Once You Conduct a “Work Climate Survey”, Act on the Results

This takeaway comes from a business owner who submitted a question about declining company morale. We suggested he conduct an anonymous “work climate survey” to find out what’s really going on in the company. The owner did and got some surprising results back and now wants to know what to do with the information.

To listen to the full question and answer, click here: Virtual Jam Session replay.

  1. Beware High Performing, but Disrespectful Team Members: A strong, cohesive team is crucial for enduring success. Team members must be “coachable” and able to grow with an organization. Somebody who is a star performer, but happens to be a real jerk can quickly poison a team and cause huge problems. Don’t be afraid to part ways with top performers who lack the emotional intelligence to work effectively the rest of your team.
  2. Address Issues and Challenges in a Direct, Respectful Manner: Some leaders are more concerned with “being loved” than actually leading their organization. If challenges exist (and they do…even in the best organizations), deal with them directly and don’t beat around the bush. Tiptoeing around challenges can quickly frustrate the rest of the team and cause people to question your leadership ability. Make sure you are factual, avoid personal attacks, empathize, and solicit feedback on potential solutions.
  3. Leadership is Not the Same as Management: Leadership is all about inspiring your team to achieve extraordinary results. Leaders carry an organization’s vision, cheerlead during tough times, pitch in when needed, and recognize that the organization is far more than simply the sum of it’s parts. Smart leaders understand that they don’t have all the answers and are continually improving themselves through coaching and other professional development.

For more information on getting the most out of your “work climate survey”, be sure to listen to a past Virtual Jam Session replay.

What New Business Ventures Should I Pursue And Which Should I Avoid?

Business ModelQuestion from Leah G. from Half Moon Bay CA

I’ve wanted to leave the traditional employment cycle/circus for more than 10 years so I’ve been saving money, reading, and attending entrepreneur start-up seminars. What business or industry do you recommend I avoid (which fail most often) and which offer the most promise (most likely to succeed)?”

If you want to listen to the full audio reply of Leah’s question, please click here!

First and foremost ~ If you don’t have experience or expertise in the restaurant/bar industry – STAY AWAY!!

Here’s a couple of pointers as you venture out:

  • Look at the margins of each business. Is there plenty of wiggle room? Not being tied to locations is always good, and most often have high margins. On the flip-side anything that is labor-intensive with location restrictions will most often have very thin margins.
  • Work in the industry you hope to have a business in, for at least 12-18 mo. Learn the ropes, become familiar with all aspects of the business. Be the expert.
  • What are you passionate about? Is there a business that matches that passion? Your entrepreneurial journey will be incredibly challenging if you aren’t emotionally invested in it.

Independent restaurants are difficult. For some reason that industry attracts people with no experience but that ‘like to cook’, they see the romantic side of the industry. Which of course is not the best plan when searching profitable businesses.

MLM, or multi-level marketing, remain very stale these days,. They tend to attract ‘wealth seekers’ and most spin out after a very short time.

Retail stores are extremely competitive. And remember, you are paying per square foot costs. AND paying on that square feet 24/7

On that same note, if you open a gym consider making available for other opportunities beyond your operation. For instance, is there a personal yoga instructor who can rent your space for her clients, or is there a group who can rent it out for meetings when you’re closed to the public? This will allow you to increase your revenue per square foot.

Consulting/Business Coaching are tough to sustain. Anyone can claim to be an expert in the industry and charge for their ‘expertise’. There isn’t much regulation so the market is flooded.

Bottom line ~ FIND YOUR PASSION, THEN FIND A PRODUCT THAT MATCHES THAT PASSION

And remember most people will overestimate how much revenue to be made in the first year of business and underestimate the revenue made after five years.

To listen to the full audio reply of Leah’s question, please click here!

Should I Consider A Line Of Credit To Grow My Business?

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Question from Gordy, from Lancaster PA:

“I’m loving my life as a business owner! I’ve been growing revenue and EBIDA since I opened my auto body shop 4+ years ago. I’m considering expanding my existing shop to add more bays and technicians or acquiring a second location. I have some working capital and capital reserve but wonder if I should consider a Line of Credit. If so, what do I need to do and what can I expect the process to be?

If you want to listen to the full audio reply of Gordy’s question, please click here!

Excellent question and congratulations on your success!

Let’s first explain EBIDA: Earnings Before Interest, Depreciation, and Amortization. In other words: How profitable will the business be?

First tip: before you grow make sure you’ve got the capacity, the pent-up demand behind it. See that you’re not growing just for the sake of growing. Are you being seduced by growth and ego? Be very cautious!!

To the question at hand – the challenge with any lending institution is they generally give you money when you don’t need it. Don’t get caught behind the 8-ball on this. You do not want to be in need and have the process go longer than you expect or have glitches in the process and you lose out on a potentially great business opportunity. It’s best to have the money at your ready.

So, YES! Get the Line of Credit, BUT don’t use it if you don’t have to! We’d prefer you grow your business through operating capital whenever possible but we are big believers in having a line of credit before you need it.

As far as the process goes – beware of a potential recession coming, not sure when but there will be, so lending may be tricky at some point soon. Another reason why, if you can get the line of credit now, do it. But know this – bigger banks have less leeway than the smaller, regional banks. If you have a smaller bank handling your accounts, approach them, they know ‘your story’, which is important. Also, know what you’re going to do with the money – account managers want to see your plans, hear your story. Have this speech ready to go. That being said, most of the time a line of credit application is a fairly painless process, easier than getting a traditional loan. And 4+ years in the business is a positive!

Last point to make here: Anything you can do to expand your current footprint is better than acquiring new property. Get to a point where you are bursting at the seams before you obtain more real estate.

To listen to the full audio reply of Gordy’s question, please click here!

 

How Do I Start A “For-Profit” Company?

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Write in question from Lavey, Newburn NC:

I am very comfortable with the 501c3 that I have started. How do I start a For-Profit business. Should I use an alias? Can they be connected in anyway?

If you want to listen to the full audio reply of Lavey’s question, please click here!

These are really 3 specific questions:

*If you’re comfortable with the non-profit side, why change?

*Alias’ – the answer is a big, fat “it depends”. Would you use your brand, or external brand. What is the impact on your non-profit?

*Should they connect in anyway? Same as the last response, unfortunately, a big, fat “it depends” Some for –profit businesses will have a ‘foundation ‘ or nonprofit arm. And they are able to continue their mission and receive tax deductible donations.

Some states have hybrid business entities: B-Corp, or L3c (low profit lended liability companies), it might be helpful to look into that to see if your state has that. If your non-profit is up and running well, talk with your state attorney. Non-profits are under scrutiny by the IRS and the government, really under the microscope so it’s important to do the legwork required.

Ask the “why” questions. Merging one to the other is not the wisest, we wouldn’t normally recommend it. Also, seek legal counsel. And consider non-profit vs. socially good business. There is nothing wrong with serving those in need and creating a profit from it. Consider reading a book by Dale Partridge, founder of sevenly.org and who does an immense amount benevolence work, “People over Profit”. It is an interesting commentary on this subject. He will also be speaking at our eUPRISING event in February!

To listen to the full audio reply of Lavey’s question, please click here!

 

How do you know when it’s time to sell your business?

For Sale By Owner Vector Real Estate Sign Ready For Your Own Message.

How do you know when its time to sell your business?

From listener Christine G. from Liverpool, NY

“How do you know when it’s time to let go of your business and if it’s time, how do you go about closing it or selling it?

If you want to listen to the full audio reply of Christine’s question, please click here!

First off, this is great question.

From the selling point of view: You must begin with the end in mind. Most people think about selling when it’s already too late. The best time to think about selling is 3-5 years out.

Try this: if you can step away from your business for 30 days and it becomes stagnant it’s not time to sell.  A few things to consider before selling: Who is your brain trust? and Are the systems in place?

Additionally, if you want to walk away, not sell but close the doors, there are legal process’ in place to do that. Get with your lawyer, business manager and CPA to do that properly. Sometimes its best to jump ship, as long as you learn from your mistakes!!!

When making the decision to sell: You’ve got to dig deep on reading the value of the company. Value comes in the business when the brand is created.

Things to consider to add value to your business:

~systems

~clients

~profits

~distribution channels

Finally, what TIME is good to sell – never when revenues are down. Sell when the business is on upward trending.

To listen to the full audio reply to Christine’s question please click here!