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5 New Years Resolutions for Your Business in 2012, Part 4

So far we’ve had three New Years’ Resolutions for your business, and each of them has been tailored very specifically towards the way you think about and approach your business. Now I want you to take the time to analyze not just your business, but also your business environment.

As a turnaround professional, I know how fast things can change in business. A new competitor can enter the marketplace, seizing a large percentage of your market share in a matter of weeks or months. By undercutting prices, getting better arrangements with vendors, capturing a few large clients/customers or offering something you’re not, competitors can be ferocious.

Rather than live in fear, however, there are some steps you can take to minimize the impact of competitors on your business, at least as a surprise. First, if your business relies too heavily on a “Big Gorilla,” (that is, a single customer or client), make sure that you either diversify, determine what you can do absolutely best for this customer/client and do it, or ensure that there are legal reasons this customer/client is bound to you.

In addition, don’t compromise on routine competitive research to regularly evaluate the marketplace and business landscape. Consider having a full time employee whose job it is to research the products you offer, who else offers them, at what prices and with what conditions, what vendors they use, where they’re located, what their growth looks like and more. If you use the Internet to do a lot of business, consider the tool Spy Fu.

You must know your competition, and you must know them well. Consistently investigate your competition and what your competitors are doing. You never know when a flailing business will be ready to be bought out by a ready and poised you. But you’ll never know if you aren’t researching the competition.

As you plan for the New Year, consider what a great time it is to take a look at your competition in order to incorporate any new information into your planning and self-evaluations.

Monitoring your competition isn’t the only thing you should do to watch your business environment. If you’re in an industry subject to regulation, keep your eyes out for any new legislation as the clock tics towards 2012.

What are you doing to stay apprised of your business environment?

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5 New Years Resolutions for Your Business in 2012, Part 3

It can be very easy to neglect your financials and just assume that as long as you’re making payroll, the lights are on and no tragedies are coming your way that all is well. But that’s not the kind of attitude that helps you protect and grow your business.

As 2011 draws to a close, resolve to sit down and review your business’ financial documents.

The most important thing here is that you’re honest with yourself.

Make or Break?

Compare the results of your financial statements with what you had planned for 2011. Would you call this a successful year? According to which metrics? Where did you over-perform? Perhaps you can adjust your expectations accordingly for 2012 and make more accurate projections. This will help you plan better in the coming year.

What goals did you miss? Why did you miss them? Was it some singular event or did things just not transpire as you’d hoped. The key is not just to review your financial documents but to act on the information you garner.

If you didn’t achieve particular goals, figure out what you can do differently. If it’s just because “the economy’s bad and no one is buying our [insert widget here]” then you better think long and hard about how 2012 is going to be different. The economy is not getting any better, and what people were reluctant to shell out for in 2011 is something they’ll be equally reluctant – if not more so – to shell out for in 2012. If you want to keep making payroll and enjoying the lights on, I suggest you think long and hard about how to do things better and different.

Review Contracts

Part of reviewing your financial documents is also pulling out contracts and agreements and giving them a once over. Are there any personal guarantees that you made a while ago and have proved yourself worthy of removing? Go back to the beginning. You never know where you’ll find a personal guarantee that just doesn’t need to be there anymore.

Take a close look at all of your agreements, including your business’s operating agreement, employee contracts, contracts with financial institutions and more. It’s not that you have to do this every year, but because I feel like you might not have done this in a while (or ever), now is a great time to review those documents and ensure that you’re protecting yourself and your business.

Meet with Your Financial Team

This is also a great time to sit down with your accountant and/or financial advisor and think about your budget, your taxes and your opportunities. Perhaps things went well this year and you should be purchasing some key items before the end of the year. Maybe there’s an opportunity that you should be considering, but both your accountant and financial advisor will be hard pressed to share those with you if they can’t review accurate financial statements.

So, in Closing, Look Closer

The end of 2011 is a great time to work on your strategies and goals for 2012, but you can’t do that without an accurate financial understanding of how things went this year.

So, resolve to sit down with a P&L, Balance Sheet and documents that share the details of your business’s KPIs. Even if the news is bad, you won’t regret having done this. It’s one of the most important ways to prepare for a successful 2012.

Did you meet your goals? How or how not? Please share in the comments below.

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5 New Years Resolutions for Your Business in 2012, Part 2

When was the last time you looked at your business plan? You remember, that thing you made so many years ago to ensure that you knew what you were doing and that everything was thought through? Wait, you did make one didn’t you?

If so, great – pull it out. If not, I’m not going to ask you to spend your time on that now, but I am going to ask you to think about a contingency plan in case of an emergency.

That’s right, the New Year is a great time to review your contingency plan.

We’re in the middle of a horrible economy. If things are going well for you and your business, I commend you and say, Keep up the good work. But even if things couldn’t be better, you should always have a contingency plan in place that you update at least every two years. At the cusp of 2012, this is a great time to review and update yours since I’d be willing to bet that you haven’t since before 2009 (pardon my assumptions if you review yours bi-annually).

So what should one think about with a contingency plan?

The first and most obvious thing is money. Capital is, after all, the life-blood of any business. Without proper cash flow you won’t be able to buy inventory, make payroll or pay your bills. So, do you have a line of credit? If so, is it currently in use? Could you stand to ask for it to be expanded?

Do you have good relationships with multiple banks? There are hundreds of banks across the country that are failing but can’t even be taken over by the FDIC because they lack the resources to do so. That should make you nervous if you’re banking at any of them, and it should also make you ask whether or not you can find multiple banks with whom to do business.

What assets could you liquidate in case of an emergency? Is there anything non-essential that would fetch a fair value? I’m not suggesting you sell it. I’m only suggesting that you know what you would liquidate and how if you had to.

Do you own your business? Are you it’s president? Is there a board? All of this is to say, think about a succession plan. If something terrible happened to you (God forbid, but you never know), can your business survive without you for one month, three months, a year? Is there someone who will take the reins? These questions are especially important to answer if you are going to ask banks for money any time soon.

What about your other key positions? Who is indispensable to your operations? What would you do if something happened to him or her? How would you replace that person?

Think about your industry and the kinds of emergencies that usually face it. Is it a highly regulated industry? Is it a litigious industry? Are your products safety related? What could go horribly wrong in your industry and business? Think about these things and use your core team to brainstorm potential solutions in case any emergency hits.

You never want to be left wondering what you’re going to do in the event of an emergency. As a turnaround manager, I assure you that having a contingency plan in place is essential and a great way to proceed into 2012.

Resolve to create or update your contingency plan this month.

Consider answering any of the questions I asked above in the comments below and share some of your creative solutions to help others.

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5 New Years Resolutions for Your Business in 2012, Part 1

In these final week’s of 2011, I want to offer you a series of 5 posts that will help you prepare for 2012. In essence these are resolutions for your business.

The first thing you want to make sure you’re doing between 2011 and 2012 is ensuring continuity.

The New Year is a time when people resolve to change. Individuals resolve to better themselves by no longer smoking or starting to exercise four times a week. Either they’ll never do something again or they’ll start doing something forever more. Whatever it is, big change is in store for them in 2012. The failure rate for these resolutions though is near 98%.

For businesses, this kind of Big Change Resolution is also often in the air. It’s the “right time” for a huge change in direction. The sales force is going to employ some new strategy. The store is going to get a redesign. Whatever it is, it’s time for Big Change.

And Big Change can be great. If things have been stale and the changes are well researched, then by all means, Big Change away. The problem with Big Change is when it’s happening “just cause.” Because it’s the New Year. Because we should do something. Because we haven’t thought of anything else, etc.

Don’t get distracted by the Big and Shiny, though. Stay focused on the little things that are manageable, in line with your business plan and structure, and whose aggregate can have a Big Change impact.

All of that is to say: Ensure Continuity.

You don’t have to eschew change in order to ensure continuity. You just have to make sure that you’ve successfully evaluated what is working about your current direction, strategy, goals and structure, emphasize its value and continue to pursue it. You can give continuity a fervor that is just as good as the excitement of Big Change.

One of my clients was already planning some big changes by moving into a new office space and warehouse. Their lease was aimed for January 1st. It was an exciting date for change, but they’re a retail business, and that change was coming right on the final days of the Holiday Season. That is to say, they’re already busy and focused. Creating this enormous change  (the new location) at this time of ubiquitous change (New Years), they were heading for a big and jarring impact – not necessarily bad, but more extreme than it needed to be.

For organic reasons, their lease date was extended a few weeks into the year, which changed the way the move was affecting their business and the perceived continuity of transitioning from 2011 to 2012. I know a lot of people in this organization feel better about the transition, and to be honest, the adjustment away from “huge change” on New Years Day is a good one.

Despite the excitement of the calendar’s change, resolve to create a feeling of continuity for you and your team as you move into the New Year. The future of your business will rely on innovation and progress as much as on solid foundations from past successes.

Start thinking about what you can do to create continuity and preserve a feeling of consistency for your business and personnel.

Look forward to four more Business Resolutions for 2012. What are yours? Please share in the comments below.

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Giving Back During Tough Economic Times, Part 7

This final way to give back during tough economic times is the most personal.

Business can be stressful. Life can be stressful. The holidays – especially if you’re in retail – certainly bring this to the fore.

Do your part to reduce the world’s daily stresses – and your own – by spending more quality time with friends and family. Part of destressing during the holidays may be setting boundaries and seeing less of your family or only as much as you can reasonably handle, but if you have grandkids or your wife needs to get away for a weekend, or whatever the case, set up time to see people and be social.

You may say either, “I’m not stressed so why make this special effort,” or “I really can’t handle more family right now,” but that’s what makes this a “giving back” activity.

You have no idea how this tough economic environment is treating others. They could be stressed about finances, business, life and everything else. Your friends and family could need nothing more than to sit down for a drink, a fun dinner or a relaxing movie night. You can facilitate that by including friends and family in “for no reason” activities and really listening to them and what’s going on in their lives.

Life is too short to stress too much about jobs and family relationships, and tough economic times only tax these relationships more. If your family has hit rough spots, whether interpersonally or financially, you need to move forward after these speed bumps of life.

I promise that you’ll be a better person for this shared time, and the positive effects will be reflected in everything else you do – not to mention the effects your time and kindness will have on other people.

This concludes my Giving Back During Tough Economic Times 7-Part Series. I hope you enjoyed it and that you got some valuable ideas for how you can give back, both now and when times aren’t so tough. Even when things are looking up for you, your family or the US economy, there are always people in need everywhere. Just think creatively about what you can do to help them.

Are there ways that you give back that you’d like to share with us so that we can get good ideas? Please share anything I haven’t mentioned so far below or feel free to comment on anything I did mention.

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Giving Back During Tough Economic Times, Part 6

We’ve discussed a lot of different ways over the past few weeks that you can give back during tough economic times. This one happens to be a little trickier, because its effects are – hopefully – not immediate. However, at some point it’s sure to have a big impact.

Write a bequest in your Will to one or multiple charitable organizations or institutions that you value.

You can designate a specific amount or a percentage of your net estate, which, after taxes, probably won’t drastically affect your family’s inheritance. A particularly good idea is to get your children and spouse involved in the decision, so they can learn from your generosity and support your wishes.

The last thing anyone wants while grieving for a loved one – in this case, you – is to have a struggle over where money is going, particularly if that struggle is with a charitable organization.

If you or your children are concerned that an organization may not be what it once was when you pass and leave it money, you could set parameters. For instance, the organization may currently return 90% of all donations directly to those it’s helping (that is, less than 10% of donations are used for administrative purposes). However, you might stipulate that if the organization has gotten sloppy at the time of the bequest – say, using 25% or more of donations for administration – then the donation is canceled. I’m not saying you should do these things (who knows why the circumstances might be what they are), but there may be ways to temper your family’s concerns and potential objections.

One of the most valuable lessons and immediate impacts in the “giving back during tough economic times” sense is the lessons this will teach your family. If your family members see and understand your desires and decisions and the generosity with which you lived your life, they are that much more likely to become charitable people themselves.

I remember once as the CFO of a non-profit business, we were having cash flow issues and couldn’t even make payroll that week. A bequest suddenly appeared that allowed me to make payroll, and it made the biggest difference to the business and every one of its employees because some anonymous donor who had recently passed – at some point in his life – changed his will to add a donation to this organization that he considered worthy. You never know how the timing will help, but in this case the impact was tremendous and integral to the survival of this non-profit.

Have you written charitable organizations into your will? Do you have a comparable way of achieving these ends?

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Giving Back During Tough Economic Times, Part 5

Giving away your services pro bono – pending you’re in a service based profession like law or consulting – can be a particularly unsettling thought. You may fear that giving away your services devalues them, and I can absolutely appreciate you not wanting to do that. I also understand that your time is valuable – after all, you charge for it, and maybe even an arm and a leg – and there just aren’t enough hours in the day to start giving a chunk of them away for free.

I get that. Really I do. I am, after all, in the service industry. But fear not.

How and Why I Do It

As a turnaround manager, I bill by the hour, but you better believe that I give a ton of those hours away for free. Now, I’m not saying that I just don’t bill certain clients out of the goodness of my heart. However, I did recently use my skills to help guide a community center that is near to my heart through some challenging fiscal times (made even worse by the general economic climate), and I perform similar functions for the religious institution with which I affiliate.

These are both organizations that I donate to fiscally anyway, but I realized that I didn’t need them using my dollars to hire someone who does what I do, and not as well at that. I could give them my time pro bono, which is what they needed most anyways.

Pro Bono in the Service Industry

For some professions, doing pro bono work is easier than for others. For instance, it can be particularly easy if you’re a lawyer or accountant. Just ask your priest, minister, rabbi or imam (if you attend a religious institution) if you can be helpful with any paperwork or forms. Issues arise all the time that could use someone with a knowledgable eye to review a document or contract – and much better to do it yourself for free, knowing what it costs and how much time it takes, than for the institution to hire an outsider.

Just consider the many ways your skill set could contribute and where. The help and time mean much more to the institution than to you. And if you’re an accountant worried about helping with taxes during your busy season, encourage the institution to hand its books over in early January so that you can get it out of the way right away. Rather than devalue your services, if word spread that you were helping pro bono, it would probably generate more paying clients than it would create potential ones that want your services for free.

If you’re still concerned about doing pro bono work for the reflection it casts on the value of your time, make official criteria for the kinds of people and businesses you help for free, ensuring that whomever you help could truly never afford you otherwise and that they are really in need by some set of standards you establish.

Giving Back in Retail

And what if you’re not in a service industry, but you do retail?

If you sell goods or own a business, consider donating a portion of the proceeds bought by members of your congregation or community back to the community’s schools or church/synagogue/mosque. Create some kind of buyer’s card that can be used and monitored, and then every month or year, donate a portion of the proceeds of what the members have bought to their institution. I know that the Kroger near me always donated a portion of our bill to my kids’ school, and I know of a local yogurt shop that has three rival high schools signed up with proceeds going to their football teams.

You can do this with multiple institutions at the same time (there are programs that allow you to create and track spending), and as a bonus it makes for great publicity. Surely the institution will publicize to its members what you’re doing because it will want people to shop with you. I know those high schoolers buy a lot of yogurt.

Are there other good ways you know of or try to give back based on your industry?

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Giving Back During Tough Economic Times, Part 4

We’ve already discussed three ways to give back during tough economic times:

  1. Include singles in your life who could use a place to go
  2. Mentor those who could use guidance and help
  3. Lay people off more compassionately

Today, I want to add a more obvious way to give back without straining an already thin wallet: volunteer work.

When people hear the word “volunteer” they often think of doling out soup at a soup kitchen or sorting cans at a Food Bank. For many people, that involves a long drive to a neighborhood they might not otherwise go to, and it can be one of those things we do once and imply that we do regularly with action statements (e.g. “Oh, yeah, I volunteer at the soup kitchen).

But when life is short and time is valuable – which is to say, always – we don’t always want to take those trips and engage in these volunteer connotations (not that they’re not great things to do, but they’re conceptually daunting for a lot of people who may then avoid volunteering altogether).

That’s why I want you to rethink what it is to give your time with volunteer work that doesn’t really seem like volunteer work as much as spending your time on and for other people.

Volunteer to assist in a program that’s happening in your community or neighborhood, whether a beautification project, a food drive or any number of other volunteer projects going on. If you’re looking for ways and activities, check out your local YMCA or JCC.

Another great option is going to your local old folks home or elderly care facility and reading a book with someone, taking a new friend for a walk or wheelchair stroll or playing games like mahjong (if you don’t know how to play, I’m sure someone would love to spend an hour showing you how . . . and then beating you). You could even just drive someone to the doctor or an appointment s/he might not otherwise be able to attend easily.

Alternatively, coach youth sports, sit at a welcome desk, hand out cookies to Red Cross blood donors (or give blood) or think of another way your heart suggests that you can volunteer your time for the benefit of others. If you own a business or building, consider putting a collection bin for food or toys or something comparable.

Remember, you don’t have to raise millions of dollars, buy overpriced plates of fancy foods at balls or start cutting big checks to make a difference in someone’s life during tough times. Just putting a smile on someone’s face, spending time with him or her to reduce loneliness and give them an activity, or helping someone enjoy a home cooked meal is a wonderful way to give back. If everyone who could did that once a month, our world would be a much more pleasant place to live, whatever the state of the economy.

How do you give your time?

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Giving Back During Tough Economic Times, Part 3

Have you ever been alone for the holidays? Have you ever felt alone generally?

I imagine we’ve all been there. In my line of work I encounter many CEOs who feel isolated and alone as their businesses crumble around them. They’ve done all they know how, nothing has worked, and people around don’t understand what they’re experiencing. Heavy is the crown and so forth.

That kind of loneliness is crushing, and if I could wish it on no one ever again I would. Unfortunately, I can’t. All I can do is try to lighten the load of loneliness for those experiencing it.

This is an especially important time of year to alleviate the loneliness of others as it’s the time many of us are most reminded of our families, especially those members who may be gone.

One way I give to others is by opening my home to those who could use a place to go, not necessarily for monetary reasons, but because it’s tough to be alone and I can make that better. You can open your home, too. It’s a great way to give back during tough economic times. As holiday meals always have leftovers that go to waste, why not just include more people?

Open your home to the singles in your community: the widow or widower, the divorcee or a person in transition. I’ve named some general titles here, but I’m confident that there are others who don’t fit quite so neatly into these categories – just the new person in the neighborhood or community, a friend who’s more estranged from family than he talks about, or whomever could use the company.

The holidays may be the most poignantly lonely times, but the rest of the year may be even more challenging because those are the days that drag on and pass, especially when one is lonely.

An invitation to a meal with your family, a birthday party or any other occasion is a wonderful way to welcome someone into your home and life. It doesn’t have to be an everyday thing to make someone feel loved and watched out for.

I remember how lost my 36-year-old widowed mother felt by being excluded as a “third wheel” after my father died. Fortunately, she remarried several years later and rebooted her life, but I’ll always remember the look on her face sitting at home alone.

These days, I always invite an old friend of my parents whose husband died a year ago to all of our family affairs. She’s elderly, quiet and sweet, and I know it means a lot to her to be around friendly faces for special occasions, even if they’re not the faces she wants to see the most.

Do what you can to give back by opening your home to others.

Who do you invite and how else do you give back?

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Giving Back During Tough Economic Times, Part 2

Last week I discussed the importance of giving back during tough economic times, and I promised I’d make suggestions that weren’t hard on your wallet.

We discussed the importance of making humane decisions when laying people off and how to ease their burden. A colleague who read the post reiterated the challenge of offering someone a lesser position in your company. He pointed out that this could be embarrassing for the person who’d been severed, and mentioned other problems that might arise when continuing to employ someone who had been effectively demoted.

That’s what has brought me to my next suggestion for how to give back during tough times (and all times).

Become a mentor.

One way that I choose to use my time and that I hope you will as well is mentoring those who need some assistance. In a weird way, this can be the perfect accompaniment to letting someone go or being there for someone who has been let go.

Help that person hone and display his or her marketable skills. Assist that person in pursuing other gainful employment or counsel that person in those areas that are your strong suits as s/he pursues an alternate path, be it entrepreneurial, educational or otherwise.

Become a mentor to those who need your expertise and who are eager to learn from your gray haired, no haired or wrinkled status.

This person doesn’t have to be someone recently severed. He could be anyone: a child, co-worker, or someone you met at a social gathering.

And don’t mentor just one person, but as many as you can. Spread your knowledge and be compassionate. Those who benefit from your wisdom today could be the leaders of tomorrow and the financial footings of your community.

Mentoring is an amazing way to give back in difficult financial times – especially if those times are falling particularly hard on other people.

Do you mentor? How did the relationship come about?