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Why Isn’t My Company Making Money?

Don’t just wish for business success – plan for it.

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What does it take to be a compelling business leader? We hear all this talk about leadership styles but, really, is any one style preferable to the others? In my observation, there is no single, universally superior leadership style. Some people are in business to save the planet or share their unique gifts with the world. Some people are in business just to make money. Either way, whatever a business does, it succeeds by making money. So let’s forget about social value, put aside purpose and look at a simple question: How do I make money in my business?

For most business owners, the answer is simple: We only get what we want if we manage it consciously. Do you manage your company’s money every day, every week and every month? Whether you’re hard-driving with huge goals or you just want to see results improve a little, a simple plan and a bit of attention will go a long way.

If we don’t make a money plan and track it daily or weekly, then our subconscious attitudes and assumptions will manage our work, time and money. That will keep us locked in at the same level of profit – and net revenue – month after month. When things are going well, you put on the brakes and go easy on yourself. You do that each week. You push when it’s slow; you ease up when you are doing well. That’s exactly the mentality that limits your business’s potential. And results never improve. That’s the problem. What’s the solution? Make a plan, track work, income and expenses daily or weekly, define the work, and track progress monthly.

1. Make a plan.

Your money plan can be a simple Excel spreadsheet. The key is to link work activities to income. What does each employee do that makes money? What do you sell?
If you sell products, you need to make individual sales projections. If you sell flat-rate services, then you need to track contracts closed and the rand value of each contract.
If you sell hourly services, track contracts closed and billable hours. The basics are:

  • Up goals and consequences.
  • Let each team member know what they contribute to the team, and make sure they get incentives. Whatever is good for the business has to be good for the employee. Incentives include recognition, thanks, appreciation and, of course, more money.
  • Give each team member a choice.
  • Set a range, with a low goal and a high goal, and provide tangible incentives for achieving the high goal. This gives the employee a sense of control. During a good month, they make the high goal. During a month when their kids get sick a lot, they still know what they need to do to satisfy you and be secure in their jobs. When people feel safe but also have an opportunity to contribute to get more, they are highly motivated.
  • Avoid demotivators.

Keep distractions away from your team. If team members are worried they aren’t doing well enough, or that the company isn’t doing well enough, they won’t work well. If they feel threatened, they won’t do well. If there are unclear expectations about some part of their job, it will cut into their work time. So give everyone a clear job description and let them go for it.

2. Track work and income daily or weekly.

Check in weekly. Each week, track employees’ time and numbers with them. Ask how things are going and how they can do better. Don’t pile on pressure. Do be clear, encouraging and specific. Look at the work in relation to the plan.
This is key. Don’t look at work in relation to interruptions or excuses, or anything else. Begin with a clear commitment and, in a no-blame environment, take an honest look at the gap between the plan and actual achievement. If the team member isn’t meeting the goals, find out why. When you find the cause, determine if it’s a one-time thing or if it will happen again. If a blizzard buried your town or the guy was off on his honeymoon, then let it go and get back to work.

But what if the cause of the problem is ongoing?
This is when you need to decide whether the cause of the problem is in your control, under your influence or outside your influence entirely? Then begin working to fix things that are either in your control or under your influence. If it’s out of your control, accept what you cannot change and figure out what you can do to reach your goals. Sometimes the solution will be obvious and practical. Other times, you’ll have to get creative. Do whatever it takes.

3. Define all the work.

Employees who aren’t in sales may not be adding to revenue, but they’re affecting the bottom line. Every team member contributes to delivering value to customers, reducing cost or reducing risk. Find the critical success factor that each employee contributes to the company. For example:

  • A marketing assistant may send out notices, announcements and ads that increase business
  • Your tax accountant reduces your taxes
  • A security guard prevents break-ins, thefts and attacks on employees

When critical activities are defined, it makes the employee’s job worthwhile. This is not a job description to file with HR. This is a tool that the team member uses daily to stay focused and that you review with them to help them improve and add more value.

4. Track expenses daily or weekly.

Too many businesses let their financial information pile up in a shoebox until the end of the year. Money is the lifeblood of a business, and you should be taking your financial blood pressure at least on a weekly basis. How much money are you spending? How does that compare to your plan? Are you spending the way you planned to spend? If you know the answer to those questions weekly, you can correct course and speed, and reach your destination.

5. Track progress monthly.

The final step of this plan is checking progress – or income – monthly. Ask yourself what you can do to earn more and spend less, and how you can deliver results sooner and get paid faster. As you keep finding ways to improve in these areas, you’ll build momentum and reach greater net revenue sooner. Businesses succeed by linking each job to earning money, reducing cost, delivering better results sooner or reducing risk. Motivate your team members by letting them know that what they do matters. Then show them how to make more of a difference, week by week and month by month. Do this and you won’t just meet your goals – you’ll exceed them.

Sid Kemp is an author, motivational speaker, trainer, consultant and executive coach. He is the author of the Amazon.com bestseller “Ultimate Guide to Project Management for Small Business” and eight other business success books.

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Strategy

4 Ways To Find Your Own Business Style

The only way to develop a business style is step-by-step over time.

Timothy Sykes

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Finding a style in finance will define how you react to changes and how you approach new situations. It’s as important in business as it is in stock trading. Developing a business style and developing a stock trading system are extremely similar pursuits.

But I’m not going to pretend that it’s easy to do. It will take time and you do have to be willing to work at it.

Here are my four ways of finding your own business style.

1. Get rid of your expectations

You can’t force anything to work. It’s necessary for you to be flexible when it comes to finding a business style. Begin by letting go of any expectations you have before trying a new style.

Prior to attempting a new style, you have to be willing to go into it with no expectations. You never know what you’re going to find.

Related: 8 Steps to Building Your Business According to the Lifestyle You Want

2. Track your movements

Some things are going to work and some things aren’t going to work. I always tell my students in the Tim Sykes Millionaire Challenge that they should keep records of the things they’re doing. Keep these records as detailed as possible because attempting trial and error can quickly lead you in circles.

Don’t fall into the trap (as I did in the beginning) of trying the same thing multiple times because you never tracked the results.

I keep large spreadsheets with notes of the various styles and systems I’ve tried in business. Business mistakes can be costly, so you need to do everything you can to avoid making them.

3. Look at what others are doing

business-options

I refuse to believe that someone is doing something truly unique. The moment someone makes a breakthrough in business there are a hundred people replicating the same things. And that can be a powerful tool. Consider what others are doing and see whether you can learn something.

It’s why I also advocate finding a mentor to help you out. They’ll be able to help you out and you’ll benefit from their enhanced experiences in business.

Again, track what you’re taking from other people so you know whether something is working.

Related: I Started Saying ‘No’ To These 6 Things. My Life And My Business Got A Lot Better

4. Refine what you do

Rarely will anything in business work the first time. However, your first attempts will give you a good benchmark as to what you need to do next.

You should never be satisfied with what you have, even if it’s working. Always work on improving your business style. I believe this is the most important thing because it also teaches you how to adapt to changing conditions over time.

Last Word – Constantly Growing

There’s no step-by-step guide for how to develop a business style. The only way to do it is to obey the fundamentals and then develop everything over time.

Even though the process is long, you’re guaranteed to learn a lot of lessons and gain from a huge number of experiences over time.

This article was originally posted here on Entrepreneur.com.

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Strategy

6 Questions You Should Be Asking When Coaching

Top athletes have coaches because they’re winners. Business leaders should be the same.

Nadine Todd

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Dr Marshall Goldsmith

Whether you’re a CEO looking for a mentor, coaching your management team, or structuring a coaching programme for your managers to implement, there are six questions that can help anyone get better at anything.

The expert

Dr Marshall Goldsmith is a best-selling author and world-renowned business educator and coach. He has coached top CEOs, including Alan Mulally, former President and CEO of Ford Motor Company.

The key to a successful coaching programme is simple dialogue and establishing responsibility. The person being coached must understand and agree that success lies in their hands. They must take responsibility for their actions.

Related: How Business Coaching Can Help You Achieve Your Goals

The method

Once every few months, have a direct coaching session. Ask (or answer for yourself) these six questions:

  1. Where are we going?
  2. Where are you going?
  3. What are you doing well?
  4. Do you have suggestions for my improvement?
  5. How can I help you?
  6. So you have suggestions for me?

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Strategy

4 Ways To Develop The Leaders You’ll Need In The Future

One of the most challenging aspects of leadership development is consistently and effectively identifying the next wave of leaders.

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One of the most challenging aspects of leadership development is consistently and effectively identifying the next wave of leaders.

It can be easy for those at the top to forget that eventually someone will have to take their place at the helm. And ignoring that fact has lead to issues with succession planning, unwanted turnover and other challenges in leadership development in many organisations.

2016 High Impact Leadership research from Bersin by Deloitte asked 2,422 HR and business leaders from around the world how well they believed they could discover new leadership talent. Just 35 percent of respondents said they were above average when it came to successfully identifying and developing leaders.

To understand why this is, consider the typical leadership development paradox. Traditionally, the first step is to choose who has leadership potential, then develop their skillset. Logically, however, this makes little sense.

How is it possible to identify effective leaders if employees have yet to receive any type of leadership development?

Here are four ways to properly identify better qualified candidates for leadership positions:

1Stop choosing potential leaders based on unrelated skills

Gallup’s 2015 State of the American Manager Report, which studied 2.5 million manager-led teams in 195 countries, found that the top two reasons employees are promoted to management positions are because they were successful in a non-managerial role or because of their tenure with the company. Neither of those criteria have any proven correlation with leadership skills or relevant experience.

Create a better means of measuring for true leadership potential. Look at the culture of the organisation and envision what it would look like for someone to lead by those values.

Also consider how successful leaders evolved over time in the organisation. Then use that information to make a list of recognisable traits to look for as signs of leadership potential.

2Broaden leadership development to more employees

People learn and grow at their own unique pace. Requiring that an employee reach a certain position or be with the company for a certain number of years before they’re offered leadership opportunities holds back those who might be ready for more responsibility now. Or even worse, it might push those who aren’t yet ready into leadership roles.

Instead, let leadership development be a company-wide initiative. This gives more people the chance to take the next step in their career. It also creates a larger pool of possible great leaders to draw from across the organisation.

3Track progress and growth

Track progress and growth

There’s no way of knowing who is ready to step up and lead unless development is monitored. Remember that this is a process. Employees need feedback from their mentors and coaches to know for certain what skills they’ve mastered as well as where there can still be improvements made.

Develop a way to assess progress for different leadership positions, and be clear with employees and coaches about what success would look like in different situations. For instance, explain what is expected of a first time project leader.

Get everyone on the same page about the developing leader’s responsibilities and how that should guide their team.

Then collect thorough feedback from all those involved. Ask the leadership candidate what challenges they faced as well as where they think they thrived. Pose the same questions to those they supervised and organisational mentors.

Over time, this will reveal patterns that make it easier to identify who is best suited for leadership in the long-term.

4Focus on continual leadership development

There is no such thing as too much experience. There is always more that can be learned. After leadership candidates have been identified, continue to nurture them. This keeps employees from feeling that they have plateaued, which is unfortunately common.

The 2014 Insigniam Middle Management Survey: Middle Management’s Critical Role In Saving Company Innovation looked at responses from 200 middle managers from around the world. It found that only 15 percent of managers believe they will ever be promoted to the next level of leadership at their company.

Whether intentionally or not, employees who have proven their leadership abilities are being told that their leadership journey is over – and this hurts both them and the organisation. Encourage a steady stream of highly trained and skilled leaders working their way up by demonstrating that there is no end to development.

In order to clearly see who the next wave of leaders is going to be, employees need to be given the chance to hone and exercise their skills.

That means redefining how leadership potential is identified and providing each employee with the chance to develop personally and professionally.

This article was originally posted here on Entrepreneur.com.

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