Article Comment: Advisory Board Tips

Check out this article "Tips for Creating an Advisory Board" from the FOX Small Business Center. http://tiny.cc/l0mp5

I agree entirely with the author on Boards of Advisors with one exception; I do not agree that members of the board should be expected to work for free. I think that there should be a board fee paid for each meeting and any extra work that they do. It may not be much, perhaps $500.00 per meeting. Without a fee being paid, you frequently just get what you pay for.

Top 10 Resolutions for a Family/Privately Owned Business

Making New Year's resolutions are always a good idea. However, most of the time breaking them is just as easy as making them. I have read where up to 90% of all resolutions fail. However, there is no reason for this to happen. What it requires is discipline, commitment and resolve.

I will attempt to list the resolutions in categories with a short commentary as to the importance of each:

1.) Finance:
Do you create annual budgets? If not, you are missing a great opportunity to look at your business. The list of advantages is just too long. If you don't do it your competitor(s) probably do!

2.) Review your financial results:
You can see lots of trends and give yourself the opportunity to make adjustments and changes.

3.) Inventory:
When was the last time you really checked your inventory for obsolescence? There is lots of money on those shelves that I am sure could be put to better use than just sitting there in the form of unsaleable product.

4.) Your Banker:
In my opinion it is a very good idea to be proactive with your banker. Invite him/her for lunch and give an update as to what is happening in your business/industry. This goes a long way in a relationship especially if you run into a rough patch.

5.) Strategic Planning:
Do you do Strategic Planning now? If so, great! If you don't you should give it serious consideration. It really helps in looking at your business into the future. It requires looking at your competitors and what they are doing. What your product lines/services are offering your customers, or not. When was the last time you asked a customer what he/she wants, and how are we doing in providing it? It gives you a road map into the future. It requires including your managers so that they take ownership to it. Strategic Planning is essential to make you a better competitor on today's marketplace.

6.) Management by Objective:
This is a great tool to get all of your employees on the same page. Each individual, each unit and the company as a whole will all be working in the same direction to reach the stated goals. If the goals are reached everyone shares in the success. If the goals are not attained everyone shares in the failure. Great way to create an atmosphere of TEAMWORK!

7.) Social Media:
This is the hottest marketing tool in the new decade. If you don't have a website get one now! If you haven't updated your website lately do it! Are you on Facebook? You Tube? Twitter? LinkedIn? If not, you had better learn about it before your competitors do. It will put you at a distinctive disadvantage of you don't.

8.) Board of Advisers:
For many family or privately held businesses the thought of having outsiders look at your confidential information is just not an option. Wrong! It could be the best thing you have ever done. I didn't do it and I still regret it 20 years later. Outsiders look at your business differently. They would give a fresh perspective and make you look at your business differently as well.

9.) Management Meetings:
Commit to monthly management meetings. Schedule the same time every month so everyone knows where they will be at a certain date and time. Have an agenda and give everyone a little homework. Works great.

10.) Communicate:
Maintain two way communications with your employees and your employees to you. This will create an atmosphere of working together and giving your employees an opportunity to let you know how they feel, make constructive suggestions, etc.

And here is a BONUS resolution:

11.) Visit Your Customers

The best way to learn about what customers want is to ask them. When I would do store visits, I always introduced myself to customers and asked what they liked and didn't liked; what merchandise they would like to see in the store; and ask about any service improvements we need to make. Whenever a customer took the time to call the office to complain, my policy was that all those calls were put through directly to me. The customer always appreciated this - and I made sure that the problems or issues were addressed immediately. You need an unfiltered link with the customer - so you have a direct view of a customer's needs, wants and desires. This can be applied to any type of business.

That's it! Simple isn't it? I am sure you may be doing many of these things already. Try doing them all. It can only make your company better and more competitive.

Have a Happy, Healthy and Prosperous New Year.

Use Your Business Microscope in Bad Times

I have a client who's business nearly folded after the bank collapse in 2008. His phones stopped ringing, receivables began to slow down, payables just kept growing! Yikes! He wasn't able to meet his debt obligations. What do we do now?

Instead of panicking we began to put every aspect of the business under a microscope. Where do we cut? How can we reduce our receivables? How do we control our expenses better? Should we spend more on marketing or cut back?

Here is what we did:

• We cut our payroll to the bone and then a little more - more productivity, less people.
  
• We went to our customers, explained our cash crunch and put as many of them as possible on credit cards. That reduced our aged receivables dramatically.
  
• We went to every vendor and neogiated better terms when ever possible. Admittedly it didn't work all the time.
  
• Not one penny was spent without the knowledge and consent of the owner.
  
• We spent a great deal of time on our monthly financials and cash flow projections and watched our cash daily.
  
• Our major lender stayed with us all the way!
  
• We put on a dramatic push on marketing. We hired a new sales person. We visited every current and potential customer numerous times. The theory being the economy will turn around and we want to be there when it happens.
  
• We came up with some creative ideas to help our customers with some of their challenges.

One and half years later our sales are up greater than 30% month to date. We are having to purchase more equipment to keep up with the demand! We have been cash flow positive six months now and getting better every day. So what does this mean? The microscope works!

Here are some good articles that focus on this area:

A S.Y.S.T.E.M for Thriving

Go Big or Go Home

How To Better Manage Your Cash Flow

A Board of Advisors May Be the Best Thing You Ever Did!

For many privately held companies the thought of having a bunch of "strangers" meeting with you on a quarterly basis to look at your company and your financials and question what you're doing is almost unthinkable! Let me make this statement:


Not having a Board of Advisors was probably one the worst decisions I made when I owned my own business!!

I always said to myself "who knows the business better than me?" Answer: A lot of smart people.

I'm going to have a group of people tell me how to run my business? - YES!


Very briefly: with the correct people on your board, they can provide for you the following:

• An objective view of how your running your business
  
• An objective view of your strategy
  
• Share with you their own experiences dealing with similar issues
  
• Objectively evaluate your management team
  
• Objectively evaluate your strategy and make suggestions
  
• Provide contacts and experience in almost every area you may need for the growth of your business

In order to get the best out of each and every board member and every meeting, I recommend that you pay board members. Why? Because you always get what you pay for.

Here is some additioinal information on the mechanics of assembling an advisory board:

- Are there Empty Seats at Your Management Table?

-10 Tips on Setting Up an Advisory Board

Feel free to contact me with your questions about advisory boards and how to make one work for you.

Managing Your Assets

There are three very important assets that any owner must manage in order to have a successful business. Those assets are:

• Your Inventory


• Your Cash


• Your People

Your first reaction maybe "no kidding"! However, think about it for a moment.

• Is your inventory giving you the turns that you need to serve your customers without being too large?
• Are you making sure the inventory is clean, fresh and saleable?
• How many times do you check the physical to the book inventory to make sure you are getting the correct information?
• Are you watching your receivables to make sure no customer(s) get too far ahead of you?
• Are you stretching your payables without getting your vendor(s) upset with you?
• Are you managing your people so that they are giving you all that is required to be successful?
• Do they know what is expected of them?

Think about these questions. Spending some time answering these questions can pinpoint the areas of your business that can be improved for better results.

Here is some additional food for thought:

Do the 5 Minute Review of Your Financial Statements

Corporate Identity/Branding

What is "Corporate Identity/Branding"? I have always defined it as the "nonverbal communications" between you (the company) and your employees and customers.

Thirty years ago I attended an industry seminar where a presentation was made on the importance of a strong corporate identity. We were a very small company in a very competitive space - retail drug. I then decided if we were going to not only survive but flourish against our competitors we were going to have to do something bold!

I hired an international corporate identity firm. We discussed who we are, what we are and what we wanted to be in the marketplace. A whole new identity was created for us. It differentiated us from the pack. We were highly recognizable in our competitive area. We looked like a national chain! Our business grew rapidly!

We were the smallest client this firm ever had. It was expensive but worth every penny.

After we sold the drugstores to CVS, I bought a small chain of pet supply super stores. I did the same program of corproate indenty/branding. It worked just great! We became the largest privately held chain in New England. We sold it two years later, to PETCO Animal Supply of San Diego, and got a 10x return on my money!

Here is a document to take a look at: Protobrand 25 "New England's Most Powerful Brands". This link is an excellent example of how important branding is to a business.