Thursday, September 21, 2006

Business Fundamentals - Goals

“A goal is a dream with a deadline.”

Most everyone agrees that you should set goals. I’m no different, I think it’s imperative to identify certain levels of achievement, and reward yourself upon reaching them. But there’s more to it than just setting goals. Let’s look at why you should set goals.

An older study done by Success magazine of Yale’s graduating class of 1953 gave us some pretty startling numbers regarding goal setting. Among other questions asked, three were,

Have you set goals?
Have you written them down?
Do you have a plan to accomplish them?

Pretty simple questions to which you shouldn’t have to think very long for an answer.

84% of Yale’s graduating class had no specific goals at all, mostly using the phrase “enjoy themselves”.

13% had goals, but had not put them in writing.

3% had written down goals, and had a plan of action to achieve them.

Twenty years later, the same class was interviewed again. The results stated this:

The 13% with goals not in writing were making on average twice as much money as the 84% ‘enjoying themselves’.

The 3% who had goals and plans in writing were bringing in on average 10 times as much as the other 97% combined.

That in itself is enough reason for me to write down all of my goals, all of my plans, and anything else that may be relevant. 10 TIMES AS MUCH!!!!

Goal setting and having a plan of action cannot be emphasized enough. It works, it’s worked for too many people too many times there is no arguing it.

Have you written your goals and action plans?
Do you have goals and action plans?

Before you even set your goals, do you know where you want to be?

Here’s another story, this one from Alice in Wonderland:

Alice: “Will you please tell me which way to go from here?”
“That depends a good deal on where you want to get to.” replied the Cat.
“I don’t care much where….” said Alice.
“Then it doesn’t matter which way you go.” said the Cat.

What a great illustration. You have to know where you want to go before you can choose your direction. If you know where you want to end up, then the first step is done and you can start to plan. If not, that should be your first priority.

You may have to do some self analyzing to find where you want to be. What are you good at? What are your weaknesses? What could you work at all day? What kind of people do you want to be around? You may also want to talk to those who know you best, and will be honest with you. Sometimes the things you need to hear aren’t what you want to hear, or what you would’ve told yourself. Be open to others input. And you should write all of this down as well.

Decide upon your destination, and now you are ready to devise your plan.

Here are a couple of guidelines for getting those ideas out of your head, and putting them into play:

Goals must be specific, concrete and detailed. You need to know what steps you must take to achieve your goal, by what date it must be accomplished, and how you are to measure achievement. A goal of “best sales month ever” won’t cut it. How much do you expect to sell during that month, and how are you planning on making it more successful than other months?

Believe in your goals. Make them challenging, yet attainable. You do not want to set yourself up for failure, and at the same time, keep the bar high enough that you are going to have to take your performance from ‘ordinary’ to ‘extraordinary’. If you set goals and come up a little short, as long as having a goal helped you get more out of yourself, then it served its purpose.

Remember, it’s the goal setting that’s important, not the goal getting.

You have to believe in your goals, and you have to believe in the effectiveness of goals. Goals must be in writing. An unwritten goal is just a dream, in writing, it’s a commitment. You must have the conviction to put your intentions on paper. I can speak from firsthand experience of the impact this will have on your business and personal life. Learning to identify goals and plans of action has been one of the most important tools for success for me personally. If you are serious about learning and growing your business, it will be for you too.


On another note, our group will be arriving in Connecticut for Ryan's bootcamp early Thursday afternoon. Pat and I have a couple of meetings scheduled but plan to spend most of the evening hanging around the hotel in order to meet everyone. Make sure you stop by and say hello.


Nick Berry

Tuesday, September 19, 2006

Creating Organizational Structure

Don’t let the title bore you. This is the fun stuff. Another necessary component of business building – well, successful business building. Anyway, you should love this. I’m going to teach you another step in systemizing your business, and pulling yourself out of it. It’s not nearly as difficult as you make it out to be.

Every successful organization has some semblance of hierarchy. Everyone has a role, and the more clearly defined that role, the more efficient a person can be in that role. The more efficient a person can be in a role, the better off everyone else and the organization as a whole. What I’m describing to you is an Organizational System. And any business that is successful has one. As a small startup venture, you will find it difficult to assign responsibilities and tasks to roles, because you may be the only individual filling many roles. It may even seem like there is no need for a system, if you don’t have anyone else to worry about. That kind of thinking will get you in a lot of trouble if you don’t change it fast.

By defining roles and creating an organizational structure, you are developing the prototype for how you want your business to look in the end. You should make sure every position is outlined, from the President down to the cashier – and each of their responsibilities and whom they are accountable to is defined. Nevermind that YOU are going to fill each of these roles for now – just work to get each position established and defined. And put it all on paper. Documenting everything you do will help you build your systems from the ground up.

So now you have your President, a VP of Marketing and a VP of Operations. Under the VP of Marketing you have your Sales Manager, under your VP of Operations you have your Service Manager. (For simplicity, I will leave off Sales Reps under the Sales Manager, and Techs under Service Manager, and any of the other titles we could have added. If you plan to make them a part of your business, then add them in accordingly.) You have your structure, and you personally are fulfilling the role of each one. For now.

Now you need to identify the responsibilities of each position. Again, documenting everything. You may even draw up a Position Agreement for each, summarizing the expected results, the expected workload, standards to be evaluated, and a signature line. Now you have a contract, an agreement, for the individual you deem worthy of this position, so they understand and are reminded of their role. Until you make the decision to bring someone into this position, then it is YOUR agreement to uphold.

At the point and time you decide your business is doing well enough you can afford and/or need someone to help you out, you have the Organizational Structure in place to do so. You need to decide who you are going to hire and for what role. Interviewing and hiring is another discussion, so let’s focus on that role. In most, if not all cases, you are going to hire someone for one of the lower positions, for a couple of reasons. 1) You aren’t ready to relinquish control of an entire division of your operation, and 2) you need to get someone started on the ground level, so you can evaluate and groom them for any promotion. It is also much simpler to bring in a new Sales Manager and refine or make any adjustments necessary than it is to bring in a new VP of Marketing who will also be your Sales Manager.

Now you’ve added your Sales Manager, freeing yourself from that role and giving you more opportunity to work on your business.

From here it is a takedown schedule. Next you look to find a Service Manager. Then a VP of Operations, which may be a promotion for your Service Manager. Then you move on to your next need. One by one you are bringing in people to a setting that is conducive to success. If you have done your job, defining the positions and training the employees, then you have a system in place. You have increased the predictability of the results. If your infrastructure is well-oiled, then you just need to focus on getting the right people in your organization.

Now, take that very generic model that we just developed, and imagine if you had never defined those roles. If you just did all of the work, and one day decided to hire someone to do the things you either a) don’t want to do, b) aren’t good at, or c) spend too much time on. What kind of structure is that? Where do you go from there? What would your prototype look like?

There is the key: the Prototype.

Imagine it. Define it. Realize it.

Decide what you want your business to look like in the end, and start to assemble the pieces.

Monday, September 11, 2006

Only if You Want to Save Time, Money, AND Sleep Better at Night

Running a business is a matter of survival for most, if not all of us. Entrepreneurship is an ever-evolving world in which you must make timely decisions on a daily basis that either put you ahead, or behind, the competition. We’ll never be able to make the right decision all of the time. I wish I could say we would. The choices you make regarding your vision, the direction of your business, staffing, expansion, your niche, the list goes on forever. Those choices can’t be made for you, nor should you want them made for you. There are however, several choices that should be no-brainers. The most important is the one that can save you, or cost you, thousands, or tens of thousands, of dollars a year.

I’m referring to your accounting, bookkeeping, and taxwork. This area needs to be in the hands of a professional. That may or may not be you. If it is, fine, if not, outsource it. You need to make sure your bookkeeping and taxwork is done properly. Improper bookkeeping and taxwork can cost you a TON of money, just being incomplete or sloppy. You work hard on your business, you deserve to take advantage of every loophole, deduction, or discount you can find. Wouldn’t you be better off to pay a few hundred bucks a month and insure the job is done properly, than to keep the books yourself and miss out on the countless deductions you could have had? You also set yourself up for some hefty fees and fines if any of your work is not done properly and on time. Let someone who knows what they are doing handle this. It will more than pay for itself.

I understand being a small startup and not having the capital to afford an extra couple hundred dollars a month. Make it a high priority. I’m speaking from experience, this will be one of the best investments you make. My first experience of keeping the bookkeeping in-house was VERY expensive. Look at it like this; you will spend that money one of two ways; 1) on fees, fines, or taxes, plus you will be spending your own time on your books, or 2) on an accountant, who is spending their own time, and they can deal with the govt and the IRS. And I can promise you this, option 1 will always be more expensive than option 2.

I’m sure you can get online and find some accounting software that promises to make things easy. And you probably feel better balancing your accounts each day and writing each check, which you can still do with an accountant. Can you ask your software or your spreadsheet whether you should lease or buy a car, extend a business trip into a vacation, and how much you should put aside for retirement?

No.

In short, specialists are worth their salt because they know how to save you time and money. Your accountant needs to be a part of your management team.

If you need some help deciding if you need an accountant or a simply a bookkeeper, I’ve put some more information regarding accounting up at:

http://www.fitnessconsultinggroup.com/personal-trainer-accounting.html


Unless you are a tax specialist yourself, you are probably going to need some degree of help with your financials. Don’t be afraid to spend the money, it will pay off. Get the books out of your way, and focus your mental energy on those other choices I talked about. They are the choices that can take you from good to bad, bad to good, or Good to Great. I have to mention Jim Collins' Good to Great, I'm currently reading it for the second time, and I forgot how good it was. Incredible book. If you haven't read it you should.


Nick Berry

Friday, September 08, 2006

Quick Management Lesson

When I first went into business for myself, I had 4 employees working along with me. I was running a pro-shop/smoothie bar inside a superclub. 23 years old, managing people pretty close to my age, enjoying the hell out of working for myself. I never had any turnover to speak of, a couple of college students would work temporarily, and then leave, always on good terms. I wasn’t everyone’s buddy, but if they straggled in a little late, or had something come up, I was a pretty forgiving guy. I talked to them about upsells, cross-sells, education, but there was no formal training. Whenever I needed to hire someone, I basically asked the other employees if anyone they knew needed a job.

After almost 18 months of doing this, I had the opportunity to open a second location. This was my goal from the start, and what I expected to be the time I really turned the corner regarding revenues.

What really happened is I turned the corner and became twice as incompetent as a manager. Everything that I had been doing wrong was magnified.

First off, I was trusting that whomever was working while I was away was a) on time, b) trying to increase sales, c) wasn’t stealing, and d) cared about the business as much as I did.

Wow, was I wrong.

I learned very quickly that absolutely no one cares about your business as much as you do. Bar none. That business is your baby, and if you don’t care for it like one, it will never flourish.

I also learned that you can’t expect what you don’t inspect. If I wasn’t holding them accountable for the tasks I assigned, I was assured that they would eventually stop doing them. Maybe not the first time, maybe not the 5th, but at some point the employee would come to the realization, “Hey, if he isn’t checking to see that I was cleaning those shelves, it must not be a big deal, so I don’t always have to do it.” That one can bite you really quick.

Not all employees are bad, don’t get me wrong. Most of my employees then, and my employees now, I believe, are good employees. Most of what they needed was proper management. The good employees have more to offer if you can reward and motivate them.

Poor employees need to be gone as fast as you can identify them. Don’t hesitate.
Probably one of the most important lessons I’ve learned as an entrepreneur, hire slow, fire fast. This principle, if not followed, can foster cancer and poison within your business. It’s as simple as that. Be very careful about the precedent you set regarding second chances, because as soon as you give an inch, someone is going to take another inch, and another, until it has become a foot.

Building your business will depend on your selection and management of employees, there is no way around that. This is the foundation of Jim Collins’ “Good to Great” which lends incredible insight into getting the right people on board, then putting them in the right place. Improving the quality, capabilities, and motivation of those employees can put your bottom line through the roof, or submarine your entire operation. Train them well, hold them accountable, and reward them. As soon as your employees elevate their level of performance, your business will be elevated.

Saturday, September 02, 2006

The Easiest Steps

I’m going to continue to hammer away at one of my points I’ve made so far, developing systems. It must be important, I’m going to make a Saturday post.

Hopefully after reading some of my posts you have stepped back and made an objective assessment of your business. Hopefully you took some of the insight I gave you to heart, and are looking to improve your business for the better. If that’s the case, then there’s no better time to start planning than now.

You need to plan backwards. Pat explains in more detail “Backwards Planning” in an article recently at http://http://www.fitnessconsultinggroup.com/fitness-riches-13.html. To be brief: Define where you want you and your business to be in 2 years…..then 1 year…..then 6 months………3 months…….one month……one week. Identify each and every step you need to take in order to hit each of your marks along the way. Be clear and specific. Start following your plan.

Well here’s my best advice on one small initial step you can take to make your life much easier, and free you up to work on your gameplan even more:

Automation.

It’s pretty simple. Anything you can have done automatically, do so. It makes complete sense. Automated programs take the workload off of you, eliminate human error, and encourage repeat business. What’s not to love??

You can automate your follow up marketing. You can automate billing. You can autoship supplements. Your business can be as systematic as you want to make it. These systems in particular are already developed, you just have to make the choice to implement them.

This is just a starting point. But only look into these systems if you want to make life easier…..and make more money……and have more free time………with less stress.

So maybe it’s not for you.

Have a great Labor Day Weekend and be safe.

Nick Berry