An Ally’s Advice

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Old School Methods Yield Fresh Results

As I sat in front of my computer struggling to express exactly what I wanted to share with you today, I realized that I might be more successful if I tried writing the old fashioned way.

Thus, I broke out a pencil and paper, and instead of sitting in front of my computer, I changed up my environment and began to write. And the words flowed wonderfully.

They flowed so well, indeed, that I decided that what came out wasn’t best shared today – but you’ll get to enjoy it later in an alternate manifestation.

What I do want to share with you is the lesson my experience evoked: the value of changing up your environment when trying to accomplish something that doesn’t seem to be happening – especially when that something happens to require creativity.

This is actually something I do all the time, though the pencil/paper approach was a new take on it. I’ve spoken before of my predilection for the beach in Hilton Head in the context of the value of rest and relaxation. One of the great things I love about the beach is its effect as a creative lubricant. My job involves a great deal of creativity, and I often do some of my most creative work at the beach. The environment isn’t the usual suited, office-furnitured, formal one of every day business, and that allows my mind to loosen and get creative with solutions and opportunities.

I suggest you employ similar approaches in your own life and business. When you find yourself facing a tough situation, a complicated problem or a stalled out day, don’t keep spinning your wheels. Try changing up your tools and your environment. Try bringing fresh perspectives into your conversations. Just don’t do the same old thing if the same old thing isn’t getting you anywhere.

How do you vary things to get the creative juices flowing?

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I Want to Introduce You to a New Friend

What do you think of when I say, “The IRS?”

Does your stomach clench up a bit? Does your forehead get warm? Maybe the physiological reaction isn’t so dramatic, but I imagine that your mental associations with the Internal Revenue Service of the United States are anything but positive. Fair to say?

Maybe you got off to a rough start, but perhaps that was due more to schoolyard rumors than anything else. It’s possible, too, that you’ve hit a rough spot in your relationship. But I want you to get reacquainted with the IRS and think about the way you two could be friends.

Certainly the thoughts of being friends with someone taking anywhere from 25% to 50% of your hard-earned dough on an annual basis might seem distasteful. I don’t like the Tax Man any more than the next guy, but as long as you accept that the IRS is taking some of your money every year – and you really come to terms with the fact – you may want to get better acquainted.

There are only two business people who should be concerned by the IRS:

1. Those whose accounting is so terrible that an audit would be an unbearable nightmare, and

2. Those who are trying to cheat and break the law.

If you don’t fall into either of those categories (and a lot of my clients, I unfortunately discover, do), then consider what the IRS can do for you. Remember, the government is going to take a nice bite out of your income, but the size of the bite and the ferocity with which it’s taken might be more variable than you’d otherwise imagined, particularly if you are a business owner, CEO, president or CFO.

And I want to be very clear here that everything I am suggesting you do is 100% legal. Do NOT do anything illegal. It’s not worth it, and you will be caught. They’re always caught. Trust me. I’ve seen more fraud than you can imagine.

You might be saying right now, of course there are ways of paying taxes “better” – that’s why I have a CPA. And I bet you have a wonderful CPA, but I assure you he won’t mind you doing a little leg work yourself to figure out how to save your company some money.

An obvious way to save money is to take advantage of the Bonus Depreciation and Increased Section 179 Deduction under the American Recovery and Reinvestment Act, which allows you to fully depreciate a wide variety of assets. That’s right. No schedules this year if you don’t want them. And the IRS is happy to let you do it.

That’s just the tip of the iceberg, though, and the only way you’re going to figure out all of the ways that you could more advantageously be classifying your expenses and spending your money is if you explore www.IRS.gov. Use the search bar in the top right hand corner and start getting acquainted with the IRS. You guys could be better friends than you think.

WARNING: Obviously you shouldn’t go reorganizing your business’s books for 2011, confusing your CPA/account/bookkeeper and doing anything funny. However, since you’re bound to be meeting with your accountant again soon, you should think about all the ways you spend money – consider terms like “petty cash,” “entertainment” and “meals” for starters – and start looking them up. Go to your accountant with a list of questions, suggestions and links, and see if s/he can’t continue steering you in great directions to get, use and save more money in 2012 than you may have in 2011.

If you notice any particularly good tidbits while you’re looking around, share them with us in the comments section below. Happy hunting!

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Learn From Your Mistakes or Enjoy Them in Round II

I was at a presentation recently where one of the handouts included the following quote. I thought it was a great one to share:

“No one learns from success; you really only learn from your mistakes and failures.”

– John Rowland, former governor of Connecticut

I love it, because it’s the essence of what makes a good turnaround professional. Oh, no, no – those failures are long past. We’re in the business of succeeding where it was not done before us. But as I’m fond of saying, it’s the gray hair or no-hair ones who succeed in this business.

That’s because we’ve been around long enough to have seen so much. No, it’s not that we were failing and learning so many lessons from our mistakes (though we’ve all got some gems in there, I’m sure). It’s that we’ve had so much experience of our own and watching and learning from others’ mistakes and all of the business hullabaloo that goes on around us.

I’m going to encourage you to take some time to think about some of your mistakes and share them. This is a great team-building exercise and a great way to pass around your wisdom. I suggest that you ask every member of your team to think about and explain – to everyone else – one big mistake he or she made and what was learned from that mistake. You never know who’s going to need that wisdom to avoid a blunder that could cost your company big-time.

What lessons have you learned from your mistakes and failures?

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It’s 2012: Let’s Roll Up Our Sleeves and Get to Work

Happy New Year, everyone!

I want to welcome you and your business to 2012.

Unfortunately, in business we can’t just say, “Well, it’s a New Year. All from last year is forgotten. Here’s a totally fresh start. Yeehaw.” (Presumably, the yeehaw would have an exclamation point at the end, but that’s somewhat challenging in this fantasy statement since it can’t really happen.)

Despite the inevitability of continuity, some things from 2011 can be halted and considered “past problems” in some sense. For instance, though there are exceptions, by and large, the tax year of 2011 is now over. You may have concerns about what happened and spend the next four months dealing with them, but they’ve happened. You can’t change what happened – only handle it. There’s something relieving about that.

Also, it’s a new quarter. If you took a loss last quarter – or last year – that loss is definitely going to affect you and your business. There’s no getting around that. But it’s a fresh quarter and a fresh year, and that means a chance to make some changes, some positive impressions and, hopefully, some money. That is what you’re in the business of doing, right?

With the Holidays over, December – also known as the Month of Distractions – is behind us. People will return to their regular schedules. Children will go back to school (soon). If you’re in retail and prepare all year for December, only to hold onto your hat while it barrels you over, then normalcy has returned.

That all means that the New Year can be a time for fresh starts, new ideas and inspiration. I’m not one for the New Year’s Resolution Bandwagon (it’s fraught with problems, not the least of which is a total lack of stick-to-it-iveness), but there is something to be gained by using our culture’s mental break between years in order to be an inspirational leader who motivates one’s team and company to rally around strengths and successes and have a great year. If last year was a tough one for your company – as it was for many companies – you’re going to need to be that kind of leader today, this week, this month, this quarter and this year.

Business isn’t easy. If it were, everyone would be doing it. It takes hard work, dedication and a dash of luck. Whether 2011 was the best year ever or the worst on record, take the first work day of the New Year as a time to get back to business and refocus your company and your team. As a turnaround manager, it’s my job to roll up my sleeves, get down in the trenches and get dirty. If all business leaders did that, I wouldn’t have to. My advice to you is to do just that: roll up your sleeves and get to work.

If you are stuck and aren’t sure what to do and how to handle your business, your team, your finances and your general situation, then I want you to start by reviewing my five articles that ended 2011 about Resolutions for Your Business in 2012. Each of them is just as relevant in its own way right now as it was in 2011. These are ways to think about your business and get started in the New Year – an important balance of continuity with the past and innovation for the future.

Ensure continuity and preserve a feeling of consistency for your business and personnel.

Think about a contingency plan in case of an emergency.

Sit down and review your business’ financial documents.

Analyze not just your business, but also your business environment.

Engage your team in short- and long-term planning, and don’t be afraid to innovate.

What are you going to do differently in 2012? How are you going to manage and grow your business? Please share in the comments below.

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5 New Year’s Resolutions for Your Business in 2012, Part 5

My final New Year’s Resolution is one that can span both 2011 and 2012, as you no doubt have a lot of planning to do.

Engage your team in short- and long-term planning, and don’t be afraid to innovate.

The corollary to the first New Years Resolution we discussed – ensuring continuity – is engaging in short- and long-term planning. Start thinking 3, 6 and 12 months out for short term planning and 2, 3 and 5 years out for longer term planning.

Though it may seem like the final week of the year is a bad time to start doing your planning for the coming year, no time is a bad time to plan if you haven’t done any planning yet.

This is also your last week to do any quick tax planning that may help you for the coming year. Are there any big purchases you’re going to have to make in the next 30 days that you could make now to enhance your tax situation? Talk to your accountant and financial planner if you haven’t already. Make sure they know what you’re doing, where you’re headed and what your goals are. It’s the only way they can help you plan.

To make sure you know where you and your business are going as you enter the New Year, consider sitting down to a series of meetings with your key team members. If you won’t have time for that before the New Year, then take any break time you get to sit down and think through what you want and where you’re trying to take your business.

Start by figuring out what your goals are.

Is your goal this coming year increased revenue? By what percentage? Would you rather figure out how to increase profits without worrying about revenue? Perhaps there are a few KPIs in your business that could stand improvement? Maybe you’re just looking to survive. Do you want to acquire a competitor this year or make your company enticing in a buy-out?

Whatever your goals, you have to know them in order to do your planning. Map them out over the course of the year and start considering how you’re going to achieve them. Who’s involved? Sales, marketing, fulfillment, accounting? All of the above or none of them? As you consider who’s involved and how you want to achieve your goals, you should be starting to see a sketch of your plan for the coming months and year. Is what you’re developing in line with your even longer term goals?

Consider your plan and then start presenting it to your team members. Though business is not a democracy and you do not need to ask for others’ permission (pending you’re the CEO or key manager – and this exercise can work for managers as well as CEOs), it will behoove you and your business if you get buy in from key stakeholders and team members. That gets them on board, aligned and motivated. Ask for their help, input and concerns. This will help you plan even better.

Once you’ve set up your plan, consider reviewing it with your budgetary committee to make sure that you won’t hit any unfortunate pitfalls along the way. One tool I consider very helpful in short- and long-term planing is the whiteboard. Consider employing one along the way.

Don’t just enter the New Year blind. Resolve to plan with your team and make this year a calculated and successful one.

Good luck!

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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.