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Preface: “Strategy is the highest level of a plan” ― Fritz Shoemaker

Questions are the Strategic Runway Towards A Great Business

Credit: Donald J. Sauder, CPA | CVA

NOTHING succeeds in business books like the study of success. The current business-book boom was launched in 1982 by Tom Peters and Robert Waterman with “In Search of Excellence”. It has been kept going ever since by a succession of gurus and would-be gurus who promise to distil the essence of excellence into three (or five or seven) simple rules…….

It was only when they shifted their attention from how companies behave to how they think that they began to make sense of their voluminous material.

“The Three Rules ” is a self-conscious contribution to the genre; it even includes a bibliography of “success studies”. Michael Raynor and Mumtaz Ahmed work for a consultancy, Deloitte, that is determined to turn itself into more of a thought-leader and less a corporate plumber. They employ all the tricks of the success genre. They insist that their conclusions are “measurable and actionable”—guides to behaviour rather than analysis for its own sake.

They divide companies into three cutely named categories: “miracle worker”, “long runner” and “average Joe”. They even employ the cutest trick of all: the third rule is, “There are no other rules.”

The authors spent five years studying the behaviour of their 344 “exceptional companies”, only to come up at first with nothing. Every hunch led to a blind alley and every hypothesis to a dead end. It was only when they shifted their attention from how companies behave to how they think that they began to make sense of their voluminous material.

https://www.economist.com/business-books-quarterly/2013/07/13/where-thinking-is-king

Sometimes the best entrepreneurial lessons are not from business stories; to give an example of the power of thinking strategically, consider John 6: 3-9.

Then Jesus went up on a mountainside and sat down with his disciples.  The Jewish Passover Festival was near. When Jesus looked up and saw a great crowd coming toward him, he said to Philip, “Where shall we buy bread for these people to eat?”  He asked this only to test him, for he already had in mind what he was going to do. Philip answered him, “It would take more than half a year’s wages to buy enough bread for each one to have a bite!” Another of his disciples, Andrew, Simon Peter’s brother, spoke up,  “Here is a boy with five small barley loaves and two small fish, but how far will they go among so many?”

Do you know the rest of the story? Two questions, 1) Was the lad trained in strategic thinking 2) What was strategic foresight payoff that day? In addition, please carefully note the initial question.

Ask yourself the following business self-assessment questions, for the strategy and planning. If you answer any question “NO”, then follow-up and ask yourself – “WHY NOT”? Document your answers concisely.

Strategy | Planning

1. Does your business have three or more written values?
2. Does your business have a written purpose?
3. Does your business have a written vision or mission statement?
4. Does your business have a plan for key employee risks?
5. Does your business have written unique marketplace advantages?
6. Does your executive team review financials monthly?
7. Does your executive team have monthly or more frequent meetings?
8. Does your business have the real estate location to reach its long-term vision?
9. Does your business have a recognition in the community that aligns with its purpose and values?
10. Does your business seek advice from trusted advisors?
11. Are your businesses advisors and consultants trusted and effective?
12. Does your business have a plan to develop and groom its next-generation leaders?
13. Do your employees have confidence in your businesses executive team?
14. Does your executive and management team set and meet expectations quarterly or annually?
15. Does your businesses executive team invest at least one day per year analyzing historical performance and clarifying the future goal and mission?
16. Does your business contribute time or cash to the community that sustains its success?
17. Does your business have a succession plan?
18. Does your business have a buy | sell agreement?
19. When something isn’t working as expected in your business, does your management team invest the time to know why it isn’t working?
20. Does your business have an IT plan?

Preface: “I still keep asking these ‘how’ and ‘why’ questions. Occasionally, I find  an answer.” Stephen Hawkins. Genius cannot be that easy, right?

Questions are the Strategic Runway Towards A Great Business

Credit: Donald J. Sauder, CPA | CVA

Are you a businessman or a journeyman in business? Maybe neither? But, if you’ve asked that question, you are on the right path towards more effective management as either one. There is a difference. The entrepreneurial strategy that brought you to where you are in business today, if you are a journeyman in business, may not take you to where you want to be as a businessman. And yet that may not be a problem, because a journeyman in business can be as noble as being a businessman. The journeyman in business sometimes simply discovers benefits when managing their responsibility more effectively like a businessman.

Every business starts with a journeyman in business.

A journeyman in business takes deep risks, a businessman takes calculated risks, first, because he can afford it, and second, because he understands the winning is sometimes as easy as not losing. A businessman hires people who can help his enterprise grow, and he helps his team to grow along with it. A journeyman in business is focused on keeping up with the opportunities in the marketplace, and meeting project deadlines effectively.

A journeyman in business often doesn’t take the time to ask the questions that show they care about their organization, and at the root, the people who help them.

The journeyman in business finds fulfillment through excellent service and workmanship, while a businessman finds fulfillment through calculated expansion. A journeyman in business competes against the fierce competition, while a businessman observes the competition and works to keep the marketplace cooperative. Every business starts with a journeyman in business.

A journeyman in business often doesn’t take the time to ask the questions that show they care about their organization, and at the root, the people who help them. They enjoy and thrive on work. And that is a main reason their vision of an enterprise is sometimes held in check.

The following questions will help the journeyman pinpoint the depth of a lackluster business strategy, and provide a challenge to the businessman working towards an enterprise pinnacle.

If you answer any question “NO” then follow-up and ask yourself – “WHY NOT”?

The blink of the lights to that runway can begin with asking yourself the following business self-assessment questions. If you answer any question “NO”, then follow-up and ask yourself – “WHY NOT”? Document your answers concisely. There a several enterprise segments and we’ll begin with management.

 Executive Management

1. Does your executive team lead from example?
2. Does your executive team have the appropriate free-time to work on the business at least quarterly?
3. Does your business have adequate operational, financial, and employee risk safeguards?
4. Does your business have a clearly defined executive visionary and integrator?
5. Does your executive team have realistic expectations for growth and profitability?
6. Does your business have a strong relationship with a legal firm?
7. Does your management team regularly complete all tasks scheduled for completion each week?
8. Does your management team solve Company problems effectively?
9. Does your management team regularly discuss Company issues?
10. Do your management team strive to make management decisions that provide long-term solutions vs. short-term patches?
11. Do your management team value your teams character more important than team profits?
12. Does your management team deliver the field performance you expect?
13. Does your business have a cohesive and vetted management team?
14. Does your business have regular Company-wide meetings?
15. Does management reward and recognize Company employees for loyalty, 2^nd mile service, or continuous accountability?

Preface: Yes, we like lawyers, and if you’d like to know one reason why, research this quote.“I shall not rest until every German sees that it is a shameful thing to be a lawyer.”

Why Your CPA Advises You to Work with an Attorney When Necessary

Credit: Donald J. Sauder, CPA | CVA  (2015)

You are well advised to retain an attorney in certain instances. Why? Sometimes you don’t know what you don’t know. Your CPA appreciates this fact. After all, if you knew every tax and accounting angle, you wouldn’t need your CPA. When financial matters involve a peripheral individual or business, additional risks arise, and an attorney is worth the investment.

Often your CPA and attorney will work together to provide your business with a financial fortress. The fortress works like this.

If you need accurate financial statements, tax advice, resolution of an IRS matter, or numerical analysis, your CPA is the right resource. If you need to amend a partnership agreement, write a buy-sell agreement, incorporate a new business, or draft a letter of intent, you need an attorney. Remember this–if your CPA or attorney disagrees with this advice, you probably need a new CPA or attorney.

Often your CPA and attorney will work together to provide your business with a financial fortress. The fortress works like this. You wouldn’t pay a carpenter to install a new phone system in your business, nor would you pay marketing experts to install carpet in your new office. You understand the importance and value in working with a business or individual specializing in the task at hand. You would, perhaps, pay a human resource specialist to hire the right talent for a managerial role in your business. These are understandable examples of specialization. In too many instances, entrepreneurs have the wrong impression of what trusted advisors, such as their CPA, can do for their business.

Who forgot to take your name off the business credit card, or the at-the-limit-line of credit with your personal guarantee?

Suppose you are selling an interest in an LLC to your partner. You tell your accountant your plans, and he writes an agreement of sale document and amends the Operating Agreement. Your accountant makes the appropriate adjustments with the tax filing, and you receive payment. Here’s how things can go wrong.

Three years later you decide to contact the bank for a loan on investment real estate. Your banker says your credit score is too low, but when you checked five years ago it was stellar. The problem–the partner who bought your business interest has a delinquent credit card with a $35,000 balance.

Think of your attorney as saving you and your business from making major mistakes, not just getting you and your business out of major mistakes.

Who forgot to take your name off the business credit card, or the at-the-limit-line of credit with your personal guarantee? Don’t sweat a business attorney’s fees if you want savvy advice. It should be obvious why your CPA advises you to retain an attorney. They don’t want to pay the line of credit or credit cards from a malpractice lawsuit, and the professional oversight of an attorney provides additional financial protection to you and your CPA.

Think of your attorney as saving you and your business from making major mistakes, not just getting you and your business out of major mistakes. Listening to your CPA when they advise you to retain an attorney is in your best interest.

In summary, attorneys can save your business from legal hassles.   An attorney is an asset to your business, not a liability. Your CPA will likely give you a referral to a trusted attorney, should the need arise within your business.

Preface: “I never worry about action, only inaction” – Winston Churchill

Planning vs. Procrastination

Churchill might very well have been the “un-procrastinator”. Although he was plagued by doubts many times in his career, he never let such doubts interfere with the need to make a decision based upon the best available information. He made his share of mistakes, but he also realized that failure to make a decision is invariably the worst possible course…..click the link to continue reading.

Planning vs. Procrastination

Donald Feldman has worked with a wide range of companies in many different industries as an advisor with his business Keystone Business Transition, LLC. The KBT team works with a wide range of professionals, including leadership development specialists, employee stock ownership plan (ESOP) experts, qualified retirement plan and deferred compensation experts, merger and acquisition attorneys, and transaction intermediaries. These collaborations allow our advisors to develop a targeted transition plan that solves your unique challenges.

Preface: Kind words are like honey–sweet to the taste and good for your health. Proverbs 16:24 “Good New Translation”

I Can’t Believe He Just Wrote That

By Jacob M. Dietz, CPA

Preface: “Am I being careful enough with what I write to ensure that my implicit tone and meaning cannot be misunderstood?” Dr. Rob Skacel in Tailing Mulligan

Imagine Elmer’s business just entered the world of email. He and the team are excited about the whole new realm of opportunities and possibilities it opens to them. Now Elmer can document in writing what he wants others to do. It will be right there, in black and white. From now on, his team’s communication will be effective, clear, and mutually upbuilding. Right?

Although email does have some great capabilities, beware of the pitfalls that come with emails.

The Dumb Mistake

Elmer showed up at work Monday morning ready to fire off his first email. Elmer struggled with spelling, but he planned to rely on spell checker to get his emails right.

But that was 15 years ago when Elmer flunked his spelling tests consistently. He looked forward to typing emails that would automatically fix his spelling errors.

In school he dreaded spelling class. He received a 100% in spelling class one time. But it only lasted a minute. The teacher handed him the test, with a great big blue 100% splashed across the top and absolutely no red ink. Elmer was overjoyed. As he started to descend from cloud 9, he looked closer at the spelling test and realized the teacher mistakenly handed him the test of his cousin, Elam. Elmer pointed out the mistake. Dejectedly, he saw the red 60% on the test his teacher handed him with his name on it.

But that was 15 years ago when Elmer flunked his spelling tests consistently. He looked forward to typing emails that would automatically fix his spelling errors.

He needed a subcontractor to bring a dump truck to the jobsite that day, so he fired off an email to Eli, a subcontractor.

“hay eli I need your dumb truck today. Can you please drive it to the job down from your shop? Tanks elmer”

Spell checker showed no problems, and Elmer hit “send.”

Eli showed up for work that morning. While still rubbing sleep from his eyes, he saw the email from Elmer. Eli’s blood pressure rose when he read the email. “I can’t believe he just wrote that,” muttered Eli. Eli realized that his truck wasn’t the newest truck on the road, but he thought it could do a good job. It certainly wasn’t a dumb truck.

He quickly responded with his own email.

“Elmer, if you think that of my truck, then you can find someone else to help you. I prefer to work with contractors that appreciate me and my equipment.”

Elmer was confused. He liked Eli’s truck, and still hadn’t noticed that he inadvertently misspelled “dump” as “dumb.”

 Eli was taken aback. He thought Elmer was insulting him based on the email, but now, based on the nonverbal cues, Eli could tell Elmer liked him.

The Accidental Accusation

Elmer, while speaking on the phone with a customer, typed back.

“I do appreciate you liE. I don’t know why you think I don’t.

Eli was so frustrated, he decided to give up on email and walk the 500 feet down the road to Elmer’s shop. He opened the door to Elmer’s office. Immediately Elmer jumped up, smiled, stuck out his hand for a handshake, and said, “Hi Eli!”

Eli was taken aback. He thought Elmer was insulting him based on the email, but now, based on the nonverbal cues, Eli could tell Elmer liked him.

Eli asked why Elmer insulted his truck by calling it dumb. Elmer gasped “what do you mean? I never called your truck dumb!”

The Truth is Revealed

Eli told him to pull up the email. Elmer was dumbfounded when he found the word “dumb” in his email. I’m so sorry, he said, I meant to say “dump” truck.

Eli continued. “Then you had to accuse me of lying in your second email. I have never told you a lie for the 10 years we have known each other.”

Elmer was shocked when he pulled up the email. He now saw he had misspelled “Eli” as “liE.”

“Eli, I owe you an apology. Those misspellings were not what I intended to communicate. I was wondering if you could bring your dump truck to the job site. Thanks for stopping by this morning so we could hash out this miscommunication.”

Eli promptly forgave Elmer. The two shook hands, and later that day Eli’s dump truck was working away at the job site.

The Future of Communication

Eli and Elmer continue to use email to share information about jobs. They love the convenience of sending email and the ability to look back and see information that they would have forgotten if it had been delivered verbally. After the “dumb” truck email, however, they share a greater appreciation for the pitfalls of email. If an email seems insulting or unusual, they quickly meet face to face or call each other to find what is really intended.

Preface: Whatever your line of business services, to ensure your business is managed effectively, you need Bob Cratchit’s math skills to calculate your  costs accurately as frequently as every month.

Why Hourly Job Costing Analysis?

Donald J. Sauder, CPA | CVA   (2015)

Do know your hourly job costs? Maybe you need an Excel document from Bob Cratchit ? Costs count, and accurate hourly job costing is a easy component when analyzing if your business is making a profit on an hourly basis.

If you have a team of service technicians who service computer networks, how do you know how much to bid on a new server install or client network upgrade? How do you calculate what to charge per service hour? If one technician works on three projects in a day, how do you begin to calculate your cost for upgrading a hard drive, repairing a server power supply, and resolving malware concerns?

So when you calculate costs of your technician wages at $40 per hour, you can see that your true cost for your business per billable tech hour is closer to $114 per hour to upgrade the hard drive, repair the server power supply, and resolve malware concerns.

With thanks to Bob Cratchit, here is a simplified method to figure hourly costs for your projects. For example, your service technicians costs $40 per hour including employee benefits, employer taxes, and perks. If a hard drive upgrade takes 3 hours, your cost is $40 x 3 = $120 for labor. So what should you charge? Let’s say you have five technicians who work a combined 420 billable hours per month. Your cost for employee wages is approximately $1,600 per week (40 hours x $40 per hour), and $6,400 for the month ($1,600 x 4 = $6,400 per technician, per month). Overhead for the five technicians is $175,000 a year in rent, utilities, office supplies, advertising, office staff, and sales reps. Your fixed cost for the service technicians’ salaries plus overhead is approximately $575,000 per year. At 420 hours per month average your five technicians would work 5,040 hours a year. $575,000/5040 = $114 per hour of labor costs per hour to break even. For an 8% net profit margin, you should charge at least $123 per hour ($123 x 5040 = $619,920 of yearly sales).

So when you calculate costs of your technician wages at $40 per hour, you can see that your true cost for your business per billable tech hour is closer to $114 per hour to upgrade the hard drive, repair the server power supply, and resolve malware concerns.

If you didn’t accurately figure the cost of your operating expenses in the above example, and billed $95 per hour, your business would have a loss of $96,200 for the year based on the 5,040 billable hours. However, if you can optimize efficiency from you technicians and have only 4 technicians working 1,260 billable hours per year (vs. five technicians working 1,080 billable hours individually) you could decrease service wages $76,800, and decrease operating expenses and service wages to $482,200 per year to an average of $95 per hour.

Perhaps you have a good sales rep and have five efficient techs working 1,500 billable hours per year, which would be 7,500 billable hours yearly. With an overhead cost of $175,000 and technician wages of $384,000 your total costs of $575,000 would result in a cost of $77 per tech hour at 7,500 billable hours. So if you billed $95 per hour you would net $18 per technician hour, or $135,000 with five billable service technicians.

In summary, accurate costing is key to profitability in any service businesses be it plumbing, cleaning, electric, snow plowing or mowing yards. If you are unsure or need your confidence boosted when calculating cost, contact your trusted advisor.

Whatever your line of business services, to ensure your business team’s costs are managed effectively, you likely need Bob Cratchit’s math skills to calculate your updated hourly costs accurately as frequently as every month.

 

Preface: The Traction EOS Process™ provides a proven way to successful manage your business. The entrepreneurial operating systems (EOS) incorporates EOS Tools in the right order to best strengthen each key component of your business. One of those key tools is the Clarity Break. Try it. Scheduling your “vacation hour” monthly will likely be more challenging than you think. Read about it here….

EOS-Clarity-Break

Preface: Bitcoin is as much a speculative asset as a medium of exchange in today’s economy. While the Federal Reserve has no governance over the BitCoin exchange as such, as a digital cryptocurrency, its exchange value rises and falls on marketplace whims and traders.

Bitcoins in Business

Credit: Donald J. Sauder, CPA | CVA

You’re Invited to an Exclusive Building Your “Dream Team” Workshop

October 3, 2019

Develop Your People, Build a Positive Corporate Culture And Take Your Business To The Next Level

As leaders, we want our organizations to be high-performing, and in order for that to be a reality, our people need to perform at a high-level. When our people perform at a high-level, and they do it together, your organization will have your own “Dream Team”.

This workshop is for business leaders that aspire for their organizations to perform better, and in the process, produce better results. This workshop will address important questions:

 Join us on October 3, when Steve Erb, of True Edge Performance Solutions, will walk us through the following:

•  How can we make the positive changes to Build Our Dream Team and take our organizations to the next level?

• Company Culture -> Why does it matter? How can I impact?

• We’ll work toward evaluating your organization and identifying positive culture development strategies

• Your Greatest Asset -> How can I develop my team? What tools can I use to assist?

• We’ll work on processes and tools to help you build your “Dream Team” • Recognition -> Why is this so hard?

• We’ll work on recognition strategies that will enable sustainable change

Develop Your People, Build a Positive Corporate Culture And Take Your Business To The Next Level

As a workshop, you will develop and clarify your “Next Steps” for your business after each session; and you will have the opportunity to learn from others in a collaborative environment in the process.

Register Here: Building Your Dream Team Workshop

(A buffet breakfast is included.)

For more information, please contact:

Presenter: Steve Erb, MBA

True Edge Performance Solutions

SErb@TrueEdgeLLC.com

717-509-9177, ext. 106

“Grow With Traction” – An EOS (Work)shop to help you achieve your vision!

If you are the owner, leader or manager of an entrepreneurial organization who wants to see your business consistently run better and grow faster, Brian White and EOS can help you and your team simplify, clarify and achieve your vision.

Even the most successful entrepreneurs occasionally find running a business more challenging than they expected. Many work longer hours and get less return on their investment of time and money than they would like. Most entrepreneurs regularly grapple with one or more of the following challenges:

• Lack of control – over time, the market, or the company
• People – don’t listen, understand or follow-through
• Profit – there’s not enough of it
• Growth – is okay, but they just can’t seem to break through to the next level
• Magic Pills – Lots of remedies and quick fixes have come and gone, but the wheels are still spinning

If these problems seem all too familiar, you’re not alone. It doesn’t have to be that way. For over 15 years, Brian has been helping entrepreneurs and their leadership teams succeed. In this interactive workshop, Brian will introduce you to the Six Key Components™ of successful businesses. He’ll arm you with a set of simple, practical tools you and your leadership team can begin using right away to get more done and realize better results.

Read More Details on Eventbrite:

Clarify | Simplify | Achieve your Vision

Companies who should attend:

• A company that has 10+ people
• A company that is more afraid of the status quo than making change
• A company who is self-implementing EOS (read Traction, Get A Grip, have been implementing with no facilitator and/or downloaded some EOS tools)
• Companies who want to get to the next level (would like to see what EOS is and get some tools)

Brian is excited to share his expertise to help you run a better business.