Tim Kinane

inner-image

Posts Tagged "Business Strategy"

Thursday, January 14th, 2021

2021 CEO Summit (Virtual)

CEO 2021

What do the US elections and the global pandemic mean for the economy, your company and your wealth in 2021? Register for free to join NAVIX founder and CEO Patrick Ungashick, as he and a panel of experts present their insights, followed by a keynote presentation by Brian Beaulieu, Chief Economist of ITR Economics. For the first time in its more than 15 years, the annual CEO Summit will be held virtually. Registration is complimentary as our guest.

When: Wednesday, February 3, 2021 from 1:00pm to 3:00pm EST

Topics covered will include:

  • Strategies for your business in 2021
  • Potential tax reform
  • M&A markets & company valuation updates
  • PPP loans and impact
  • Exit strategies

Space is limited, so please register today. Registrants will receive a Video Link to this private virtual event.

Register Now

Contact Tim 772-221-4499, to discuss strategies for your business.

Monday, December 28th, 2020

A Holiday Miracle: New PPP Funds, Second Draw Loans & Tax Relief

Sick Dollar

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

A Holiday Miracle: New PPP Funds, Second Draw Loans & Tax Relief

In a surprising turn of events, Congress and President Trump acted, as part of yet another omnibus COVID relief package, to add new funds into the Paycheck Protection Program (PPP) and override the IRS’s previous attempts to tax PPP loan forgiveness.

Under the new act, an additional $284 billion has been allocated to the PPP program which was first created earlier this year under the CARES Act. The newly passed act also allows businesses that have already received a PPP loan to apply for a second loan under the “Second Draw” provision, albeit under stricter guidelines. To apply for a Second Draw PPP loan, a borrowing company must have fewer than 300 employees (down from 500) and must be able to demonstrate that it experienced a 25% or greater reduction in gross revenue during the first, second, or third quarter in 2020 relative to that same quarter in 2019. Second Draw PPP loans are capped at $2 million compared to $10 million under previous PPP guidelines.

The new act also directly addresses one of the most frustrating elements of PPP since the program was first made available—the taxation of PPP. Under the new act, the good news is PPP borrowers can deduct expenses paid for using PPP loan proceeds that are subsequently forgiven. The provision is effective as of the date of enactment of the CARES Act. The provision provides similar treatment for Second Draw PPP loans. This new law seems to finally close the door on the PPP taxation debate, and overrules multiple efforts by the IRS to assert that taxpayers would not be able to deduct expenses paid for with forgiven PPP loan proceeds.

As with any major piece of legislation, there are important provisions that will impact different taxpayers differently. Business owners and leaders should consult their tax advisors on these recent developments.

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.

 

Contact Tim 772-221-4499, to discuss strategies for your business.

Thursday, October 15th, 2020

Company Sales Rebounding Despite COVID-19

By: Patrick Ungashick

Navix check

The COVID-19 pandemic brought many aspects of US society and business activity to a halt in March of this year, including sales of small to mid-market companies. Yet already there are signs that mergers and acquisitions activity (M&A) is rebounding for small to mid-market companies, an encouraging development for business owners who seek to exit from their companies by way of sale to an outside buyer. The emerging increases in company sales come after deal value in the US fell by 20 percent in the first half of 2020 to according to PitchBook Data. Deal value declined by one-third in the second quarter alone.

Buyers and sellers are coming back into the market, after pumping the breaks when the pandemic first hit. First, many companies have been largely unaffected by the pandemic. Other companies have adjusted their operations and are returning to profitable growth despite the ongoing public health challenges. Additionally, the upcoming US elections have spurred many business owners to resume exit planning out of fear of tax increases in the future.

Overall, the volume of sales of small to mid-market companies remains below pre-pandemic levels. However, signs point to the need for business owners to be ready to sell as the “window” reopens. In response, we recently published a new whitepaper, “Top 10 Signs You are Not Ready to Sell Your Company,” to assist business owners during these uncertain and changing times. Download a free copy to review if you and your company are ready to sell, or what it takes to get you prepared.

 

Contact Tim 772-221-4499, to discuss strategies for your business.

Thursday, June 25th, 2020

How Leaders Inspire Even in a Time of Crisis

I’m sharing a recent Inc. Real Talk Business Reboot Webinar with Simon Sinek.

Learn how to embrace an infinite mindset and strategies to lead your team through these difficult times and into the new Abnormal.

Inc SS

 

Inc. Real Talk Business Reboot:
Leading  Through Times of Crisis and Change

Sinek teaches leaders unconventional ways of thinking, acting, and communicating to help inspire those around them. He believes great leaders are the ones who think long term rather than short term. In today’s ever-changing world, knowing the framework for leadership is more crucial than ever.

What tools and strategies are you using to lead your team through these challenging times?

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

Please share this with a friend/colleague

 

 

Tuesday, June 9th, 2020

SBA PPP How to Maximize and Beyond

I was a guest speaker on the inaugural Small Talk online series for the Business Development Board on Martin county.  The interview is from late April and the key points remain valid as businesses transition back to a healthier economy.

The topic was How to Maximize Your Loan Funds.  Along with reviewing how to best use SBA PPP funds, we discussed what to consider moving forward.

 

 

Key take away points:

SBA PPP Funds:

Keep communication open with banker and CPA.

  • Be proactive
  • Review options
  • Ask questions
  • Document expenditures
  • Consider immediate and longer-term cash needs
  • Multiple cash flows

 

Keep communication open with vendors:

  • Terms
  • Vendors are partners- you want them to be there to get you back on track

 

Businesses are resilient.

Generally, businesses need to find a way to react quickly to an issue or problem.

  • How much money is needed
  • What is the best way to spend money now
  • How to make the next immediate decision

That is great during the time of crisis, but it is important to think future down the line.

Employees

They are the one who helped to build your business to where it is now, they will be vital  to re-build your business.

Keep in contact- keep communication open.

 

Opportunities in times like these

Resilience of people in general, Americans and Small Business

Small Business is the engine that runs this country- Small Business is what will bring the economy back.

  • Step back from the problem
  • Explore all new opportunities as you move forward
  • Challenge employees and help them find opportunities

Contact Tim 772-221-4499, to discuss strategies for your business.

Monday, June 8th, 2020

PPP Loan Forgiveness Just Got Easier

By: Patrick Ungashick

Sick Dollar

 

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: PPP Loan Forgiveness Just Got Easier

On June 5th, the new Payroll Protection Plan Flexibility Act (PPPFA) was signed into law, with the purpose of making it easier for companies with PPP loans to secure loan forgiveness. The new law was passed in response to widespread confusion and criticism surrounding the rules pertaining to loan forgiveness. The new PPPFA law is intended to provide greater flexibility to the loan forgiveness process, in order to help the millions of businesses and their owners survive the economic challenges created by the virus.

The important PPP loan forgiveness changes are:

1. More Time to Spend the PPP Loan Proceeds

The most significant change is that companies now have more time to spend the loan proceeds. Before the new PPPFA law, borrowers had only eight weeks (called the “covered period”) starting upon receipt of the loan to spend the funds. That pressured many companies to spend PPP funds more quickly than would best help them through the coronavirus crisis. Now, borrowers have until the earlier of either: (1) 24 weeks from the loan origination date, or (2) December 31, 2020, to spend PPP funds.

However, under the 24-week covered period, companies will have to maintain the number of FTE employees for about three times longer (24 weeks instead of eight weeks) to maximize loan forgiveness. To help employers address this, borrowers who received PPP funds before June 5th (when PPPFA was signed into law) can opt to remain with an eight-week covered period, if advantageous.

2. More Flexibility for How PPP Proceeds are Spent

The next important change is that the new PPPFA law reduces the amount that companies must spend on payroll costs to qualify for loan forgiveness. Previously, PPP borrowers had to spend at least 75% of the loan proceeds on eligible payroll costs. Under the new law, companies must spend at least 60%. This means that forgivable non-payroll expenses can now be up to 40% of spending, increasing from 25%. 

PPPFA also clarifies if borrowers are required to spend a minimum amount of loan proceeds. The new law clearly states that in order to be eligible for any forgiveness, a borrower must spend at least 60% of its total PPP loan proceeds towards payroll costs as defined under the CARES Act. Meaning, a borrower is not eligible for any loan forgiveness if it spends less than 60% of its total PPP loan amount.

3. More Time to Pay Back the PPP Loan

Another critical change is that borrowers now have five years, an increase from two years, to repay the PPP loan. The loan interest rate remains unchanged at 1.0%. 

4. Extended Safe Harbor to Preserve PPP Loan Forgiveness

The new PPPFA law expands the opportunities for employers who experience a reduction in employee headcount or wages/salaries to maximize loan forgiveness through several means:

  • Initially, PPP provided a “safe harbor” which permitted employers to avoid a reduction in loan forgiveness due to a significant decrease in employment and/or wage levels between February 15 and April 26, 2020, as long as the numbers of employees and employee wage levels are restored by June 30, 2020. The PPPFA extends this safe harbor restoration deadline from June 30 to December 31, 2020, giving employers six additional months to preserve loan forgiveness. 
  • PPPFA clarifies that loan forgiveness will not be reduced based on an inability to rehire employees if the borrower can document (1) written offers to rehire individuals who were employees of the organization on February 15, 2020; or (2) an inability to hire qualified employees for unfilled positions by December 31, 2020.
  • Loan forgiveness will not be reduced for borrowers who are able to document a failure to return to the level of business activity as existed prior to February 15, 2020, due to compliance with coronavirus-related guidance for sanitation, social distancing, or safety requirements from the Health and Human Services (HHS), the Centers for Disease Control and Prevention (CDC), or the Occupational Safety and Health Administration (OSHA) between March 1 and December 31, 2020.

5. Potential Longer Deferment of Loan Repayment

Additionally, PPPFA extends the loan deferment period for many borrowers. Under the previous rules, borrowers could defer loan interest and principal payments for six months (although interest does accrue during the deferment). Now, borrowers can defer payments until the SBA determines the loan amount forgiven for that borrower. Given the new 24-week covered period, and given that lenders have 60 days to act and the SBA has 90 days to determine loan forgiveness, this could significantly increase the deferment period for many companies. However, PPP borrowers cannot just stall filing their loan forgiveness application in order to extend the deferral period. If a PPP borrower fails to apply for forgiveness within ten months after the PPP loan forgiveness covered period (which is now the earlier of 24 weeks from origination or December 31, 2020), the deferment period ends, and the borrower must begin making loan repayments.

6. Payroll Tax Deferral Expanded

Previously, companies that secured PPP loan forgiveness could not defer their employer share of payroll taxes. The new PPPFA law now allows all borrowers that receive loan forgiveness to defer payment of employer payroll taxes under Section 2302 of the CARES Act. (The payroll taxes typically due between now and through December 31, 2020, may be deferred with 50% payable by December 31, 2021, and the other 50% payable by December 31, 2022. Similarly, a self-employed taxpayer can defer paying 50% of his or her self-employment tax that would be due from now through the end of 2020 until the end of 2021 [25%] and 2022 [25%].)

However, keep in mind that this payroll tax deferral is different from the CARES Act employee retention tax credit. The PPP and the employee retention credit are still mutually exclusive, and companies may not apply for one if they use the other.

PPP Loan Forgiveness Application

To secure loan forgiveness, borrowers must complete and submit to their PPP lender the Small Business Administration (SBA) loan forgiveness application. Borrowers should carefully review the 11-page application, and consider the various definitions and options under the loan forgiveness process. Business owners are encouraged to consult their tax and banking advisors. 

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.

Contact Tim 772-221-4499, to discuss strategies for your business.

Friday, April 24th, 2020

PPP Funds Replenished – What You Need to Know

By: Patrick Ungashick

Sick Dollar

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: PPP Funds Replenished – What You Need to Know

April 24, 2020 @ 12:00 PM

US federal lawmakers today passed legislation that replenishes the Payroll Protection Program (PPP) forgivable loan program, adding another $310 billion to the forgivable loan program created by the CARES Act in response to the coronavirus crisis. The first found of PPP funding, some $349 billion, was exhausted in 14 days as about 1.6 million US businesses rushed to secure a PPP loan.

Today’s legislation also restocks the SBA Economic Income Disaster Loan (EIDL) programs, adding $10 billion to the emergency grant program and $50 billion for disaster recovery loans. Both of those lending programs were fully exhausted, as US companies seek relief to help deal with the unprecedented challenges presented by the COVID-19 crisis.

If your company did not secure a PPP loan during the first round of funding, consider contacting your SBA-approved bank or other lending organization and completing an application as quickly as possible. Demand for the second round of funding is expected to be even greater than the first round.

If you did successfully complete a PPP loan and either have received your funds or are waiting for the funds to be released, be sure to study carefully the guidelines on the proper use of the funds and how to maximize loan forgiveness.

The following free resources can assist you with PPP and other relief programs available through the CARES Act:

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.

 

Contact Tim 772-221-4499, to discuss strategies for your business.

 

Friday, April 10th, 2020

How to Maximize Your PPP Funds

By: Patrick Ungashick

Sick Dollar

To help our clients and other business owners and leaders respond to the unprecedented leadership disruptions caused by the coronavirus (COVID-19) outbreak, the team at NAVIX offers the following crisis management information series.

Responding to Coronavirus: How to Maximize Your PPP Funds

Despite widespread stories of a chaotic rollout of the CARES Act Payroll Protection Program (PPP), some of the first companies to apply have received their funds. With millions of eligible companies expected to apply for this forgivable loan program, it will be important to properly utilize any funds your company receives from PPP.

Review the following steps and tactics to comply with the program, maximize the loan forgiveness amount, and provide the greatest benefit to your company. (Note: The US Treasury Department changed several important provisions of PPP while the program was being rolled out, so it is possible that some of the information provided here may change, or that additional guidance may be provided. Business owners must consult their tax, legal, and exit advisors to discuss how this program applies to your specific situation.)

1.Have a plan for how your company intends to use the funds prior to actually receiving them. Once your company receives the funds, an 8-week clock starts ticking. What your company does during this 8-week period determines the loan forgiveness, so it is best to be prepared before the funds are received.

2.Be prepared to carefully document during the 8-week period the company expenses that qualify for loan forgiveness. Your lender will require that documentation to apply for loan forgiveness on your behalf.

3.Create a balance sheet account to keep track of the PPP loan and funds. 

4.Deposit the PPP funds into a dedicated bank account. Document as you draw down the funds for eligible expenses to help create a clean audit trail.

5.Carefully monitor how the funds are used, consistent with your plan. To qualify for loan forgiveness, you must use at least 75% of the funds for payroll costs, as defined by the CARES Act. That means you can use up to 25% of the funds for eligible non-payroll costs, which are: rent, interest payments on mortgages, interest on pre-existing loans, and utilities. (Note: For purposes of determining the percentage of use of proceeds for payroll costs, the amount of any Economic Injury Disaster Loan (EIDL) refinanced will be included.)

6.Loan forgiveness may be reduced if either of the following occurs:
      a)Employees who made less than $100,000 of compensation in 2019 have their compensation reduced by 25% or more; OR

        b)The number of full-time employee equivalents is less than the same number of employees during; either February 15, 2019, through June 30, 2019; OR January 1, 2020, through February 29, 2020—you choose the more favorable period to apply.

(Two important notes here. First, it is unclear at this time exactly how loan forgiveness will be reduced, and we expect further guidance providing some sliding scale. Second, if employee terminations have already occurred, you can hire employees back by June 30, 2020, to still qualify for loan forgiveness.)

7.Avoid utilizing other CARES Act relief programs that nullify participating in PPP, including:
         a)The Employee Retention Credit

          b)Deferral of Payroll Taxes

8.During the 8-week period that starts immediately after receiving PPP funds, maximize the payment of expenses that qualify for loan forgiveness, for example:
          a)Time payroll where possible to maximize payments during the 8-week period

          b)Consider paying bonuses to employees who have demonstrated superior job performance during the crisis (remember compensation above $100,000 does not count toward loan forgiveness)

          c)Make catch-up payroll payments to any employees whose compensation was reduced as a result of the COVID-19 crisis

         d)Make additional or early payments on rent, mortgage interest, or utilities (up to the 25% threshold)

9.Remember that any amount of the PPP funds not forgiven must be repaid within two years, but loan repayment may be deferred for up to six months. 

10.There is no penalty for early repayment, but do not rush to repay any loan balance that is not forgiven. Make sure your company’s cash position remains strong until the business crisis has clearly subsided. 

11.Avoid any misuse of the funds. Business owners using the funds for fraudulent purposes are subject to criminal charges.

For additional information, download our free C.A.R.E.S. Act Executive Summary, which contains actionable information on the PPP and ten additional major tax, stimulus, and business programs created in response to the COVID-19 public health and economic crisis.

Download Summary

The NAVIX team has helped hundreds of business owners prepare for exit. We have also helped countless owners and leaders deal with recessions, liquidity crises, and economic upheaval. Our experience and perspective enable us to guide our clients through difficult times, such as these.
Contact Tim 772-221-4499, to discuss strategies for your business.
Wednesday, November 20th, 2019

Team Strength DISC

team_strength_logo

Team Strength DISC

 

Team Strength DISC is a simple, practical, powerful tool used to understand people. It focuses on individual patterns of external, observable behaviors and measures the intensity of characteristics using scales of directness and openness for each of the four styles:

Dominance
Influence
Steadiness
Conscientious

Using the Team Strength DISC model, it is easy to identify and understand our own style, recognize and cognitively adapt to different styles. The Team Strength charting app makes it easy to develop a process to communicate more effectively with others.

 

Word Art Team Strength

 

Team Strength DISC a tool to:

  • Demystify behaviors
  • Improve communications
  • Develop strong teams
  • Build better relationships
  • Facilitate conflict resolution
  • Self-growth

Team Strength DISC provides tools to help you become a better you – to develop and use more of your natural strengths while recognizing, improving upon, and modifying your limitations. Then, because we can easily see and hear these behaviors, we can quickly and accurately “read” other people and use our knowledge to enhance communication and grow our relationships.
Historical and contemporary research reveal more than a dozen various models of our behavioral differences, but many share one common thread: the grouping of behavior into four basic categories:

Dominance, Influence, Steadiness, and Conscientious.

There is no “best” style. Each style has its unique strengths and opportunities for continuing improvement and growth.

BEHAVIORAL STYLES

Historical and contemporary research reveal more than a dozen various models of our behavioral differences, but many share one common thread: the grouping of behavior into four basic categories.

The Team Strength DISC styles are Dominance, Influence, Steadiness, and Conscientious. There is no “best” style. Each style has its unique strengths and opportunities for continuing improvement and growth.

The assessment examines external and easily observable behaviors and measures tendencies using scales of directness and openness that each style exhibits.

 

DISC directness

This is part one of the Team Strength DISC Profiles Series.

Knowledge builds better relationships and strong teams. Team Strength DISC profile is a cost-effective tool that gives powerful results that can be used for both personal and professional relationships. I have used Team Strength DISC profiles to help businesses and organizations develop strong teams and great leaders.

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

Please share this with a friend/colleague

 

 

Friday, September 27th, 2019

Book Review: E-Myth Revisited By: Michael Gerber

E-Myth Revisited

By: Michael Gerber

E Myth

Readitfor.me Book Summary Review

When you become an entrepreneur, there are many predictable frustrations you’ll run into:

  • Not having enough profit
  • Not enough personal income
  • Not enough customers
  • Can’t find good people
  • Don’t have enough time
  • The business depends too much on you

And the list goes on. Finding your way out of those predictable problems is difficult, if not impossible, without a system that predictably produces the opposite of those issues.

That’s where The E-Myth and the Entrepreneurial Model it promotes comes in. According to Michael Gerber, the solution involves thinking about your business like a franchise – which is a proprietary way of doing business that successfully differentiates every extraordinary business from their competitors.

This is the classic “work on your business rather than in it” advice you’ll hear repeated by business gurus. The difference is that Gerber has created step-by-step instructions on how you should get there.

Through this book and summary, you’ll find the answer to the following questions:

1.How can I get my business to work without me?

2.How can I get my people to work but without my constant interference?

3.How can I systematize my business in such a way that it could be replicated 5000 times, so the 5000th unit would run as smoothly as the first?

4.How can I own my business and still be free of it?

5.How can I spend my time doing the work I love to do rather than the work I have to do?

Understanding the Rules

Here are the rules you’ll need to follow in order to get your business running like a franchise that produces predictable results:

1.The model will provide consistent value to your customers, employees, suppliers, and lenders, beyond what they expect.

2.The model will be operated by people with the lowest possible level of skill.

3.The model will stand out as a place of impeccable order.

4.All work in the model will be documented in Operations Manuals.

5.The model will provide a uniformly predictable service to the customer.

6.The model will utilize a uniform color, dress, and facilities code.

There are 7 distinct steps to get there, which we’ll cover in turn.

1.Your Primary Aim

Every entrepreneur starts a business for themselves. But we often get so tied up in the business that we forget that the ultimate aim of the business is to serve ourselves.

Here are the questions you need to answer with 100% clarity if you want your business to serve you, and not the other way around.

  1. What do I wish my life to look like?
  2. How do I wish my life to be on a day-to-day basis?
  3. What would I like to be able to say I truly know in my life, about my life?
  4. How would I like to be with other people in my life – my family, friends, business associates, customers, employees, and community?
  5. How would I like people to think about me?
  6. What would I like to be doing two years from now? Ten years? Twenty years? When my life comes to a close?
  7. What specifically would I like to learn during my life – spiritually, physically, financially, technically, intellectually? About relationships?
  8. How much money will I need to do the things I wish to do? By when will I need it?

2.Your Strategic Objective

Your Strategic Objective is a clear statement of what your business ultimately has to do in order to achieve your Primary Aim.

It’s a list of standards you can use to measure your progress towards hyour ultimate goal.

There are many standards you could include, but Gerber suggests that the first two on the list should be as follows.

First, you need to be clear on how much money your company will make when it is ultimately “done.” Will it be a $1 million a year company? A $500 million a year company? Something else? How much after-tax profit will it make? That’s the money you are going to use to build the life that you want through your Primary Aim.

Second, you need to build a business that can fulfill the financial standards you’ve set with the first standards. It tells you what kind of business you are creating and defines who your customer will be.

From there, there are no specific number of standards that need to be created. But it will help if you answer some of the following questions:

  • When is the ultimate version of your company (Gerber calls this the prototype) going to be finished?
  • Where are you going to be in business? Locally? Regionally? Internationally?
  • What type of business are you going to be? Retail? Wholesale? Something else?

The standards that you create for your business will ultimately become the business you strive to create. Many entrepreneurs skip this step when they start, and never climb their way out of day-to-day operations of their business.

3.Your Organizational Strategy

Gerber reminds us that most companies organize themselves around personalities rather than around functions. And the result, he suggests, is almost always chaos.

The next logical step in building your business prototype is to determine the exact organizational structure you’ll need in order to execute on your strategic objective.

Here’s how you’ll do it.

  1. Build an organizational chart for what your business will ultimately look like. For instance, you might need a CEO (which may or may not be you), a COO, a VP of Sales, account managers, and so on.
  2. Put your name in all of the positions that you currently fill. When you are starting out, this will likely be all of them.
  3. Create very detailed descriptions of each one of the positions, which Gerber calls Position Contracts. This is a summary of the results that need to be achieved by each position in the company, the work the person is responsible for, a list of standards that the results are to be evaluated against, and a line for the signature of the person who agrees to fulfil those responsibilities.
  4. Sign your name to each of the contracts you currently fill.

The insight here is that you should create the system inside your business based on the standards you want to set, rather than letting other people do it for you.

In order to free yourself up to work on the strategic parts of the business, you need to rest easy knowing that the tactical parts of the business are being taken care of.

For instance, you don’t place an ad for a salesperson until you’ve created the Sales Operations Manual for the company.

Once you’ve created the position contracts for each of the roles in the company, you’ll know exactly which standards you need to be hiring against.

4.Your Management Strategy

Now that you have your organizational strategy created, you can move on to your management strategy.

Gerber suggests that our management strategy is the system we create for the business. It shouldn’t and can’t rely on expensive and talented people. The more automatic and specific your system is, the more effective it will be.

At its core, it is a series of checklists for everything that needs to be done inside the business.

For example, a hotel would have a series of checklists for the people who clean the rooms. And another series of checklists for the people responsible for checking guests in. And so on.

Finally, you should have a mechanism built into your system for following up on making sure that the work in the checklists is done properly.

For instance, you could have your people sign a checklist at the end of each job letting the company know that the work had been completed based on the steps required. And then make it a fireable offence for signing off on work that hadn’t been completed.

The benefits of a system like this are clear. You’ll be able to hire and train new people so that they’ll quickly be performing the tasks and producing identical results to people who have been doing them for a long time.

5.Your People Strategy

At the heart of your people strategy is creating an environment where “doing it” is more important to them than not doing it.

One of the key parts to making this happen is to ensure that the people you hire understand the reason behind the work they are being asked to do.

As Gerber points out, people do not simply want to work for exciting people. They want to work for people who have created a clearly defined structure for acting in the world. A structure through which they can test themselves and be tested.

In short, a game. The key, of course, is to make sure you are creating a game worth playing.

Gerber describes the “game” a hotel owner had created where his hotel become a world in which the sensory experiences of his customer were greeted by a profound dedication to cleanliness, beauty and order.

This went beyond the commercial justification and extended into the worldview the owner of the hotel had. It was then communicated to his employees in both words and actions.

He communicated his idea through the systems they documented for running the business, and through his warm, caring manner.

Importantly, he set the tone for this game at the beginning of his relationship with his employees – before they were hired.

There were 5 distinct components to the hiring process:

A scripted presentation communicating the Boss’ idea in a group meeting to all the applicants at the same time. It described his idea, but also the history of the business and their success in implementing the idea, and what would be required for the successful candidate for the position.

Then he met with each applicant individually to discuss their reactions to his idea, and ask them why they thought they would be a good fit to implement the idea.

He notified the successful candidate by phone with a scripted presentation.

He notified the unsuccessful applicants, thanking them for their interest.

On the first day of training, the boss did the following:

    • Reviewed the boss’ idea;
    • Summarized the system through which the entire business brings that idea to reality;
    • Took the new employee on a tour of the facility, highlighting the people and systems that bring the idea to life;
    • Answered the employee’s questions clearly and fully;
    • Reviewed the Operations Manual with the employee, including the Strategic Objective, the Organization Strategy, and the Position Contract for the employee’s position.
    • Completed the employment papers.

This is how you bring the core values of your business to life.

6.Your Marketing Strategy

Your marketing strategy lives and dies with what your customer wants, and how you deliver it to them.

And understanding what your customer wants depends on you understanding the two pillars of a successful marketing strategy – the demographics and psychographics of your customers.

When you first start your business, you’ll already have defined the demographics of your customers. Your next job is to figure out as much of the psychographics for that segment of the market as possible.

What other brands do they buy? How are those companies – who are already successfully selling to those people – sell to them? What colors do they use? What messages are they sending? What values do they seem to be promoting?

Then, you’ll take all of that information and figure out what your business must be in the mind of those customers in order for them to choose you over everybody else.

Finally, you’ll make a promise your customer wants to hear, and then align your entire organization around delivering on that promise better than anyone else on the block.

Of course, as your company continues to grow, you’ll continue to learn about the demographics and psychographics of your customers, and continue to iterate on your marketing strategy over time.

7.Systems Strategy

The last piece of the puzzle in building your business is your systems strategy. There are 3 kinds of systems.

Hard systems are inanimate, unliving things. Soft systems are either living things, or ideas. The core of the book and summary so far have been a combination of those two systems.

The third system is the information system, which provides us with information about the interaction between the other two.

As an example, if you have a sales system that tracks the sales steps from beginning to end (you should), you would be tracking some or all of the following items:

  • How many calls were made?
  • How many prospects were reached?
  • How many appointments were scheduled?
  • How many appointments were confirmed?
  • How many appointments were held?
  • How many Needs Analysis Presentations were scheduled?
  • How many Needs Analyses were confirmed?
  • How many Needs Analyses completed?
  • How many Solutions Presentations were scheduled?
  • How many Solutions Presentations were confirmed?
  • How many Solutions Presentations were completed?
  • How many solutions were sold?
  • What was the average dollar value?

In short, the information system should tell you everything you need to know about how your people are performing, so that you can meet your strategic objectives, so that you can meet your primary aim.

Conclusion

Successful businesses are not built on myths. The right organization, people, management, marketing and systems build a business capable of producing the desired, predicable results.

Tim Kinane

Call 772-210-4499 to set up a time to talk about tools and strategies that will lead to better results.

Please share this with a friend/colleague