Business Education

My Small Business Manager didn’t Manage the Business Well and Now it’s a Total Mess…What Do I Do?

Some business owners run their company for many years, only to discover that they can’t do everything on their own. Once this inevitable realization materializes, most start to hire others to help them with various aspects of the business. Some even aspire to be largely absentee owners, leaving the day-to-day operations to a professional manager. So, they train someone up, giving them the responsibility of managing the company and then take a more offhand role, sometimes into a completely new venture or, to focus on one particular area. Typically, this goes fairly well, especially when said manager has been well trained. However, it sometimes ends in utter disaster and the manager winds up making a mess of everything. So, what do you do if you’re stuck in the latter nightmare scenario?

What Good Managers bring to Small Businesses

Before we get into how to fix a bad situation, let’s first look at why business owners hire managers in the first place. Usually, managers are brought on to handle all of the day-to-day activity. This allows the owner to put his or her efforts into expanding the business and even exploring new opportunities. A good manager will bring a nice return on investment, easily paying his or her salary, all while adding to the company’s bottom line.

Bad management can impact employees and a company’s overall operations. Incompetent managers exist, and they can have challenges relating to staff members and keeping them motivated. In addition, substandard supervisors may not be able to balance budgets, increase revenues or capably perform other crucial tasks. —Houston Chronicle Small Business

A good manager can really be an invaluable asset, being able to oversee employees, carry out projects, order materials and inventory, assign employees to various tasks and projects, and a whole lot more. In the end, the manager is also responsible for the public face of the company, particularly when the owners aren’t on site. Of course, there’s a great deal of trust involved here and unfortunately, that trust is sometimes betrayed.

How Business Owners can Fix Mismanaged Companies

If your small business has been mismanaged by an incompetent or uncaring manager, you’ve got your work cut out for you. The amount of damage he or she may have done may not be immediately apparent and will materialize over time. But, you can’t just wait to find out, you’ve got to leap into action immediately and do the following after letting him or her go:

Talk to the employees. The very first thing you want to do is get a sense of the employees’ perspectives. You’re likely to learn a lot and some of it may take you completely by surprise. But, you’ll probably also get a kind of consensus and that will help you to know precisely what’s most important and how to prioritize what to fix first.
Speak with vendors. This may sound a little odd but it’s probably worthwhile. Since vendors interact with the managers routinely, they will have different stories to tell and just like the employees, will probably give you some type of consensus. At the very least, you’ll find out how your former manager interacted with the vendors and if he or she had good or bad business relationships.
Consult your customers. If you haven’t really heard any complaints from customers, this would be highly unusual. Although, your former manager may have been great in providing excellent customer service, while still mismanaging the business’ finances and/or mismanaging the team members. Regardless, getting your customers’ input is very important because it will let you know the reputation of your company.

Lastly, you’ll have to go through the slow and meticulous process of piecing the operation back together. This might include having to make other personnel changes, establishing new relationships with different vendors, and possibly, having to repair customer relationships. Fortunately, a good business consultant can walk you through this very difficult process step by step. Interested in learning more about business? Then just visit Waters Business Consulting Group.

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Network Event Do’s and Don’ts

May 16, 2017 No Comments

Some people have an innate ability to walk into a room full of strangers and start connecting and uncovering business contacts galore. They seem to glide through the room, smiling, freely introducing themselves, while holding conversation. These people know how to read a room and individuals naturally. Then, there are people who move through events quickly, collecting an astounding number of business cards while shaking hand after hand. The difference between the two personalities couldn’t be more stark. One is making new contacts, the other is doing little more than trying to bag new clients. It’s obvious which one will benefit and which one won’t. The purpose of networking events is to do just that: meet new people and have conversations. It’s how you go about it that makes all the difference. Connecting with people is an art form, and, is learned over time. Before there’s any real connection, though, you’ve got to be prepared to meet new people. Network Event Do’s and Don’ts There’s a huge difference between meeting new people and connecting with them. Meeting a group of new people is even more of a challenge than meeting a single person or a very small group. Attending a networking event is something that stirs excitement and anxiety. These events tend to be noisy, where it’s not easy to hold a conversation. What’s more, you’re expected to participate and interact with several people. We network because we don’t work and live in a silo. Due to human nature, we tend to trust doing business with people we know or who are referred to us. People often think of the need to network whenever their jobs are in jeopardy, or whenever they’re in search of new business. —Career Builder When you go to a networking event, you do so to open new doors. There won’t be time to establish a relationship and connect with others, but there will be plenty of opportunity to introduce yourself and hold brief, casual conversations. To accomplish this simple, yet challenging feat, you ought to know the do’s and don’ts of event networking. Network Event Do’s Go prepared. You ought to have a brief list of topics to discuss and/or experiences to share. It’s okay to go over these out loud and practice introducing yourself. Just don’t practice too much, or, it will sound rehearsed and artificial. Keep one hand free at all times. Keep your dominant hand free of snacks, drinks, and other objects. You’ll be able to freely shake hands without having an awkward moment to find a place to temporarily set something down. Know who to approach. Just because someone is standing alone doesn’t mean you ought to rush over to approach. Take a moment to read his or her face and body language. When you do make eye contact, confidently approach and introduce yourself. Look for opportunities to offer help. One of the most powerful and likable gestures is to ask questions and offer your assistance. Only offer to help when it’s realistic and be sure to follow-up. Don’t make the mistake of over-promising or over-extending. Network Event Don’ts Believe collecting business cards is a measure of success. Remember, the purpose of attending these events is to meet people — not just to collect business cards. If that’s all you accomplish, the whole exercise is for naught. Be on the lookout for someone else while speaking with another. If you do have the misfortune of getting into a boring conversation, find a gracious and courteous way to excuse yourself. What you should avoid is awkwardly scanning the room for someone else to speak with to break away. Try to impress others with jargon or facts. Using big words, insider jargon, or trying to impress with a barrage of facts is a turn off. It’s pretentious and tells others you lack self confidence. What’s more, it keeps you from having a genuine conversation. Speak over or interrupt others. This sounds obvious, but, it’s something that can be unintentional when you’re nervous. When you do approach someone else and introduce yourself, be courteous, ask polite questions, and listen. Yes, the purpose of attending Network Events is ultimately to acquire new business. However, do not go to a Network Event if that is your initial purpose. Your priority for attending a Network Event is to develop Relationships which you can foster over time into a business opportunity with that connection or with someone they introduce to you. Minimize your agenda, and spend time listening and asking the other person questions about themselves and their business. Show them genuine interest and watch how your relationship moves to trust even during the Network Event. Isn’t it more rewarding to leave a Network Event with 3 or 4 really good, meaningful connections where both of you developed a relationship and can follow up after the event to further explore opportunities together? When is the last time you attended a Network Event and made some meaningful connections that turned into real business? [shareaholic app=”follow_buttons” id=”26833294″]

Reasons Why Small Business Loans are Denied

May 24, 2017 No Comments

Small business owners can easily find themselves in the unenviable position of needing capital, but, not having ready access to cash. It presents an age-old problem, buying equipment ties cash up, even though said equipment is considered an asset. Such assets can depreciate, which worsens the situation all the more. On the cash liquidity side, there are tax consequences to having a certain level of retained earnings. This is why debt instruments are a part of doing business. However, even profitable small businesses can be denied for a loan, and, there’s ample evidence to support this phenomenon. In the first two quarters of 2014, about half of applicant businesses received any funds, according to a survey conducted by the Federal Reserve Banks of New York, Atlanta, Cleveland and Philadelphia. Reasons Why Small Business Loans are Denied Unfortunately, present trends don’t show much improvement in the access to capital, or, in reducing operational costs. In fact, since November 2014, three out of ten businesses reported more difficulty in trying to reduce operating expenses, and, one-quarter reported unexpected expenses too hard to plan for, according to a study conducted by Nav (formerly Creditera), a business credit management company. If your company recently applied for business credit and was rejected, you’re not alone. So what can you do if your business credit application is denied? Start by trying to find out why. The Federal Trade Commission suggests submitting a written request for the reasons within 60 days of the denial, and the creditor must give you the specifics in writing within 30 days of the request. Consider discussing any concerns you have with your lender, and you may be able to resolve the issues. —Washington Post Within the same survey, about 20 percent of participant companies considered closing their doors, citing two primary reasons: lack of growth and issues with positive cash flow. These factors are likely why 53 percent of all companies applied for lines of credit or loans over the past half-decade, with more than one-in-four attempting to access capital numerous times. During the same five year period, one-fifth were denied and of those, 45 percent reported being turned down more than once. Twenty-three percent of all those denied loans or lines of credit did not know the reason why their applications were denied. So, why is this happening and what makes it appear so prevalent? There are reasons why small business loans are turned down, and, it’s actually not complicated. Here are some of the most common reasons small business loans are denied: Having no credit or even bad credit. Some business owners do not realize they have two credit scores: their personal credit and their business’ credit. What’s worse, some owners have relied on personal lines of credit and have seriously driven their DTI or debt-to-income ratio into dangerous territory. Making payments on-time, keeping a low balance, and not seeking to continually open new credit lines are all necessary to improve both personal and business credit. Too little collateral. Since most business owners aren’t willing to sign a personal guarantee, leveraging their personal vehicles and home to secure a loan, there’s little to nothing left to pledge as collateral. Lenders aren’t keen and will not provide financing that constitutes an unnecessary risk. Anemic cash flow. After all other expenses are paid, lenders want to see demonstrable proof there’s enough cash to repay the loan. Too tight a margin and banks won’t be willing to approve a business loan. Lack of strategic planning. It’s often true that business owners don’t understand the loan process, including the application itself, and all necessary documentation and that can lead to being turned down. Applicants must provide a clear forecast and show a realistic, actionable plan. Under capitalization on loan applications. There are sometimes more assets available to claim than applicants realize and as a result, their loan application makes the organization appear under capitalized. Some assets aren’t immediately clear, which means all potential assets ought to be identified. Another reason businesses might have trouble securing debt instruments is industry-specific difficulties. For instance, a construction company that’s operating in a locality where people are moving away from, or, a taxi company that’s facing tougher licensing regulations or an industry disruption as we have recently seen with Uber. The best solution in the short term is to reduce your Cost of Goods (labor and materials) to improve Gross Margins and reduce Expense Overhead to increase Net Profits which will help with cash flow and operating capital. Also, negotiating terms with your Receivables and slowing growth will allow for an influx of cash. Where possible, attempt to self fund your growth. If capital is required for growth, pursue alternative lending sources other than banks. There are several available and feel free to contact us if you are in need of alternative lending sources. Want to find out about what a business coach can do for you? [shareaholic app=”follow_buttons” id=”26833294″]

Groupon Teaches Us These Lessons About Discounts

December 1, 2017 No Comments

Groupon is up in its latest earnings report. About 18 percent and that’s welcome news for the e-commerce discount platform. Headquartered in Chicago, Groupon launched in November 2008. It rose by leaps-and-bounds. That is, until recent years, when it experienced big time losses. In fact, its 2011 Q4 figures revealed a whopping $9.8 million loss. Ironically, that comes about a year after the Wall Street Journal forecasted it to reach $1 billion in sales faster than any other company in history. Today, it’s a different story. And, this business model teaches us all important business lessons about discounts. The Downside of Discounts Big companies aren’t immune to blunders. Right now, McDonald’s is trying a bold new experiment. There’s no guarantee it will work. But, the company won’t know unless it tries. Groupon’s saga tells us much about discounts. For participating businesses, Groupon vouchers do get more customers through the door. But the question to ask is if those same individuals would have patronized the business without a Groupon? Your marketing message plays a huge role in conveying the true value of your products. Even if your prices aren’t the lowest around, emphasizing the added value that customers get from your store, such as any guarantees you offer, personalized service or better-quality merchandise than the competition, can convince shoppers your prices are worth it. —Small Business Trends Additionally, there’s another phenomenon at play. A large majority who use a Groupon do not repatronize a partner business. After all, why pay full fare? Moreover, it does cause customers to seriously think about the value of non-discounted purchases. That starts a cycle. A business partners with Groupon. That business serves more customers during the discount period. Then, visits go back to the previous levels. If it comes at a net cost per ticket, there’s obviously no benefit. So, they do not participate in Groupon discounts again. Product and Service Discount Advantages But, this isn’t always the scenario. Some businesses gain a net plus from working with Groupon. Which means there are some distinct advantages to offering discounts on products and services. Here are the benefits to offering discounts to your customers: Attract more customers. It’s no secret people like deals. So, play to this by offering discounts on key items or services. You’ll attract new customers and this will increase repeat business at the same time. It’s a great way to advertise and to be seen as providing real value. Increase sales. With more new customers and repeat business, you’ll have more sales. If you choose the right discount strategy, you’ll come out ahead and that’s money you can use in different ways. For instance, you can purchase more inventory or put that extra sales money to other uses. Free up space. Discounts can help to free up precious shelf and/or cabinet space. This is a great move for small, independent retailers because it allows them to offload certain things to bring in new products. Bolster reputation. Offer discounts to certain people, like military and first-responders. This shows your business cares and that’s a positive for its reputation. You can do the same with elderly customers or families with small children. Do you offer discounts? If so, what kind and how much? Have you found discounts help or hurt your business? Please share your thoughts and experiences by commenting! Interested in learning more about business? Then just visit Waters Business Consulting Group.

My Small Business Manager didn’t Manage the Business Well and Now it’s a Total Mess…What Do I Do?

What Good Managers bring to Small Businesses

How Business Owners can Fix Mismanaged Companies

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Related Posts

Network Event Do’s and Don’ts

Reasons Why Small Business Loans are Denied

Groupon Teaches Us These Lessons About Discounts

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