were in business.  Were you one of them?

Every piece of business success literature I’ve read emphasizes the importance of having a goal and a plan to reach it.  And several studies and surveys over the years have confirmed that a higher level of success comes to those companies who have a plan.  So I conclude that if you have no goal or plan, you either a) don’t care if you succeed in business, b) feel that your success is more a matter of luck than design, c) fail to prioritize planning enough to make a small amount of time for it, or d) don’t know how.

If reasons a) or b) apply to you, it may take more discussion than I can allot in this post to help you see the importance of planning.  But with reasons c) and d), maybe the following four step approach will help you both to know how to get started and to realize that your plan for 2015 doesn’t have to take up a lot of time or be as hard as it is sometimes portrayed.

1. Examine your financial results for 2014 as your starting point.  What sales level did you achieve?  How much money did you pay yourself this year?  What was your bottom line net income number?
2. What goal would you like to set for 2015?  How much sales can you reasonably achieve next year?  How much money would you like to pay yourself during the year?
3. What will it take to achieve the goals you’ve now set?  What will you do differently to hit your higher sales numbers?  What needs to change in regard to your expenses that will help you achieve your profit and take-home-pay goals?  Remember to consider that you also may need to account for debt payments.  How much do you plan to reduce your liabilities in 2015?
4. Write it down!  Your goal and plan are much more helpful to you if you put them in writing and put them in a place where you will see them and refer to them often.  Keep it simple by putting it on one sheet of paper to start with.

If an annual plan is not something you are in the habit of doing, start with these four simple steps this year.  You’ll find that it will help you think just a little differently about your business, and thinking differently leads to performing differently during the year.  Planning is not just a game of picking a number year after year.  Although most of us want growth in our businesses, the growth must come because of planned actions we will take that give us the best chance of achieving that growth.

If planning still seems too foreign or confusing to you, reach out for help.  There are many coaches and consultants who would be happy to help you sort it out and put your business on a firmer path toward success.

Do It All, or Specialize?

In general, most small businesses don’t turn away work.  We have a can-do, whatever it takes, and “the customer is always right” kind of attitude.  Sure, there are parts of our business that we feel best at, but doing that alone doesn’t always seem to pay the bills, so we expand our offering and thus, our revenues.

Regardless of whether that is a good approach, the result of it is that we tend to market our businesses according to ALL the services we’re able to perform or products we provide.  We are your “one-stop shop”, your source of all things ________ (fill in your industry description).  Our marketing messages work to build the perception that we are unique because of our broad offering.

In my coaching practice, our overall marketing message has been similar.  Our clients, small business owners, wear a lot of hats.  So we need to wear all those hats, too, in order to relate to the challenges and opportunities they face.  But recently, I’ve found that the opposite approach can lead to even better results.

Prior to writing my book, Final Act Of Ownership, (www.amazon.com/author/jerrybaltus) I hesitated, because I felt that promoting a specific portion of our work (Exit Strategies) would limit our attraction for business owners who were not yet concerned about exit strategies.  What I found, however, was that by offering great content and education about the exit strategy portion of our business, we were actually drawing in clients to our entire business offering.  The laser focus of a part of our marketing effort on this specific business issue turns out to elevate the perception of our ability to deliver great service with our entire portfolio of knowledge.

What does this mean for your business?  I encourage you to think about a portion of your business that you are most interested in, most passionate about, and best at delivering.  Give some thought to how you could laser focus your marketing tactics and messages around this one thing.  If you can position yourself as the foremost expert on your “One Thing”, it is likely that the perception of your customers and prospects will be elevated for all the things your business does.  In doing so, you will more vividly set yourself apart from your competitors, and do a better job of competing on value instead of price.

Come Out of Your Cave

Although we live in the part of the world (Wisconsin) where some of our animal friends hibernate through the dark, cold winter months, it doesn’t mean we should follow suit.  I know the whole “man-cave” movement is popular now (and I confess to finding it very appealing!), but it is not a tactic I would recommend to help build your business.

I was recently introduced to a business owner with almost 50 years in business in my local area.  Yet, as much as I pride myself in having a pretty good awareness of existing businesses, I had never heard of them.  They are a small, but prominent name in their industry, yet they don’t do a lot of business locally.  It got me thinking about other business owners who, even though they are small, would like to be prominent in their industry.  In many cases, one factor holding them back is that few people know they exist.  Their business “lives in a cave” of sorts, which causes them to be invisible in the community.

Even if your business and customers come from outside of your local area, please don’t underestimate the power of networking and visibility to enhance what you already do.  There are three important benefits to being active in your local business community:

·        We live in the age of “Six Degrees of Separation”.  This is the theory that everyone and everything is six or fewer steps away from any other person in the world.  Want to meet that high level prospect in California?  The chance that someone in your community is already connected to them, or only one or two friend linkages away, is very high.  You can’t meet this local connector if you are living in your cave.

·        Even though your customers may not be local, most likely your employees are.  Successful hiring these days is much more about networking and awareness than about putting an anonymous ad in the paper or job board.  If you want to hire the best local candidates, it helps that your business is recognized as a desirable local employer so that when you have job openings, the best talent is drawn or recommended to you.

·        Business seems more complicated today than it used to be.  Having professional resources at hand to help with your business challenges is invaluable.  Being visible and active in your business community exposes you to the kind of accountants, attorneys, bankers, printers, web designers, financial planners, insurance pros, staffing companies, (even business coaches!) who you may need to get things done the right way, and cost effectively in your business.

As appealing as it is to get away from the stress of your business by rolling yourself into a comfy ball in your cave, getting out of that cave can be rewarding, too.  It can be motivating.  It can generate new friends.  It can help educate you.  It can help your business be more successful.

Come out and play!

When You Come to a Fork in the Road, Take It!

Yogi Berra’s comically wise saying occurred to me this morning as I was thinking about options and choices.  Why in the world was I thinking about options and choices, you might ask.  Well, one of the things I stress with clients is that we always have options.  There are always other ways of accomplishing the same things, so if one path doesn’t appeal to us, there is usually another one that will work.  But of course, it only works if we make a conscious decision to follow it.  So we have a choice to make, often among many options.

Although options are good, too many options sometimes leads to paralysis.  We don’t know the outcomes of any of the options in front of us, so we hesitate.  It’s when the hesitation turns into a long-term pause, that things get dicey.  That’s when the improvement we seek or the problem we’re trying to solve stalls out, and we’re stuck exactly where we stand.  The fear of moving forward stems from the unknown.  None of us can predict the future, so we don’t know with certainty what the outcome of our choice will be.  We hesitate.

Ironically, the hesitation doesn’t help.  Progress only comes from action, not inaction.  So in order to move forward we have to act.  We have to choose an option and go forward confidently, but also realizing that if our choice doesn’t quite turn out, we may have to change again later.  But at least by making the choice we are making progress.  However, making that choice still comes with that fear of the unknown.  So even though we know we need to act in order to have progress, we still hesitate.  We are in the proverbial do-loop.

Although we can’t know the future with certainty, there are some things that can help us make a choice that will likely take our business in a good direction:

•  A goal.  If our goals are fairly clear, it makes options easier to sort out.  Will option A lead me to my goal?  If not, discard it and look at option B.  Will options B or C get me closer to my goal?  I think option B will, so that is the choice I’ll make.  Our goals are an important benchmark to at least give us some perspective about the path we’ll choose.  If you don’t have some idea of where you’d like your business to go, you’ll have a tougher time making choices.

• A financial proforma.  A proforma is a hypothetical financial look at the impact of a scenario.  Proformas can give us a rational benchmark for judging options in what can otherwise be a completely emotional decision process.  We might love to have a Super Bowl ad to blast our brand to the world, but a proforma look at the cost and potential outcome will probably give us the realism to decide on a more affordable and targeted marketing approach.  That might be oversimplified, but proformas are helpful for more complex decisions, too, like whether to add that new product line, or add or cut staff, or change a pricing scheme.  Even if you dislike numbers, a proforma exercise can be an eye-opener that brings relief to your decision-making.

• Collaboration.  Sitting and stewing over your decision doesn’t help the paralysis.  It helps to talk it out.  Engage your team.  Work it through with your business coach or other professional advisors.  Talk to your family and friends.  Don’t abdicate the decision to others, but at least let them provide you with perspective.  The best advisor might not need to say anything at all, but just be a great listener who lets you talk yourself into a decision.

• Courage.  I’m not talking about the take a bullet for a friend kind of courage.  Rather just the recognition that it is time to act, and get out of the state of paralysis that we’re in.  It is making a commitment and trusting in it, believing in it, and acting confidently on it so much so that a good outcome is assured.

Action leads to results.  So when faced with options, be aware of whether you are acting or hesitating.  My advice is to err on the side of action.  When you come to a fork in the road, take it!