|
|
 |
Accountability:
What's really standing between you and success?
I truly believe that you can
accomplish anything you want in this life...if you are willing to pay
the price. The problem, honestly, is that most people don't know the
price of a good life, full of fulfillment and joy and prosperity. In
this newsletter we discuss some of the nuts and bolts of business
success. But if you don't know the true price of these items the
likelihood that you will implement and use them on a daily basis is
zero. So I'm going to give you the price now, and you can decide
whether your life is worth the investment.
The price for a good life is
ACCOUNTABILITY. That's right, to have a great life, full of everything
and everyone that you truly desire requires that you commit to
accountability. In my business people pay me lots of money just to hold
them accountable. They know that accountability is the secret to their
success. I really enjoy this part of my job, and I enjoy seeing my
clients achieve success on a level they never dreamed possible. But
what I am talking about here is accountability on a different level. To
be truly successful and happy (and we're not talking about just money)
you can't hire someone to pay the accountability price tag for you. You
must commit to PERSONAL accountability.
Personal accountability demands that you do three things.
First, take responsibility
for the actions that have created your present circumstances. We all
hear more excuses than we care to hear. The startling fact is that most
of the excuses we hear come from inside our own head. If you can't
accept responsibility for your actions, if there's always a good reason
why you didn't accomplish this, or failed to finish that...then you
will never be truly successful.
Second, judge yourself and others by results, not intentions.
We have a saying that "the numbers don't lie." In your life and
relationships "results don't lie." The best intentions never built a
wonderful marriage, a lasting relationship with one's children or a
great business. Results measure up, or they don't. Results aren't
sincere or insincere like intentions. Results aren't open to
interpretation. If you start to measure yourself by your results, and
you start to apply this same standard to others your life will become a
lot more genuine. People will know where they stand with you. And you
won't spend unnecessary time and energy trying to justify something
that didn't happen.
Third, develop a bias for action.
Most people are paralyzed by the fear of making a mistake or a wrong
decision. But once you accept responsibility for your results that fear
is much reduced. Action is the only way to achieve results. Action is
the only way to grow, personally or professionally. Action is what sets
you apart from everyone else. One thing that I have found that helps is
to tell other people what you plan to do and when you plan to do it. It
is no coincidence that I've told everyone in my family that I will run
another marathon in January 2008. They don't need to know this. They're
not my training partners. But the fact that so many people expect me to
run a marathon helps make sure my daily routine includes training.
If you're afraid to commit to something by telling others your
intentions there is a very good chance you don't have the internal
fortitude to carry through. We all need help, don't be afraid to ask
for it.
On that note I will make one
final comment about accountability. You must surround yourself with
people who will support you rather than tear you down. If there are
people in your life who are constantly skeptical of your abilities, if
they doubt you, or ridicule your ideas...by all means get away from
them. The world is full of good people, supportive people who will help
you achieve your dreams. Life is too short to spend time with anyone
else.
I am passionate about helping
business owners achieve their dreams and it tears me apart when I see a
person with so much opportunity give control of their life over to the
whims of the world because they won't hold themselves accountable. By
the same token, I have sat in the room with startups and I've known
instantly that they will succeed, no matter what, because the owners
are supremely accountable to the toughest boss any of us could ask for,
our self.
If you are interested in improving your results and the results of your business please give me a call today. |
|
A Big Thank You
 Last month I was named to the Gulf Coast Business Review's 2007 40 Under 40 class.
This was a big honor for me personally and a great validation of our
work here at Axiom. However, none of it is possible without our
clients. For those of you reading this who are Axiom clients I send the
sincerest thank you for your business and support. We love working with
you and count your successes among our greatest achievements. Thank you
for making our success possible.
|
|
|
Dear Clients and Friends,
About 70% of my time is spent in front of
small business owners discussing the challenges they face on a daily
and monthly basis. Over and over again we end up talking about three
critical, essential issues that are keeping them from realizing
success. I call these "The three biggest mistakes small business owners
make" for the simple reason that we see them so often. They are:
- The failure to build detailed financial plans.
- The failure to measure results.
- The failure to focus.
This month we are going to spend time on each
of these areas and show you how to turn these common weaknesses into
opportunities for your business. |
|
Cut to the Chase:
How to build a detailed financial plan
Startup
businesses and business boot-camp attendees spend an awful lot of time
developing business plans. What happens when a banker or investor
receives one of these nicely bound tomes? That's right, they skip the
mission statement and the org charts and the marketing studies and go
straight to the projected financial statements. Unfortunately, these
outsiders often pay more attention to the projections than the owners
of the business. Time and again I am astounded that more businesses
don't have a detailed financial plan.
So
where do you start. Most owners don't have a plan because they don't
know how to get started. The first thing you must do is put together a
sales projection, month-by-month, for the next year. Now, I'm going to
make a strong statement, but it is one I believe to be true. If you, as
a business owner, cannot compile an intelligent sales forecast for the
next 12 months you shouldn't be in business! I'm not implying that your
sales forecast must be 100% accurate, or even 50% accurate. What I am
saying is that if you don't have a sense of your market, your industry,
the local economy and your ability to deliver your message then you
shouldn't be in business. I have told this to prospective clients
before, and they don't like to hear it. But it's true. An owner who
says "we just can't forecast sales in our industry" is more a gambler
than a business person.
Your
sales forecast should detail large contracts, seasonal fluctuations and
income from different product lines (service contracts vs. product
sales for instance). You must also explain how growth over prior year's
numbers will be accomplished. Presumably you must do something
different to achieve different results. You need to explain in a short
paragraph what that difference is and how it is expected to affect your
sales.
Once
the forecast is finished you need to understand the costs involved in
making your product or delivering your service. For a manufacturing or
production company these are the costs of materials and labor. For a
service business this is primarily salaries for the necessary staff
positions. You may also need to factor in the cost of building up
inventories or purchasing larger quantities of raw materials to achieve
the costs you expect. Through the process continually ask yourself "If
we sell X amount of product how much are we going to need to produce,
when do we need to produce it, and how much is it going to cost us?"
The process sounds simple but once you factor in order lead times and
inventory requirements to meet your sales figures the project gets a
little more complicated. Leverage your bookkeeper and CPA to help put
together solid numbers that make your revenue forecast achievable.
Next
you will project selling expenses. These are marketing expenses, the
cost of sales people, advertising and all the other expenditures
necessary to make your sales forecast happen. In a business plan they
call this the marketing plan, but in your financial plan it is simply
the quantification of all your sales and marketing assumptions. Again,
look at your sales forecast. How much product do you plan to sell next
month? What has to be done in order for that to happen? When does it
have to be done and how much is it going to cost? Write your
assumptions down in short sentences and put dollar values next to them.
This part is critical, otherwise you will end up with a bunch of
numbers with no story behind them. When it comes time to re-evaluate
the plan you will have to start all over again rather than just
amending the parts that didn't match your assumptions.
Finally,
you will project overhead costs. What does it take to keep the doors
open? Administrative and executive salaries, rent, utilities,
insurance, etc. If you are already in business these costs are easy to
determine. If you haven't started yet make sure you brainstorm the list
with someone who is in business with a facility and employee count of
similar size. Make sure you factor in annual increases for rent and
insurance premiums and all of the other costs that increase with
inflation every year. Also determine the months when these payments
have to be made. Managing cash flow will be important and staggering
payments can go a long way toward helping you sleep at night if times
get tough.
When
you've finished the tasks above you will have a projected income
statement. Now it's time to sit down with your CPA and build projected
balance sheets and statements of cash flows. If you do all of this you
will be way ahead of most of your peers. Now all you have to do is
measure results and refine the plan as you go. |
|
Discipline Yourself:
The key to measuring results
This
one is simple. If you are going to measure results in your company you
must do it regularly, consistently and without fail. In my experience
there is a tried and true method for most business owners to accomplish
this.
First,
determine the date when your financial books will be closed each month.
Usually it works best if this is a moving date that provides a
consistent time frame to finish data entry and adjustments. A range of
seven to ten business days from month end is usually sufficient. But
don't pick a range, pick a day and stick to it. If you decide the books
will be closed by the eighth business day after month-end this day
becomes set in stone. Vacations shouldn't detract from it. Sickness
shouldn't be an excuse. Computer failures don't stop you. Nothing. From
now on your books will be closed by the eighth business day after the
month-end.
Now
that you know when your books will be closed outline the exact closing
procedure that will be used every month. This was covered in last month's newsletter
under Accounting Best Practices. Enlist the help of your CPA and
streamline the process so that no one is scrambling two days before the
deadline or working late hours to finish everything the night before. A
checklist is absolutely critical for timely and accurate closing of the
books.
The
second thing you can do when you know your books will be closed on a
certain day is circle the day on your calendar and schedule your other
appointments around it. Your CPA, your banker, your key employees and
possibly even some customers will need information that becomes
available on that day. Be pro-active, tell them it's coming, when they
can expect it and make a commitment. Now, you have all the more reason
to make sure you don't miss that deadline.
With
timely financial information you can measure your progress against the
financial plan you have already developed. But there will be some
non-financial information you want to capture as well. Restaurants may
want to compare covers this week to covers in the same week last year.
Sales calls made, proposals delivered, overtime worked...these are all
candidates for monthly measurement. Some businesses even do this type
of measurement along with a rough estimate of financials each week. In
any case decide what other, non-financial information you need to
measure and put the systems in place to capture it.
Finally,
systematize your review process. The easiest way to do this is to have
a standing staff meeting on the day the numbers become available.
Measure your progress, discuss changes that need to be made to the
financial plan and make key members of your team responsible for
reporting on progress or changes in their respective areas of
responsibility. This is key! You must DO something with the
measurements you are taking. Without action there is no reason to do
all this work.
If
you put together a monthly measurement process we can almost GUARANTEE
a 10% improvement in net income. I won't guarantee it completely but I
will say that I haven't ever seen a case where disciplined measurement
didn't result in AT LEAST a 10% improvement to the bottom line. And in
no case have I worked with a top performing company where these
practices were ignored. |
|
Focus:
Spend time on your highest value tasks
 This
is one of those parts of your life where you really will accomplish
more if you do less. Let me explain. Most business owners got to where
they are by doing all the jobs in their business. From selling the
largest customers to taking out the trash on weekends these people take
great pride in their role as chief cook and bottle washer. But problems
start to develop when owners stray from their highest value tasks and
spend time on things they could hire (or have hired) others to do. A
motel owner who cleans rooms instead of hiring a competent head of
housekeeping is not doing the business any favors. Until these owners
get out of their own way the business will stagnate and sputter along
while they work very, very hard to accomplish meager results. Here's
how to break the cycle.
First,
fill out your org chart as if the company were completely staffed. Put
down every position that is required in your business, whether you have
a person for that position right now or not. Next, put a name in each
box for the person who is currently responsible for the duties of that
position. If you're a one-man show your name will go in every box. If
you have only a couple of employees then chances are your name's will
show up in several boxes. Now, start at the bottom of the org chart and
document how that job is done. As you define a job and build the
processes used to perform that job you will eventually reach a point
where you're ready to hire someone. When that happens move up to the
next position and start your documentation and processes all over again
for THAT position. If you've read the E-Myth by Michael Gerber this
should all sound very familiar. It's not my idea.
Another
exercise we put clients through is to find out what they absolutely
love to do in their business. This will usually be their highest value
task, and the thing that will bring in the most revenue for the company
over the long run. You must pursue your business with a passion and if
you don't love what you do that becomes very difficult. Once you know
what your highest value task is you need to ask yourself "What is
keeping me from doing this 100% of the time?" If you love working
with customers and you find yourself in the back stocking shelves
that's a serious problem. Why haven't you hired a stock person? Is it
because of finances? If so we can eliminate that worry by building the
position into your financial plan so everyone knows where the money is
coming from for the hire, how much we can spend and when the start date
should be scheduled. You see, there can be no excuses. If you truly
want to be successful you must take responsibility and find solutions.
The
final piece of advice I have regarding focus is to get help. As alluded
to above, you should be focused 100% on what you do best. Everything
else, EVERYTHING ELSE, should be delegated to others. For everything
you can't do internally use outside professionals such as CPA's,
attorneys, business coaches, insurance agents, financial advisors,
recruiters and staffing specialists. Make a conscious decision NOT to
do things that take you away from your core task. Get in the habit of
saying "No" when people ask you to do things that aren't part of your
job description. This is very difficult for most business owners
because they want to help their employees, they want to be accessible,
they want to model humility. These are all great qualities but if they
pull you away from your highest value task your business will suffer.
Discipline yourself to do what you do best and help others
understand that by increasing your focus the business will be much
better off. | |
|
|
|
