A Formula for Change

In pursuit of understanding why business owners are not always able to fix their businesses, I want to start with a Formula.  In fact, it is called Gleicher’s Formula.  This is a way of judging whether any change will happen within an organization.  Let me use what is a simplified form called the Dannemiller Version:

D  x  V x  F  >  R

Where D stands for Dissatisfaction;
V stands for Vision;
F means Fist Steps;
and R is Resistance.

Now if I apply this formula to most business books, they are really clear on the Dissatisfaction.  Most of these books are single topic-oriented about how to grow a company or have better employees or have customers lining up for your products and services.  Readers will self-select books around topics that are of interest to them.  There are over 20 Millions solo entrepreneurs in the United States, so there is a good sized market.

The Vision is generally pretty clear as well.  “Would you like to be able to never advertise your Products, Click Here to Find Out How!”.  Some books are not quite as clear about this, but they generally miss the point of Vision anyway.  Vision is all about how whatever change impacts the rest of your life.  Nobody wants to address this, because it is intensely personal.  A book can not interact with a business owner and find out how their life is different because of a change.  So, instead, it is all puppies and rainbows.

Finally, most books are very unclear in First Steps.  They talk about a grand idea of some sort.  But leave the implementation of the idea up to the user.  It is one reason that I actually have a very small number of books that I recommend to people.  I want to recommend books that don’t just sound good but give you a roadmap for implementation.  And it is an implementation where books very often fall short.  Well, it is not really their fault.  Books fall down because things happen in our business and our life.  Momentum gets lost and there is nobody to force us to carry on with implementing a change.  The change becomes forgotten and washes away.

So, you can see how many well-meaning books can simply fail to get results.  This is true even if they offer excellent ideas and information.

Have a great day!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!

Advertisements

Books about Business

I was thinking the other day about Business Books.  I have read many as have many of you.  Lots of innovative ideas, tips, and thoughts are in these books.  So, I ask myself:  “Why do businesses still fail?”  I think this is a fair question.  I want to explore this notion over the next several posts and talk about it.

I want to start with my business.   I work with several smaller businesses and meet many more.  When most people talk to me about their business what they want is a different result.  That part I understand.  They want More Revenue, Better Employees, More Time, or a Business Exit.  Pretty simple.  What many of them are unwilling to do is change what they do.  It reminds me of the saying by Albert Einstein, “The definition of insanity is doing the same thing repeatedly and expecting different results.”

Transformation of results is about Change.  Change is a much scarier prospect than failure it seems.  The good news that Change is a way to make things happen.  You can take control of what you want by planning a Change.  All good Coaches of any sort want to look at what will be achieved and helping people define that.  That is why we all focus on Goals and Vision.  Get a person or a business to define what they want and make it meaningful for them.  Once that is done, we just must help come up with a reasonable plan and ensure that there is progress along that plan.

I think that Sports Coaches are all about that.  What makes one team better than the other?  Talent is a key factor.  But so is motivation and the willingness to work toward a common goal.  We have all seen groups of people be a team.  We have also all seen them be a group of individuals.  That ability to get them to pull in one direction is Leadership.  Helping a group become a team and pull in a common direction is what a Coach does.  This includes Business Coaches like myself.

Have a great day!
Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!

Time and Process

One of the ways to make a business grow is to make it more efficient.  One method for that is to look at the processes within your business and seeing where the most time (and potentially dollars) are spent.  By optimizing your business processes, you will improve your focus on those items that are most important to your business.

Even the smallest businesses have at least 3 processes:  Attracting Customers, Delivering Products and Services, and Administering the Business.  For most small businesses will spend the vast bulk of their time in the first of those two processes.  They are either landing business or delivering it.  Business Owners spend a lot of time on what they do in their business and the industry that they are in.  I am going to attack the other primary process of all business Attracting Customers.

Attracting Customers really consists of 3 sub-processes:  Marketing (turning the Audience into Prospects), Sales (turning the Prospects into Customers), and Customer Retention (receiving additional Revenue from Existing Customers).  Each of these is somewhat independent of the other but can be improved by ensuring that the processes line up.  But let me focus down simply on the Marketing sub-process.  Are you clear on the channels that you use to market your business and how you expect the audience-at-large to become Prospects?  About how many Prospects per month are you expecting from each Marketing channel?  What is the out-of-pocket cost is there for each prospect?  What is the time required to receive the prospect?  How often does each type of prospect become a customer?

When you examine the results of these questions, you can begin to put numbers on the business.  By doing that, you can direct your time (the most valuable resource that you have) towards Marketing channels that give the best results.  Those efforts can, in turn, be understood in metric terms (How many appointments do I need to set in a week?).  You can see how you can look at your business and understand how the things that you do every day can drive bottom-line results.  Those best activities become those things to focus on for the future.  Lesser activities can be outsourced, re-engineered, or eliminated.

Doing that in your business gives you a head start on doing the most important things in your business.

Have a great day!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!

An Announcement

This week in lieu of my regular blog post, I am going to be talking about a new service that I am offering.  This service is called Board Room.  Board Room is a specific kind of Coaching Service aimed at smaller enterprises.  As I have worked with many of them over the years, I have come to understand that they value the Trusted Advisor that I bring to the table when I show up at their door.  Board Room is my way to encapsulate this service.

The core of Board Room is an Advisory Board.  This Advisory Board reviews a standard Board Package each month.  This will include Financial Results, Initiative Updates, and Key Events.  Once per quarter there will be a Strategic Planning add-on to the standard meeting.  These Strategic Updates are Annual Budget, SWOT, Marketing, and Operations.  Each of these sessions will help ensure that the forward-looking portion of the business is being managed efficiently.

My vision for Business owners is that they end up with a Strategic Partner to help them navigate the tough decisions and changing business environment.  By bringing in an outsider perspective, the owner can ensure that they are having a 360-degree view of their business and its state.  This will allow the CEO to make the best possible decisions for the business.

I know that the active Board process is new to many people.  To help businesses down this path, I will provide a Board Ramp-Up Package as a first step.  This will be separate and can be bought and used by businesses on their own.

By putting Strategic Review through Board Room in place, CEOs do not have to go it alone.  They can have a timely, efficient way to review and manage their Business.

I plan to offer this package in both month-to-month as well as annual subscriptions.  If you have any questions or want to get started, contact me at jim@jimsackman.com.

Have a great day!

Jim Sackman

Focal Point Business Coaching

Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!

Inorganic Growth: Go it Alone?

I hope through this series that I have given you some ideas about this notion of inorganic growth.  There is a lot of potential value here.  Business Growth is absolutely attainable.  So why do so many small businesses not go through this path?  The answer is the risk.  There are so many true stories of failed acquisitions that people are gun shy.  And the truth is that this is a risk.

So what is the best way to mitigate the risk?  The best thing to do is get good help.  Let me go over the elements involved in the process to make sure you know where to go.

There is the Strategic Planning Element.  You might have a Board of Directors or Advisors.  Those are great people to talk to first.  If you don’t have this kind of help, you may consider it.  The viewpoint of an external observer can help provide a different perspective on any plan.

There is the Deal Element.  Each transaction is a significant effort in valuing the business and performing due diligence.  Do you really want to read every contract?  Do you have the time or proficiency to go through the Financial Statements?  There are M&A Advisors out there that can help make sure that you are getting the right deal.

There is the Execution Element.  Assuming you have a good plan put together, you might wish to hire a Project Manager with M&A Experience.  This helps keep all the things that have to change on track.  This goes from the large as Communications Plans to the minute like Address Changes.  If you don’t have the extra time, then you might want to consider getting help.

All of these advisors can be built into what are called Deal Costs.  Anytime there is a transaction like this, there are costs incurred.  There is nothing for free.  But the help involved above is well worth the price of getting the deal right.

I am one of those Advisors who can help companies in any of the 3 elements.

Have a great day!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!

Inorganic Growth: Applying Leverage

So we are at the point we are going to try to redeploy the capital that we have saved in the transaction by our Cost Replacement strategy.  I am going to talk about the ways to deploy this money in a Revenue Enhancement mode.  The challenge with Cost Reduction is that all companies are different in their ability to save cost.  This makes it difficult to come up with a plan that will work for most if not all businesses.

On the other hand, Sales and Marketing are functions of every business.  These are areas that can have capital applied to them effectively and so make a great Leverage model to talk about.

Now, you can hire additional Sales People or increase the value of the partnership to Sales Channels.  These are both viable, given that you are really hiring them to increase the number and quality of the prospects that you get.  What this means you are using these resources primarily for Lead Generation which is a Marketing function in any case.

So, we are back to the ways to increase Lead Generation so that the business will expand.  Choosing to increase the Sales budget, but this should be compared to other increases in the Marketing Budget.  One thing to think about when you do think about it is Scaling as it relates to Lead Generation.  Many Marketing activities (Cold Calling, Networking, Referrals as examples) require an investment of time as a resource.  This means that the ability to scale these depends on people and time.  One of those examples, Cold Calling, can be outsourced for scaling purposes.  But Networking and Referral Marketing are both tough to scale because of this.

What this means is that you should look at any Marketing Strategy (SEO, PPC, Radio, TV, Print) that uses money and generates leads first.  There will be an ongoing expense for a campaign, but these time frames can be limited.  This allows an owner to measure the results and reallocate the money to other areas that are working better.

So, there you have it.  A first step in growing a business that you have acquired is to take the savings and apply it to Marketing and Advertising.  You may have come up with some better ideas on the cost side, but Marketing should be in consideration in any case.
Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!

Sonoma County: News and Notes

I apologize for being slow in getting these out.  Post-Fire Business Activity has been quite high and I have had some trouble getting these out.  I want to start by talking about Calix.  The company announced results before Valentine’s Day and I want to talk about that.  Revenue for the quarter was $137M and the company lost $0.15 per share.  This was slightly lower than Wall Streets estimates but at the low end of the company guidance.

Once this release was out the company was down in aftermarket trading.  The stock has since gone positive and I want to talk about both of these items.

I believe the intial negative reaction was due to two items.  The company has had lower product revenue in 2017 than it did in 2016.  The total revenue is up but is skewed by the increase in services revenue.  The challenge is that this service revenue is negative gross margin (sold at a loss) today and predicted to be substantially below product gross margins (products are a lot more profitable).  All of this came at a cost of more Operating Expense (OPEX) than in the past, though this trend has reversed itself in the 4th Quarter.

That lowered OPEX is the first reason that I think the stock has recovered.  It has been very clear that the company has been spending too much money.  By lowering these costs, there seems to be a recognition for what I have been asking the company to do for the past year.

The wild card here is the announced contract and trial deployments with Verizon.  The analysts have done a terrible job with this.  Verizon already has a substantial Fiber To The Home (FTTH) project with FiOS.  It seems unlikely that Verizon will be doing this new trial for FTTH.  It seems much more likely to part of the 5G Wireless deployments that Verizon has also announced.  There is good news and bad news for this.  A FTTH home deployment in Verizon represented millions of endpoints.  It is unclear what a 5G rollout would represent.  This is partly because the density of 5G stations is unclear.  Verizon believes that it will be able to get several hundred megabits per second with distances of say 1,000 ft (3 football fields).  Other carriers (in other spectrums) think the distance will be more like 300 feet (1 football field).  I think the issue is up for debate and you may want to look at this article as an introduction.

Wireless cells would be a nationwide rollout which would be good, but again it probably won’t be millions.  Imagine rolling out a cell antenna every couple of thousand feet across Montana on I-90.  So 5G coverage will be less than 4G for a long time.

What this means to me is that you are buying an option on this Verizon business with the stock.  Verizon will not stand for high prices and I suspect analysts question the gross margins on the deal.  No public information is available, but you would have to think that this will be a squeeze.

Finally, this notion of a multi-year ramp in Verizon is flawed (see the Q & A with Christian Schwab on the call).  The company quoted past Fiber Rollouts.  I take that to mean FiOS.  Within the 2 years from first deployment, Verizon was building FiOS at $150M/quarter business rate.  By setting the expectation at about 10% of that, I would guess that Calix is really unsure what is going to happen here.

Have a great day and weekend!

Jim Sackman
Focal Point Business Coaching
Business Coaching, Leadership Training, Sales Training, Strategic Planning

Change Your Business – Change Your Life!