It is a reasonable question. What can a business coach do for you? The answer is simple. A business coach can help you move your business from point A to point B in a straighter line than what you might accomplish on your own. A straighter line meets less time wasted, less money lost in the process. The early bird gets the worm. Getting there quicker provides increased opportunities.

Some Examples

Let’s say you have an established business, but you need to raise money. You need capital. Nowadays that is a particularly vexing problem. Do you go to the bank? Do you go to investment bankers? What do you do? A business coach that has the right experience can give you a real-world look at all of these options. You may have capital laying around your business that you are unaware of and it is the businesscoach who can help you see these things.

Troubling Times

When an entrepreneur or businessowner has problems it is difficult at times to actually see what they really are. Because they are too close to the problem, it may not be as obvious as it is to an emotionally detached party who understands the whole scope of the issues at hand. Remember the business coach is not an accountant but a skilled business professional that knows the role that numbers play in your business. He also knows that your business is not just numbers. There are more factors at work and a turnaround depends on understanding all of them and integrating all of them into a workable solution for the company.

Startups

Startups are particularly interesting and challenging. The typical startup is undercapitalized and lacks all of the resources to make the business blast off from the beginning like the founder envisions. This can be a good thing and a bad thing but a good business coach knows what it is like to bootstrap a business and can be a real good go-to person for resources and advice on development of more personal resources. He can also be a strong reality check.

Although the services of a good “coach” are not free, they can be invaluable if properly utilized.

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Let’s face it, the last several years of “plenty” have made lots of us very fat. I am not talking about weight or inches around the midsection, but instead I am speaking in terms of gluttonous business waste. A close friend of mine told me once that entrepreneurs can either eat well, or sleep well, but seldom both. He was right then, and it is even more important now to remember this.

Eat Well

When  a business owner is “eating well” then consumption is the rule of the day. Real attention to expenses and excesses is rarely given and in times of plenty this attitude only results in less-than-possible results. The business does not do as well as it really could and essentially the business will do “good enough”. This is fine for the entrepreneur at the time. However the lost opportunity cost is hard to quantify. Excess does bring short-term comfort at a cost.

Sleep Well

When the business environment is in a difficult phase as we are currently experiencing or if the business is in a startup phase, capital protection is of paramount important. “Sleeping Well” refers to the concept of reduced anxiety over having enough cash to cover the monthly nut or to grow the business. Entrepreneurs who want to sleep well protect their cash at all costs.. including the cost of not “Eating Well”. Frugality brings comfort.

Riding Out the Storm

It may seem extreme, but the entrepreneur who is intent on surviving crises or even a growth spurt will have the keenest eye on all expenses, even the most mundane. Business owners and managers must continuously ask the question: “Is this expense absolutely necessary?” and of course: “How can I reduce the cost on this or that?” Cutting all non-essential expenses is a mandate, and while there may be less Filet Mignon and caviar for a while, the comforts of having enough cash to meet the needs of the business will outweigh the perceived costs of reduced creature comforts. A well-rigged and secure ship will ride out the storm.

Many times entrepreneurs have a serious vision problem. To put it simply they cannot see the forest for the trees. What that really means is that they are too close to the problem and have also become married to a certain mindset or method of doing things. Viewed from the outside in, there is an obvious need for change. From the inside, there are no obvious problems. A good business coach and consultant is skilled at identifying these problems and making suggestions for adjustments that can be beneficial. However we have all heard the old adage about “leading a horse to water..” and “old dogs… new tricks”. A business coach must  be a good businessperson, salesperson, guru, minister and politician. The entrepreneur who employs this coach must be at least one thing. The businessowner must be “Coachable”.

What is Coachable?

Whenever I am considering a new client, I consider my perception of their coachability quotient. To put it simply I am trying to figure out just how well this client will respond to suggestions that encroach on their “kingdom”. Although not always, entrepreneurs are very often “A” type personalities with strong self worth and powerful self esteem. Sometimes these characteristics give way to narcissism and arrogance and these negative qualities will inhibit or prevent the coach from doing their best work in solving problems or growing business.  There is a single quality that the businessowner must cultivate in order to get the most from this relationship: humility.

There is No Single “Right” Way

The truth of the matter is that neither the businessowner nor the coach know everything there is to know about any subject. The coach has certain experiences and a strong degree of emotional detachment from the business that aids in being of assistance. However, if the business owner brings a Texas-sized ego to the process, it is doomed from the start. Being coachable means being able to accept criticism and a second point of view, and then working to enact agreed-upon changes with gusto.

The coach has no reason to try to make hurtful changes, and I know that in my business it is important to have successes instead of failures. Be coachable and better times will be headed your way much faster.

Sometimes the thing that will save your business is simply effective management of cash, even when you aren’t really making any money.

A Case History

Recently a new client of mine was reviewing suggestions for increased marketing efforts and exclaimed “My phones are ringing! I have tons of business, more ongoing projects than I normally do!”. After a moment’s reflection I told him that we needed to really look at that block of business then, because no matter how many projects he had, he wasn’t covering his expenses every month. After the phone call had finished I took some time to reflect on that outburst and contemplate all the different reasons why this client’s “projects” weren’t adding up to a positive figure at the bottom of his cash flow statement. This was going to be fun.

Cash, not Profits

It is certainly true that while the basic goal of any commercial business is to turn a profit, a more basic goal these days must be survival. The oft-used phrase “Cash is King” is more pertinent now than ever.  As I thought about my client’s problems I determined that we needed to look closely at his aged payables statement, and look closely at the balance sheet for each job he was working to find what gremlins were eating the life’s blood of the company. If your business has the same ailments then making a list of where to find cash-eaters will be helpful as well. My initial investigatory list looked like this:

  • Analyze aged receivables
  • Analyze payables for discounts taken or missed
  • Prioritize payables
  • Evaluate pricing matrix, and compare to actual results
  • Evaluate detailed profit and loss statement
  • Evaluate 10 sample projects’ income/expense records and compare to businessplan model.
  • Develop deviation tables to determine projected vs. actual income/expense/profit results
  • Evaluate employee productivity
  • Islolate the gremlins and kill them.

 

Let’s Look at the Logic

Let’s take a quick look at each of these so that I can at least provide my logic behind these items.

(1) Analyze Aged Receivables: Find out who is paying the slowest, and if they are outside of the terms of their billing agreement. Extremely slow pays must be cut off, or aggressively collected no matter how big a client they are. If they value the relationship then they will increase the pace of payments. If people don’t pay it really doesnt matter how much business they do with your firm, because they eat YOUR capital while protecting their own. Doing these things will result in expense reductions too. The flip side of this is that the clients that pay the fastest should be moved to the top of the production list. If they pay fast, finish their work fast and money flow will increase. If you have a client that you are determined to keep that has a slow pay history, then it is time for a serious “come to Jesus” discussion with their accounting department or higher. Remember, it is the life of your business you are concerned with.

(2) Analyze payables for discounts. Take discounts where you can.

(3) Prioritize payables: if income is less than outgo, then you have to prioritize payables and expenses. Slash costs everywhere you can. For an entrepreneur this is akin to accepting defeat. That is completely narcissistic. Be a General instead, and remember that survival is equal to victory in tough times.

(4) Evaluate pricing matrix: compare to actual results. Check your prices and determine if you are charging all you can for everything you sell. Then look at how you are actually billing clients. Cut out the “buddy deals”. You cannot afford them.

(5) Evaluate profit and loss statement. Cut unnecessary employees or reduce hours. If you have done a good job on 1-4 above, you will find that this is probably an easy thing to do now.  Find waste every place you can and eliminate it. Lean times call for lean operations.

(6) Evaluate 10 sample projects: Look at 10 of the most recent projects that you have completed. If you do a good job of accounting for costs on a job by job basis this can be accomplished by a few keystrokes in Quickbooks. If you don’t, then shame on you and fix this problem immediately. Every project you do should be accounted for as if it were a mini-business inside your business. When you set prices, you had a model in mind as to how much each thing you sell costs you, and a desired profit margin. Review these projects to see how things shape up in the real world and then make pricing and cost adjustments.

(7) Develop deviation tables to display actual vs. projected data on the 10 projects reviewed. A graph of actual vs. projected on income, expense, and profits will show you how far off you are.

(8) Evaluate employee productivity. This is usually pretty painful, but you have to know who is producing and who is not. If you can consolidate jobs, then do it. Slackers have to go. They will drain the life from your business. Morale will improve if you toss someone who obviously isn’t carrying their weight.

(9) Isolate the Gremlins: Find the problems and stamp them out immediately.

The survival of your business is at stake. An orderly method to discover and solve your problems always helps.

Happy Gremlin Hunting.

Everyone has heard the story about the pot of gold at the end of the rainbow, and more than a few of us have actually wished we could find it. The truth is that the pot of gold in the form of success is truly achievable, but you won’t find it at the end of a rainbow; you need a stairway instead!

The stairway that you need is one that sequentially and progressively puts you on the path to your dreams and goals. In fact, success is certainly no destination. It is simply the orderly and progressive accomplishment of dreams and goals. I like to visualize the necessary building blocks of the stairway by using that word “stairway” as an acronym. It helps to remind me of the basic things that I should be doing every day to become successful. If you can imagine that truly the goal you seek is at the bottom of a rainbow, then the real trick would be to get to the top, and then it’s just a gentle slide to the bottom…once you have your act together enough to get to the apex in the first place.

Our Acronym: STAIRWAY

S = “Stretch Yourself”

Nobody who was ever successful at anything was content to stay in the same little box, accepted limitations, or refused to venture outside of their normal little world. Stretch Yourself means think bigger; do things that aren’t comfortable to you; increase your personal limits.

T = “Try New Things”

As an extension of stretching, trying new things exposes you to new opportunities, new people, and new methods. The willingness to do this will open up a two dimensional world and truly make it three dimensional. It produces a sea change in a person’s life.

 A = “Associate with Successful People”

My father always told me that if I swim with fish long enough, I would start to smell like one. Of course his commentary was on friends of mine that he didn’t particularly care for however, the antithesis of this comment is powerful indeed: if you want to be successful, then spend time around truly successful people. You will pick up lots from their attitudes and methods of negotiating life and business. They can be good influences on you if you choose them wisely; winners hang with winners.

I = “Identify Your Goals”

I like this one because it reminds me to constantly keep the goals I have set for myself in front of me. These goals are important because then at least you have a pretty good idea of at least where you are going. They provide a motivation for you when the road is steep or the going gets tough.

R = “Realize You are Unlimited”

Have you ever wondered why a chimpanzee is supposedly stronger than two or three men? I suspect that fitness levels aside, the biggest reason that the ape is so strong is that nobody ever told him that he wasn’t. The monkey believes it, and so he is. History is full of examples of men and women whose power of belief was so strong that it allowed them to accomplish truly amazing things. The power lies within you to do the same. Draw on this incredible resource.

W = “Write Down Your Goals and Commit to Them”

Write a contract with yourself that starts with the words: “I will….”. Be serious about your journey. Having a goal without an internal commitment to reaching it is a waste of time. It is a moral sin against yourself and your future to commit to something and fail to do it.

A = “Act on Your Commitment”

Commitment minus action equals zero. Although a stationary rock has lots of potential energy due to its mass, it is wasted potential until you get it moving… and then you really have something because that movement translates into inertia and seemingly energy is created out of thin air!!! Get Moving!

Y = “Yield to Nothing”

Lead, follow, or get out of the way. Don’t let life, friends, enemies, or the world in general slow you down. Don’t take no for answer, make lemonade from lemons, and turn disasters into opportunities. Be the irresistable force.

The virtual stairway that you create in your life by following these principles will serve you well in your quest for success. Each step is a process in itself, but it cannot be shortcut. It is impossible to have one step without the others before it. If you want to win bad enough, get out the nails and hammers and start building it today!