Employees - Your Most Precious Resource

Matrix Key:  Financial Viability - Resource Management - People

"People are definitely a company's greatest asset.  It doesn't make any difference whether the product is cars or cosmetics.  A company is only as good as the people it keeps." - Mary Kay Ash

A vital component of Financial Viability is Resource Management.  Your company must be a good steward of the people, products, capital, and information it has available if the company seeks to be profitable.  The most valuable resource of all is your people.  In these challenging economic times, it may be easy to think that it is an "employer's market."  Many people are searching for work, and it could be tempting for employers to cut wages, benefits and incentives thinking that their workforce can be easily replaced.

Here's the thing...you wouldn't purposely buy inferior products, because the lack of quality will cost more in the long run.  Excessive employee turnover is another huge cost to an organization.  Better to hire, train and nurture excellent people who share your commitment to making the company great.

To properly care for your employees, you need to be taking the following actions:

1. Create a human resources department that can handle your employee needs and comply with all pertinent rules and regulations.
2. Train your employees well, and cross train them so they have a better understanding of other roles.
3. Provide consistent, visible leadership.  Make sure your employees know where they fit in to the company's goals and why you are asking them to do what they do.
4. Evaluate employees regularly and reward excellent performance.

If you recruit and train great people, you will want them to stay.  The best teams are those that have worked together over time and who feel like valued partners in the company's success.  When you have your A-team on the field, you have a much better chance of winning the game of business.

Are You Ready to Win?

Sales Conversations

Matrix Key:  Financial Viability - Marketing and Sales - Sales Conversations

"To succeed in sales, simply talk to lots of people every day.  And here's what's exciting - there are lots of people!" Jim Rohn

The topic of sales shows up again and again throughout the WholeLife Matrix.  If you want to sell something, you've got to have sales conversations.  Some people need a lot of persuading; others just need a quick explanation for how your product fits their needs.  Some form of interaction must take place to transact business and that is usually a conversation.  The more conversations you have, the more sales you will close.

A successful sales conversation has four distinct parts:

1. Identifying the Opportunity
2. Presenting the Proposal
3. Follow Up
4. Closing - Asking for the Sale

When you start to think of your sales conversations in this way, you become more efficient and effective.  You present how your product meets the client's needs and you close more sales.  You also gain the confidence necessary to keep on talking and winning deals.

Are you ready to win?

Managing Your Capital

Matrix Key:  Financial Viability - Resource Management - Capital

"Capital, in some form or other, will always be needed." - Mahatma Gandhi

As most entrepreneurs know, obtaining capital to fund their start up or their ongoing operations can be a daunting task.  Your business must have capital in order to be financially viable.  So once you acquire capital, how do you manage it?  Capital is a precious resource that needs care and nurturing if it is to help your business grow.

To properly manage your capital, you need to manage all four of the following:

1. Investors - They gave you the money.  Make sure you hold yourself accountable to them and be able to show them the value of their investment.
2. Profits - If you are not converting your capital into profits, you have a problem.
3. Banks - Your banker can be your most effective partner.  Banks can supply additional capital and give you tools to manage it.
4. Accounting - You must track how your capital is being deployed into the production and delivery of your product and be as efficient as possible.

Every business owner has a duty to carefully manage capital.  It is important to find the right balance between releasing capital into the business and holding some back to fund future projects.  Get as much advice as you can from trusted sources, and always be on top of your numbers.  When you manage capital effectively, you have already won half the battle.

Are you ready to win?

Managing Sales & Marketing Actions

Matrix Key:  Financial Viability - Marketing and Sales - Managing Actions

"Sales are contingent on the attitude of the salesman, not the attitude of the prospect." - William Clement Stone

If you are going to be successful at marketing and sales, your actions must reflect your commitment to the sales process.  You must have a disciplined approach to managing your sales and marketing actions.  Sales requires a lot of constant effort in order to keep clients moving along the sales cycle and to keep new opportunities coming in to your pipeline.  If you're not careful, you can easily drop something out and lose an important deal.  You can use the WholeLife Matrix as a guide to managing your sales actions.

The most successful salespeople know that these four attributes are essential to an effective sales process:

1. Training
2. Attitude
3. Setting Goals
4. Time Spent in Sales and Marketing

The best salespeople understand that they need continual training to stay on top of trends and technology.  They set specific goals so that drive their actions.  They spend time every day in sales actions, and they know that a good attitude shows through to prospective clients and keeps them in the game when times are tough.  There will always be days when you want to throw in the towel, but if you focus on consistent sales and marketing actions, you will soon find yourself in the winner's circle.

Are You Ready to Win?

Production & Delivery Resources

Matrix Key:  Financial Viability - Production and Delivery - Resources

"The waste of plenty is the resource of scarcity." - Thomas Love Peacock

It should be no secret to business owners that in these challenging economic times, managing resources well is essential to being profitable.  In the Financial Viability quadrant of the WholeLife Matrix, we dig into resources management as part of a successful production and delivery system.  The first question to ask is, what exactly are we managing?

Every production and delivery system has four key resources:

1. Facilities and Equipment
2. Inventory
3. Labor
4. Management 

When you break your system down into these four parts you accomplish two things.  First, you identify more clearly what needs to be managed within each of the four resources.  Second, you begin to see how they affect each other.  Each resource should be managed and measured in different ways but also in the context of the entire production system.  A breakdown in any of the four will have serious impact on the rest.  The key is to manage all your resources both independently and collectively if you want your company to succeed.

We continue to offer our Deeper Dive into the Whole Life Matrix, a free bi-weekly discussion of different elements of the WholeLife Matrix. To join the Deeper Dive, email Ralph@Consulting2Win.com, with "Deeper Dive" in the subject line.  We will send you the log-in information for the call.  

Are You Ready to Win?

Measurements of Performance

Matrix Key:  Financial Viability - Production and Delivery - Measurements of Performance

"In God we trust...all others bring data." - W. Edwards Deming

In business, you can't just amble along and hope that things are going OK.  The only way to measure your success is to do just that, measure your success.  But what do you measure?  And when?  There are literally hundreds of potential performance measures.  Using the WholeLife Matrix, we divide these measurements into four key areas within your production and delivery system:

1. Management - how do you know if your executive leadership is doing a good job?
2. Company - what do you measure to best showcase your company's financial performance in the marketplace?
3. Individual Job Descriptions - how do you and your employees know what is expected of them?
4. Rewards and Consequences - how do you hold the organization accountable for your measurements of performance?

It's important to develop standards that are relevant to your company and that are challenging,  yet attainable. Too many metrics make the focus of your production on the metrics and not the product.  Too few takes the focus away from "doing it right."  You must take the time to develop a set of performance measures that you can calculate quickly and review often.  You can't win the game of business if you don't have some way of keeping score.

Are you ready to win?

Measuring The Projections

Matrix Key:  Financial Viability - Profitability - Measuring the Projections

"It is often said that there are two types of forecasts, lucky or wrong." - Unknown

Even the best business projections and forecasts are meaningless unless you compare them to your actual performance.  One of the most important facets of Financial Viability is to measure your projections, that is, to measure your company's performance against those projections.  If your results vary widely from your projections, you should take action immediately to either stop the bleeding or make necessary adjustments.  So what's the best plan for measuring against projections?

Here are four weekly actions to take to stay on top of your projections:

1. Accounting department meeting
2. Production department meeting
3. Sales department meeting
4. Estimate department meeting   

Each of these parts of your business need to constantly review their costs, labor, and time, as well as report on any unusual circumstances that will skew the results higher or lower.  A forecast is a critical tool for success, but it is just that, a prediction that will be lucky or wrong.  The proof is in the pudding, and measuring your results is a key ingredient your recipe for profit.

Are You Ready to Win?

The Sales Pipeline

Matrix Key:  Financial Viability - Marketing and Sales - Sales Pipeline

"It's not your customer's job to remember you.  It's your job to make sure the customer doesn't forget you." - Patricia Fripp

It's rare that anyone sells something at the very first client meeting.  Sales is a process, and your sales pipeline consists of customers at different stages of the sales cycle. The WholeLife Matrix gives you the tools to develop a discipline for your sales pipeline activities. A good sales person can effectively manage customers at all points of the sales process, and manage a constantly flowing pipeline without dropping anything out.

Here are four necessary actions for building and managing your sales pipeline:

1. Qualifying Potential Clients
2. Consistently Adding Names to the Client Database
3. Keeping the Client Database Current
4. Staying in Touch with Clients

We will address specific sales actions in other blogs, but it's crucial to first create a structure for tracking clients, prospects, and deals as they make their way through the sales cycle.  Your client database is the foundation of your sales pipeline, and the framework for a winning sales plan.

Are you ready to win?

Information Management - What Do You Need to Know?

Matrix Key: Financial Viability - Resource Management - Information

 "Knowledge is power." - Sir Francis Bacon

Take a look at all of the Financial Viability components on the WholeLife Matrix. When you run a business, you quickly learn that you must manage all kinds of information if you want to remain financially viable.  It helps to break that information into two distinct categories - internal and external.  Internal information are all the performance metrics your company produces that tell you where you stand financially and productively.

Just as important are external reports that highlight how your business is performing compared to the marketplace.  How do you stack up?  How are you perceived?  How can you track your influence on the market?

Here are four key pieces of external information that you should be tracking:

1. Market Research - what is the appetite for your product or service?
2. Prospect Research - who buys that product or service and where can you find them?
3. Client Database - who buys that product or service from you?
4. Competitor Research - who does as good a job or better at selling your product or service?

 Imagine if a company started up today and tried to sell covered wagons to young families.  A ridiculous example to be sure, but one that shows the importance of keeping your finger on the pulse of what's happening in the market, and how it impacts your potential customers.

Are you ready to win?

Cash Flow Forecasting

Matrix Key:  Financial Viability - Profitability - Projections and Plans

“Cash Is King.”

Few components of the WholeLife Matrix carry as much weight as profitability.  For many people, profit has negative connotations.  But without profit, you don't have a business. Cash flow forecasting is essential to the success of every business, and should include the following:

1. A schedule of receipts and disbursements
2. Liquidity measurements
3. “What if” scenarios
4. Accounts Receivable to Cash projections

Here’s the bottom line…if your business runs out of cash, you are out of business.  You need cash to pay vendors.  If you don’t pay them, they will stop selling to you.  You need cash to pay employees.  Few employees are willing to volunteer their time.  You need cash to pay off debt.  Banks are picky about being re-paid.  Cash is King.

You must monitor your cash flow at all times.  How quickly will your Accounts Receivable convert to cash?  What if your customers pay you three months late?  What is your percentage of cash to inventory?  A close look into all of these questions is worth your time and effort.  A little planning now will keep the wolf from the door later and will keep you on a winning path.

Join us for an ongoing conversation about my blogs every other Tuesday at 11am Pacific Time.    Send me an email (Ralph@Consulting2Win.com) with "Deeper Dive" in the subject line, and I will send you the login information.  

Are you ready to win?

Projections and Plans

Matrix Key:  Financial Viability - Profitability - Projections and Plans

"Failure to plan is planning to fail." - Unknown

We've devoted a major quadrant of the WholeLife Matrix to the practice of Projections and Plans.  Most good entrepreneurs know that planning is essential to success.  It's easy to let planning drop down the priority list though, when the day to day responsibilities of a growing business become more time consuming.  Here's the thing...without consistent, good projections and plans, your business is being run by the circumstances.  That's like the tail wagging the dog.

The four principles of good Projections and Plans are:

1.      A reliable Cash Flow Forecast

2.      A reliable Sales Forecast

3.      A projection for your Sales/Expenses/Profit

4.      A System to Review and Adjust all of these projections and forecasts

Don't let the market determine where your business will end up.  There are too many easy and efficient tools you can use to stay out in front of your company's performance.  Use your own ideas as your guide and head down your chosen path.

Are You Ready to Win? 

Good Accounting System

Matrix Key:  Financial Viability - Profitability - Accounting System

"The company accountant is shy and retiring.  He's shy a quarter of a million dollars.  That's why he's retiring." - Milton Berle

There's a good reason that the cornerstone of the WholeLife Matrix is having a Good Accounting System.  The accounting system is the road map of your business.  Without it your business is basically blindfolded and wandering aimlessly.  All the hard work you put into your product, your employees and your visibility in the market vanish in a heartbeat without a good accounting system. 

The four requirements of a good accounting system are:

1.      The system must be Tracked Daily;

2.      You must have Someone Accountable;

3.      There must be a system of Checks and Balances; and

4.      There must be Capacity for Growth.

Look at your current accounting structure – can you identify each of these requirements in your system?  As the above quote hilariously implies, your accounting system is only as good as the people who run it.  Depending on the size of your business, you might need only one person to manage the accounting system or you might need a whole department.  Make sure you invest in a quality experienced financial accountant.  That's a winning bet for your business' long term health.

Are you ready to win?



The Production & Delivery Team

Matrix Key:  Financial Viability - Production and Delivery - Team

"Individuals don't win in business, teams do." - Sam Walton

Sam Walton knew a thing or two about building a viable business.  Whether your business is a small mom-and-pop operation or the next WalMart, it will not succeed without a production and delivery team that is committed to winning the game.  Take a look at how this shows up in the WholeLife Matrix.  It's not just a matter of hiring the right people and stepping back.  Business owners and managers have a responsibility to consistently coach their teams to perform effectively on the playing field.

Successful production and delivery teams depend on four key components:

1. They have a common goal.
2. They are committed to a high level of performance.
3. They can easily define and align on their purpose.
4. They have a plan and know how to execute it.

Putting together a high performance team that can deliver on the company's goals over time is a huge part of a manager's job.  Motivating your team is an ongoing and necessary process, but it is one that will pay tremendous dividends in the long run.  If your team is unskilled and uninspired, your business will fail.  Better to devote some resources to creating teams that can win the game.

Are You Ready to Win?

Opportunities For Sales

Matrix Key:  Financial Viability - Marketing and Sales - Opportunities For Sales

"Ability is of little account without opportunity." - Napoleon Bonaparte

We talk a lot about sales because sales is the heartbeat of every business. On the WholeLife Matrix, sales is a key component of Financial Viability. It doesn't matter if you make widgets or provide services, you must focus on getting people to buy.  Sales don't just show up on your doorstep.  In order to create sales, you must know how and where to create opportunities for sales, and you must consistently take action to create those opportunities.

Here are the four best ways to create opportunities for sales:

1. Referrals
2. Social Networking
3. Upselling Current Customers
4. Re-engaging Prior Customers

Sales is a process of having conversations with people who have a need for your product or service.  The more conversations you have, the more sales you have.  If you put together a plan for creating sales and use these four tools for finding opportunities, you will soon have a wealth of possibilities for winning in a competitive marketplace.

Are you ready to win? 

Estimating and Pricing System

Matrix Key:  Financial Viability - Profitability - Estimating and Pricing

"And when is there time to remember, to sift, to weigh, to estimate, to total?"  - Tillie Olsen

Within the Financial Viability quadrant of the WholeLife Matrix we have included a section on the importance of  an Estimating and Pricing System.  As any good bargain shopper will attest, it pays to know what things cost in the marketplace, and what it will cost you to source materials to produce your product.  Your production cost doesn't include just materials either...time is an equally precious commodity.  You must have a clear understanding of your costs and be able to accurately estimate them if you want to be profitable.

               The four requirements of an estimating/pricing system are:

1.      You must have estimates for time and material

2.      You must be able to compare estimates to actual results

3.      There must be a system to track the percentages of time and materials used

4.      There must be a system to deal with significant variances from your estimates

If your business is not as profitable as you think it could be, review your systems for the four above principles.  An accurate cost accounting system with help you determine your gross profit margin, track your expenses, and calculate your net profit.  Estimating and pricing take time, but the potential savings can show up as big wins on your bottom line. 

Are you ready to win?

Production & Delivery Procedures

Matrix Key:  Financial Viability - Production and Delivery - Procedures

"A bad system will beat a good person every time." - W. Edwards Deming

We've often talked about how a good business shares many of the characteristics of a winning sports team.  No team can win the game if they don't know the rules.  As we can see from the WholeLife Matrix, your business will not win if you don't have production and delivery procedures in place. Imagine trying to create a product if your team has no idea how to make it?  You must create specific procedures for all aspects of your production system, and you must review and update them regularly.

Here are four things to think about when developing your production procedures:

1. Systems - Break down your production flow into logical steps.
2. Standards -  Define how to make your product the best it can be.
3. Quality - How will you know if the product meets your standards?
4. Customer Service - How do you respond to your customer?

Developing procedures takes time and effort, but it is time well spent.  The trick is to have specific actions that your employees and staff understand.  They also need to grasp the "why" behind the "how."  If your procedures make sense and clearly make a contribution to the end product and to customer satisfaction, your employees will take more ownership in doing the job right.  When they know the rules, they can win the game.

Are You Ready to Win?

Managing Your Product Resources

Matrix Key:  Financial Viability - Resource Management - Products

"A product for everyone rarely reaches much of anyone." - Seth Godin

Next to your employees, the most important resource in your business is your product!  If you don't have a product, you don't have a business.  As you can see on the WholeLife Matrix, you must devote time and energy to caring for your product resources.  If you cannot consistently produce a quality product, you will not be able to sustain your business.

Here are the most important points to consider if you want to effectively manage your product resources:

1. Cost
2. Materials
3. Technology
4. Research and Development

You can manage these resources by developing good relationships with vendors and always looking for new ways to source materials.  Make the investment in the technology that will keep your product cutting edge, and always be on the lookout for your product's next evolution.  When you produce a quality product effectively, you have already won half the battle.

Are you ready to win?

Financial Viability

Matrix Key:  WholeLife Matrix - Financial Viability

"Things work out best for those who make the best of how things work out." - John Wooden

The first quadrant of the WholeLife Matrix is Financial Viability.  For most business owners and entrepreneurs, Financial Viability is top of mind and sometimes all consuming.  Without a financially successful business, it is hard to achieve balance in all the other areas of your life.  

The Financial Viability quadrant identifies the four key essentials to a healthy, thriving business:

1. Profitability and Finances
2. Resource Management
3. Marketing and Sales
4. Production and Delivery

 These are the four legs of your financial viability table.  You have to make sure you are putting equal effort into each of these four aspects of your business.  Future blogs will detail some of the actions to take in each of these areas.  For now it is important to note that each of these components affects the others, and all four must be operating in tandem and very efficiently.

Business owners and managers have a lot to do and handle every day in order to be financially viable.  By breaking down the business into segments, it will be easier to identify strengths and weaknesses as well as delegate actions to the appropriate teams.  When you have your Financial Viability game plan in place, it will be much easier to win the game of business.

Are you ready to win?