I recently attended my Keystone Business Forum’s semi-annual Keynote event, which launched the Erie, PA branch of the Drucker Society, a non-profit devoted to education of business ethics as written about by the late, great Peter Drucker. The branch will be run by Kevin Smith, who also manages Vie Associates, a training and education company devoted to helping local small businesses grow and succeed.

The first question to be answered about business ethics is, given the directive to “first, do no harm”, is this, is your business living up to this standard and what are you doing to ensure that it is?

Although we cannot guarantee that what we do in business always helps our customers and clients, we can at least make a pledge that we will never knowingly do harm to our customers and clients. By committing to do no harm, we make a statement about the main intention of our business. We are giving assurance that the customer or client will, at minimum, not lose as a result of doing business with us. That goes a long way to build trust, which is ultimately all we must have, if we plan to stay in business for any length of time. Without trust, words are just items of propaganda which do not serve the customer’s interest. If your word cannot be believed, they certainly won’t trust your product, or your service.

To commit to doing no harm, the business owner or the manager needs to take a fresh look at every part of the business, find out what actually goes on, randomly call customers, and basically protect the asset of trust, which is easier to build than it is to re-build. Find ways to find out what goes on when the boss is not looking.

Effort and resources spent on adding to the customer’s experience are wasted if the basics are mishandled and trust is broken or is not consistent. So, is your business living up to this standard and what are you doing to ensure that it is? Get to work ON your business, hire people to work IN it.

CASH FLOW

What is more important to your business than cash flow? Ultimately, it all boils down to this, right? After all, it’s the reason you got that entrepreneurial itch in the first place. It’s OK to admit it. Without profits and cash flow, you’re out of business and a lot of people are out of work. Your most important job is to manage the finances of your business to ensure cash flows properly. Getting this wrong is what kills businesses, it’s how they die. You want to live and to prosper. That’s the spirit that made this the best country on the planet.

The problem with using your books to tell you how your business is doing is that accounting can only show you the past. Where you’ve been. History. It’s like driving a car by looking in the rear view mirror.

To see the future and not the past, you need to turn around as a business owner and look forward. The future of your business’s profits depend on decisions, actions, and directions you will take today. You cannot do anything about the past. You can only affect the future. That’s your job.

Maybe you’ve tried to do a budget with your accounting software or maybe you made a budget from scratch with Excel. The problem with traditional budgets is that in practice, they are actually not very useful. Oh sure, they are good at pointing out (all year long) what numbers you got wrong. Yeah, that’s real helpful. Chances are, if you’ve done a budget, you abandoned it after a while anyway.

I’d like to introduce you to a different kind of budget. In fact, I don’t even like the word, budget. Budgets are static. Boring. My process is dynamic. Alive. I prefer to call this a cash flow plan. Let me show you why it works.

As I say, it is a dynamic process. Start by developing a base 12 month, side-by-side, monthly plan. Revise, refine, and tweak it. Update it after each month with your actual numbers. There are many variables, like how you collect your receivables, how you pay your payables, how seasonal your sales pattern is, that go into this base plan. I have developed business budget forms to give you the tools to gather the information needed from your historical bookkeeping.

Once the base plan is developed,  go over the plan carefully to check for errors and to revise it. For example, unless a plan has ALL the elements, it’s no good. Just forecasted P&L’s or Income Statements is not enough, you have to do forecasted balance sheets too to make sure the P&L forecasts are working properly and then you have to look at the forecasted cash flows- now we’re getting somewhere!

Do you see? It’s the CASH FLOWS that really matter!

Imagine it. You will be able to spot a cash crunch months in advance. You will see where your money will come from and where it will go. You will see where the drains on cash are. You will see where you can save money. YOU WILL SEE THE FUTURE, NOT THE PAST.

A base plan of side-by-side 12 months of P&L’s, tweaked to be the best it can be.

Numbers replaced each month with actual results. More accurate.

You should get another set of eyes looking at your numbers. Can’t hurt.

You are seeing in advance, in time to do something about it.

You are finally looking forward, where you can have an affect, and seeing more clearly.

Learn more at www.10minpay.com/cf

Let me know what you think by leaving a comment below.

Looking for a better job? Check out www.indeed.com. Great site, it looks at several sources for jobs, you just type in your job title and your location. You also can set it to email alert you.

On the other hand, if you are done with being a wage slave, I think a really good way to escape Dilbertland permanently is to start and build up a business WHILE you are still working for the man. What do you think? Sure, it’s hard. You’ll work your ass off, but it’s good work, you will know that what you are doing benefits YOU, doing work that is in the best interest of someone else is actually not very smart. The only benefit derived is the wage. Sometimes that’s just not enough. Life is too short to have spent it just working for a living wage, don’t you think? Well, then, get off your ass, grow some snickers, and go do something with your life! You’ve got one shot at this thing, this ain’t no dress rehersal!

I’ve read other blogs that seem to whine about how hard it is to give up the salary handcuffs. Don’t you believe in what you do? If you have something to sell that you REALLY believe in, and you KNOW it is a great value, then you should have success getting out there and selling it.

So what if at first you don’t make much money? That’s why, in my opinion, the first thing you need to do is get your personal finances in better shape so you have the freedom to act. That’s why if you are so inclined to start a business while working for someone else, getting control of your spending is priority one. You need to be able to live on very little AND build up a FU fund.

Let me know what you think by leaving a comment below.

Why do small businesses fail?

If you think you know the answer, send me your answer in a comment.

I already know the answer, I want to see if any of you out there know the real triggering event. I’m not talking about owners abandoning the business, I’m talking about they got out the paddles, shouted “CLEAR” and it was no use, the patient died… WHY?

Bad starting idea, lack of perseverance, those are solid reasons why a business does not take off or ever get viable, to be sure. If nobody likes your product or service very much or you don’t stick to marketing it, which can take 2 years of solid effort to see results, the business could flounder. I am looking for the actual triggering circumstance that makes a business go under. There are many things which could bring it to that point, but only one tangible circumstance…

Let me know what you think by leaving a comment below.

http://www.youtube.com/watch?v=iivL4c_3pck

Go ahead, just give it a listen. Obama in his own words describes the challenges of actually re-distributing the wealth. He laments that the civil rights movement did not address it. He says the courts would never find it constitutional, but legislatively and administratively, it can be done!

Just great, folks, he has a plan how he is going to bring “justice”. He is going to play the role of Robin Hood. He (just who the hell does he think he is anyway?) is going to take by force, the wealth of one free citizen, and redistribute it to another (soon to be slave) citizen, who did not earn it. I say this as if it were not already happening, I know.

We will potentially lose that which made us, as a nation, made us grow and surpass nations which have been around centuries longer then we have. Why do you suppose our economy is greater than all the others? Free people, freedom of capital to move where it is best put, incentive to work your butt off. Under socialism, there will be no incentive to succeed.

Obama talks in this very revealing tape about how he regrets that the founders only limited what the government could do, the constitution largely states what the state can’t do. Yes! That’s the point! A government too powerful is dangerous! Let me repeat what I have said before, we need government (all of us) to help those who cannot help themselves, and to defend us militarily from people who want to kill us. We need government to coordinate the big stuff, building roads, setting guidelines for health and safety, and so forth. Beyond these, we need government to get out of the way. And we certainly do not want government as nanny. Are we incapable of self rule? Are we little children?

People, I hate to tell you, YOU are responsible for the way your life turns out. Not the government. You want better circumstances in your life, then turn off the television and go do it! Change is possible, and it starts and ends with you making change happen in your own life. Why would you sit around, waiting for the government, or someone else to make things happen in your life? Go make it happen!

Let me know what you think by leaving a comment below.

Got me a spankin new website for my little biz, check it out: www.10minpay.com

It’s hard to imagine that time- years ago, before the internet became a force, when small business was confined to their own local market, forced to purchase costly advertising in a shotgun attempt to gain some recognition. It seems like the dark ages now when I think back. Not a good time.

Now any kid with a dream can create a presence, a storefront, a giant ad out there on this “series of tubes and pipes” and reach way beyond their neighborhood.

I am promoting a new emphasis now to my little payroll service, it’s called “10 Minute Payroll“. The old business name, “Van Cleve Payroll”, is like what Gerber describes in The E-Myth as an infancy business name, named after me, so no one forgets who the boss is, and it states what we do, payroll. Who it is and what we do. It’s how most businesses start out. 

A small business that grows up successfully has a different perspective. The successful perspective is from the customer looking at the business which supplies the need. Most small businesses that stay small are oriented the other way around. Here’s me. Here’s what I offer for sale to you. Please buy my stuff.  

Not very effective anymore. Sure, in the dark ages, you learned about a business by what advertising reached you. Your world was your locality. It was small. You didn’t have many choices. Today, we are so bombarded with advertising, we now ignore it. We hit “skip” on the Tivo. It’s everywhere and so we ignore it. We also can find just about anything we want. It’s out there, and we know how to find it.

Today, if we want something, or want to check into something we’ve heard about, we Google it, or we ask someone we trust, and they tell us or they Google it. 

A website works better than shotgun advertising because it works the other way around, people type in what they are looking for and find companies that have it. In the old days companies that had stuff advertised hoping to find someone who wanted it. The new way is way better. It’s also a heck of a lot cheaper. So now the entire monkey-trick is to be found. 

Anyway, my new emphasis is from the customers’ perspective, not mine. It’s called 10 Minute Payroll because that’s about all the time my customer has to spend on payroll, 10 minutes. That’s at least a 90% reduction from doing it yourself. I’m workin on the other 10 percent! 

I hope that anyone looking to not have to do the non-profit chore of payroll anymore, or that is unhappy with their current payroll service, will be able to find my site, get some good information about how the service works and what it costs, and gives me a shout. 

Exceed Expectations.

Under-promise and over-deliver. This is so easy to do, you should be able to do this instantly, today. With the next in-coming phone call, with the next e-mail inquiry, with the next bell jingling of someone walking through your door, do it. Make it company policy. Now. Forever.

Ponder a little bit on the psychology of how it works. If someone tells you your product will be delivered on Thursday, but does not show up until Friday, you are very disappointed. If they promised it Saturday and it shows up Friday, you are elated with their great service! The difference is just what was promised by YOU.

You are in control of what you promise. DO NOT just tell people what you think they want to hear. Lie to them! Always tell them it will later than it will be, more expensive than it will be or not more at least. When you say you will get back to someone by tomorrow, get back to them this afternoon.

This is so easy to do, you need to just do it.

Let me know what you think by leaving a comment below.

I feel a rant coming on….

In this day and age, how can people with small businesses be so damn stupid? In ancient times 50 years ago your business existed fairly cut off from the rest of the world. You would treat customers badly and maybe you got away with it because you were the only provider in town or you lived in a large populated area and could rely on new customers all the time. People were connected only to the extent they talked to each other. Today we have outlets to connect and share information. We can add our ratings to just about anything we want now, and it’s getting more and more connected every day as more and more people who are not afraid of technology join in and become the norm.

When you treat someone badly and they go away and you never hear from them again, do you seriously think that is the end of it? Are you THAT stupid? Yes, yes, I think you must be. Don’t you understand that when you mess with people today, as it has been always, you set in motion a negative advocacy? People who are not happy with your little business will be out there spreading the word, the negative word, to DOZENS of people, every chance they get!

They will often go out of their way to spread the negative word about you, free of charge. If your category of business comes up in conversation, even years later, they will strongly encourage others not to do business with you. And people listen to people.

Negative word-of-mouth (NWOM) is the stupidest thing you could possibly set in motion. It cancels out the positive advertising you are paying good money for because one is being said by you, which is suspect, the other is being said by someone who has dealt with you, which is almost always believed instantly.

A rule of thumb I used to hear all the time was that someone that was happy would tell like 5 people about your business but someone that was ticked off would tell 15! There is a part of us that values highly this social contract between us, we help each other because we want our opinions to matter, and when someone without a vested interest says something, if that person is credible, we accept it as fact.

The difference today is that we have so many ways to get the word out that negative publicity can spread within hours to a much wider range of people than was ever possible before. Do you think it was very smart of Verizon to piss off Seth Godin?

(http://sethgodin.typepad.com/seths_blog/2008/06/learning-from-f.html)

At the risk of generalizing, home repair contractors are the worst. You call and maybe you can get someone to show up or even to return your phone call. The smaller the business, the worse they are, and if it is a one man show, I would say 8 out of 10 either never even return your initial phone call or they cheerfully set up an appointment but then never show up and never call again.

Tell me your thoughts, am I alone in this?

“Make yourself necessary to somebody. Do not make life hard to any.” Ralph Waldo Emerson

Let me know what you think by leaving a comment below.

Take away the risk of doing business with you.

Today, we are marketed to constantly and everywhere it seems, and as a result people largely ignore hype. The ad rarely generates the interest by itself, a person has to have been somewhat interested  for the ad to even get their attention. Once you have someone’s attention, the first thing they think is, “can I believe this”? If your marketing offer is believable, then the next thing they think is “how much”? Obviously, if the price is too high, they bail. Assuming the price is reasonable, NOW is where the important step of taking away the risk comes into play. By removing the risk you are getting them to say, “OK, why not!” The decision process I just described takes place in about 2-10 seconds! 

Is this something I’m interested in? NO-YES

Is this believable? NO-YES

How much?

Is it worth it? NO-YES

Decision made. Time elapsed, seconds.

Take away the risk of doing business with your small business. Take away ALL risk. Offer a 100% money-back guarantee or even a 150% money-back guarantee. It’s very simple, people don’t want to be stuck paying for something that is not what they expected. Remove the barrier. 

For my payroll service business, Van Cleve Payroll, the fee I charge with each payroll is in the form of a printed check, made out to my company, delivered along with their employee’s paychecks. I tell them that if they are unhappy, if they feel I did not earn the fee, to please tear up the check. All other payroll services, as far as I am aware, automatically deduct their fee and the customer has no say. I give them the control. That’s my way of removing the risk. 

For every person who starts a business of their own, or has a small business, Michael E. Gerber’s book, “The E Myth Revisited” should be a required read. I’m going to post once a week on ideas from this book. For those who have never read it, I’ll boil it down for you, although you should get a copy anyway, I’m only going to talk about the lessons, yet there is much more. Gerber is a wonderful story-teller. For those who have read it, this will be a refresher of a wonderful business-self-help classic that stands the test of time, and it is one of those few books that you find yourself reading over and over…

This week lets see how the concept of a franchise started and how Gerber suggests adopting the ideas for your small business.

Franchising has been around for a very long time. Coca-Cola and General Motors have always franchised as a way to increase sales over a wider area. What they franchised was their name primarily and in the case of Coke, the right to combine their syrup with carbonated water and bottle and distribute the product. A different thing started in 1952 when Ray Kroc, a milkshake machine salesman, walked into the MacDonald’s brothers hamburger joint and became instantly enamored of the efficiency of the processes he saw. He struck a deal to franchise the entire business, right down to exactly how hamburgers were cooked, how the pickles were arranged. Ray, who was modestly successful as a milkshake machine salesman, became a huge success when he grasped the bigger picture and was able to share (and sell) his enthusiasm for the entire business format to others. Ray had the insight to see that he was selling the business, the way it operated, the way it looked, the way it made money. He wasen’t selling hamburgers! The business itself was the product, it was a money machine! He was selling money machines! Later he bought out the MacDonald brothers, changed the name to McDonalds and the rest is history. So, how does this apply to your little business? What Gerber prescribes is to treat your little business as if it were a prototype of a franchise, like a McDonalds. Not necessarily to actually franchise it, but to treat it like one. What it forces you to do is to look at your business differently. To look at it as the product you are selling. That’s the secret, it’s not the commodity your business sells that’s important, it’s the way it sells it! It’s the series of systems you are taught to establish that make up your business model.