April 2011
4 posts
Preparing For a Recovery
Most businesses are beginning to recover from “The Great Recession”. However, how many business owners are proactively planning for the recovery? “Plan for a recovery?”, you may ask. Don’t you just need to get through the downturn and when things get better the ship rights itself automatically? Sometimes that’s the case but in some situations a recovery can lead to a business failing. By now...
Which Medium to Use for Communication and When
Business has changed a lot since I got my first full-time job after graduating from college in 1976. When I got my first real job there were basically three ways of communicating with our customers: in person, over the phone, and believe it or not youngsters, via letter. In today’s digital world there are a lot more ways to communicate with customers but some modes of communication aren’t...
Reading List (Part One)
I got an email recently from a young man who graduated from college last May and is working in his family’s building supply business. He said that despite the construction downturn he really enjoys the business and wants to make this industry his career. He went on to say that he was disappointed to find out that most of what he learned in college hasn’t prepared him for being involved in a small,...
March 2011
6 posts
Your Associates Don’t Listen To What You Say, They...
As I type this my wife and 21-year-old daughter are in Vienna, Austria and I am in my office working. Our daughter is doing a semester abroad in Prague and my wife is visiting her for spring break and they are doing a three day trip to Vienna. You may be wondering why I am sharing this with you as I doubt you care for a status report about my wife and daughter. The reason I am telling you this is...
How to Compensate Sales People
Since graduating from college in 1976 and immediately going into outside sales selling roofing products in the state of New York, and then moving into sales management in 1979, I have seen a wide variety of sales compensation plans. I have seen an even wider variety of theories about compensating salespeople published in trade journals and newsletters published by consultants and at conventions....
Terminations
One of the dirtiest tasks that any manager has to do is terminating someone who reports to him or her. Most managers do anything to avoid a termination because they find it so unpleasant. I, on the other hand, dread layoffs. Laying off a good person due to a slowdown in business that is not their fault is the task I find most unpleasant. After 35 years in business, terminating people who deserve...
The Small Order Problem
Following up on my previous post on customer profitability, just as many business owners and managers don’t know that some customers are unprofitable because of too many transactions, many aren’t aware that small orders are eating them alive. By this I mean that most businesses have a large number of small orders that generate less gross profit than the cost of processing the order. As I mentioned...
Do You Really Know Who Your Most Profitable...
Most businesses evaluate their customers by looking at a ranking of who buys the most from them. Some, more enlightened businesses, look at a ranking of who generates the most gross profit among their customers. While I agree that it’s more important to evaluate your customers on gross profit than revenue, neither is the best way to ascertain who your most profitable customers are.
Most computer...
Toxic Customers and Suppliers
What do I mean by a toxic customer or a toxic supplier? Let’s examine toxic customers first. Most of us who own businesses grew up hearing that the customer is always right. While that is correct most of the time there are exceptions. Do you have customers that are always “shopping” you against your competitors for a better price? Have you found that almost always those same customers pay late?...
February 2011
4 posts
Telephone Tips
The telephone is a vital business tool but most people don’t put a lot of thought into how they use the telephone. Here are a few tips about how to use the telephone in business.
Leaving a message. One of my biggest pet peeves is when someone calls me and leaves a message but I can’t make out his name because he mumbles it. Also, I can’t return many calls because the caller says her phone number...
How to Get Ahead in Your Career
Over the years I have had many people ask me how to get ahead in their career. Just like my selling tips in my last post, it isn’t rocket science, but it does take above-average effort.
Here are a few of my tips:
Arrive early and stay late. When my son, Thomas, was going to work for a large corporation he asked me for some tips on getting ahead in a big company. The first thing I told him was to...
Selling Tips
The early part of my part of my career was in sales and, much to my surprise, I excelled immediately. My first sales job was selling roofing materials to distributors in New York. I was 21, fresh out of college, and totally wet behind the ears. I tripled the sales of my territory from $800,000 to over $2.4 million in my first full year selling. It not only gave me an income that exceeded my...
Disaster Planning
I live by the phrase, “Expect the best but plan for the worst.” This philosophy has helped me avoid disaster in my 35+ year business career. There are a lot of potential pitfalls in business and in life and you can’t avoid all of them but you can avoid most of them with proper planning.
Here are a few things I do to protect against disasters:
Property and casualty insurance. This is no revelation...
Accrual Accounts
One of my early mentors taught me the value of a accrual accounts. When you own or run a small business the last thing that you want is for a surprise to destroy your earnings for a month or quarter. The more for which you accrue, the less your earnings volatility. Banks especially like to see steady, not volatile. earnings.
I suggest you set up accrual accounts for most, if not all of the...
January 2011
8 posts
Associate Recognition... on a Budget
In these times of belt tightening, how do you give recognition to your associates without it busting your budget? Everyone likes to feel appreciated, especially when they are doing more for less. When I was in business school we reviewed a study that showed the number one thing that employees wanted was recognition for a job well done. This was followed by opportunities for advancement, being with...
Developing Talent
I, and many business consultants such as the renowned Peter Drucker, feel that the most important job of a CEO is developing people. In my company I probably spend more time on finding, interviewing, hiring, managing, and in some cases terminating, people than anything else. As mentioned in a prior post, we send out a net promoter survey each quarter and our customers consistently rank us much...
Weasel Words
“Weasel words” are words people use to weasel out of a commitment or to avoid responsibility for something. I first heard this phrase from an attorney we worked with at one of my prior companies. I think it is a very fitting term. Whenever I hear someone use one of the below phrases I think of that name. Some of the weasel words that bug me the most are:
“To be perfectly honest with you”. I have...
Participating in Trade Associations
No matter business you are in, there is one or more trade association representing your interests. Are you active in any of the trade associations for your industry? I’m not asking if you belong to a trade association, I’m asking if you are active in it. There is a big difference between being a member of an association and being active in it. Why should you be active in one or more trade...
Turn Dead Stock into Cash
Any business with inventory has a certain percentage of that inventory that is dead stock or obsolete. However, most businesses let the dead stock sit on the shelves gathering dust for years. I prefer to turn dead stock into cash even though that means taking a P&L hit when you do it. I would rather take a loss on the P&L and turn dead stock into cash than hope someone will come in and buy...
Effective Complaining
Most of us don’t like to do it, but from time to time anyone involved in business needs to complain to a supplier or vendor about a problem. (Or you need to complain about a personal problem.) How you complain determines how quickly your complaint gets resolved, or if it gets resolved at all. As I mentioned in my previous post, I had a serious problem with my furnace in my home recently and I had...
