success Archives - New Paradigm Advisors

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

future, Planning, Process

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:

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.
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?
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.
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).
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?

The New Paradigm Advisors team

Process

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.

Have good, reliable internet. Your video should not sputter and/or skip. It’s incredibly distracting, and it’s not acceptable.
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.
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.
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.
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.
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.
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.
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.
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).
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!

The New Paradigm Advisors team

future, Leadership, Planning

What Now?

You are facing a downturn in the economy and business. What do you need to be doing right now?

Do you keep people or let them go?

What about your vendors and suppliers?

And what about your customers?

Consider the airline oxygen mask concept. Put your mask on first so you can ensure you’ll be able to help someone else get theirs on. You know this drill.

Your highest priority as a business owner is to protect the life and health of the company. Do everything you ethically can to keep the company alive. It’s like the federal government whose number one priority is to defend the country. It doesn’t matter how the economy and other parts of society are doing. If a foreign adversary attacks us and the government isn’t ready to defend us, then we all lose! Defend your company first!

Not your salary. Not your assets. And, unfortunately, not your employees.

Once you’re committed to this first priority, the decisions on everything else become clear. Notice I didn’t say easier. It’s clear what you must do to keep the company alive. Also be clear on the benefits of this commitment to all concerned once the crisis has passed:

Employees have an opportunity to find another job or to file for unemployment.
Vendors have someone they can collaborate with and possibly provide some temporary relief to in hopes of saving a valued and long-term customer.
Your best customers will be much more understanding than you think and quite possibly be willing to help.

Once the downturn is over and the company has survived, you can:

Hire back the people you laid off or new people.
Perhaps earn a favored customer status with your vendors.
Have customers who have a new respect for you and the company.

The real secret sauce here is to communicate with each of these groups. Go beyond just communicating. You must implement what we call the Three C’s:

Communicate
Collaborate
Cooperate

These are part of our Core Values here at New Paradigm Advisors. If you apply these three C’s to the situation, we can assure you that your stress level will go down. It won’t go away. However, it will go down. Apply the three C’s with your people, your customers, your advisors, and your vendors. You will be shocked, yet pleased, with the results.

Call or email us and let us know your experience. Let’s learn together.

Leadership

The Opposite of Servant Leadership: Power Leadership

We’ve discussed servant leadership at length, showed you examples and introduced you to experts. But to truly understand the concept, we should really discuss the opposite of this leadership concept.

Meet power leadership.

Leaders who use power as their main motivator, usually rely on negativism, fear and misdirection to guide or direct an organization the way they see fit. They typically are not collaborators or team players.

Power leaders tear down. They thrive in economic downturns because cutting, not adding, is what they do to shape an organization. By cutting budgets, costs and employees, they destroy morale, drain resources and reduce organizations to shells of themselves. They typically are short-term thinkers.

“Leadership is about vision and responsibility, not power.”—Seth Berkley

In the mirror, opposite the power leader, is a servant leader. Servant leaders build up, see downturns as opportunities, and do things up front and in a transparent fashion. To them, power is in the organization and its people and ideals, not in them.

The four elements of servant leadership are in direct opposition to power leadership:

Servant leaders put service before leadership and are focused outwardly; power leaders are focused inwardly.
Collaboration is central to servant leaders and relies on consideration of what others think; power leaders believe there is an “I” in team—them.
Mentorship is important to servant leaders as it helps grow the team and the organization; power leaders believe all starts and ends with them.
To be a servant leader, you must have foresight and that comes from listening; power leaders only listen to themselves.

Where do you begin to develop and build a culture of servant leadership? Start by looking within and taking stock of what you already have. And then consider enlisting the aid of a partner. We are here to help with skills assessments, systems and programs as well as one-on-one advice.

Call or contact us for more information on servant leadership.

The New Paradigm Advisors Team

Testimonial

Awake Restaurants Testimonial: “Focusing on Facts”

As a family run, locally owned restaurant business, my son and wife and I all play various roles. We needed to find a way to sort out who did what within the organization and to have it all make sense.

Discovering EOS

Through Michael Visentine and his New Paradigm Advisors team, we discovered a methodology known as the Entrepreneurial Operating System or EOS. I had been exposed to EOS before, but Michael really pulled it all together for us and made it a practical solution.

A Way to Focus

EOS really helped us focus as a team. Since our team really has multiple personalities, EOS gave us a disciplined success model to help us stay on course. The model takes personal feelings out of the dialog and focuses on facts and people to grow the business. And that is critical in a family owned business. The EOS tools were great:

Three- and ten-year plans
Weekly meetings
Regular discussion of quarterly and annual objectives (or “rocks”)

Great Results

Now we actively meet weekly. There we review our “rocks” on the list of things to complete in a concise and solution-focused way.

We are grateful to the New Paradigm Advisors team for the education and ongoing support!

Rob Colarossi

Owner Awake (formerly The Egg & I) and Dairy Queen Restaurants

future

Exit Planning: Decision

As with any journey, getting to a decision phase is what we all work toward.

After discovering the value of your company and the expectations of your personal finances, formulating a plan, the time or execution of “getting to done” is nigh upon you.

In the decision phase, a business owner, now armed with sufficient data and a plan, can answer that all-important and timely question:

Do you want to continue to grow or get ready to exit the business?

Keeping or selling a business is much easier (if this decision is ever easy) because the owner is much more educated at this point.

Remember ready, fire, aim? There will be none of that now. You know where you can go, if you so choose.

Beyond this step allows the owner who wants to keep her company to go to and advanced value creation step and process. By the same token, those who want to sell or leave the business are ready to initiate a selected transaction program.

Each phase or step leads to the next and a final decision. We look forward to helping you through this process using our Value Acceleration Process. Call us with any thoughts or questions you might have about this or any other aspect of your business.

The New Paradigm Advisors team

Process

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

freedom, future, Planning, Value

Summarizing the Four Drivers

We’ve talked in this space individually about the four drivers of a successful transition. Let’s finish this series up by putting the four all in one place and tying them together.

As you recall from earlier blogs and a recent workshop, the four drivers are:

Creating a future vision for your company and you.
Building a structured environment that is flexible.
Detaching yourself from the organization and affirming that position.
Fashioning a team environment.

The order is significant as well: create a vision, build an environment, detach yourself, and put the team in charge. While there is some overlap and some of the work you do in each of these areas is concurrent, the outcomes should be the same if you pay attention to the specific sections and concentrate on the end result.

In fact, the vision is most likely an on-going refinement exercise, once you get the key elements down and in place.

Truthfully, the structured environment is most likely there, it just has to incorporate flexibility. And, as we noted in that specific post, is an organic process that relies heavily on teamwork and simplicity.

The detachment piece is probably the hardest element of this process for the founder-owner-entrepreneur. Letting go and watching “your baby” thrive without you usually takes some getting used to. But countless business owners have done it and do it well.

And, finally, having the team in place to keep everything moving forward and into the future. Remember the team includes not just your internal team (employees and staff), it includes your suppliers and partners and your customers. The well-oiled machine has many moving parts.

Good luck with your transition. Should you have any questions or would like to explore this topic further, contact us.

future, Leadership, Planning, Process

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.