Archive for the ‘General Business’ Category

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Guident Business Solution’s “360° Assessment Program”™ can really help your business

Wednesday, August 19th, 2009

Guident Business Solutions “360° Assessment Program”™ will provide you with:

 

·         An unbiased written assessment of these areas using our disciplined process and proprietary assessment tools;

·         Company Culture

·         Human Resources

·         Marketing Strategies

·         Operations/Management

·         Financial Analysis.

·         Comparison of your company’s performance data to industry averages.

·         Summary of the areas your company is performing very well.

·         Summary of the areas where your company needs to improve upon.

·         Identify areas where your company needs your immediate attention.

 

What we will need from you:

 

·         Two hours of your time

·         30 to 60 minutes with your key employees

·         Payment of $360 due upon completion of assessment

Call us today at (920) 427-5077 for a no obligation consultation to learn more about this customized program.

Let me know what you think.

Take Care

Posted in General Business | No Comments »

Fire Fighting versus the Strategic Planning Process

Tuesday, June 30th, 2009

One of the early steps in the strategic planning process is to assess the current state of your organization.  Through this process the ‘most urgent’ issues are identified and neutralized.  Once neutralized the organization now has time to plan a strategy to eliminate the ‘root cause’ of these most urgent problems.  These urgent issues must be dealt with first before a formal strategic planning process can be developed.  Customizing a process to eliminate the root cause may take time and you don’t want to miscalculate the cause(s) and have to back track the process later. 

Once the most urgent issues are dealt with, now you can begin to be proactive in developing a customized process to deliver your organization’s strategic goals and objectives. 

An important concept for strategic planning has to do with the owner’s ability to redirect his or her energy from ‘fire fighting’ to ‘strategic planning’.  Once the root causes are eliminated, the owner’s time spent fighting fires will be significantly reduced and this time must be filled with other value added activities.  Why would anyone want to eliminate a main portion of their daily activities without filling it with something else?  These emotions have to be dealt with within this process.  Having the owner focus on the metrics used to track the success of the strategic progress in the various areas will add value to the entire strategic planning process.

There are several very good tools used to assess your organization.  This is not a random process, it is calculated and structured using proven tools to show benchmark metrics which will be used later to assess the success of the strategic planning process. 

Let me know what you think.

Take Care

Posted in General Business, Strategic Planning | No Comments »

Does your organization fully understand your liquidity ratios?

Wednesday, June 3rd, 2009

If you have gone to a financial institution to request a loan and they declined to give you that extended line-of-credit or that new term loan, one of the determining factors they used to make their decision was most likely your company’s liquidity ratios.  Understanding them prior to talking to your lender can help you to better prepare for that discussion and hopefully help you to secure the financing you are requesting.

Owners and managers can understand how their businesses are performing by understanding these liquidity ratios;

Return on Equity Ratio (ROE)

Return on Asset Ratio (ROA)

Asset Turnover Ratio

Account Receivable Collection Period

Current Ratio

Quick Ratio (Acid Ratio)

Debt to Asset Ratio

We will look at the three ratios your banker will probably look at first; Current Ratio, Quick ratio, and Debt to Asset Ratio.

Your Current Ratio is calculated by dividing your current assets found on your balance sheet by your current liabilities, also found on your balance sheet.  This ratio is often expected to be a 2 to 1 ratio, assets to liabilities.

  Your Quick Ratio (also known as your Acid Ratio) is calculated by dividing your current assets minus your inventory by your current liabilities found on your balance sheet.  This ratio if often expected to be a 1 to 1 ratio, assets minus inventory to liabilities. 

Your Debt to Asset Ratio is calculated by dividing your total liabilities found on your balance sheet by your total assets, also found on your balance sheet.  This ratio may be depended on your industry.  Here is why you need industry benchmarks in order to analyze what the information is telling you.

Knowing these three ratios and how your organization performs to your industry averages can greatly enhance the conversation between you and your lender.

Let me know what you think,

 

Take Care

Posted in Financial Analysis, General Business | No Comments »

Provide your managers with a ‘good understanding of business financials’.

Wednesday, May 13th, 2009

Often business owners feel the financial numbers of their company are no buddy’s business but theirs!  This may be fine if you’re a one-person shop but as you grow your business you will have to rely on others to achieve your organization’s financial goals. 

Your managers should have a good understanding of their specific departmental financials and how those numbers effect the organizations financial performance overall.  They don’t have to fully understand the cash flow statement and they may never see the balance sheet in a privately owned company, but they do need to manage to the numbers on the profit and loss statement.   Remember, the profit and loss statement is a management tool showing the operational effectiveness of your organization.  

One important financial tool for managers is an operating budget.  By having an established budget, your managers will have a target, a benchmark, and set goals.  The best budgets are the ones your managers will have helped to develop.  At the end of the day you want your managers to believe they can achieve the target budget numbers and a great way to accomplish this is to have them contribute to the development of those numbers.  It is harder to say the numbers are bogus and unreachable if they had a hand in building the budget with your support.  Half the battle in reaching your organization’s overall financial goals is having a positive attitude and believing you can accomplish the budgetary goals of each department. 

Let me know what you think.

Take Care

Posted in General Business, Management | No Comments »

Do you hold company meetings and have a formal communication policy?

Monday, April 27th, 2009

The messages from companywide meeting can be re-enforced days and even weeks afterwards through one-on-one talks and group meetings conducted throughout your company.   Encourage your management staff to hold regular department and/or division wide meetings.  If used correctly company meetings can generate camaraderie and solidarity between management and employees.  They give the company a platform to celebrate victories, boost morale, and show that you really care about your employees. 

A simple monthly newsletter with employee contributions can help your employees feel connected to you and your organization.   A bulletin board can help communicate customer satisfaction, quality benchmarks, exceeded sales goals, and other important information you chose to include. 

Establishing a formal process for communications and including the policy within your employee manual will show you’re serious about open communications to all members of your organization. 

Creating a culture of ‘open communications’ does not cost a lot of money but can return huge dividends through higher employee morale and improved employee and customer retention rates  

Let me know what you think,

Take Care

Posted in Company Culture, General Business | No Comments »

Do you have a monthly budget in place as an operations tool?

Sunday, April 12th, 2009

Developing a monthly operations budget can help the owner and key management team analyze the operations against a pre-determined benchmark.  This practice will highlight operating problems, allowing for any needed corrections before they become larger problems in the future.  By including your key managers in the budgeting process you can greatly improve the final product.  They have the experience and understand the challenges they are facing every day.  They also may have that one innovative solution that can save your company dollars well into the future.

Budgets should include percentages against the total revenues of the organization and have a section for ‘comments and assumption’.  Each budget should be analyzed against actual performance on a ‘line-by-line’ basis from the profit and loss statement.  Each line should have a variance column reflecting how actual performed to budget. 

Using the budget as a financial analysis tool, you can identify where your organization is performing above the estimated budget and possibly duplicate those positive actions throughout your organization.  You can also identify where your organization is under-performing to budget and either correct a miss-calculation on your budgeted profit and loss statement or identify an area where you need to improve and correct an immediate problem.  

Not only will you be able to benchmark against your budgeted profit and loss statement, you can also benchmark against a budgeted cash flow statement allowing you an insight to what your cash needs will be on a monthly basis.  Each of these budget statements should reflect any seasonality your business may experience.  Having this information will also greatly improve the quality of your discussions with your lender.

Let me know what you think.

Take Care

Posted in Financial Analysis | No Comments »

Do you really understand your what your financial statements are telling you?

Wednesday, April 8th, 2009

¿Hola, cómo es usted? or Bonjour, comment allez-vous ?

Can you read and understand either of these two phrases? 

 

 

If you can read and understand either phrase, you have most likely taken a class in Spanish or French during your school days.  Is it prudent for us to think we could understand either phrase without having some type of training in that language?  Most of us would say no.

Well, reading and understanding your company’s financial statements without having the proper training is just as difficult as trying to understand either of these two phrases without having the proper training. 

Most business owners launched their businesses in an area where they have a specific talent and often have years of experience practicing the technical aspect of that business.  But they may not have years of experience reading and analyzing Profit and Loss statements, Cash Flow statements, and Balance Sheets.  In order for owners and managers to make the best business decision for the future sustainability and growth of their businesses, they must understand their financial statements to the point they can read them and analyze what these statements are telling them about their business.  

It’s not unreasonable for business owners and managers to seek out the proper financial training in order to fully understand their financials, just like it is not unreasonable to seek out the proper training in order to fully understand a foreign language, even the simplest of phrases such as; “Hello, how are you?”

If you want to undersand your company’s financials fully, give us a call.  We can help.

Let us know what you think,

Take Care

Posted in Financial Analysis | No Comments »

Does Your Company Set Short-Term and Long-Term Goals?

Friday, February 27th, 2009

Short-term goals are usually one to two years and long-term goals are more than two years out in the planning.  Each goal must have at least these three elements; 

·        What is the goal

·        Who is accountable for achieving that goal

·        When is the goal to be completed

Your company’s key management and their employees should have input into the goals.  They can know the organizations overall objectives and help develop goals and identify the tools necessary to accomplish the gaol within the designated timeframe.

Besides being tied to the overall objectives of the organization, your company goals must be written out and the person who is accountable for the goal must be aware of the timeline and know who to go to when they need support to accomplish that goal.

Accountability is crucial for accomplishing your company goals.  If you as the owner are responsibility for accomplishing one or more of your company’s goals, who will hold you accountable?  We will assist with holding the owner(s) accountable within your organization.

Your short-term and long-term goals are a critical part of your company’s ‘Strategic Plan’.  For more information on strategic planning visit this website.

 

Let me know what you think,

Take Care

Posted in General Business, Management | No Comments »

Small business owner’s have to have a ‘split’ personality, both manager and owner.

Thursday, February 26th, 2009

The best way for me to describe this is with an example.  You and your buddy have bought an auto service repair shop.  The both of you do all the work and you are both excellent mechanics.  You both have a passion for your work and it’s nothing for you two to work 10 to 12 hour days under the hood of a car, truck, or SUV.  Business is good and you can make the bills.  The issue is that both you and your partner are working over 90% of the time as managers and less than 10% of the time as owners.  The last thing to do at the end of the day, after working 10 to 12 hours, is to do the books, or think about advertising, or review the financials from two months ago.  Does this sound familiar?  I hope not, because its’ a recipe for disaster.

 If left to ourselves, we will most often choose to do the things that we like to do.  We are good at them because we like them and we feel we have accomplished something when we’re done.  To a lot of business owners, setting marketing strategies, analyzing financial statements, reviewing the budget (that is if you have a budget) and other things such a collecting account receivables or balancing the checkbook is something that happens when time permits. 

To have a successful, sustainable business model you will have to divide your time between you as “manager” and you as “owner”.  You will have to schedule time doing each job much like you may schedule time for lunch.  Mark it on your calendar and between you and your partner you have to hold each other accountable to do the “owner” jobs. The other manager jobs are the FUN jobs and we always find time to do them, but the “owner” jobs, that’s different.  You and your partner will have to be the ones that decide what’s best, maybe 70% as manager and 30% as owner?, and you both will know what is right because both the manager and owner jobs will be done on time.  And you may even sleep better at night as a result.

It may seem silly, but if it helps you to accomplish this you may want to leave the shop area and put on a clean white shirt while you’re doing the “owner” jobs and when you’re done, put on that ‘dirty’ shop shirt again and get greasy.  Whatever it is, find what works for you and stick with it. Your business will thank you, your banker will thank you, and you will be building a sustainable business that you and your partner will be able to enjoy well into the future.     

Let me know what you think,

Take Care

Posted in General Business, Management | No Comments »

From Personal Mission Statement to Company Mission Statement.

Friday, February 20th, 2009

Why should you write a personal mission statement and why is it important for your business? 

As a business owner your personal values , attitudes, and beliefs are reflected in your business, whether you know it or not.  Someone from outside of your organization can walk through your location and have a feeling for what is important and what is not important to the organization.  Most times this is a direct reflection on the owner.

Knowing your personal mission statement and writing it out will help you to understand what you want the culture within your company to reflect.  Who do you begin?  Answer these simple questions with simples words or phrases, writing down your responses in one and two words….

 

·        What are my values, attitudes, and beliefs I want my spouse and children to use when describing me to their friends?

·        What are my values, attitudes, and beliefs I want to exhibit within my friends and with my church community?

·        What are my values, attitudes, and beliefs I want my colleagues, employees, and vendors to use when describing me as a person?

·        What are my values, attitudes, and beliefs I want to exhibit when dealing with strangers and the underprivileged population that I may meet?

 

Now, using the values, attitudes, and beliefs you have noted - begin writing using a blank piece of paper and do not stop until you have used most of your values, attitudes, and beliefs within your statement.

A personal mission statement can be shared or private.  It can be long, short or a single sentence.  They can be bullet points or a short story format.  Whatever it becomes, the most important thing is that it is yours and you have written it out for future reference.

Now use your Personal Mission Statement to model your Company’s Mission Statement.

Your company’s mission statement should reflect your organization’s values, attitudes, and beliefs, which should parallel your personal values, attitudes, and beliefs you have reflected in your own personal mission statement.  If your company does not a have a mission statement, I believe each of your employees will operate by their own personal mission statements.  We all have a personal mission whether we realize it or not and if your business doesn’t have a mission statement then your employees will revert to their own personal mission statement, good or bad. 

The reason you need to establish a company mission statement is to help guide your employees as to how to perform their work, how to act with your customers, and how to represent you when they are on the clock.  If you don’t set these parameters, how will your employees know how to act?

I think the best mission statements are no longer than two to three sentences in length.  This way every employee, customer and vendor can remember your mission statement.  It is short enough for your employees to memorize and you can reward them when you ask them and they recite their company’s mission of the top of their heads.  

Remember, your employees are representing you to your customers and vendors, give them a mission statement to guide their behavior. 

 

Check out our mission statement on this website and let me know what you think.

Take Care

 

 

Posted in Company Culture, General Business | No Comments »

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