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An entrepreneurial spirit is part of the American dream – a lot of people want to have their own business. But, most people never take the steps to make it happen. They do not follow though for variety of reasons. Some of the reasons include not having the determination, desire for control and denial needed to start a business and run it.

Entrepreneurs need all 3 of these traits to be successful and effective. However, like most things, there is a downside to these characteristics. They may be hurting you and your ability to achieve your goals. Let us look at how you are getting in your own way.

1. Determination

It is good to be determined. That is what keeps you going, even when it is tough to do so. But, too often, determination (positive) turns into stubbornness (negative). Stubbornness creates the inability and unwillingness to listen to others who have information you need to succeed.

Are you willing to ask for help, or do you think “strength of character” means going it alone? Do you take too many risks because you think you can force it all to work out? Has there been a toll on your physical or mental health due to “gutting it out” for months or years? Do you think problems and difficult situations need to be attacked, rather than logically managed?

2. Desire for control

People go into business for themselves because they want to do things their way – excellence and innovation are created from people’s desire for control. Unfortunately, it becomes a negative when people fail to understand that controlling is not leading or managing, and they do not want to do either. They do not want the responsibility (i.e. operations, financials, people) that comes with ownership.

Is your desire for control really a desire for autonomy (to be left alone)? If so, are you the best person to be running the company? People, products and money will never manage themselves. They need a firm, committed, visible leader to guide them. Is that you? Should someone else, better suited to leadership, be in charge?

3. Denial

Denial is a legitimate coping skill, one which all entrepreneurs need. There are times when the naysayers and doom peddlers must be ignored. Denial becomes harmful to you and the business when it is a knee jerk response, instead of a reasoned one. It can easily turn into defiance, hopelessness and helplessness.

When others (i.e. employees, family, key people, accountants, lawyers) tell you there are problems do you ignore them? Do you get angry and defensive when they are brought up? Do you have high turnover, employee trouble, or quality issues that you “can’t do anything about”? Have you given up looking for solutions? Are you saying, “I’ve tried everything and nothing works.”?

Your entrepreneurial spirit is a double-edged sword. It has taken you far, and with the right amount of honing it will take you further.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Building a successful family business can be one of the most rewarding experiences of your life, or it can be one of the most frustrating. Many times it is both, often on the same day. It is a unique situation, which comes with unique challenges. When it is going well it can bring family members closer, and give them a good life. When it is not going well it can damage or destroy families, and leave them financially insecure.

Do not let that happen to your company or family. Here are 4 ways to run a successful family business.

Keep it structured

Family businesses are usually run informally, and this is where the problems start. If anything they should have more checks and balances than the typical business, not less. When – not if – a family member starts taking advantage you want to address the behavior immediately. Clearly written policies, metrics and procedures should already be in place.

When someone knows what his duties and responsibilities are, and has agreed to be held accountable for them, it is more difficult for him to develop hard feelings. Metrics are facts, not feelings – solid numbers reduce misunderstandings and conflicts.

Control power struggles

On-going power struggles are common in family companies, usually going back to childhood. Be rigid and vigilant about keeping family drama out of the workplace, and workplace drama out of family life. Take as much of the emotion out of decision making as possible.
Develop a clear chain of command and follow it. Decide who is in charge of which area and leave them alone to do their job. The metrics will show, in a non-emotional way, who is doing a good job and who is not.

Everybody pulls their weight

Commit to running a business, not a charity. Everybody works and gets paid fair market value for the work they produce. They should have a job description, clear duties/responsibilities and get yearly, formal performance reviews.

One of the reasons family businesses fail is that there are too many non-producing members on the payroll. It is simple math – overpaying family to do less work than an unrelated employee can be the difference between profit or loss. If you want to provide financial rewards to family then do them and your bottom line a favor, tie it to performance. No free rides.

Have a succession plan

A succession plan is important in any company, but it is doubly so in a family company. Most do not survive into the second generation. One of the main reasons is lack of a succession plan. Planning for succession is difficult for owners, most just avoid it. Their belief that “It’ll all work out.” is naïve and commonly wrong.
A successful plan starts years in advance of retirement. It covers 3 main areas: operational leadership/management, financial/wealth and family issues/interpersonal. Each section is equally important and may require outside help to navigate it. Families often respond better to a neutral party.

Strong families and family businesses are the backbone of our country. They are what built it and they are what will keep it strong. Make sure both your company and your family have all the tools they need to survive the challenges of working together.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Anyone who is in, or paying attention to, the manufacturing industry is in a state of unease – with good reason. Just a few of the challenges manufacturers are facing include: slow-growth in 2017, low output projections for 2018, political uncertainty at home and abroad, money for growth is tight, the energy supply chain is still depressed and foreign trade is at historically low levels.

It is difficult to be a small business owner in manufacturing right now. Many owners are taking an “I’m going to wait and see what happens” approach. Overall, that is a good idea, so long as you hunker down with a strategy. Risk adverse owners are going to wait it out and do nothing. Risk smart ones are going to wait it out with a plan. They will be the ones who come out of these tough times stronger than ever and positioned for growth.

There are a lot of opportunities out there to position your company for success, if you know where to look.

Focus on Productivity
On average the typical $5 million company is leaving $100,000 – $300,000 on the shop floor, much of it lost in production. Finding and fixing problem costs in a slow-growth time is a no-brainer. You and your employees have the time to create, add, try, and tweak new systems, before you get busy again.

You may need outside help to identify and correct the harder problems, but spending $50,000 to save $100,000 minimum is just good business. It saves you money during down times and gives you the ability to ramp up immediately when things pick up.

Get serious about analytics and data
Simply put -The goal of analytics is to use data to improve business management (i.e. cost control, quality, productivity, estimating, inventory). In manufacturing a lot of small business owners are resistant to using analytics as a management tool. Consequently, they are being left further and further behind; soon they will be left out.

Companies up and down the supply chain are starting to assume that everyone has and uses operational data. The expectation, especially with tech natives, is that data will be shared for everyone’s benefit. For example: You have an on-going problem with shipping defective parts to your largest customer. How are you going to answer when he says, “What do your analytics say? Send me your numbers along with your action plan. Let’s get this fixed.”

Learn how to estimate and bid
The inability to estimate and bid is one of the top 3 reasons manufacturing businesses fail. Take this easy test to see if you know how to do it – answer all the following questions with facts, not guesses or assumptions. If you do not have hard numbers it is time to learn how to do it correctly.

What are your margins? How often do you look at your profit/loss statement (should be no less than weekly)? What is your overhead? What is your break-even point? How much rework are you doing and why? How are you calculating how much of your overhead is applied to each job? What is your machine loading? What are your percentages of waste and scrap? What are your warranty costs?
Succeeding in difficult times requires patience and resolve. Waiting for the smoke to clear can be a good strategy, unless it means doing nothing while you are waiting. Doing nothing is standing still and standing still quickly turns into going backwards. Smart owners will move forward by getting their companies in good working order while waiting.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Like most owners, when you started your small business you probably did not know much about corporate veils. Eventually, you learned enough to know you needed one. So you got a lawyer, did the paperwork, paid the money, and became a corporation or limited liability company. Then you put the paperwork somewhere and forgot about it, believing you were now covered against being personally liable for the debts and obligations of the business.

But, you, like most owners, would be mistaken. You are not as protected as you think you are. In business the most common legal cases are disputes about a company’s legal liability, which they routinely lose. Let us look at why they do.

What is a corporate veil supposed to do?

It was designed to shield people (i.e. shareholders, officers, directors, owners) from the debts and bad acts of the company. The business is a separate and distinct entity from the owner. The owner, even though he acts for the entity, cannot be held liable for the business’s obligations or actions. Claimants and creditors can only go after the company, not the people involved with it.

What is piercing the corporate veil?

The corporate veil is not a get out of jail free card. If you are not following the rules or laws the courts can pierce, or disregard, the veil and hold you personally responsible for the debts and bad acts of the company. Once declared personally responsible the shareholder’s, officer’s, director’s and owner’s assets (bank accounts, property, investments, etc) can be used as restitution for the improper behavior of the business.

What factors contribute to piercing the corporate veil?
The short answer is – it depends. There are many factors a court will consider before it will pierce the veil. Here are a few of the main ones they look at.

Intent to deceive – You cannot knowingly behave dishonestly, wrongful or fraudulently and be shielded by the veil. For example: If you take on debt you have no means to or intention of paying, the creditor may be able to pierce the veil and you will be personally responsible for it.

Alter ego – The business is separate from you, it is not a part of you. It has limited liability status, you do not. The assets of the company belong to the company, not you. There should be a rigid line between business and personal money. When you commingle assets you tear down the veil.

Identities of subsidiaries – Any companies you own must have separate identities and not share resources (i.e. bank accounts, facilities, financing, contracts, management, employees). Courts look at the purpose for having multiple companies – deception, insufficient capitalization to evade creditors, tax avoidance, fraud, etc.

Not following regulations – If the formalities (i.e. updating by-laws, annual reports, stock or membership ledgers, annual meetings, election of officers) are not followed it can be seen as an attempt to achieve limited liability status without any plan to form a valid company.

Most small business owners do not know what they need to do to maintain their corporate veil. This comes from a lack of knowledge, rather than a desire to deceive. Unfortunately, claiming ignorance will not protect your personal assets. Take the time, spend the money and contact a business attorney to make sure you are following all the rules. A lot of small business owners are not protected. You should not have to lose your home to find out you are one of them.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Doing the Work

Just by sheer numbers, most businesses in the U.S. generate between $1 – $5 million in annual revenue. Many companies stall out at this level, while some manage to grow beyond. Why is that?

Too Many Hats

Many entrepreneurs start their business because they enjoy the technical aspects of their job – the hands-on work. Plumbers like plumbing, machinists like machining, etc. Those technicians with entrepreneurial tendencies often grow tired of working for someone else and decide to strike out on their own. We usually find that somewhere around $1.5 to $3.0 million in annual revenue these technicians bump into the fact that there aren’t enough hours in the day, or days in the week for them to get the work, to do the work and to keep track of it all. The owner is… wearing too many hats!

With the first article in this series, we discussed the “Getting the Work” hat. The owner must delegate this hat for in order to grow sales. Now, let’s look at the second hat – “Doing the Work.” This second article addresses the operational aspect of business.

Delegating this hat can be especially challenging given the fact that many small business owners are highly skilled technicians. They love doing the work. In many instances, they feel that no one in the company can do the job as well as they do (and in some cases, they are right). Unfortunately, continued growth is often stifled at this point because the owner becomes a bottleneck. Frequently this can also affect a company’s financial performance because inefficiencies begin to surface.

To complicate things further, the operations side is the most physically demanding part of most businesses. Many owners try to get more done by putting in extra hours. They come in early and stay late with the hopes of keeping up. It is not uncommon for owners at this stage to be working 70 – 80 hours per week. That may work for a short period of time, but it’s not sustainable long-term. Frequently we see productivity actually go down when fatigue begins to set in.

Grow Beyond the Plateau

To grow beyond this plateau and realize a viable work/life balance, an entrepreneur typically must delegate the operations hat to someone in the company other than himself – someone that will be solely responsible for managing operations. At Cogent we recognize that it’s more than just handing the hat to the next closest person. We know the key to success is structure and control. Typically we find it is necessary to install operational systems, procedural systems, and reporting systems.

• An example of systems include developing formal job descriptions so that company-wide everyone is aware of responsibilities.
• Another example is the need for employee training to emphasize processes and quality requirements.

These systems are just a few of the many that are critical for success! Letting go is tough for many technician/owners. But the payoff can be significant.

Real life success

For example, a small cabinet shop Cogent Analytics worked with several years ago had maxed out $4.5 million in revenue and was actually losing money because of bottlenecks and inefficiencies.

• The owner, a cabinet maker, tried to be hands-on in all aspects of the business and attempted to wear all the hats. While that management style worked when he was just starting out, it was becoming increasingly less effective as he added employees and grew revenue. Ultimately, growth halted, productivity dropped, quality slipped and employee morale suffered.
• Early in our consulting project, Cogent recognized the fact that the owner needed to delegate his operations hat. We helped identify an employee with the aptitude and interest in becoming the operations manager. Beyond that, we helped train the employee on how to be an effective manager and set him up with the tools he needed to perform his new responsibilities. We worked with the owner to develop job descriptions and install employee incentives, measurement tools, management dashboards, etc.

At the end of the project, the owner stated, “My quality of life has improved. Probably the biggest thing is it’s helped my time – really taken the pressure off me.” The best part is the company returned to profitability and the owner actually found himself working less. Plus, the company began to grow again.

Each company is different and this is just one example. However, to effectively grow a company beyond the initial plateau, we typically find owners must start to build a true organizational structure and delegate the responsibility of who wears the hats. In the next article in this series, I will discuss another hat a small business owner must hand off to grow their company to the next level.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

One of the biggest complaints employees have about their managers is that they play favorites. Employees say rewards and consequences are not handed out equally, and not everyone is held to the same standards. What is interesting is when managers are shown these findings they usually agree with the employees. Managers admit they have favorites and do not treat everyone the same, even though they know they should.

This creates favoritism in the workplace. We all have experienced it and know what favoritism is – it is when someone is singled out as special. He is perceived as better than other workers even though usually he is equally, or only slightly more, skilled as they are. In some cases, he is even less skilled than his co-workers, but is still seen as special for other reasons.

When employees are working with someone who has been singled out as a superstar it creates a damaging work atmosphere, which can hurt a business’s success. Over the years, thousands of companies have been harmed or gone out of business because of favoritism. Here are 3 reasons why.

1. Legal problems: This one should not have to be said, and yet it must be said – all the time. Hundreds of small businesses have been bankrupted because they did not treat all their employees equally. It is simple – employees sue, employees win and the company is out of business or severely compromised.

2. Lowers employee morale: It is true, one favored apple can and will spoil the whole barrel. Having one, or more, identified favorite can ruin a whole company’s morale, especially in small businesses where the impact is greater. The fewer the people, the more likely favoring one person over the others will negatively affect the whole group.

A fundamental human principle is – People do not like to be treated unfairly. Starting from childhood we react strongly to a person, situation or idea that we think is unfair. It is also one of the most common reasons people leave a job. They get tired of being treated poorly, not having their ideas listened to and managers playing favorites.

If employees are not able to leave a job physically they will leave mentally; and, this is when morale and motivation really start to drop. When they feel their ideas and skills are not valued, they give up. And, when people give up productivity, quality and innovation suffer. “Why bother, what I think doesn’t matter” are words you do not want your employees to say or believe.

3. Good workers leave: One of the reasons that having a favorite is so destructive to a workplace is the amount of attention he gets. Positive attention matters, it is the best way to motivate others. Employees have the expectation that their good work should get them a certain amount of good attention. But, the favorite often gets more attention for slightly better, the same or worse work while others go without attention.

When the favorite gets more notice it causes turmoil, jealousy, and resentment in others. Over time even the most levelheaded employee becomes affected by it – good, solid performers start to become discouraged, annoyed and fed up. Good workers have options and they take their skills to another company where they are appreciated and fairly rewarded.

There are very few superstars in business and chances are there are none in your company, including your favorites. Avoid the problems of favoritism by learning how to set up a transparent system, which ties rewards and consequences to performance only. It will go a long way toward having less risk, a smoother running operation and happier employees.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Every successful small business has its problems. It is normal to have ups and downs – a sales slump, a few jobs requiring a lot of rework, a sudden increase of employees’ leaving or a week where some machines break down. Short term, stand alone difficulties are just part of being a small business owner. While they are frustrating, they are not fatal.

The trouble starts when they become a pattern – the seasonal sales slump lasts too long, rework and mistakes become normal, there is a revolving door of employees and machines break down every month. Instead of being stand alone problems, they are part of daily operations; and, that is when they become fatal!

Here are 2 big signs your business has crossed the line of having routine problems to having fatal ones.

– Cash flow problems. If you are having a hard time paying employees, yourself or bills you are in trouble. Cash is king in a small business. You can be making a profit, but still not have enough cash to keep the doors open. Learn to read and understand the information your financials contain. They are a valuable management tool which provides facts – not your guess – as to why you are in this situation.

How long have the cash flow problems been going on and why? Who is paying on time and who is not? What are your profit margins? What is the billing cycle? How are the receivables and collections? Where can you decrease costs? Where is your money tied up (i.e. inventory, debt, overhead, salaries, skimming too much, perks)?

What about sales? Do you have salespeople or order takers? Do they have sales goals and are they held accountable for them? Do you need to increase or change your marketing? What are your customers’ perceptions of the products and their quality? Do you know what they think of your customer service? Have clients gone to competitors and why?

– A constant state of chaos. Some people thrive in chaos, but the majority do not. They operate best in a stable workplace, where they can do their jobs without too much turmoil and difficulties. If you go from crisis to crisis and spend most of your time putting out fires you are in trouble. It is time to figure out who and what is causing these problems.

Is it you? Are you trying to do too much by yourself? Does everything have to flow through you? Do you know how to delegate and hold people accountable effectively? How is your time management and ability to prioritize? Do your employees respect – respect, not like – you? Do they listen to you? Is employee turnover too high, and if so why?

Is it someone or something else? Do you have a disruptive employee or group? Is there a manager(s) who is undercutting you? Are your employees really a problem, or do they have valid concerns and complaints that you do not want to face? Do the employees have the instructions, skills, knowledge and tools to do their job properly? What will you do to address these situations?

Small businesses do not “suddenly” fail. There are signs all along the way that identify problems. As the owner of the company, you have the responsibility to figure out whether they are go, caution, or stop signs. Knowing the difference between the three will help you avoid the crash.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Small business owners are in a unique situation. They are expected to be a leader and the main motivator for others. But, who motivates them? It usually falls on them to self-motivate, which the majority of people do not know how to do effectively. Very few people are born knowing how to inspire and encourage themselves, they have to learn how and then practice it.

Will power is overvalued and misunderstood in our culture. People usually do not need more will power, what they really need is more discipline. Discipline is established through organization, habit and control, which, in part, is created by understanding how you are motivated. Once you know what drives you, you can create a blueprint to achieve your goals – even when your will power is fading or gone.

There are 5 common methods which motivate most people. Sometimes we use 1 method only, while other times we may use a combination of methods. We all have different ways to inspire ourselves, ways which work for us but not for others. These techniques are neither good nor bad, better or worse – just different.

Words – Individuals who are motivated by language need to hear or read words of affirmation, inspiration, and instruction from others, as well as themselves.

Steve was accountable only to himself and had become lazy. He kept putting off the work required to get his business to the next level. Steve knew he liked being challenged by and learning from others, so he found an outside expert to help him. Talking with and being accountable to someone else was the “kick in the pants” (motivation) he needed.

Time – Having control over their time (i.e. lives) is important to some people. They do not like having their time being overly structured or regimented, especially by others.

Neal started his business to have more freedom and “not punch a time clock.” But, he ended up working longer hours and felt tied to the company. He realized that if he wanted time off, he would have to do something differently. He was finally motivated enough to make the management and operational changes he had known for years needed to be made.

Experiences – The people who are motivated by experiences need to do something for others or have something done for them as an incentive.

Allen was the 2nd generation to run the family business, and employee morale was at an all-time low. His father had prided himself on running a shop where workers were “treated like family and liked coming to work.” Even though sales were flat, productivity was down, and quality was slipping it was his employee’s anger that finally motivated Allen to address long-standing problems.

Need for Community – People who have a need for community are motivated by belonging to and being accountable to an entity (i.e. team, group, club, friends, co-workers, family).

Lynn liked selling. She built a successful company through networking, sales calls, meetings, and presentations. But, she had become office bound. She wanted to be out talking with and selling to potential and current customers. Her desire to be out with “her people” motivated Lynn to develop controls and structures, allowing her to return to selling by turning the daily operations over to a manager.

Money and Things – Some people are motivated by money and/or the things they can buy themselves or others.

Charles started his business to make “serious money”. He was finally making it and enjoyed spending it. But, he knew there was trouble in the business and had an outside expert in to look things over. Charles was shocked when he and the expert uncovered $285,000 in problem costs. He quickly became motivated to fixing the problems – no more of his money was going to be taken from his pocket.

Motivation is big business – books are read, TED talks watched and workshops attended every day. There is no one size fits all technique. Motivating yourself is a learned skill which takes work and practice. It does not come naturally and is accomplished through trial and error. But, having the ability to build and maintain a successful business through self-motivation is worth the effort.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

It has been said many times – A business partnership is a lot like a marriage. They both start out with each person believing he has the same expectations and dreams as the other person. And they both fall apart when the real expectations and dreams of one individual are very different from what the other individual first assumed.

A business relationship is usually started with the partners discussing how the business is going to work (i.e. sales, production, product, quality, startup costs). It rarely includes how the relationship is going to work (i.e. division of management decisions/duties, leadership styles, who is disciplining employees and how, long term financial payouts, conflict resolution).
This is why problems start, usually leading to the partnership ending in bitterness. But, it does not have to be that way. No matter how many partners your company has there are steps you can take to create a functional, successful ownership, rather than a dysfunctional, failing one. Here are 3 places to start.

Start Rowing Together
Why are you in this business and what do you want to get out of it? Each person should be able to answer this question in detail, with examples and time frames. You cannot plan for and work together to meet people’s expectations if you do not know what they are. This must be an on-going conversation because people’s situations and needs change over time.

Your individual goals for what you want out of the business can be different, but your company specific objectives and methods should be the same. A business fails every day because the partners were not able to set up a working relationship where everybody was getting most (not all) of what he wanted. The idea is to move forward, not go in circles or backward.

Take Responsibility
Disagreements happen in any relationship, even the best of them. The key to a good partnership is the ability to work them out. This requires each party to take responsibility. What is your part in the problem? How are you going to fix it and by when? Keep in mind an old saying – There’s your side, my side and then the truth.

We all have strengths and weaknesses. You bring both to the table, as does your partner. You can agree to work together and maximize each other’s strengths to improve your business, or you can tear each other down for your weaknesses and fail. This step can be hard for a lot of people. A third, neutral party is often required to work out old problems and help create ways to minimize new ones.

Be Accountable
A working partnership holds everybody accountable, especially the business owners. It is easy to point fingers and blame other people for your company’s problems. Are you willing to be accountable for your behavior? For what you say and what you do or do not do? A good leader expects to account for his actions.

Effective business partners have defined roles and jobs. They understand they each are responsible for certain tasks, outcomes, and duties. Each person knows that if he does not perform them satisfactorily, there will be consequences. The number 1 reason partnerships (and businesses) fail is that owners give themselves a free pass when it comes to their own behavior. Therefore, this is another area where a neutral, third party can be particularly helpful.

Some business partnerships go well, a number of them just limp along, and others end very badly. Give yours its best chance for success by following these steps. And remember: Perfect partners do not exist – you included.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

You’ve probably heard the old business saying, “Innovate or die”. It’s been around for a long time. But, the idea it represents has been around a lot longer. The concept is as old as business and commerce itself.

A horse’s ability to work is dramatically decreased without “shoes”. Thousands of years ago Asian horsemen imaginatively used leather and plants to make booties for their mounts, and changed the world. Horses were able to transport goods further and more efficiently, opening up new trading opportunities.

The horse’s important place in history had a good, long run until Henry Ford made them obsolete. He looked at the automobile and re-imagined the manufacturing process. His innovation radically changed the way business was conducted throughout the world, again.

Imagination stimulates innovation, which increases your business’s chances of survival. Just as we can learn from Ford and the ancient horseman what to do, we can also learn from Blockbuster, Woolworth, Bethlehem Steel and Polaroid what not to do.

Unfortunately, many of today’s small business owners feel like they “don’t have time to think”, let alone imagine or innovate something. They believe they aren’t even keeping up, forget about getting ahead. They identify being discouraged and frustrated because they’re falling further behind their competitors each year.

So, what can you do? How do you learn how to imagine and innovate?

Identify your strengths and interests. Before you made your first dollar you had to imagine your business into existence. In the beginning, it’s easier to put good ideas into place because they’re part of your areas of expertise (plumbing) and passion (customer service). But, over time, you can lose your enthusiasm in routine tasks and problems.

The area to re-start the innovating process is the one you do well in and enjoy (i.e. mechanically inclined owners redesigning machining processes, people oriented ones creating customer service programs, number’s guys developing better bidding systems). The more you work your innovating muscle the stronger it’ll become, and then you can move out of your comfort zone into more challenging areas.

Look for inspiration and be willing to recognize it when you see it. Stimulating the Imagination is important to a business’s success. It sparks creativity and inspiration, which lead to ideas, which turn into actions. Smart entrepreneurs understand the importance of this process and actively pursue it.

There’s no limit to the places where a good idea might come from – trade shows, industry magazines, customers, employees, competitors, networking, web sites or Little League games. Innovative people seek out ways to have their minds jump started by others. As Isaac Newton said, “If I have seen further than others, it is by standing upon the shoulders of giants”.

Interact, listen and learn. Get out from behind your desk, get out of the office, ignore all electronic devices and talk to people. There’s no replacement for talking and listening to other people. Put your ego aside, recognize that others have good ideas too and be open to learning from them. The biggest barrier to success is thinking you do, or have too, know everything.

Following these 3 simple, but not easy, steps will automatically put you ahead of your competitors; because chances are they’re not following them. It’ll take time and perseverance to develop these new habits, but it’s worth it. Imagination and innovation gives people the ability to see a future which doesn’t exist and the ideas for getting there.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Proper management of Internal Customer relations is critical. A Customer is dependent on the timely, efficient and accurate generation and communication of data stemming from another party, who can be internal or external to the company. The Internal Customer stems from departments whose functional success is dependent on their relationship with other departments within the organization. Managing the health of these relationships works to assure a seamless and efficient operation within and between functional areas.

The first step to properly managing the Internal Customer relationship is identifying intra- and inter- departmental/functional area dependencies that are critical to the success of the operation. Once the dependencies have been identified, the responsible personnel for managing those dependencies should be identified. Each employee should know who their Internal Customers are and what is expected of them.

Properly managing the relationship between Internal Customers cultivates an environment designed for success resulting from teamwork rather than disjointed silos. The needs of each Internal Customer should be clearly identified, communicated and must be in support of the overall company mission and objectives. Each individual must understand the critical success factors required by the operation and what is expected of them when providing the necessary supporting data to their Internal Customers. The data provided should be timely and accurate and based on company objectives rather than solely based on the needs of the individual receiving the data.

In summary, it is important to remember that when managing the Internal Customer relationship, success is dependent upon mutual respect. In order to be effective, this relationship should be a part of the company culture. Healthy Internal Customer relationships create a more productive working environment that will result in the overall success in an organization.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

A business that runs smoothly is one that addresses key elements regarding its overall health. Similar to the human body, your business requires regular checkups to determine the underlying issues and areas of concern.

The ACE Business Review:

The ACE business health analysis enhances the chance for attaining success, identifies the underlying root cause of problem areas and minimizes risk factors.

A – Attitude:

Attitude affects business performance. Understanding this is as simple as asking these questions:

• Am I focused in the right area while operating my business?
• Am I excited about the products or the plan associated with my business?

If the answer is “no” to either of these questions, then determine the reason(s) why.

If the correct focus and passion are not present, there could be underlying factors that may negatively affect various key elements of your business such as: team building, sales and profitability, leadership, and client gain. Before examining potential external elements affecting the business, look internally to assess the attitude that has been maintained in managing and operating the business.

C – Consistency:

Consistency is a key element to obtaining business growth and success. Consistency of action implementation stems from commitment. If one is not committed to performing consistent actions, no matter the magnitude, then there is the potential of facing roadblocks. To assist with the focus on commitment, try using a Daily Method of Operation (DMO). The goal of this process is to streamline the business while maintaining the focus on commitment to success. Daily commitment to assessing and addressing the health issues can pave the way for overall success.

E – Effort:

Effort is a vital element in your commitment and attitude toward business growth and success. Business health issues will not correct themselves. Whether you are operating in a one-on-one environment or within a group, it takes effort to achieve the end goal.

Conclusion:

Employ ACE to effectively identify and address the underlying root causes of negative factors impacting your business health. Regular checkups mean better health and longevity.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

The lineage of the small to mid-sized business owner certainly includes a lot of differences, socioeconomic backgrounds and personality profiles to be sure. There is however far more that we have in common than one might imagine. The first one we will talk about is what we will refer to as “the fire in the belly”. It is the one thing that separates us from everyone else on the planet. There is a pretty good chance that mediocrity is not in your vocabulary. You very likely are a person, male or female; with what may be described as an “extreme work ethic” and you may tend to have little patience with those that don’t share your point of view on the subject.

Incidentally and without getting into too much detail here, there are a number of scientific studies out there which tend to support the conclusion that women business owners have a decided advantage over their male counterparts. This has to do with the fact that women can transition from one side of the brain (left brain, right brain) to the other much faster than their male counterparts.

When you started your business you probably did so by yourself or with one or two other people, at least in the beginning. You probably had a wealth of experience in whatever your base vocation was and likely as not had, a “boat load of common sense.” You might have even been the best technician, engineer, plumber, electrician, sales person, architect or any other discipline and then you got the bright idea, hey! I can start my own company! And here you are! You had a lot of “shoulders down” background and experience and either felt your common sense or your sum total of experience was all you needed to be successful and you probably didn’t give much thought to the “neck up” component that would also be required. We will refer to this “neck up” skill set as; the technicals of how to operate “this particular business” for maximum profit, maximum ease of operation.

We have seen the formal education levels of successful business owners run the gamut from didn’t finish high school to multiple master’s degrees.

Your business may have grown both in terms of revenue and number of employees to the point where it is no longer possible for you to “keep your arms wrapped around it”. Starting a business and operating a business for maximum profit, maximum ease of operation are two very different issues. One is obviously much easier than the other and is to a large degree responsible for the statistically high business failure rate within the first five years. There probably isn’t anyone alive that knows more about the “shoulders down” portion of your business than you do! That knowledge will continue to serve you well. We hear often from business owners “what I know does a good job for me; it’s what I apparently don’t know that’s hurting me.”

If you are in your office late at night or you are there over the weekend instead of being at home with your family then perhaps you should give some consideration to ascertaining your spending that time in the business is necessary and implement the necessary steps to correct the problem. Are you running your business or is it running you?

Your business may actually be doing very well and if that is the case then once again “kudos” to you. If that is not the case then perhaps you should investigate getting an update on the “neck up” skill set particularly if your formal business education has become dated.

Read more from Behind the Desk here.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

In business today, we as business owners are tasked with the responsibility of making good business decisions. Some business owners get caught in the “trap” between actually “making a decision” and “inability to make a decision” or perhaps “procrastination”. There is probably not one single thing that can ruin a perfectly good business faster than procrastination. We often hear from employees that “we talk about it forever; he or she just can’t make a decision.” Well, perhaps the best business decision won’t be popular with our people or so we sometimes think. Don’t let that stand in your way. Owning a business is not a popularity contest and these employees are the same people who are betting their individual livelihoods that you can in fact “make a good business decision”, so don’t disappoint them.

What is the worst that can happen if you make the decision and it turns out to be wrong? You can fix it! What you can’t fix is the decision that you put off because of procrastination. While it may not be what you intended, it is actually a decision to do nothing. So whatever the issue was that could have been dealt with by making a decision, still hangs around out there unresolved including all of the continuing costs or lost profit.

In order to make a good business decision, you need adequate information. That doesn’t mean every single word or scrap of information that has ever been written on the subject but rather “adequate information”. Don’t use the lack of more information as a basis to procrastinate. If the information you have at hand is sufficient to answer any and all questions that can be identified, then make the decision.

There are essentially two kinds of business decisions, Operational and Executive. We tend to want to involve our core management teams in the decision process and that works well with operational decisions. A word of caution about allowing non owner employees to participate in Executive decisions should be noted. Though well meaning, their recommendations sometimes tend to smack of self-interest and of protecting one’s turf. Employees can go somewhere else and get a job tomorrow. Very few business owners have that option; you have to stay here and make it work!

When you are involving employees in high level decisions, make sure that they are knowledgeable about your financial statements and the actual financial condition of your company. If not you will find that you are asking for their input on decisions which have a financial impact without any knowledge of the cause and effect financially of the decision. If I don’t have to be concerned about the financial impact of the decision then almost any decision will do. This of course is not the position you are in as a business owner.

Read more from Behind the Desk here.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Employees will generally be identified in one of these two categories. Think for a minute about all of your conversations and interactions with your employees today. When they came into your office, did they bring a problem with them? If your answer is “Yes”, don’t feel bad, because you are not alone. It’s a fairly common theme.

Most of the time it is because, although inadvertently, we have trained them to do just that! We really want everything to run smoothly, so in many cases we may actually tell our employees, “If you don’t know what to do in a particular case or you don’t know how, just come and ask me”. BINGO! The training is complete. It’s not uncommon for employees stop trying to come up with solutions themselves, because it’s so much easier just to bring the problems to you and let you solve them. In fact, your valuable “star” employees can be plagued with the same thing… cleaning up the shortcomings of others because over time, it’s become their job to do so. This becomes enormously expensive over time; not only in terms of lost productivity, but it makes you feel like you have a “Mr. Problem Solver Sign” hanging around your neck for all to see. You find that you can’t get the important things that were on your “to-do list” today because you have to render judgments and provide directions to employees that you are already paying to do their jobs.

So for the next working day, be sensitive to every employee contact and if they bring you a problem, just ask them “How do you think we should go about solving this?” or “What do you think the answer is to the question that you just asked me?” Their answers may surprise you. If they can’t think of an answer on the spot, then ask them to go back to their desk and think up the best possible solution that they can and then come back and tell you when it is. “Here is what I think we should do but I just wanted to run it by you just in case I missed something” is perfectly acceptable, and a great place to start.

Now you are well on your way to empowering your people, and a byproduct of that is that you will have much more time to deal with the matters that really do require your personal involvement as the business owner.

Read more From Behind the Desk here.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Successfully running a business is all about leveraging wins and learning from losses. So, the key to success is to learn proactively and avoid losses. Losses often come from mistakes, and an owner can improve their chances of success by engaging other business owners, consultants and subject matter experts proactively before trouble comes. Mistakes typically occur in three areas: people, finance, and planning.

People

Too often, we assume that team members know what to do in any given situation. Then we are disappointed when we perceive that they have fallen short. This leads to misalignment between the people we depend on and ourselves. Everyone needs clear, frequent and consistent communication. People need to know business objectives and performance, what is expected of them and how they are doing against their own performance measures and goals. But, it’s a two way street and it’s important to listen to our employees too.

Owners should take time to create and share a comprehensive job profile with their employees that clearly defines their responsibilities, goals and performance measures and how they interface with other employees. Additionally, they need well documented processes to clearly understand how to do their job, and to know how they impact their co-workers. Owners should also schedule regular one-on-one sessions and team meetings with their employees to maintain an effective two way flow of information. Staying in touch with your team and encouraging two way communication will go a long way in building a successful business.

Finance

Nothing will get an owner into trouble faster than not paying attention to two key financial reports: Cash Flow Statement and Profit and Loss Statement. Most people have heard the term, “cash is king”, and nothing could be truer. You can have the greatest product, best sales and most cost effective operation possible, but if you don’t have the cash it could all go for naught. Conversely, you could be sitting on a pile of cash, but if you aren’t watching your margins the cash will go down the drain in a hurry.

It is vital that small business owners manage their businesses finances regularly. Owners should develop a habit of regularly monitoring these two statements. A 12 week look forward cash flow should be reviewed on a weekly basis. Check the key components: A/R, A/P, loan payments, recurring costs (ex. rent, salaries, taxes, etc.). Looking out over a 12 week time frame will give the owner more options to address any potential shortfalls. The P&L, like the Cash Flow Statement, is a great indicator or financial health. Owners should ensure they have a conservative budget loaded so they can do variance analysis between planned and actual costs. Use the P&L as a starting point to evaluate price points, direct variable costs (ex. labor or materials) and fixed costs (ex. wages or rent). Ask yourself, is this a realistic budget and/or am I controlling my costs, pricing my products correctly, marketing my company and products effectively, etc.

Planning

Planning is to proactivity as reacting is to flying by the seat of your pants. Ask yourself…where am I on the planning scale? On a scale of 1-10 are you closer to a 1 (highly reactive) or 10 (highly proactive)? The difference in rating is the difference in the amount of time, and the number of solutions you will have to deal with problems.

Owners should schedule time on their calendar for important non-urgent tasks. Avoid allowing yourself to respond to unimportant urgent tasks. These often drain an owner’s available time, while producing little to no value. Important non-urgent tasks include 1-5 year strategic plans, customer and supplier reviews, financial and operating forecasts, organizational planning and capital planning. Again, it’s all about proactivity.

Proactive consideration of people, finance and planning will put an owner on the road to success. It will also mitigate many of the day-to-day headaches that monopolize time with no return to the bottom line.

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information:

Small business owners need a healthy dose of stubbornness. They need it to start the business – in spite of the family, friends, former bosses and statistics that say it won’t be a success. They need it to keep going, even when it looks like they might fail. And they need it when the business hits the ordinary, and not so ordinary, snags and problems of daily operations.

But, look at the first sentence again and notice the words “healthy dose”, because stubbornness has a downside. In some cases it even has a dark side. There’s a good, a bad and an ugly part to entrepreneurial stubbornness.

The Good

Stubbornness and not listening to the nay-sayers helped Steve Jobs create (and recreate) Apple, the Broncos win the Super Bowl and Andrew Carnegie to endow a national library system. Our country has a long history of independence, fortitude and determination in many areas.

The desire to “not answer to anyone and do it my way” is a strong motivator that’s successfully built Fortune 100 companies and the local job shop. As any self-employed person knows, it’s what makes working the long hours, investing the capital and making the sacrifices worth it.

The Bad

However, stubbornness can take a wrong turn. There’s a point when pure, darn cussedness crosses the line from good to bad. It happens when a person is so inflexible they’re unwilling to learn. This makes it difficult for them to listen to others’ viewpoints – others who have valuable knowledge and ideas.

It’s impossible for one person to know, understand and keep up with everything (i.e. taxes, health care, marketing, product advances, technology, best practices, regulations, industry innovations, market volatility) needed to run a business. Smart owners know that one of the benchmarks of success is the need to shift from a one person show to a team approach.

The Ugly

There comes a time when an owner can cross the line from bad (poor management skills) to ugly (self-destructive). This happens when they stubbornly cling to only their beliefs, ideas and ways of doing things – when they’re unwilling to accept critiques from or even consider the advice of others.

This behavior usually results in: loss of or disgruntled key people, large turn-over, dissatisfied customers, poor product quality, increased employee theft, too much rework, decreased profit, poor reputation, lost contracts and often bankruptcy.

Good, positive entrepreneurial stubbornness can easily turn bad and ugly over time. Particularly when a person fails to understand that we all need to evolve if we are to compete and prosper in a changing world. We must be willing to learn to do so. As Benjamin Franklin said, “We are all born ignorant, but one must work hard to remain stupid.”

At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information: