For over 25 years, I’ve been working with business owners who want to consistently improve the performance of their business.  In that time frame, there have been some pretty amazing success stories: companies seeing 30% compounded revenue growth, profit dramatically improving, and the owners taking home real money.  In looking back at the results, 19 of my clients have passed through the magic $1,000,000 personal net worth mark, due to the success of the cash flow of their business.

Whether you have a small, mid-sized, or large company, here are five tips that will help you be better and make more money:

1. Dominate your market.  Find an underlying advantage that will propel you ahead of your competition.  How do you do this? Look at your firms two largest costs; focus on how to stream line and improve the process.  Be much better than anyone in your market.  Have a brain storming session with your key managers – push them to think outside of traditional procedures. Find ways to improve speed, cost, and productivity.
2. USP. Your Unique Selling Position is critical in today’s competitive environment.  Everyone in your organization needs to know what makes your company: a) more unique, b) more valuable and c) a better choice (to your customers). Your employees need to be able to communicate this effectively, as with your advertising and marketing. The central theme in your marketing should always be consistence and repetition.
3. Focus.  Set clear goals for the next 90 days that you communicate to your management team (and maybe all of your employees). This could include: sales, gross profit margins, profit, accounts receivable, inventory turns (reduction), or unlocking a major bottle neck in your company; these are examples of what your management team can rally around and work towards.  Weekly meetings help keep the focus on the issues and measure progress towards your defined objective.
4. Control Your Cash. If Elvis is the king of Rock ‘n Roll, then cash is the king in business. A growing business consumes cash, so it is critical to construct a process in which you always know that you will have adequate cash to operate your business. Ideas can include: weekly billing, one person in charge of collections, a follow-up system on slow accounts receivables, a person(s) in charge of each line item in your expense section of your profit and loss statement, and most importantly (because this will bring all the elements of cash flow management together) a cash flow forecast.  A cash flow forecast is a spreadsheet that projects all the future sources and uses of cash in the business.  An updated monthly (or weekly) cash flow forecast is an early warning system on your cash position. This is the only effective way to “look into the future” of your business for anything you can do. Successful businesses always produce an updated monthly cash flow forecast – always.  This will take the stress out of managing cash.
5. Know Your Matrix.  Profitable growing businesses know their strengths and weaknesses; they know where they have been and where they are going.  It is critical that you know the 5 to 10 key indicators that drive the success of your business.  Most businesses fail to do this and operate by the seat of their pants every day.  Here are some ideas: break-even point (break-even point by division), profit, collected money, cash position, recalls, call backs, number of new customers, on-time delivery, and so on.  Every business and industry will be different, pick those that best reflect the overall picture of your business and review them weekly.

If you do this, you will see steady improvement in your business, I personally guarantee it.  This system has worked for me for years.

Much of what I do with clients revolves around the processes I have just described. While I have always preached on how critical it is to set revenue goals and march toward them, being a sounding board, a confidant, and accountability partner is just as important. If you need help in any of these areas, please give me a call or send me an email.

To Your Business Success:

Dan Lacy
Growth & Profit Coach, Financial Strategist, Cash Flow Doctor, CEO Mentor

P.S. I have received rave reviews for my book – Cracking the Financial Code. This is the most practical book on understanding your financial statements, and how to use them in your business. Get your copy now for only $15.

Go to:

www.dynastybuilder.com to order now.

Here’s what others have said about this book:

“Cracking the Financial Code removed both the mystery of financial statements and my excuses for not diligently using them.  This is a must-read for any business owner wanting to make informed business decisions.”
Jonathan Arnold, President, Tuitive, Indianapolis, Indiana

“In Cracking the Financial Code, Dan has taken difficult financial concepts and made them easy to understand.  This is a “must read” for business owners who want to grow their business.”
Kirk Klabunde, Senior Vice President, First Merchants Bank, Anderson, Indiana

“Cracking the Financial Code is a terrific reference source for growing companies to make sure their financial focus is sound.”
Terry J. Pahls P.E., President and COO, I Power Energy Systems Anderson, Indiana

Here is a proven principal that is very useful in helping you identify the BEST and sometimes the EASIEST ways to improve revenue/sales.  This concept was developed a few years ago by Tom Epply when he, as the president of his company, wanted to help his manager identify the best way to increase sales.

Tom named this the “stop light study” because it resembles a traffic stop light – Green, YELLOW, and RED.  The GREEN is the easiest because it is selling an existing product to an existing customer.  The relationship is already formed, the players are known and all that needs to be determined is what does the customer need that you are currently providing.  This is the easiest way to increase revenue in your business.

The Caution areas are YELLOW.  This is selling either a new customer an existing product or an existing customer a new product.  The familiarity with one of the two key functions is known; either the customer or the product, the other side of the equation has to be created: the customer or the product.  There is one unknown in this step and one known.  It can be done but it is somewhat harder than the GREEN alternative.

The RED box – finding a new customer to sell a new product to.  This has the highest level of failure and the sales cycle is the longest.  Not that this cannot be done successfully; but it takes the longest, cost the most and the highest level of risk.

The easiest, fastest and most cost effective way to grow revenue is by going to existing customers with one of your existing products (GREEN) ; the next best is going to existing customers with a new product or going to a new customer with one of your existing products (YELLOW).  The most risky is trying to find a new customer with a new product (RED).

I’ve help scores of businesses wade through tough times and come out on top. I would be happy to help you as well.

Unfortunately, many business people have not come quite as far since the Depression, in their ability to discern what makes a company or organization work and what needs to be done to ensure its survival. There are basically nine “danger signals” that indicate the strength and viability of a business is deteriorating:

1. Declining gross income, combined with operating losses. In most instances, declining sales will not be targeted as a problem until operating losses deplete cash reserves. Normally operating costs will remain high and not be adjusted as sales decline. This creates the operating losses that eat up cash reserves.

2. The absence of an operating plan to guide the company. Most managers do not use a carefully crafted planning procedure to create an on-going validation system. If a planning document exists, it is often shelved and forgotten as day-to-day concerns take precedence over future goals. When this happens, management has little or nothing to measure itself against and is oblivious to hidden dangers.

3. Breakdown in communications between upper management and the labor force. Failure to communicate vertically creates a situation where upper management cannot identify conflicts that exist in the on-going operation of the organization.

4. Inadequate cash flow. The ability to generate cash flow is the key ingredient in a successful business operation. Without adequate cash flow, an organization is doomed to failure. While it is normal for most organizations to have seasonal fluctuations, balancing these adjustments is critical for the survival of any organization.

5. Inability to convert accounts receivable to cash promptly. The slow collection process of accounts receivable can be a danger signal that a poor job of screening accounts and granting credit has taken place.

6. Inability to convert inventory to cash promptly. A slow down in inventory may signal a problem in the quality of products shipped.

7. Cash tied-up in nonproductive assets. Investing heavily in a new office building, equipment and personnel without careful planning can be a nonproductive use of assets and can destroy a company.

8. Amounts owed to vendors. When an organization is unable to meet the payment terms of their vendors, not only does a serious cash-flow situation exist, the future credibility of the company is in doubt. Long-term business success depends on the goodwill a company is able to generate with its creditors.

9. Low employee morale. Most employees truly want their organization to be successful. When a company is without solid direction, morale declines and with it goes productivity.

In today’s economic climate, if any of these ring true with your business, it is time to take swift action.

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There are steps to take as you head up the road to success. Here is a quick overview on Dynasty Builders and how I make millionaires by examining the financial side of businesses.

Have any questions?

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In 30 years of consulting with businesses, this is a common problem aired by most business owners. Smart business owners are frustrated because they are not making the progress they want personally. Not making the money they should, not seeing the growth in their business and not seeing their largest personal asset improve in value.  There are two primary causes of this, this article is going to speak to the first and next week’s article will deal with the second.

The most common problem business owners have is not understanding and utilizing the key performance indicators that monitor the performance of their business.  Not one of you reading this article would take a long trip in your car without looking at the cash gage or viewing the speedometer periodically to pace yourself against the posted speed limit.  The best performance indicators of a company are accurate and timely financial statements (profit and loss statements, balance sheet and statement of cash flow).  But less than 30% of business owners take advantage of this resource.

Let’s quickly discuss what understanding monthly financial statements will do for the owner of a business:

1. It is a report card on the performance of management that everybody outside of the business uses.
2. Bank and other lenders place a major portion of their decision making on the performance of the business as stated by the financial statements.
3. Vendors and other creditors will rely on financial statements to make key credit decisions.
4. Investors will strongly rely on the financial information from the company to determine if they should make the investment or not.
5. The government relies on them to assess taxes.
6. Purchasers of businesses will rely on financial information to decide if they want to purchase and how much they will spend for the business.
7. It is a tool to tell you, as the manager/owner of the business if you are on the right track in attaining your company and personal financial goals and objectives.

Financial statements provide the reference point for you as a manager to guide your company.  I believe that accurately prepared financial statements reflect all the activities in the business: employee satisfaction, product quality, on-time delivery, customer satisfaction, and all of the key financial indicators: revenue, margins, profit, cash flow and upside potential.

Most businesses leave thousands of dollars on the table every year in loss profitability because they don’t use financial statements as a management tool.

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Your business is your mission field and a tool that can be used by God in demonstrating the truth of the Gospel. Every day of the week people are influenced by you, and the way you run your business is your testimony to them — the only testimony many of them will ever witness.  The way you operate your business, how you believe in and market your product or service, how you pay your bills, how you maintain your facility, and how you treat your employees and customers are either an indictment or a wonderful demonstration of what God has done in your life.

Those who misunderstand money will misunderstand profit.  If Christians even subtly view money as evil, they cannot properly enact the biblical principles of sowing and reaping and of stewardship of resources.  Consequently, their ability to effectively operate their businesses — their mission fields — is adversely affected.

Just what is profit?  The textbook definition would define it as the difference between revenue and expenses.  But it is really more than that.  Profit is the only business goal that must be achieved.  Profit is the only thing that can reduce debt, increase working capital, and provide the ability to expand in equipment, facilities, markets or personnel.  Profit is the grease that keeps the business moving forward.  Profit insures that new capital and credit will be available.

Conversely, businesses without profit or with profit margins that are significantly smaller than competitors, are at a disadvantage in obtaining credit or attracting new capital, meeting obligations to creditors in a timely manner, properly compensating employees and in reducing debt.  These businesses are unable to grow, expand, and touch other people with their products.

One third of all new businesses fail in the first three years.  Over three quarters of businesses fail in the first ten years. Obviously, many factors go into those failures, but the bottom line is, there simply wasn’t enough profit — without it, businesses become statistics.

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As the Commander of your company, what is your battle plan for 2010?  Do you even have one? Economically, next year should be slightly better than 2009.  Credit will still be tight, there won’t be much growth in the economy and your competitors are doing everything they can to take your market share because they need the revenue to keep their doors open.   If you struggled in 2009, it won’t be much better in 2010.  Do you have a BATTLE PLAN for 2010? Are your chances of success much greater if you do have a strategy or do you believe in the “wait and see” strategy by commander Obama?

Hopefully, you will be one of the 15% of business owners who believes that your chances of succeeding in 2010 are much greater if you do have a battle plan for next year.  If so, here are 31 questions that will help you succeed in 2010:

1. Where are we likely to finish (sales/cash flow/profits) in 2009?
2. What went right this year?
3. What went wrong this year?
4. What should we have done in 2009 that we didn’t do?
5. What did we do in 2009 that we should not have done?
6. What are our remaining three biggest sales problems?
7. What will be the consequences if we fail to overcome them?
8. What new initiatives (sales, marketing, organizational structure, cash flow, financing) should we explore?
9. Besides solving problems and launching new initiatives, what must we do better than we’ve done in the past?
10. What can we do, for example, to insure that we will attain 100% of our monthly revenue targets?
11. How can we increase margins?
12. How can we reduce account receivables on a monthly basis?
13. Where are we wasting and/or spending too much money?
14. What can we do to maximize non-traditional revenue streams?
15. Where is our largest “growth market”, how are we going to identify that target market, and how are we going to sell them?
16. How can we do a better job of prospecting for new customers?
17. How can we improve the revenue from our regular and biggest-spending accounts?
18. How can we up-sell smaller accounts with big-account potential?
19. Should we consider any changes in organizational structure?
20. What additional people do we need for 2010?
21. What additional other resources do we need for 2010?
22. What additional training do we need to improve performance?
23. What “unique expertise” that is not available from our competitors – can we offer our customers?
24. What standard of performance have we set for our salespeople?
25. How do we get the sales staff to buy into our 2010 goals and strategic game plan?
26. What can we do to better manage each salesperson for the good of the company?
27. How can we make our employees jobs more enjoyable?
28. What monthly profit targets should we set for 2010?
29. What monthly cash flow targets should we set for 2010?
30. Does this management team believe our goals are realistic and therefore achievable? Why?
31. Am I willing to commit, without reservation, to hitting my targets and planning for them?

Create a plan of action based on your answers, and you’re on the path to great success. My monthly business owner workshop can help you work through these issues. I take 10 business owners, just like you, who are going to thrive in 2010. This is a hands-on monthly workshop that will help you create the battle plan that will drive you to greater success. Call 765-644-8887 or email Dan@DynastyBuilder.com to reserve a spot in the next group.

There are a lot of negative trends, percentages, etc. But you CAN grow revenue next year. Fully understanding the economy, YOUR market, and how you ATTACK will make all the difference for you. Here is a bullet point review of what has happened over the last 18 months that will help you get a macro perspective on what you think your company is capable of doing in 2010, based on your target market, geographic focus and product line:

• The economists predicted that the 2009 U.S. economy would contract by 2.4 percent and they were right.
• Employers shed 7.3 million jobs since December 2007. The official jobless rate last month jumped to 10.2 percent , a 26 ½ year high.
• Even with the bear market rally in equities and the recovering housing in 2009, household net worth has contracted nearly 20% or $12 trillion in lost net worth – a degree of trauma that we have never before seen.
• The birth in baby’s after World War II (baby boomers) has driven the U.S. economy for the last 5 decades.  There are currently 78 million baby boomers over the age of 53.  This mass of people realizes that they will live another 20 or 30 years and will never fully recoup their net worth loss in the 2008 – 2009 recession.
• People under 55 years of age are finding it difficult to get employment.  Those that are unemployed and under-employed is closer to 17%, this U-6 number is the highest since the statistic was developed in 1994.  There is a youth unemployment crisis in the United States of epic proportions and there are a record number of Americans that have been out of work for longer than six months who cannot find employment.
• Indiana has been hit harder than the rest of the nation in terms of jobs lost, percentage-wise, since manufacturing makes up a great number of jobs in the state.
• Credit availability for small businesses contracted dramatically in 2008 and 2009.  Small businesses that depend on access to credit account for more than half of all new jobs created nationally.
• The personal saving rate hit a high of over 12% in the early 1970s through early 1980’s and dropped for 30 years to 1.5% in early 2008 and reversed in the second quarter of 2008 and jumped to nearly 5% by the second quarter of 2009.  The largest reversal in the shortest period of time since 1952.

How the experts expect 2010 to stack up:

• The Financial Forecast Center predicts that the gross domestic product for the first quarter of 2010 will be flat, increasing ½% in the second quarter and steadily improve in the third and fourth quarters.
• Consumers will be cautious in their spending and will continue to save.
• Credit availability for small business will be hampered.  Most businesses are going to find it more difficult than normal to finance investments and expand their business.
• Prime rate is projected to remain at 3.25% through the first half of the year with a slight change of an upward move toward year end.
• The unemployment rate will drop to 9.6% by year end, small businesses will start adding new jobs.  It will take another 3 to 5 years to reach full employment.
• Inflation will remain low due to cautious consumer spending and continued high unemployment.
• The housing market will show some growth; but, like the overall economy, it will be muted.   Home prices are expected to rise slowly in most markets.  Nonresidential construction will be weighted down by excess supply and tight credit for firms seeking to buy or lease space.
• The only part of the population actually seeing any job growth in this recession is the people over the age of 55.  This age group that recently retired is finding they must go back to work to satisfy their retirement lifestyle.

You can probably spots some trends in the data that will have a positive impact on what you’re offering to your customers. If not, then perhaps you need us to help you figure it out.

Have you put together a specific plan? Have you prepared a detailed financial forecast for 2010 with revenue, margins, overhead expenses and profit?  Will you have enough cash to operate successfully in 2010?  Is your banker fully confident in your ability to improve your performance in 2010?   Will you sleep better in 2010 than you did in 2009?

Don’t have a success plan for profit, expenses, revenue and cash flow for 2010?  Contact me before December 22 and I will give you a 100% guarantee that if you use our program to develop your strategy in 2010, you will be miles ahead of your competition and you will sleep better at night.

My record in 2009:  70% of my clients had between a 15% and 40% reduction in revenue between 2008 and 2009.  82% of them are projected to beat their profit budget for 2009,  27% will make more money in 2009 than the in 2008, 100% of them have adequate financing in place, and only 8% are not performing up to budget levels.  Let me help you.

Zig Ziglar said it best “Every choice you make has an end result.”

So, we’re now into February. The Super Bowl is over, the holidays are especially over and it’s got me thinking about your New Years Resolutions for your business. Have those fallen by the wayside now that January is over?

I’d like to focus on getting refocused…yes? I want to do this by giving you the Top 10 New Years’ Resolutions Your Business Should Make. That’s right….in February.

Based upon what happened in 2009 and the nominal growth predicted for 2010, it’s not too late to develop some resolutions that will boost the performance of your business.

Here are 10 proven “Resolutions” that will make your business stronger and more resilient in 2010.

1. Develop a strategic plan for the year. Define what you want to accomplish and then develop a plan to get you there.You’re not going to get where you think you want to be, unless you know where you want to go. You should be able to write it down for all the people in your organization. That way, they’ll understand where it is you are going.
2. Put time down on your calendar to work on your business. Continued planning and reviewing your plans on a monthly basis is vital if you want a healthy, growing business. Take time to evaluate what did and didn’t work each month. That will help you set new directions or adjust old goals. This will help you stay on track and get to your destination.
3. Focus on profit. Over the years, I’ve met business owners who are ecstatic about the growth in their top line or expansion of territory or new product lines. However, profit is one of the key lubricants of a business. Profit enables expansion, strengthens borrowing ability, reduces costs, pays down debt and funds growth.  Profit is critical to the survival of any business and most business owners focus too little attention on this most important concept.
4. Learn something new that will help you manage better. Set aside a couple of hours a month to improve an area where you have a definite weakness.  Traditionally most business owners are weak in understanding of their financial data. There are a lot of great seminars that will enhance your understanding of financial information and how it is used in your company.  My seminar series for example, will greatly strengthen your financial understanding from reading the numbers, profit, cash flow, business value and management.
5. Get to know your top 10 customers. Opportunity knocks when you are face to face with your customers and learning about their challenges and obstacles.  There is tremendous synergy created when you take the time to meet and understand your customer’s needs. They appreciate your time and they like seeing the president in their facility.
6. Get a coach or mentor. A recent survey of business owners indicated that over 1/3 of them missed not having a sounding board or someone to talk too. Research has quantified that coaches will help business owners set better goals, maintain focus on key goals, improve profit, reduce stress and improve quality of life.
7. Promote your business regularly and consistently. Too often marketing and advertising fall to the bottom of the to-do list in a fast paced, crisis driven business.  If you want to grow your business, you have to make marketing and advertising a priority.  Take the time to create a marketing plan, it will help in your budgeting process, help in making poor, spur of the moment decisions and keep you focused on a monthly schedule.
8. Don’t make do, get a new one. Not every leader is eager to address poor performance, but weeding out a small number of “under performers” has a big impact on the rest of the workforce It gives the message that the organization is serious about tackling poor performance. Losing the worst and keeping the best helps improve organizational performance and re-energizes people.
9. Learn how to delegate and do more of it. There are many things to do when running a small business and it’s easy to deceive ourselves that we are the only one that can do it. Determine what your personal time is worth or your personal ROI and use that number to decide if someone else should do the task.  Delegation strengthens your management team and builds strong leaders.
10. Reevaluate all suppliers in search for the best prices and services. There have been alot of pricing changes in commodities throughout 2008 and 2009.  Checking your pricing between competitors may reveal that prices have in fact dropped and you were not getting the best pricing. Service is nearly as important so make sure a good price doesn’t detract from the level of service you need.

We help businesses create strategic plans. If any of the things above sound intimidating or time consuming, call us today. We’ll help you get organized and understand the things necessary to create abundance in your business.