Is Your Business Ready For 2013?

Preparing Your Business for 2013

Change is happening.  The stress we felt in recent recession will hit our businesses again soon.  

Whether this predicted fiscal cliff is a 10,000 foot drop, a bump in the road or someplace in between, business leaders need to be prepared. 

Taxes will increase, legislation will be greater, health care costs will continue to go up, government will get bigger and BUSINESS WILL STILL HAPPEN.

Based on the lessons learned from past economically challenging times, as well as good business practices, let me share with you 5 areas that you can manage in your business to survive and possible thrive.

• Financial Management. Going beyond fundamental management of your business (income statements, balance sheets, and sales forecasts), I recommend 2 specific things to improve your financial stability: 

1. Have a strong banking relationship. This goes two ways.  Know the bank you are with is a solid bank. Think about the fallout a few years ago.  Partner with a bank that will be there for you.  Secondly, meet quarterly with your banker to review your business. Share what you have done and what you will do.  This relationship will be invaluable if you need financial assistance from your bank. 
2. Get your Accounts Receivable balance to zero OR EVEN negative!  How can you get paid before you deliver the service?  Think about magazines. They collect their money and then, over 12 months, deliver your service.  How can your business do this? 

•  Operational Management. This is where you can make the biggest impact to your survival. Again, I recommend 2 specific actions:

1. Know what you do and do what you know.  Identify your core services / products and be the best at it.  Don't get distracted by the "shiny new idea".  Focus on your core strengths and commit to being the best at it. Too many times I see businesses who lose sight of their core capabilities and wonder into unchartered waters. More often than not, they sink.  Now is not the time to stray. 
2. Simplify, simplify, simplify.  Continually ask what you can do to streamline your operations.  What steps don't add value to your service or product? There is a process called "Activity Based Costing".  Ever activity has a cost to it. Find your cost and ask if there is an offsetting value. If not, eliminate it or simplify it.

• Customer Management. Your customer relationship is the third area of focus. You must create "raving fans" to survive and thrive.  Here are two recommendations:

1. Sell solutions not products or services. As simple as this sounds, too many businesses sell products and services that they think their customers need. Ask your customers what problems you solve. Ask them why they buy from you?  Know their problems and be their solution. 
2.  Don’t depend upon a few good customers. Diversify your customer base. If you have more than 70% of your revenue coming from less than 30% of your clients, you are at risk. Find new customers who have the same problem. Can you expand geographically, demographically, gender, ethnicity, age, etc.? How does your solution solve another potential customer's problem? Profile your customers and find a new customer. 

• Utilization of Resources. Most companies are only using 20-30% of their resources true potential. Consider how much technology is at your fingertips. Besides using it for e-mail, documents and a few basic spreadsheets, most of the potential lies dormant. This is true for most of the other resources in our business - including your people.  What can you do? Here is one simple recommendation.

1. Invest in resources. Consider where the biggest opportunities are in your business and invest now - BUT measure the results.  Don't assume if someone is trained or equipment is upgraded, that you have solved the problem. Measure the expected performance improvement. What gets measured gets accomplished. This is the only true way to do more with less.

• Stakeholder Management. This is one of the most neglected asset a company has and yet the one that can make or break a business.  The stakeholders of your business includes the community you live in and the market you serve. Frank Agin, founder of AmSpirit Business Connections and author, once said "All things being equal, and even when they aren’t, people do business with people they know, like and trust." In today's business world, no reputation is a bad reputation. You must pay attention to your reputation and build your reputation. Here is a simple action you can take.

1. Invite comments. Ask your customers to give you feedback. Online, in writing, through survey cards but you must ask.  If you get something unfavorable, respond immediately. Study after study shows that a quick, positive resolution brings stronger loyalty than all the 'good' service in the world.

FOCUS on these core concepts and you have a better chance of surviving and even thriving during this next challenging time.

Remember this business truth – if someone is buying the products or services you offer, you have a marketplace to compete. Your job is to compete!

Forty Year of Leadership in Columbus

Columbus, OH, February 27, 2009 -- Leadership Management Institute (LMI) celebrates 40 years of service in Columbus.

LMI is based in Waco, TX and offers leadership development across the world helping leaders and organizations improve performance results.

The LMI Columbus region was established in 1969 by Lou Cummins, who led the organization until 2003 when Michael Diercks become the Managing Partner and Regional President. In addition to Lou and Michael, there have been many key contributors who have made LMI a major player in the Columbus business community over the year.

During those 40 years, LMI has provided leadership training and support to a host of public and private organizations throughout the Central Ohio area, including Attorney General of Ohio, State of Ohio - State Highway Patrol, Children's Hospital, Ernst & Young, Ohio Education Association, Ohio School Board, Commerce National Bank, Hopewell Federal Credit Union, Ohio Savings Bank, Winfree, Ruff & Associates, Ltd., Abbot Labs / Ross Products Division, Best Lighting Products, Inc., Equity Real Estate, T&R Properties, Aetna Building Maintenance, Rescue Rooter, Time Warner Cable, AEP, White Castle, Worthington Industries, Key Blue Prints, Liqui-Box Corp., Stouffer Hotels, Kokosing Construction Co., Highlights for Children, Chesrown Oldsmobile, Speer Industries, Midwest Acoust-a-Fiber, Sharper Impressions Painting, US Tank Alliance, Cartridge World, Midwest Electric, PuroClean, Swan Cleaners, Superior Die Tool & Machine, Sterling Process Engineering, Caspan Software, Columbus Port Authority, Safelite Auto Glass, Daniel Logistics, and Rosati Windows.

LMI stands ready to provide benefits to the leaders of any organization. For further information and to discover how your organization could benefit from Leadership Management Institute, please contact the local LMI office at 614-823-8150 or visit us on the web at www.lmi-columbus.com and discover how the forty years – and continuing – of LMI service can help you and your company improve performance.

Top Ten Things for Thriving During and After The Recession

TOP TEN THINGS FOR THRIVING DURING AND AFTER THE RECESSION

(Based on an article from www.forum.com)

I believe reading this will help you gain focus and make 2009 more than “just another recession year."

The Key to Success –
Doing More than “Just Surviving”
a Recession

The economy is in trouble and senior leaders face difficult choices in controlling expenses and working through the global downturn:

What to do? What to avoid? WHAT???

• Should we cut prices to maintain market share?
• How deeply can we cut costs?
• What about layoffs?
• How can I discourage defensive internal politics that protect others’ narrow interests?
• How can I lead my company to emerge from the end of the downturn on an upturn?

The Forum Corp. has done research which shows that business leaders who take the following 10 steps in three areas—financials, people, and organizational climate—are better positioned to emerge from the recession with their organizations poised for success.

FINANCIALS

1. Move quickly to reduce costs and control spending by narrowing focus. Winners in a downturn focus on a few critical priorities where they can develop a clear lead, and they walk away from bad business. Losers chase unprofitable sales in an attempt to hold their top line.

2. Refrain from across-the-board cutbacks. Preserve areas that customers value most. Businesses that uniformly cut costs often find that they end up damaging their ability to sell and deliver their products and services. How do you find out what customers value most? Ask them.

3. Consider alternatives to layoffs. Downsizing tends to bolster the bottom line and stock price in the short term but often creates long-term negative repercussions. Alternative strategies include cutting management bonuses, freezing salaries, and reducing compensation options. It’s critical to clearly communicate the rationale and impact to employees.

4. Invest in opportunity. A bad economy can present bargains, both in new assets and in new talent. Good areas to invest in are R&D, marketing, and customer-perceived quality. By contrast, investing in working capital, manufacturing and administration doesn’t pay off as well.

PEOPLE

5. Retain and develop top talent. High-impact workers are often more susceptible to being poached by a competitor in a downturn. Organizations that provide development experiences and rotational assignments have better employee retention rates.

6. Make sure everyone’s on the same page. When alignment on key goals is absent, performance suffers, according to studies on strategy execution. Top leaders frame an agenda and meet with key stakeholders to gain support and build commitment to overarching goals and values. Ineffective leaders let interoffice politics fester and hidden agendas dominate.

7. Encourage questions and new ideas by making it safe for employees to raise them. Leaders who admit they don’t have all the answers and ask for input empower their people to contribute their best ideas.

CLIMATE

8. Manage the heat. Leaders are often tempted in difficult times to relieve the organization’s stress by making unilateral, tough decisions. That’s often a mistake. Leadership by dictate often doesn’t take because it lacks a broad base of support, and it often eliminates constructive conflicts that challenge the status quo and fuel good decision making.

9. Communicate authentically. Strong leaders acknowledge the challenges they struggle with and, by doing so, build trust among followers. Rather than being a sign of weakness, it’s a sign of strength.

10. Create a positive vision and attitude that acknowledges reality. Businesses at the top of their markets often fall while “sleeper” companies sometimes jump to the top in a tough economy. When leaders exercise discipline and focus by mobilizing employees to respond to customers’ interests and values, they increase the chance that, when the downturn ends, they’ll come out on top.

Applying these lessons promises a tremendous upside: new competitive opportunities that result in a stronger business uncovering when the economy improves.

If you would like to discover how the unique LMI process can help you apply these key points so you are position to grow and thrive in today's market, call us today for a complimentary consultation.

Partnering with Leaders to Increase Results and Enhance Value!

Michael D. Diercks, Regional President, Leadership Management Institute

Serving Columbus for 40 years!

(614)823-8150 - www.lmi-columbus.com - mdiercks@lmi-columbus.com