Is Your Company “You Proof?”

We’ve all had a client or prospect “disappear”on us on occasion. Happens all the time and it sends us into all kinds of internal scenarios trying to figure out what happened.

I couldn’t reach a new contact recently and began to wonder what happened to him. Maybe he was no longer interested in what we had been discussing. Maybe something was going on in his business that had changed his priorities.

Well, you get the point. When a client or prospect drops off the world, you begin to wonder what happened and what you can do to pick things back up.

Then, after two weeks, I get a call from him apologizing for being out of communication since he had been on a two-week fishing excursion with his buddies. He quickly moved from a worry to being a hero.

Question: “Can you go fishing for two weeks? Maybe take your family on a two week vacation?” If not, why not?

“You-proofing” your business has enormous benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, its bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to sell. With that thought in mind, here are a five ways to get your business to run without you:

  1. Give your employees a stake in the outcome by creating an ownership culture inside your company.
  2. Create an environment of inclusion.  Ask your employees often, “what would you do if you ran the company?”
  3. Prioritize your company’s offerings by which ones require the least of your attention.  That is, revise your selling priorities towards things that sell best without you.
  4. Fire yourself as the company’s chief rainmaker by creating automated customers.
  5. Write an instruction manual on how to run your company.

Some owners focus on growing their profits, while others are obsessed with sales goals. By  making it your primary goal to set up your business so that it can thrive and grow without you, you ultimately will increase the value of your company and make life more enjoyable.

A business not dependent on its owner is the ultimate asset to own. It allows you complete control over your time so that you can choose the projects you get involved in and the vacations you take. When it comes to getting out, a business independent of its owner is worth a lot more than an owner-dependent company.



The bulls are firmly in control, but the bears are making a ruckus: will we be ready when things change?

Our economy has given us some great rewards in the last few years. North Texas has experienced phenomenal growth for several years now:

  • Many large companies have moved here.
  • For every one of them, 10 or more supporting businesses have moved here too.
  • And don’t forget the housing market plus all the infrastructure to support all the new arrivals.

It’s not just been a bull market, but a roaring bull market and it looks to still have some healthy life still ahead.

On a broader basis, stock market volatility has returned:

  • We have had several years of consistent upward movement.
  • Investors seem to have reached that point where they are expecting a correction and get a little jittery.
  • The market drops quickly on news and then rebounds as bulls continue to buy the dip.

The overall market is still positive.


While there is really no reason for concern just yet, there is something lurking that we should all pay attention to carefully.

That something is interest rates.

  • The Fed is signaling more short-term interest increases on top of the ones they have already put in place.
  • They will also be selling debt sitting on their balance sheet into the market.

All of this will affect borrowing costs.  Not just for our own businesses but for our primary customers and their customers.

Let’s take an example.

North Texas is in a building boom.

Those buildings (projects) have a timeline to completion which could run a few years.

Lots of different companies provide goods and services to these projects: companies like general contractors, architects, engineering firms, electrical, plumbing and construction contractors, material suppliers, and related trades and suppliers.

These companies employ a lot of people who buy goods and services from other businesses.  Many business sectors benefit.

All projects rely on financing.

Companies in this supply chain use leverage (debt) too.  Increases in interest rates which is the cost of debt translates to less funds available for other purposes.

As interest rates rise the number of projects will likely decrease because the economics won’t work as well.  Some projects already scheduled could be delayed or scrapped. With fewer projects in the mix there will be greater competition for the remainder creating downward pressure on the price of services as well as a build-up in inventories.

Those with higher debt service and the least free cash flow will begin cutting costs, delaying payments, laying off employees or filing the big “B.”

Then the ripple effect begins.

There will fewer people to buy certain types of goods and services causing a slowdown in other business sectors.  We all know the process.

Today everyone’s boat is floating high with the tide.  It’s easy to make money.  The real test of leadership is being prepared for adversity–that “what if” you don’t really want to think about – and how you perform when it comes.  The cycles of 2000-2001, 2007-2009 and 2011 and the precursors are repeatable (I can go much further back but that’s giving away age).

We are enjoying the good times, will we be prepared when that changes? :

  • Can you reduce debt and what you think your borrowing needs are or will be?
  • Can you improve your accounts receivable collection time with your top customers by even a few days?
  • Do you have the right customers or should you amp up marketing?
  • Do you have the right people and processes in place inside your company and as partners?

We can get away with much while things are good.  It seems it is also a good time to fine tune.  What do you think? Sure would like to hear your views.


Setting Goals: Visualizing Your Own Future

Talking with a close friend recently about growing one of his businesses and he made an interesting observation:

“My experience when setting goals in some organizations is that they simply become nothing more than setting some arbitrary revenue number that seems to be appropriate for the moment.”

He then asked me an important and revealing question:

“How do we set realistic, meaningful and achievable goals that are based on something other than that arbitrary number?”

Have you ever been there? How do you set your goals for the new year? Are you just setting them based on a percentage growth over last year? Or maybe you are basing the number on a couple of new customers and the growth that they’ve brought you. What’s your answer to my friend’s question?

Let’s pull this apart.

We will start with a relatively famous quote from Napoleon Hill:

“Whatever the mind can conceive and believe, the mind can achieve.”

Don’t you wish it was that simple? Well, maybe it is. We’ve just never fully understood how to “believe it”.


Believing something takes more effort than simply telling yourself over and over that something is possible, doable, or true. Or to this point: setting a revenue number and telling everyone that’s the goal and we just have to make it happen. Not only do you have to believe it but you also have to get everyone else to believe it. Now we’ve just stepped into the world of make believe. Come on. You’ve been there. Admit it.

Believing something takes effort. It’s not just a feeling. It’s internalizing something. It’s not just eating one portion – it’s got to be a complete diet. And a complete life style. In our case here, we’re talking about something tangible and practical, not something spiritual (which is a separate discussion). How do we take a tangible, practical goal (such as a revenue goal) and make ourselves and our team “believe” it?

Here are the steps:

  1. Make it specific.
  2. Write it down.
  3. Paint a picture of it.
    • What does it look like?
    • Or what does having it or achieving it look like?
  4. Preach it.
    • Tell everyone who can affect it how they can help make it happen.
    • Help them paint their own part in the picture.
  5. Review it.
    • Often. Every day. Several times a day.
    • If you really believe something, you’re always focused on it.
    • Force this.
  6. Track it.
    • Hold yourself accountable to the journey, always making sure you’re on track. If you were driving to an unknown location, you’d be constantly checking your progress and your GPS to make sure you’re on the right route and you’re making the right time. Well, do the same with this process.

I don’t know about you, but the hardest part of this for me is making it specific and painting a picture of it. If you’re going to paint a mental picture, you’ve got to include as many of your senses as possible. Here’s a trick I’ve learned along the way. Put yourself out there. Think of yourself three to five years from now already having achieved your goal. What does that look and feel like? I’m not talking about visualizing yourself lying on the beach with a mai-tai in your hand. How about this? You’re sitting at the front table at the Chamber of Commerce annual meeting being honored for business of the year. Who from your team is there? What did they do to help you get there? How about those customers who helped you get there (and sponsored a table for the event). And your vendors – several of them have sponsored tables. They’re all anxious to slap you on the back, shake your hand and let everyone know that “you know them.” Wow! Can you begin to get that picture? That’s what I’m talking about.

You’ve really got to flesh this picture out:

  • What do you see?
  • What do you hear?
  • What are your customers saying?
  • What are your vendors saying?
  • What is your banker saying?
  • The media is there. What are they writing and reporting?
  • What are your employees saying?
  • How are you feeling about all of this attention?

Another perspective:

  • What have you gotten better at over these three years that you’re now receiving compliments on?
  • Who have you trained up to enjoy this with you? Who did you delegate to and trust with some of the most challenging roles?
  • How does it feel to be doing what you love doing – and no longer doing the things that you have to do?
  • What is everyone saying – employees, vendors, customers, partners, etc. about your core values and culture?

Ok, I think you get the point. Goal setting is way more than setting a revenue number. It’s about believing in something that’s achievable and these items are what you have to focus on if you want to believe in them.

One final important point. You can’t do this sitting at your desk during regular hours. You’re going to have to commit some dedicated time away from the office and all the everyday distractions – computer, cell phone, To-do lists, calendar appointments, interruptions, etc. Get out! Go away! Get it done through dedicated, uninterrupted focus.

You can do this!  Call me and let me know the time and location of that business of the year luncheon.



What’s the Driving Force in Your Business?

If you’re like most of us, your growth plan next year is all about some percentage of an increase in sales. Commensurate with that will be some increase in costs and expenses. Both of these are based on your current financials – what do they look like this year and over the last several years. Those give us the confidence to project into the new year.

During this time of year, I am often reminded of a lesson I learned a long time ago – about the difference between cost and expenses and investment for the purpose of a return.

What if you turned your thinking around?

I had recently sold a successful business to a partner that I had been in business with for over five years and had taken a position managing a struggling computer software-hardware distributor for a large privately held company. Our first year was nothing to brag about but we finished within our budget. The second year, however, was all mine: I set the budget, the sales projections, and other important operational details.

Since this was a foray into the new world of computers, the entire company leadership was focused.  And a big reason I was attracted to the industry and the company. As we got into the year, it became painfully clear that we were not on track to meet our sales projections.  So I began the process of paring back on expenses. Keep in mind that I had spent the previous five years in my own business, so I was watching the financials like they were my own.

In a progress and status report meeting with Ron, the company president, I was asked about the sales numbers. What were my thoughts on why we were not meeting sales projections and what my ideas were to turn them around and begin hitting them? In our discussion I made the comment that while we were not meeting the sales objectives, I was also closely monitoring and cutting our expenses so as to not get them out of alignment. His response was a wake-up call.

“Why would you do that?” he asked.

“Well, it just stands to reason that if we’re not hitting our sales numbers, we had better be cutting back on our spending.” I said, thinking, again, that this is exactly what I had been doing in my own business.

“Dave, you’ve got to change your paradigm, here.” He said. “In this business, we budget our expenses based on what it’s going to take to make the sales numbers. You have been given a budget that would drive the sales number. Why in the world would you cut back on those if you’re not meeting your sales? You’ve got it backwards. We’ve given you that money in order to achieve the sales number – that’s our return on our investment. If you’re not hitting your sales number, you need to evaluate why and how you can find the right investment to make those numbers – not cut back on the investment.”

Now, I’m going to leave that discussion right there and let it settle in. Because if you’ve been running a business for any length of time, you’ll get what Ron was driving at. We get into the habit of projecting sales and costs with the same attitude. We set the sales number and then try and figure what our costs need to be in order to hit that number – based on what we did last year. This is standard thinking. Growth thinking is another paradigm – it’s a slight twist. But that twist can bring you great rewards. Here’s the twist, if you haven’t already figured it out.

After you finish your regular projections. Reverse your thinking about your financials. Instead of thinking about what the top line is and then what your costs are going to be to achieve those. Think, instead about your costs first. The new thought: “If I spent that kind of money on a new investment, what would I want my return to be? The same as last year? Maybe a 10 or 15% increase?” How about, “What if an investor came in today and offered me a check for the amount of these expenses? What would he and I agree on would be the right ROI? What sales level and what bottom line should that check amount drive?

Additionally, throughout the year – you’ll be asking a different question. “Am I getting the return on my investment that I wanted? If not, why? Am I spending my money on the right things and people to achieve that?” This as opposed to, “I’d better cut back somewhere because I’m not hitting my sales numbers.”

I know this sounds like a minor difference, but I can’t tell you how many times I observe this. Thinking of cutting costs as opposed to evaluating ROI those costs should be driving.

Either you’re driving those costs in order to hit your ROI or the costs are driving you.

Change your paradigm and see if you don’t see a significant change in your business.

Blessings my friends.


Act Now – even when you’re in your busiest season

Every business has its busiest season. You know when yours is. The question is, do you put your planning on hold during that period while you take advantage of your busy season or do you continue the bigger plan while business ramps up?

While working with a successful CPA recently who is getting in touch with his original passion for his business, I was working with them putting together the strategy for growth and some organizational changes. As we got to the calendar to start laying out some specifics, he quickly drew back and said he didn’t know if he wanted to start this until after tax season, obviously his busiest season. Fair enough, wouldn’t you agree?

Well, I don’t.

And after our talk, neither did he.

In his case, he’d be postponing an important, (may I say critical?) decision and time of execution for the same reason he hasn’t made any significant changes to his business for the past 20 years. “Regular business, takes priority.” Hard to argue with that. Revenue is flowing through the door. So, what’s the answer? The short answer is, “If not now, when?” Postponing it one more time, will lead to another time, and another time, etc. So, NOW is the time. Not some future, unknown and unproven “better” time. Pull the trigger and let’s go.

There are at least three reasons to do this: (can you think of others?)

  1. When you’re the busiest, it’s easiest to delegate. You have no choice – other than to do it all yourself. Your people are expecting you to delegate – so for goodness sake, delegate!
  2. There’s no better time to evaluate your team’s performance than when they’re “in the fight”. How are you going to evaluate them when they’re slow? Your best performers will rise to the top during your busy season – not your slow season. You’ll see how they do the work, treat their team, treat the customer, commit to the objective.
  3. You’ll discover the strengths and weaknesses of your systems, processes and procedures. If there’s a hole in your bucket, it’ll get revealed when you’re going full speed. When you’re slow, it’s easy to just make do – no pressure or urgency to fix anything – “let it ride, we’ll get to it later.” Kind of attitude. You know it. You’ve experienced it.

So there you have it. Are you brave enough to move forward even in your busiest season?

If not now, when?


Texas Probate Court Is Not Your Best Planning Partner

It’s not often that I work with someone who is “quite a bit older” than I am; but, recently I had the privilege of working with someone who is. I’ll be really blessed when I reach his age and am as sharp and aware as he is.

But, his acute mind and obvious business success have totally missed an important element that his age should be telling him: you must do something to set your company up, and your heirs up, to be in the best position to operate your company after you’re gone. Whether “gone” means gone fishing and not involved in the business or gone as in “gone for good.” The only way I could reach him was when I told him that the State of Texas was not a wise choice of partners in his business planning. Probate is not a great option for a business leader.

Now think about this. If you are gone from the business for any reason and for an extended period of time, don’t you want it to continue? Don’t you want it to, in fact, prosper? What should you be doing now to ensure that your extended leave is not going to totally destroy the thing you’ve spent a lifetime building?

Let me be clear at this point. My associates and I are not financial planners. We are business planners and developers. We help businesses, their owners and leaders, grow. And grow seriously! This means we focus on changing the processes, the capabilities of the leaders, the culture, the marketing and sales plans and we help execute all of it for the express purpose of increasing the “enterprise value.” In short, we execute on the things that represent the “real” value of your business – not just the financials. We focus on increasing the value of your biggest asset – your company. And the best financial planner out there can’t or doesn’t do that.

So, if you’d like to avoid “partnering” with the State of Texas at some unknown future date, here’s a quick outline of what you should be doing right now:

  1. Identify who you should be raising up (training) to take your place.
    • My 80-year-old client was bemoaning the fact that his “number one” wasn’t ready to take over because he didn’t know the financials. This, as he pointed out the stack of payables sitting on his desk waiting for his approval. The telling question here? “What are you doing to teach him the financials and how you’re managing them?”
  2. Identify what processes and procedures should be simplified, modified or otherwise quantified in order to make them duplicated by the newest employee in that department.
    • By not systematizing his accounting processes, my friend was also telegraphing that there were most likely many other areas in his company that had not been systematized.
  1. Identify your key client relationships and make sure the person in charge of that relationship has introduced into that relationship a protégé  (a “second,” so to speak). This is especially important if you are that lead person.
  2. Do this same thing for your key supplier and vendor relationships.

These are just a start – but they ARE a start! Here’s an analogy that captures this whole concept:

What if tomorrow morning, you received a call from a legitimate, trusted source and they told you that you, your spouse, and your entire family had just won an all expense paid vacation for three months to do an around the world tour? The catch? You have to leave by one week from today.

How would you organize your company in that one week so that you could confidently take the trip?

(Note – from a negative side, how are you going to tell your spouse that you can’t make the trip because you can’t leave the company for that long?)

Call me – let us help you get ready for the trip . . . we know how.


What’s Your Plan?

I just came back from my “xx” High School Reunion where I enjoyed hanging out with folks that were a lot older than me. I understand that you can learn a lot from your elders . . .

deadline-stopwatch-2636259_1920An interesting thought struck me while enjoying this little ride back into nostalgia. Most of the people there were wondering, “how in the world did I get here so fast?” And, “did I arrive here through a good plan, or is this the result of me just slipping and sliding until I got here?” I can assure you that both thoughts went through most of our minds.

In the construction business we always had a very specific plan and a completion date that we were targeting. Without these, a project just never seems to end. Without them, the costs never seem to end. In order to hit the target date and the budget, you had to constantly stay focused on them both – starting on the first day you walk onto the job. As a team our motto was simple “What are we doing today to make that day (the completion day) happen?” If the team couldn’t quickly give a very specific and detailed answer, I knew that we were not on the same wave length and we had some more training to do.

So, how about you? What are you doing? Got a plan? Got a date? This is just as much about hitting your revenue goals and market share goals as it is working toward your transition or exit plan. You must have a plan and you must execute it. And you must have a date certain that you’re targeting. The alternative is “slipping and sliding toward some undefined end point. You’ll never know when you get there or whether you achieved anything once you get there – wherever “there” is. You’re going to arrive at your “xx” High School reunion and have those same questions needling you.

Now, to the point. What are your goals for the next year? The next three years? Ten years? What about your ultimate transition or exit plan? What are you doing today to make any of it happen? Are you going to wake up tomorrow and do the same thing that you did today, or are you ready to change your paradigm and make serious progress? When are you going to do it?

Call me – let’s get this done together. Then when you get to your high school reunion, rather than you wondering how you got there so fast, your old buddies will be asking you, “how you did it.”

Call me.

Are You Making Plans for Next Year?

We’re talking here about your annual business planning session. The annual “how are we doing, where have we been and where are we going from here” meeting. However, if you’re looking to do the more significant strategic planning meeting, your list is going to be significantly different and will incorporate far different elements.

Here’s a brief checklist of the basic things to get done to make the most of your planning:

  1. Establish the objectives and purpose of your planning session. Include plans for all of the major business areas in your company:
    • Sales
    • Marketing
    • HR and personnel
    • Finances
    • Operations (systems and processes)
  1. Gather all the data needed to evaluate each of the above. Delegate this to the department heads when and where possible. It is important that your leadership team participate in this exercise. They (and you) will need the last 3 to 5 years of data and any comparative year to date info that has been tracked for the current year.
  2. Formulate the guidelines of the exercise to challenge your team and let them know what they are working toward.
  3. Set expectations for the new year. This will be the time to tell your team and get them all going in the direction you want. Ten percent growth year over year? Five new major clients?Five percent EBITDA growth?  You get the idea. You’re the leader.  You are the only one with a blank page. Everyone else will be working from your outline.
  4. Draft an agenda and determine how much time this planning time is going to take. One day? Two days? Delegate the planning of the program including location, food and other details.
  5. Schedule the meeting.  Put it on the calendar as soon as possible so everyone has ample time to clear everything else off their calendar. This should be a “no miss” meeting.

One final, but important, note: invite as many people as possible to participate and contribute to this, even if they are not going to be in the actual meeting. You want engagement and the best way to get it is to engage them first. If you’re a business of “one” you can still engage your closest adviser or mentor.

Good luck with your planning. If you need help in this early stage, the actual planning session or in the execution of the plan, I’m here for you. Call or text me. I’d be honored to help. Your success is my success.