Simple Rule that will Change your Business!

Always get a customer: Never lose a customer.

Sounds simple but very hard to do. A few aspects of this point:

Always get a customer:

• Prospect everyday for new business.
• Hustle. Easy to say but almost nobody does it.
• Do your homework. Get in front of the decision maker. This will instantly give you an edge against your competition.

Never lose a customer:

• Customer service must be a culture in your organization and not just a saying. This starts at the top!
• Sometimes you may have to give in order to keep a customer. Do it.
• Customer retention and repeat business must be the most important part of your business. Do you track it and know the math?

Question: When was the last time you trained your people on getting new business and keeping current customers?

Market Like Oprah

Oprah started her syndication in 1986. How has she done? 20 years at number one! But even more impressive is what I call the "Oprah Empire" and how she become the modern Marketing Guru! (Martha Steward, Donald Trump not far behind)

But look at the marketing EXCELLENCE of Oprah:

• Dr Phil: Now has his own show because of Oprah
• Rachel Ray: Now has her own because of Oprah
• Harpo Studios
• O Magazine
• Harpo films
• www.oprah.com
• Oprah book club
• Angel Network
• Radio syndication on XM Radio: Oprah and Friends
• Oprah Winfrey Leadership Academy
• Oxygen Media
• The Color Purple
• Friend Gayle King
• Friend Bob Greene
• Friend Dr. Oz
• Friend Jean Chatzky
• Friend Dr. Robin Smith
• Friend Nate Berkus
• Friend Dr. Maya Angelou
• Friend Marianne Williamson

From poverty to a net worth of 1.5 billion. That is why one of my new sayings is "Market Like Oprah!"

Where do you spend your time?

Most businesses are started by aspiring owners who only understand the technical side of their business. Those owners think all they need to know about business is that technical side. Wrong. That is why 80% of small business does not make it past 5 years of operations.

There is a huge distinct difference between "the business" and the "technical side" of the business. The business as a whole is the product not the services or things the business outputs. That is why good companies get "blue sky" when they sell rather than just asset based price.

If you are one of those business owners that only do the technical work, you really are not a business owner; you just have a job.

E-Myth and Micheal Gerber have a great principle called "Working On Your Business, Not In It." A good business creates a model that can run effectively and profitably without any one person. So what should you be doing?

• Owners should create the vision and establish the values and behaviors of the company. In addition, the owner should set the strategy to win for the company and communicate it to the entire organization. Good owners also are involved in the people process to ensure the right people are on your bus.

• Managers should be getting the results through others. This includes systems development, supervising, training, hiring, recruiting, and the orchestration of others.

• Technical work is the hands-on direct work of producing products or services.

Here is a guide for what you should be working on:

1. CEO should be 90% on entrepreneurial work, 10% managerial work.
2. Managers should be 20% entrepreneurial work, 75% managerial work, 5% technical work.
3. Employees should be 5% managerial work, 95% technical work.

Make sure you are working On your business and not In your business.

Values need to include behaviors; make them real!

Most companies have a mission statement and then a set a values with it. They are hung on a nice plaque in the lobby and then on occasion, dusted off and brought before the employees. The employees giggle to themselves and then everyone goes back to "real work" where everything is forgotten. These values need discussion.
Often these values are generic, vague, and cryptic. Examples include: ABC company believes in good customer service or 123 company values quality in our products. No kidding. Tell me a company that does not want good customer service and quality products. Then the company wonders why its employees are cynical and have no enthusiasm.
The solution: the values must include desired behaviors. They are very specific, crystal clear, and leave little doubts as to what is how the company operates.
Bank One has a five page singled spaced document outlining all values and corresponding accepted behaviors. Example is "We treat customers the way we would want to be treated". Most companies would stop there. Don't! Keep going as Bank One did and list the detailed behaviors expected. In Bank One's case on the value of treating customers are you would want to be treated, here are some behaviors:

• Always look for ways to make it easier to do business with us.
• Don't forget to say thank you.
• Never let a profit center get in the way of doing what is right for the customer.

Then once you have clear values and behaviors, it only works if you reward people that follow them and there are consequences for those that don't.

Don't be a company that has values which are just a bunch of noise. Have values and specific behaviors that actually mean something. Once done, your employees come alive and your company will take a huge step in achieving full potential.

Employee Reviews

When was the last time you gave/received a 100% candid, no b/s, meaningful performance appraisal? If you are like most companies, the answer is not good. The fact is, most companies do not have a proper employee evaluation process in place. This is not good.

There is no "must do" system for employee reviews but here are some tips that should be in place:

• It should be 100% candid and honest. No sugar coating; no glad handing; no dodging; and not an ounce of anything fake.
• Clear and simple. Take out all bureaucracy. No more than 2 pages per person. The key components must include: What the person did right; What the person needs to do to improve.
• It should gauge people on important issues that you and the employee agreed to that directly relate to the employees performance.
• Once a year in a formal face-to-face organized and structured meeting.
• Should include future generations development. Managers get to know exactly where they stand and what the next steps are plus the employee should give a couple names of people that could replace them in the event of a promotion.

The system must be full of 100% integrity. Without integrity, it becomes just another wasteful bureaucratic exercise. The evaluation system should measure both quantitative results and qualitative behaviors. Both are very important for future success.

In the end, successful companies let the employees know where they stand and what is needed to move forward; and the employee appraisal process is the tool to get that done right.

The Leader's Seven Essential Behaviors by Bossidy

How do you rate?

1. Know your people and your business
2. Insist on realism
3. Set clear goals and priorities
4. Follow through
5. Reward the doers
6. Expand people's capabilities
7. Know yourself

This is what it takes to be a leader. How do you develop these qualities? Mainly from paying attention to experience. You can't master the above by reading a book or watching a DVD. As Bossidy says "this is not an intellectual exercise". Its just takes experience.

That is why every experience and especially the negative one's become positive in the end. Learning these behaviors takes guts, persistence, and a willingness to dust yourself off after being knocked down. But once you get it; sky's the limit and there are not limits to your success.

Are you ready for 2007?

Most businesses will depend on the hope plan this year instead of planning and controlling what happens. You know how the hope plan goes: I hope it’s a good year. I hope we get more customers. I hope the phone rings. I hope more people move to our town. I hope the new product sells. I hope I make some money.

If you’re serious about planning for success this year and especially if you want to actually control your profitability this year, don’t just hope, make it happen instead. And for those of you who decide to make it happen, here are some tips on how to pull it off.

1. Track it. Most important, you have to figure out where you are actually at; and what you actually did last month, last quarter and last year. You need to know your averages and trends. In each category, you need your total for the year, your totals each month and your current average (current average = last 90 days) in examples below:

• Income
• Customer Retention
• Closing Ratio
• Selling/Variable Expenses
• Fixed Expenses
• Inventory
• Gross Profit

At a minimum you need to start with some basic tracking to get an idea of where you are at. Why is that important? Because not knowing your averages makes goal setting a crap shoot because you don’t have a baseline to start from. Without knowing exactly what you do now, you have no idea how to even duplicate your production/results from the last 12 months, much less how to improve it.

2. Set your goals for the year.

Key words in goal setting are realistic, achievable, specific, written and review.

If you sold 100 units last year, and your goal for this year is 200 is that realistic? Is it realistic for you to double your sales this year?

“Realistic” is critical and that’s where all these old sayings come from because it’s true that...

“Whether you think you can, or think you can’t, you’ll be right.” - Henry Ford
“When you can see it and believe it, you can achieve it.” - Napoleon Hill
“What you see is what you get!” - Unknown

To set a realistic goal, use your baseline (your current average) and go from there. The how you’ll reach your goal is the important part of goal setting. It’s the plan of action you’re going to follow. Your goals have to be written and they need to be specific about what your objectives are (your goals) and what your plan is to reach those goals.

A goal isn’t just what you’ll do. As J. Douglas Edwards said, it also has to include “the service you’ll render to achieve that goal”. You don’t just wish for more sales, there’s a payback, and that’s what you’ll change about your selling style, skills or activities to reach the goal.

“Review”: How often should you review your goals daily? Seriously, if you set a goal and read it at least once a day, don’t you think you’d stay more focused on it, believe it more and then be more likely to actually hit it? Of course you would. So make some cards with your goals on them. Put them everywhere you will see them. The more often you read your goals, the more likely you are to reach your goals.

Today’s business is filled with nothing but opportunity, especially right now while so many owners', managers' and companies attitudes are out of whack, so go for it this year. You’ll be amazed at what you can accomplish when you are prepared and have the right attitude.

And if you need help; we can teach you how to reach every goal and have a profitable year.

Almost everyone reading this will miss hitting goals just by a little bit, just because of something you haven’t been taught yet or a step you know you should take, and don’t. We can help.

Have a great year!

CJT

A Playbook

Do you have a playbook for your business?

Just like a great sports team, your people need the know "the plays" for your company. You should have standard operating procedures for your company that detail the way business is done in your company. This provides structure, accountability, and consistency; all of which equal solid r.o.i.

A playbook does not mean you eliminate creativity or better ways of doing things; but it does make sure you have an agreed upon set ways of conducting business.

Would a sports team be the champions without everyone knowing the playbook and plays to win the game? No.

Your business is no different. You need a playbook.

PEOPLE PEOPLE PEOPLE

By far the most important factor in succeeding in today's business environment is people. Those companies with the best people win. Its that simple. But why does this constantly get ingnored?

It starts with hiring process. Most companies hire when they need someone and then are in a position of weakness. The best people are not looking for jobs; they already are in a good jobs and most are happy. The best companies are recruiting and looking for good candidacy everyday. Its a culture of finding good talent that separates good hiring practices. Once you find good talent, a good interview process is critical. Candidates should go through several interviews before being hired.

Once hired, then a training program is needed. Training should be both initial and on-going. How much time does your company invest on initial and on-going training? Do you have a detailed training process? If not, why? After initial training, there should be an structure on-going training program that develops talent and the next generation of leadership.

As part of on-going training, employees should be ranked to determine who is performing and who is not performing. I use A B C. A people are the best performers and the company must have a plan to retain them. They are superstars that drive the company. B are good, solid performers and must have a plan to move them into A. C are under-performers that must be terminated.

The company must reward performers (A).

Some quotes on people:

• Your staff is a direct reflection of you
• Having the right people is 99% of success
• Everyone says they want "good" people but don't have a list of skills, traits, and backgrounds they are looking for

There is nothing more important than working on and with your people. Do your priorities match this?

CJT

Formula for a Successful Retail Store by Chris Tapken

1. Good Location with high traffic count, plenty of parking, with easy access. (no wasted square footage)
2. Excellent Professional Trained Staff. An existing, structured on-going training program.
3. Excellent Customer Service (standard of excellence).
4. Managers paid on profits; like an owner.
5. Managers held accountable through numbers; Managers get daily, monthly and yearly numbers. There is a clear vision and communication on the key economic driver.
6. Clean Store.
7. Able to service customers quickly.
8. Up to date décor with an up scale look and feel. Design elements are present.
9. Inventory controls and excellent Inventory display.
10. Technology; computer system to provide managers information and customers efficiency.

Does your company have Charisma?

Some companies have it and some don't. Companies that have charisma are full of customers and making money. There is positive energy in those companies that have it.

It is like the leader that has charisma. People listen to them. People are drawn to them. People will follow them.

The same is true for businesses with charisma. People buy from them. People want to be associated with them. People want to sell to them. People want to work for them (most important; good people want to work for them)!

Think about your company.....Does your company have Charisma?

My Inspiration: My Son

3 things every good business has:

I was told of business man asking a highly regarded consultant, "What is the one thing all good businesses have?" The consultant thought about it for a couple days and came back and said, all good businesses have these three things:

1. Priorities: The priorities of the business are clear and defined. There is effective communication on what is the most important priorities of the organization. Everyone is on the same page. The effective organizations also make sure they have the "correct" priorities defined and are working on the most important things. This is at the heart of execution. To have excellent execution, you must first define clearly what is it that needs to be done and in what order.
2. Tolerance: All great organizations have tolerance levels set that are clear and defined. Once the priorities are set, the next step is to define the tolerance levels for those priorities. Example: A priority is to gain 12 new customers per month. The next step is to clearly communicate the tolerance level for hitting/not hitting the defined priority.
3. Stewardship: There is a clear presence of stewardship in the organization. This is managements responsibility to properly utilize and develop the talents of the team. There is a clear vision of putting people in the position to win where by the entire team then makes the company better for the next generation.

Formula to Profits

1. Charts: A simple measuring stick
2. Inventory: Key to profitability (including time)
3. Pay Plans: Proper Pay is a key to outstanding performance
4. Forecast: Intelligent based on profits
5. DOC: Daily Operating Controls; a tool needed to manage daily and hit the profit targets

Definition of a Customer?

Anyone whose actions affect your results.

• Employees
• Ex-Employees
• Vendors
• Partners
• Bankers
• Distributors
• Neighbors
• Charities

These are all customers of your business that typically you forget to treat like customers. Word of mouth is the best way to advertise your business. Its cheap (free) and its the most effective. You get positive word of mouth from you customer base. Lesson: Don't forget the definition of a customer and who your customers are.

Customer Service Must = Excellence

Here is a strategy that has worked. One of the keys to success in today's retail is that of customer service. And the standard for Greenlight Consulting is Excellence. Also you must be very clear about who you are and what you are going to do. We think Ritz-Carlton does an excellent job and here is an example.

Read this and then ask, how is my business on excellence? This standard of excellence is what customers are looking for today. Example: You have 2 bagel shops in a town and one has no standards for excellence and the other has a culture of excellence. Who wins? If you organization does not have a system for excellence, call 605.359.8920. We can help!

THE CREDO

The Ritz-Carlton is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed, yet refined ambience. The Ritz-Carlton experience enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of our guests.


MOTTO

At The Ritz-Carlton Hotel Company, L.L.C., "We are ladies and gentlemen serving ladies and gentlemen." This motto exemplifies the anticipatory service provided by all staff members.


THREE STEPS OF SERVICE
1. A warm and sincere greeting. Use the guest's name.
2. Anticipation and fulfillment of each guest's needs.
3. Fond farewell. Give a warm good-bye and use the guest's name.

SERVICE VALUES: I AM PROUD TO BE RITZ-CARLTON
1. I build strong relationships and create Ritz-Carlton guests for life.
2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.
3. I am empowered to create unique, memorable and personal experiences for our guests.
4. I understand my role in achieving the Key Success Factors and creating The Ritz-Carlton Mystique.
5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience.
6. I own and immediately resolve guest problems.
7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.
8. I have the opportunity to continuously learn and grow.
9. I am involved in the planning of the work that affects me.
10. I am proud of my professional appearance, language and behavior.
11. I protect the privacy and security of our guests, my fellow employees and the company's confidential information and assets.
12. I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment.

THE EMPLOYEE PROMISE
At The Ritz-Carlton, our Ladies and Gentlemen are the most important resource in our service commitment to our guests.

By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company.

The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened.

John Wooden Pyramid of Success

This is powerful wisdom from one of the greatest men ever. Not only a tremendous professional success but a even better man. This is truly a great human being. One of my favorite teachers.

How are your Inventory Controls?

Inventory Controls

Inventory is key part of small business success but unfortunately, often is not priority for most owners. With most business becoming increasingly more difficult and margins becoming slimmer, owners must be able to successfully manage inventory. Most business owners pay attention to only the income statement expenses and not the balance sheet items like receivables and inventory. That it is unfortunate because most of the time, a business struggles due to a lack of controls on the balance sheet.

Are you in control of your inventory? Can you answer?

• What is your current carrying level of inventory?
• Do you have guidelines for carrying levels with seasonality considerations?
• Which is your top selling products and does your carrying level reflect that?
• Which product line or individual product has your best return on investment?
• What is your average inventory turn?
• What is the most price point product you stock? What is the most price point product you sell? Is there inconsistency here?
• Do you stock what you sell?
• How often do you audit your inventory?
• What inventory gives you the greatest exposure to loss or market condition changes?

Many things can be done to boost profits in inventory. One of the key things to understand is which inventory line (if not exclusive) or individual product is providing the best rate of return on the investment (roi). Gross profit is typically sales minus cost of investment. Return on investment is gross profit divided by the investment. This gives you an annualized percentage rate of return on your investment.

Then you want to get a grasp on how long you keep the product in order to generate the gross. The goal is to turn the product quickly. Many times business owners keep products far too long on the shelves for one product and not nearly enough for the next product. The result is a slower turning inventory lowering the owner return on the investment.


To figure ROI:

1.Calculate the Rate of Return

• Gross profit divide investment cost = rate of return

2. Annualize the Days in Stock

• Days of the year divided Day Actually in Stock = Annualized turn.

3. Calculate the Velocity of your Money

• Rate of Return multiply Annualized Turn = Return on Investment (ROI)
  

Step One: Rate of Return Gross Profit 40 Investment Cost 70 = 57% rate of return

Step Two: Annualize the days in stock Days in the Year 365 Days in Stock-Actual Day in Stock 45 Annualized Turn = 8.1

Step Three: Calculate the Velocity of Money Rate of Return 57% Annualized turn Multiply 8.1 Return on Investment Equals 461%

Once you have this information, you can correctly stock your inventory and maximize your return on investment. Profitable business owners do not guess on inventory. Rather they a system based on math and very efficient with cash and hence profits.

Greenlight Consulting was created to provide leadership and tools for today's business and personal success.

Our mission statement: As teachers we provide quality consulting for a reasonable fee to help our clients reach their desired goals.

Greenlight consulting is a full scale consulting firm focusing on helping small businesses. The area of consulting include: General Accounting, Sales, Budgeting, Pay Plans, Organization, Business Plans, Financial Statements, Financial Analysis, Business Development, Bankruptcy Protection, Bankruptcy Re-Organization Plans, Management Consulting, Management Teaching, Coaching, Leadership Training, Customer Service, HR issues, Hiring and Recruiting, Computer Applications, Computers Usage, Entrepreneurship, Accounting Systems, Franchising Ventures, Marketing Strategy, Advertising and Promotion, Problem Solving, Goal Setting, Competitive Analysis, and Detailed Automotive Consulting.

Greenlight Consulting has the experience to return profitability to a struggling small business; take an average business and make it better; protect a high growth business from crashing; take a flat/declining business and make it grow; take a negative culture company and make it positive; install accountability into a company with none; make an unorganized company, organized; energize a flat company; coach and train managers/employees to succeed; get the best people hired and motivated for small businesses.

If you would like to contact us call 605.359.8920