Simple, Not Easy (Fred's Blog)

Building an Asset versus Working For a Paycheck

21 July, 2011

Choosing to build your business as a valuable asset versus a paycheck has a significant impact on how you invest your time and resources. An asset requires a strategic perspective and a consistent focus on management (hence the term 'asset manager' in the financial world). A paycheck requires putting in the time to do the job you get paid for (and for business owners, that's one paycheck for a lot of different jobs).

Many owners fall into the trap of working so hard for a paycheck that they lose sight of their business as an asset. That is, until they want to sell and wonder why the business isn't worth as much as they think it should be.

If you want to build an asset that pays its manager a salary, throws off a good income return and delivers a strong capital gain you need to focus on the right things to make that happen - like these ten I wrote about a while back. the sooner you take action the more value you will gain (think compounding).

As Seth Godin says with his elegant simplicity, don't confuse building a job with building a business. Either approach is fine - as long as it is a conscious decision.

Other Posts related to this subject:
Nearly every post I have written...
One of my recent favorites...

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Lock Your Data Doors

12 July, 2011

It seems that every day we hear about some internet security breach where sensitive information is stolen or put at risk. With so much data sent flying over wires and through the air, it's not surprising that keeping confidential information secure is more difficult than ever.

Our dependency on computerized information means data security needs to be addressed by businesses of all sizes. The complexity of this issue is growing and ultimately you can't control what happens on the Internet. Just don't overlook the basics that you can control... things like:

• Making sure you have the latest software updates and security patches installed
  
• Using anti-virus software and keeping it updated
  
• Logging out or shutting down computers at the end of the day
  
• Using strong passwords and changing them consistently
  
• Making sure that your backup media is protected (and usable)

Simple practices such as these can significantly improve security. Ignoring them is like leaving your house with the doors unlocked, windows left open and the alarm system turned off.

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Do You Have An Elephant Weighing You Down?

6 July, 2011

Most of us have heard the expression "the elephant in the room" as a metaphor for a significant issue or problem that is obvious to nearly everyone yet still get's ignored. These are usually emotionally charged issues that are hard to deal with so it's easier to pretend they are not there.

Some of the elephants I see on the loose include:

• People talking at each other but not really listening
  
• Passive aggressive conflict between individuals or departments
  
• A long-term employee who no longer fits
  
• Projects in trouble beneath the surface of a rote status report

Elephants are big, cumbersome and leave a mess behind them. Doing nothing just lets that mess get larger and harder to clean up. Of course first you have to identify the elephant. It's a good idea to go on 'safari' periodically and sit in on meetings with fresh eyes and ears. If it's your meeting, then perhaps a fresh look in the mirror (or a safari guide) might be appropriate.

Getting rid of the elephant in the room frees up a lot of space and energy for more creativity and productivity. The sooner you face the beast and deal with it the better.

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What's Good for Your Accountant May Not Be What's Best For Your Business

27 June, 2011

Successfully running a thriving business depends on timely, accurate information that aids you operationally as well as financially.

For many owners, the only information system they have is their accounting software. These programs are usually set up by accountants for the primary purpose of financial and tax reporting. These purposes are certainly very important and appropriate. But when it comes to running your business the tools and resources that your accountant finds useful may not provide everything you need to make informed decisions. For instance:

• Making real-time decisions about deploying cash or acting on potential collection issues
  
• Tracking profitability by channel, product line and customer
  
• Measuring productivity along with the true cost of delivery
  
• Understanding trends and comparing your performance with industry standards

Even if your software (e.g. Quickbooks) has the necessary reporting capabilities, your accountant may not know to provide you with this type of decision support information. If you are not getting it, ask for it.

When it comes to utilizing your information systems remember that you are in the driver's seat of your business and your needs come first.

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What Keeps You Awake At Night?

24 June, 2011

As I write this it's 4am. I've been lying awake since around 3am (which is the middle of the night for me). This happens with all too much frequency, where I wake up and then I lie there ruminating about things real or imagined like:

• All of the things on my to-do list that have been there for ... years?
  
• Things (not on the list) that I know I should be doing that I am not
  
• Financial doom & gloom, etc., etc

I don't know what it is about the middle of the night. Maybe it's the quiet or the dark (both inside the house and inside my head). I do know that there are probably thousands of other business owners out there lying awake right now too (most with much weightier issues than mine - but not blogging about it).

I wonder how many of the things that keep us awake at night are real/objective issues versus those 'ghostly voices' of inadequacy, insecurity and self doubt that haunt (many of) us.

So I ask the question (if anyone should even read this), what keeps you awake at night?

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Are You Tripping Over Dollar Bills To Pick Up Pennies?

20 June, 2011

Confusing the concepts of costs and investments can hurt the future of your business.

No business grows solely by cutting costs. It grows through wise investments.

One client didn't want to spend money on new computers because it would "cost" thousands of dollars. However when we looked more deeply, he was losing significantly more than that each year by not making the investment. Here's how:

• His employees were wasting hours each week because of the time it took to access and refresh the primary software applications that they used. That was time that would be recovered with new computers.
  
• He was also paying his computer support vendor more money to fix or simply maintain the mishmash of old systems and different configurations.
  
• He was missing out on new capabilities and efficiencies that could help him serve his clients better and more profitably

I call this tripping over dollar bills to pick up pennies.

When it comes to evaluating investment versus cost, a good place to start is by considering technology upgrades. Training is another, as is hiring temporary help to complete certain projects, rather than diverting experienced employees from the primary focus of developing business.

It's a good policy to ask your employees for their perspective. After all, they're the people most familiar with many of the tasks, so their input can be indispensable.

In no way do I advocate a philosophy of simply throwing money at a problem. Instead, I urge you to examine all cost decisions in light of the potential for a timely return on investment.

That's how you will prosper.

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Increase Revenue and Profitability by Paying Attention to Your Best Customers

6 June, 2011

Did you know I'm one of my local Safeway's best customers?

Neither did I; at least not until last week, when I dropped in early to pick up a few things.

I had just checked out when a gentleman approached and introduced himself as the store manager. "I'm very happy to meet you Mr. Janssen," he says. "You're one of our best customers and I wanted to personally tell you how much we appreciate your business."

How did he know who I was, and that I was in the store? When I used my Safeway club card a message was sent through the system to this phone. A pretty simple process in this day and age.

Now, it's easy to be a little cynical and say that this guy was just following corporate-mandated protocol. But you know what? It felt good to be recognized, and the manager was sincere in this thanks.

I already liked Safeway. But now I like it a little bit more.

For many businesses, 80% of their revenue and profits come from 20% of their customers. That's why you should always be on the lookout for ways to recognize your best customers and thank them for their business.

In a competitive marketplace and especially where you and your competitors may have similar products and prices, some customers will decide who to patronize simply on which business he or she would rather give their money to.

If customers feel more appreciated by your business, they're more likely to spend with you. After all, they already like you. And with your recognition, they'll like you a little bit more.

And that can make a big difference in your business.

Related Posts:
Simple AND Easy: Acknowledge your Customers
10 Ways To Lose Good Clients (or at least their referrals)

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The More They Over Think The Plumbing The Easier It Is To Stop Up The Drain

29 April, 2011

One of my favorite scenes in Star Trek III is where Scotty has just disabled the biggest / fanciest new Star Ship by removing a few simple parts which he holds in his hand as he says "The more they over think the plumbing - the easier it is to stop up the drain."

Here is some real life evidence with Amazon's amazingly complex explanation of the recent cloud failure... it takes over 5500 words that basically come down to:

"The traffic shift was executed incorrectly'
"we want to apologize"

Here is my (1 minute) perspective on complexity and technology ...

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What Are You Doing "Just Because?"

14 March, 2011

I was at a coffee shop the other day watching a group of people bringing equipment in for an event. Two of them were moving a coat rack on wheels - and when they came to the two small steps at the front entry, they continued rolling it an extra 100 feet to take the ramp. I couldn't understand why they didn't just pick it up and set it on the landing - it was clearly not very heavy. I found myself resisting an urge to "suggest" to them that just because it has wheels, doesn't mean you can't pick it up.

It got me thinking about things we sometimes do (or continue doing) "just because"...

• Just because something can be automated or outsourced doesn't mean that it should be
  
• Just because it's always been done that way doesn't mean it couldn't be done differently or better
  
• Just because the information came from the computer doesn't automatically mean it's accurate - or useful
  
• Just because it's the latest research or current best practice - doesn't necessarily mean it's really new or the best

My point isn't to knock technology, tradition or new information - It is just a reminder that there can be value in stopping to take a fresh look and in challenging our assumptions. It's also a reminder that common sense and critical thinking never go out of style (I hope).

Of course just because a consultant says it...

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Presentation to be Webcast Live @ 7:30 AM on Tuesday March 8th

7 March, 2011

My presentation at the World Trade Center on Tuesday March 8th (yes I know that's tomorrow) at 7:30 AM will be webcast live by Paladin Innovators.

Click Here for viewing:

I will be speaking on the topic:

Building an Asset: Strategies to Grow Your Business Lower Your Stress and Have More Time for What's Important

To participate in the Q&A text me at: 206 949-6465

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