EBITDA or EBITDAC?

The term EBITDA is common practice in the financial world. The term is also frequently used by business owners, without a financial background, but do we really know what it stands for?  EBITDA means Earnings Before Interest, Taxes, Depreciation and Amortization.

The term is used as the standard for the operational cash-flow a business generates over a certain period, without taking into account the financial result, taxes, exceptional income or expenses. As we talk about cash-flow the non-cash costs as depreciations and amortizations are also excluded.

But what about EBITDAC… Earnings Before Interest, Taxes, Depreciation, Amortization and Coronavirus?

How has the Coronavirus affected you, your employees, vendors, and customers?  It is safe to say that at some level COVID-19 has impacted every business owner and their bottom line.  As restrictions ease and we return to some level of normalcy, it’s important to look back and reflect on what learnings we can glean from this and how to prepare for the future.

As an EOS Implementer, I help companies focus on three timeless principles regardless of the circumstances. EOS, the Entrepreneurial Operating System, is a complete set of simple concepts and practical tools that has helped thousands of entrepreneurs get what they want from their businesses. Implementing EOS will help you and your team get better at three things:

  • Vision—getting everyone in your organization 100% on the same page with where you’re going, and how you plan to get there.  Does everyone in the organization know where you are going and how to get there?  Is it clearly stated and communicated?  You and your leadership team should articulate or refine your vision to reflect who you are, why you exist, what you do and where you are going.  It gives you (and your company) a road map to follow.
  • Traction®—instilling focus, discipline, and accountability throughout the company so that everyone executes on that vision—every day.  This is where he “rubber meets the road” and your strategy becomes actionable.   Your people must focus on what needs to be done, you must have the necessary processes in place to act and then you should manage outcomes to get results.
  • Healthy—helping you (and your leaders) become a more cohesive, functional, healthy team.  In the book, “The Advantage” by Patrick Lecioni, to be successful, you need to be both “smart” with strategy, marketing, finance and technology AND “healthy” with minimal politics and confusion, high morale and productivity, and low turnover.  Are you building a culture that is healthy and helping you thrive?

In the midst of this pandemic, your problems and issues only get magnified.  Don’t ignore them, recognize and address them.  Once we are on the other side of this and you report EDITDAC, let us help you build a business that is ready for both the good times and bad times.  A business that allows you the freedom to balance both work life and family life, increasing in value, and gives you a future to accomplish your dreams.

New Paradigm Advisors believes you deserve to enjoy the benefits of a profitable, growing and well-run business. We help you break out of the old way of doing things and attack the new economy with a renewed passion and focus. For more information about transitioning your business, please reach out to us.  We’d love to hear from you.

Michael Visentine and The New Paradigm Advisors team

Never Waste a Crisis

I once worked for a CEO who would say, “never waste a crisis.”  I knew what he meant, but it did not really hit home until more recently with the COVID-19 crisis we are all facing.  Whether you are looking for business or have more business than you can handle, you need to adjust now to the “new normal.”  What does the world look like post pandemic and how does your business respond?  You need to prepare now and be thinking ahead to address next steps and not be caught “flat footed” in the new normal.

I recently read a study done by BCG about the 2007-09 Great Recession and the common traits (five factors) global S&P 500 businesses employed to recover.  While this pandemic is different, it is still a valid study to obtain insight into planning for your next steps to thrive and not just survive as you move forward.

The five factors:

  1. Act proactively.  Business that weathered the recession and came out stronger, owned the situation and were forward-looking in their thinking, planning and actions.  No matter what position you find yourself in, there will be a recovery and you have to be ready.  In Stephen Covey’s book “The 7 Habits of Effective People”, Be Proactive is the first habit.  It is about taking responsibility for you and your company. Do not blame the pandemic, the economy or the government. Proactive people recognize that they are “response-able.”  They know they choose their behavior and course of action.
  2. Stick to a clear vision. Top performers did not change their vision based on circumstances.  To put it in simple terms… your destination stays the same, but how you get there may change.  In the Entrepreneurial Operating System (EOS), vision is the process of getting everyone in your organization 100% on the same page with where you’re going.  As an EOS Implementer, I help companies craft a vision the does not change with the circumstances but is timeless and also for flexibility to adapt.  If you don’t have a clear vision, how do you know where you are going?
  3. Increase demand vitality. Successful companies addressed changes in the marketplace and adjusted accordingly. With the COVID-19 and decreased physical foot traffic, you need to look online and how to adapt to and adjust your model for increased online presence with the ability to market, sell, and service online.  Where are trends and what is best option for you to capture the demand?  How will you best respond to these demand changes?  Assess and then go.
  4. Create supply agility. Businesses that thrived, were able to quickly assess impacts to their supply chains and respond with alternatives.  Too much reliance on one vendor can greatly hamper or impact your business.  You must build adaptation and agility into supply base and supply chain. Fortunately, new supply chain technologies are emerging that dramatically improve visibility across the end-to-end supply chain, and support companies’ ability to resist huge disruptions. The traditional linear supply chain model is transforming into digital supply networks (DSNs).
  5. Build resilience. The top performers knew that they couldn’t avoid future disruptions, so they worked towards a future that could withstand future shocks and, more importantly, anticipate them.  Some questions to ask… did you build a culture of trust and accountability? Did you have enough cash on hand to weather the initial storm?  Were you able to cut cost to “race and not chase” the drop-in revenue? Did you have an IT disaster recovery plan in place?  As a leader, you must anticipate and plan for these.

These five steps will increase the likelihood you will survive and thrive in the future.  Take inventory of where you are now and face reality.  Consider your company’s position.  Once you know where you are, and you start planning for the futures, ensure that what you are doing today will bring about the end of the crisis tomorrow. How must you transform your business to thrive and succeed in the future?

New Paradigm Advisors believes you deserve to enjoy the benefits of a profitable, growing and well-run business. We help you break out of the old way of doing things and attack the new economy with a renewed passion and focus. For more information about transitioning your business, please reach out to us.  We’d love to hear from you.

The New Paradigm Advisors team

Ten Tips to Improve Your Online Meetings

Due to the COVID-19 health emergency and shelter-in-place orders, there have been huge impacts to the way we all do business. One of those is the way we meet: these days it is more than likely via video conferencing. I’m guessing in the last few weeks you’ve had at least one, if not several, virtual meetings. It’s time to make these meetings productive.  It’s time to make them great!

In Stephen Covey’s best-selling book, “The 7 Habits of Highly Effective People”, one of the principles is “begin with the end in mind”.  With this, the purpose of any meeting is very simple: get things done. You meet to:

  • Solve problems.
  • Get everyone on the same page.
  • Make sure the team is on track.
  • Move forward.

Based upon these objectives, are your meetings productive?

One report found American businesses hold more than 3 billion meetings per year and 11 million meetings per day. That’s a lot of meetings so they should be worth it.   To make the best use of your time, here are a list of 10 tips to make your online meetings as productive as possible and use everyone’s time effectively.

Watch this funny video and then read our list to avoid these common issues.

  1. Have good, reliable internet. Your video should not sputter and/or skip. It’s incredibly distracting, and it’s not acceptable.
  2. Sit on a chair at a table or desk. Don’t sit or lie on a bed or sofa. This is a business meeting. This is the challenge with working from home—it’s hard to transition into work mode. This will help.
  3. Be aware of your background.  Avoid busy or distracting backgrounds, including virtual backgrounds. If you can, use the feature to blur your background, pick a neutral area or hang a sheet to keep focus on you.
  4. Stay in front of camera and keep it at eye level. It’s important that no one goes off-screen to do something else.   Make sure you are in the center of the screen at a distance of 2 to 3 feet.  This will prevent people from leaning in and you will better keep the attention of your audience when speaking.
  5. Test your lighting. Make sure there are no lights behind you and have a light on your face. People need to clearly see you.  Lighting is important.
  6. Make sure your microphone works well. Use a good microphone or buy a headset, if needed. When people can’t hear you, they struggle to pay attention.
  7. No looking at your phone. Have your phone silenced or out of your view.  Be considerate of others and treat this just like any “in-person” meeting.
  8. Don’t mute. What happens is that someone starts talking, not realizing that they forgot to un-mute. By the time everyone lets them know (with hands waving, you are on mute!) and they finally figure it out, you’ve lost valuable time.
  9. Minimize background noise. Make sure you’re in a quiet room with the door closed… no dogs barking and no family interruptions (tell your family you are at the office).
  10. Use gallery mode. Make sure that you can see all of the faces participating in the meeting, at a glance.  Most video conferencing platforms have this function.   This helps everyone stay connectedBe safe and productive!

New Paradigm Advisors believes you deserve to enjoy the benefits of a profitable, growing and well-run business. We help you break out of the old way of doing things and attack the new economy with a renewed passion and focus. For more information about transitioning your business, please reach out to us.  We’d love to hear from you.

The New Paradigm Advisors team

The Challenge of Working Remotely

Welcome to the world of working remotely. How’s it working out for you?

I’ve been working remotely for quite a while now and it’s been interesting to watch people trying to do it. It is a bigger challenge than you think. It takes more discipline than first expected.

The bottom line is you have to have the mindset of:  “I’m going to work every morning.”

The three things that should be your mantra:

  1. Get up!
  2. Dress up!
  3. Show up!

By now, you’ve probably seen plenty of social media posts of people dressed from the waist up, keeping their shorts or pajama bottoms on.

Funny.

However, here’s the problem with that: your self-image and your attitude are influenced by how you are dressed. You should really be dressed for the occasion. Maybe one level above what your audience expects, whether they are in person or online.

Personally, if I know I don’t have any meetings scheduled, it’s easy for me to dress casually or truthfully super casual for the day. Meaning, weekend clothes and that might even mean yard working or outdoor hobby clothes. But, if I know I’ve got meetings or even a serious working agenda for the day, I’m dressing up for it. It’s what I call “doing the Full Monty” in the morning. Meaning shower, shave, and appropriately dressed, ready for meeting anyone. No shorts, flip flops or sloppy clothes. I’ll admit that this is pretty easy for me because I’ve been doing it for so long. Let me encourage you to get into this habit. Keeping your professional hat on so to speak is going to help keep up your attitude and focus.

Next thing is to have a dedicated work space. Make it look like a dedicated working space, even if it’s just a corner in your dining room. Figure this out. As it is right now, we’ll all be in our home working space for another four to eight weeks. Don’t be sloppy. There are some benefits of doing this:

  • It is a space that when you walk into it, you’ll be mentally preparing yourself for work.
  • When you walk out of it, you’ll be able to leave that work behind.
  • If it’s a space you can close the door on, you can really close the door on it – both when you’re inside it and when you leave it.

Get in the habit of this. Oh, and don’t bring your cereal bowl to work with you in the morning. Go eat, brush your teeth, check your hair one more time, and come to work.

Finally, if you’re anticipating doing more online, face-to-face meetings on Zoom, FaceTime, or other similar platforms, then, for goodness sake, be conscious of your surroundings, especially your background. There have already been so many social media posts of some pretty funny incidents of people doing their online meetings. There has even been one where a lady took her phone into the bathroom and, well,  you get the point. They’re all funny or a bit tragic in this lady’s case. The point is you don’t want to be “YouTube Famous.” Be conscious of your surroundings when you’re doing these calls and meetings.

We’re all going to be working like this for the next while. Let’s make the best of it and do our best at it.

Let me know how you’re doing.

Dave

Finish Strong: Measurement

While it isn’t necessarily popular, all things of note and import need to have some quantitative or qualitative measures.  Measuring success is that yardstick on anything that helps you put your arms around it and understand its relevance to your company.

So what kind of measurements will you put in place to help secure this finish strong initiative?

There are both quantitative and qualitative measure:

  • Quantitative are mathematical and usually rely upon hard numbers
  • Qualitative are more about the quality of an attribute an and can be measured as well

Let’s start with the pure sales numbers (usually quantitative):

  • An expectation of XX% increase in sales.
  • Acquisition of YY new clients.
  • Improve your close rate by WW%.

Moving on to human resources, you might expect:

  • NN new hires.
  • Implementation of a new training program.
  • Creation of a retirement plan

Then there is operations:

  • Increased internal productivity of ZZ%.
  • Improved profitability of PP%.
  • Process improvement of MM%

On the qualitative side there are more “squishy” items:

  • Delays
  • Defects
  • Deviations

These do not have to be for a product or a manufacturing process.  Delays, defects and deviations happen in every business including service-based businesses.  Take an HVAC and plumbing company:

  • Delays can be late arrivals for appointments.
  • Defects could be dissatisfied customer visits or a problem not solved.
  • Deviations could be not following through on a standard customer interaction process.

Every one of these can be quantified and some level of over, or under, performance can correlate to a dollar or budget impact.

And so on.  You get the idea.  These are measurable goals.  The goal -setting process will help you better understand your company, too.

For more information about how to finish the year strong, please reach out to us.  We’d love to hear from you.

The New Paradigm Advisors team

Exit Planning: Discovery

As you begin the voyage of discovering the value of your company, you need to start right there: in the mode of discovery.

This phase takes two paths:

  • Business valuation
  • Assessment of your personal financials

By taking each of these components separately a clear evaluation of both “halves” of the equation can be dealt with realistically.

Truly, until you understand the value of your company viewed along with your personal financial picture, neither evaluation will be complete nor clear.  A chicken-or-the-egg scenario at its best.

Once those two evaluations are made, they dovetail nicely into a prioritized action plan.  And by plan we mean a step-by-step set of actions intended to reach a goal.

That’s our next segment: preparation.

Each phase or step leads to the next and a final decision.  Drop us a line or give us a call should you be in a similar situation.  We all need someone to talk with–try talking with us..

 The New Paradigm Advisors team

Fashioning a Team Environment

Before you get into too much of hurry to flee from your company, are things in place that will allow you to depart?

Delegated authority? Check.

Flat organization? Check.

Company sufficiently “you proofed?”

Created a team environment?  Wait a minute…

Oh, yeah.  Have you put the right team in place AND have you put the right, minimal structure in place for them to operate?  In other words, is it a TEAM environment?  Let’s look at the attributes you should have in place for your team:

  • Do they have a team mindset? That is, are they willing to give in for the right decision?
  • Can they agree to agree?
  • Are they respectful of one another and their roles?
  • Any slackers, willing or unwilling?
  • Do they not tolerate gossip?
  • Are the contributions of all team members recognized?

So the environment is possible.  Do you have the right people as team members?  Here are the attributes of a good team player?

  • Always reliable.
  • Communicates with confidence.
  • Does more than asked.
  • Adapts quickly and easily.
  • Displays genuine commitment.

That a good guide for team players.

OK, let’s review: a solid team in place with a team environment.  Check.  You should be in good shape. If you still have doubts, drop us a line or give us a call.  We can be part of your team, too.

Affirming Personal Detachment

If you founded your business and have been involved in it from Day 1, then you are truly invested in the enterprise.  It’s hard to step away, even for lunch.

However, for your health and the health of the company, you need to consider how to detach yourself from the company. But you also need to affirm this detachment in a positive way.

Truly, if you have the correct organization and team in place and have empowered them to make decisions, you are half way there.  The other half lies inside you—you need to give up on some things and you can do that with some simple acts:

  • Before you leave the office, leave instructions on any critical projects with your team lead in charge at the end of the shift.
  • Have the day start and end at a specific time. 8am is early enough and 5pm is a good time to close up.
  • After hours leave your phone off or in the charger in your garage. 99% of decisions can wait until morning.
  • Close your home office door. Office hours ended at the office and have at home, too.
  • Make standing appointments for exercise and other non-work pursuits. And keep them.
  • Take up and pursue a hobby that gets you out of your head—draw, paint or color.

You aren’t abandoning your enterprise, just freeing it and you up to go in new directions.  While you have earned the right to pursue other things, the enterprise itself has also earned something.  It’s time to consider the next act for the company.

But it all starts with you positioning yourself as a detached part of the organization.  Important, just detached.

Call or contact us should you want to explore this topic further.

 

The Fastest Most Unique Racing Boat In The World

Imagine owning the fastest and most unique racing boat in the world. You’ve designed it and built it with your own hands.

What an accomplishment!

What a prize!

You spent hours on its design. Studying and researching all the most successful winning race boats in history. Finding out everything you could about what made them faster and more efficient. You’ve interviewed hundreds of designers and drivers. And, with all of that, you’ve designed something special – something that will change racing forever.

Parts manufacturers and suppliers of all kinds are literally throwing money and technical help at you because they, too, see the uniqueness of your racer.

Your bank and several potential sponsors have all contributed heavily just for the right to say they have been on your team.

Finally, you’ve brought it all together and you’re standing back admiring your work. You’ve sent out invitations for the final reveal and the first run around the track. There’s just one problem: You’ve built the boat in your basement. And without tearing it completely apart or destroying your house, that’s exactly where it’s going to stay. It’s not going anywhere.

Sound crazy?

Of course, it does! Why would anybody build the best racing boat in history in a basement that has no exit?

Well, that might just be what you’re doing with your company. You’re so busy driving your company forward, taking every sale and customer that comes in the door, working your team to the point of exhaustion every week because there’s so much business coming in, no one can take time off. You’re going to look up one day and find that you’ve got this great company – great revenue with great profits but no one wants it because it’s stuck in your basement. The reliance of the company on you and your specific team, the lack of written and repeatable processes, the lack of reliable and understandable financials all combine to tell the outside world that your race boat – as beautiful as it is — is stuck and, therefore, not worth anything more than its parts.

Scary?

Think of your business: is it stuck in one place with no way out? Or is it already racing around the track getting the attention that it deserves? Other than its speed (revenue) and efficiency (profitability) do you know the other key things that people are looking at? What do you think it’s going to take to get this right?

Call us and let’s talk!

The One Liner

One of the hardest things a business can do is define itself.  And defining oneself in the context of the future can be quite another exercise.

So it was with setting the direction of New Paradigm Advisors. It was a bit of “physician heal thyself.”

Given that we are in the business of helping companies clearly define themselves and then succeed within that framework, it was only fitting that we have to go through the same exercise.

The human brain is drawn to CLARITY and away from confusion. If customers are confused about what you offer, they’ll look past you for somebody who can say it clearly. Once you clarify your message, your company will begin to grow. Companies that clarify their messaging win in the marketplace. Nobody will know how much they need your product or service until you tell them in the right way.

To get there we had to get some noted outside help.  Donald Miller’s “Building a Story Brand,” was the mechanism we used to get us to both understand our business as well as be able to tell clarify our story. This framework was revolutionary because it taught us to stop playing the hero in the story, and instead, invited customers INTO a story.

The process involves Miller’s application of a screenwriter’s technique of mapping out characters in the drama that is your business.  Once you’ve determined each of those characters and their role, the shaping key words and phrases follows.  Like any strategic or branding exercise, you need to paint the larger picture to get to your corner of the frame.

In our case, it broke down into a simple concise, compelling phrase that gets people interested in how we can help them.  This is known as our one-liner:

“Many business leaders are chained to their business.  We break those chains, increase their company value, and help them build a fabulous future.”

There it was right in front of us: a painting of what our business looked like and a roadmap of how we would be conducting business.

  • There was the freedom by breaking the chains that kept us from growing.
  • Followed by the ability to drive value.
  • And leading to a fabulous future with a road map on where we were going.

If you need to clarify your company’s vision and need a roadmap to move to the next level, we’re available to talk.  And guide you through the freedom, value, future tangle.