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Fourstone Mill & Casework - Feb 22, 2012

Posted by: Patrick A. Cowan in Testimonials

“After being several months behind in receiving financial statements for our business we enlisted the services of Patrick Cowan, a partner in B2B CFO, to help get us caught up. Pat quickly identified the problem and worked with our staff to provide us with Financial Statements. Not only did Pat help us get caught up but he assisted us with installing a Quickbooks Premier to replace our old software program that was not allowing our controller to provide us the reporting that we needed. The benefits and value that Pat provided exceeded the cost of his services by a great margin. I would not hesitate recommending Pat to business owners who want better results from their businesses.”

John Hunter

Ownership Team at Fourstone Mill & Casework

Management by Panic - Feb 17, 2012

Posted by: Patrick A. Cowan in Articles

Management by Panic

We have all been there in our personal lives. Well, most of us anyway. Whether it was that term paper that you thought was due next Monday and not tomorrow, or the loan that is due, the interview for the job that you didn’t prepare for, and of course, in honor of the day on which I am writing this, you forgot to get flowers, a card, reservations or a gift for your significant other on Valentine’s Day. Panic!!! That oh so human reaction to impending doom!!! So what! We survived, all the while vowing that it would be the last time that we let ourselves or others down like that. And yet, we continued to play with fire and risk impending doom.

Unlike Management by Exception, Management by Objective and countless other management toold and styles, Management by Panic is not widely discussed, understood or recommended by anyone. What happens when we resort to Management by Panic for running a business? Impending Doom!!! Management by Panic may actually result in a catastrophic loss which could cost you your business.

I could be wrong but let’s look at the facts.

Panic can be defined as “a sudden and often overpowering fear”. What caused us to panic? You guessed it. Impending doom!!! In order to fully understand the Management byPanic mode we need to look at the five R’s of Panic Management. Those are Recognition, Reaction, Regret, Rationalization, and Repetition. We will examine each of them in turn.

Recognition

Recognition is more than the absolute point that we realize that the light in the tunnel actually is the proverbial train. It is also that point we realize that we have not planned for alternative courses of action. In fact, we have not planned for this event at all. It would be obtuse of me to not point out that some situations could actually be unforeseeable. In my experience however, it is rare that the “impending doom” we are facing does not come with adequate foreshadowing.

Scenario: Your major customer, you know, the one that your auditor or accountant or some other advisor cautioned was too much of your businesses. In this case the customer is a third of your business and suddenly without warning files bankruptcy while owing you a moderate six figure debt. Or was it? They were delaying payments, making bogus claims against products or projects, not returning calls, etc. Foreshadowing! The fact is that most events that give rise to management by panic have either an indication that something needs to handled or the ability to plan adequately to completely mitigate the risk.

Reaction

“Oh {expletive deleted}! That’s a train; I better get off the tracks in a hurry.” So, you run frantically, throw yourself off the bridge, or roll down the mountainside. When in a panic mode, the decisions we make are frequently not rational, well thought out, nor the best course of action available. So while you are hurdling through the air it dawns on you that the train was on a parallel set of tracks. Oops!!!

In another scenario, the business owner realizes that the project completion deadline is fast approaching and that he has no reasonable expectation that the project can be finished on time. The reporting from the field was not adequate (or he did not read the job reports) for him to know the status of the project so he learns too late there is an issue. So, in keeping with the best practices of Management by Panic, the business owner calls the project manager and tells him he is sending reinforcements. Although the PM protests the incursion into his project, the owner proceeds to send “reinforcements” at great additional expense to the project. In this case, had the owner stopped and reviewed the situation he would have known that reinforcements were actually counter contraindicated. The project manager had notified the customer of a deficiency in the customer’s responsibilities for the project and a change order had been received. The necessary infrastructure was not in place to complete the work as scheduled. The “reinforcements” were simply in the way and had no impact on the completion time of the project. The owner still felt good, however briefly, because he was able to do something.

Regret

In the above scenario the good feeling is quickly replaced by regret. You see, the owner realizes that not only did his hasty reaction cost the company money needlessly; he also realizes that he dam....

Not Reaching Your Goals: Try Walking Backward - Dec 29, 2011

Posted by: Patrick A. Cowan in Articles

Key to achieving your goals: Walk Backward!!!

We are nearing the end of the year. You and your business have survived (nearly) 2011. The question is: What is in store for us in 2012 and how will you handle it? The answer to the first part is who the heck knows! The answer to the second part may depend on your ability to “walk backward”

For the last couple of years there has been a general malaise in the business communities around the country. It seems that every time someone was quoted as saying something positive about the economy there was an immediate response by another expert saying the economy was crashing. Business owners have stopped moving forward in the face of this pessimism. Who could possibly be optimistic in this environment?

STOP LISTENING!!!!

Even the “statistics” are suspect. A recent report stated that jobless claims went down by 650,000. Not a bad drop and certainly an indicator that things are improving, right? Not so fast say the “talking heads”. It seems that of the 650,000 reduced claims, 350,000 or so were because people dropped out of the system and quit looking for jobs. And of course they pointed out that a portion of the remainder was due to seasonal jobs. You can’t even get a few hours to be positive.

STOP LISTENING!!!!

Look, I know that there are a lot of smart people providing information through various media sources. There are also some not so smart people too!!! But whether it is TV, Radio, Newspapers or the countless bloggers that you are getting your information from, the chances are that they are not in your backyard, your neighborhood and in most cases they are not in your city. If you are a business that has a national market then the information may pertain to your business. For most of you however, unless they are actually giving you meaningful, relevant information based on what is going on in your area it is just extra noise. No, you do not exist in a vacuum and the overall economy does have an impact but the information you receive should serve as a guide look at your goals, adjust your activities if necessary and adapt to YOUR markets. If you can’t view it in this light:

STOP LISTENING!!!!

Is your business one of the many that has gotten flabby from lack of exercise during this down turn? Have you and your business been on the sidelines the last couple of years? Sitting on the couch waiting for things to get better? Are you still waiting to see? We need to change that. Many economists and business experts believe that things will never be the same as they were before the financial crisis. I happen to believe they are right. Things will be different but that doesn’t necessarily mean they need to be worse for your business. How do we make that your new reality? We create a game plan!! Below are some simplified steps to crafting a winning game plan:

1) Take a realistic look at yourself. Have you been holding back? Unsure of what direction to take? In the wake of all of the negative news did you stop leading your team? Did you try to do too much by taking on tasks that should have been done by others? What are you good at and what are you not so good at? Areas that are not your strength should be supplemented with the skills of others (head coaches generally hire others to run their offenses, defenses, etc. It isn’t that they don’t know how, it’s that they know that the team will perform better by utilizing the skills of others)

2) Take a realistic look at your business. Is your product or service still relevant? What about the quality of the product or service? Do you have the right people to deliver the “goods” ?

Ok, so we have completed the introspective piece of work and we will assume that the answers were supportive of continuing. So let’s go.

3) We need to establish a set of goals for the business (remember the SMART acronym when setting your goals… it is broken down for you at the end of this article).

4) Create a game plan for attaining the goals. Many business owners struggle with this but it doesn’t have to be so daunting. Remember to walk backwards. Or, if you prefer, in the words of Stephen Covey, “begin with the end in mind”. Isn’t that really what goal setting is about? Once you have set the goal walk backwards until you get to where you are standing today. For example:

Let’s say that you are a sales person and you want to buy a $70,000 sports car one year from today and you want to pay cash. GOAL!!!

So let’s take the steps backward.

1) &n....

F.A.M.E. CAN KILL YOUR BUSINESS - Nov 22, 2011

Posted by: Patrick A. Cowan in Articles

The Danger Zone F.A.M.E. CAN KILL YOUR BUSINESS

No, not FAME. F.A.M.E.!. What I we are talking about here is Failure to Acquire Management Essentials (F.A.M.E.). While there is no cookie cutter template for building the perfect business there are certain characteristics and essential behaviors that are common among many successful business owners. I call these “Management Essentials”. While it is possible to find success early in your business life cycle without mastering these essentials, there is a direct relationship between understanding and applying these principles and successful performance over time.

The following are essential to success in your business. Some only become important as the business grows to a certain point. By incorporating these essentials into your management repertoire you can build a successful business with sustainable growth.

Understanding the Unofficial Organization Structure of Your Company

Early on you are able to drive your business to success by your sheer will. You are engaging in activities described by Jerry Mills in “The Danger Zone, Lost in the Growth Transition (3^rd edition)” as “Finding” activities. These are the activities that owners and CEO’s should normally be engaged in. They are activities that drive the business forward. Jerry Mills describes finders as “visionary, idea generators, catalysts for change, and relationship builders or creators”¹. As your business grows there is a tendency to move away from these activities. You fall into the trap of doing “Minding and Grinding” activities. The illustration on the right, taken from Jerry’s book, shows the unofficial organization chart of your business. This is true of all businesses. You must acquire the ability to delegate tasks to the proper people. If you don’t cultivate this skill then you will be locked into doing tasks that are more properly done by others. In the book The Power of Focus² the authors describe the 4-D solution as Dump it, Defer it, Delegate it or Do it (now). By mastering this simple solution you will be able to move tasks to the proper people and be more organized in the manner that you accomplish things. They further suggest learning the power on “No”. Finders Minders Grinders

Minders are your accountants, controllers, CFO’s and your other administrative people. Grinders are the people who produce the products or services your company provides. While it is important for the owner/ CEO to understand these activities, they should not be engaging in them. Are you making collections calls? Installing cables? Making Widgets? Invoicing? While it might feel good to engage in these activities because it reminds you of when you started the business, engaging in these activities may set your business back to the levels at which you started the business, or worse.

The Danger Zone is the abyss that lies beyond the point where your cash needs exceed your ability to meet those needs. We will discuss this more in the “Proper Cash Mentality” section below. There are many possible contributing factors for a business entering the Danger Zone. Not understanding the “unofficial organization of your company” as Jerry refers to it can be a major factor.

Goal Clarity

Sound business management begins here. Clearly defined goals for your business are every bit as important as funding your business. Without this all important road map how will you know where to apply resources? You can’t reach your destination without a map. Where are you going? Why did you start your business? Sure, you were passionate about starting and owning a business, but why? Money? Fame (the other kind of fame), Philanthropy? What did you hope to accomplish? Have you? Will you accomplish what you had in mind for your business?

Your strategy plan for your business (and you definitely need to have one) should support you achieving your goals and objectives. Goals change and strategies have to keep pace. When your strategy, and thus your behavior, does not work in concert with your goal achievement you will soon find that neither is successful. Define your goals in writing and create a plan for achieving them. Revisit both regularly to make certain that you retain clarity of purpose.

Goals should be Specific, Measurable, Attainable, Realistic and Timely. Remember to apply....

Is it time to SWOT that bottom(line) - Oct 10, 2011

Posted by: Patrick A. Cowan in Articles

If you are like many business owners you have watched as your business “misbehaved” during the current economic downturn. If you are tired of the results you are getting then maybe it is time to SWOT your business bottom line!!!

Of course I am talking about a SWOT analysis.

When faced with a business or a business unit that is under performing it can be very helpful to go to back to the basics. By analyzing Strengths, Weaknesses, Opportunities and Threats a business owner or manager can assess areas that need improvement, areas they may want to focus on and how environmental factors may impact performance. The SWOT analysis begins by taking stock of internal and external factors. If we look at each component separately we see how each is used in the analysis. As that song from the 1940’s tells us, “ you’ve got to accentuate the positive, eliminate the negative, latch on to the affirmative and don’t mess with Mister In-Between”

Positive (Accentuate)

Negative (Eliminate)

Internal

Strengths

Weaknesses

External

Opportunities

Threats

Strengths (internal) – if you have never gone through the process of doing a SWOT analysis it can be quite eye-opening. If you have performed a SWOT analysis don’t be so quick to assume that what were once strengths are no longer providing you a competitive edge. What are the areas that we are better than the competition? Can we take advantage of those areas to greater extent than we have previously? Don’t assume that you will have a competitive edge in the future just because you have one today (or had one yesterday). You need only look to the mobile phone market over the last few years to realize how fast a market can change.

Weaknesses (internal) – this is, in my experience, the area that most people struggle with when doing a SWOT analysis. We don’t want anyone else calling our baby ugly and we sure don’t want to do it ourselves. However, this is the area that has the most potential for getting managers and owners on the same page with regard to viewing business performance. Managers often disagree as to the reasons why a business isn’t performing better with regard to market share. A sales manager may assume that it is because of product mix or service issues, for the production manager it may be facilities or lack of order lead time. One thing is for sure, this can be the most spirited discussion in the process.

Opportunities (external) – Ok, I admit it. It is hard to look at opportunities when your business is struggling, the economy is a shambles and frankly you just don’t have any cash. But, this is exactly the time to look at opportunities. You may find: New vendors, Competitors leaving the market and opening new markets for your products, strategic partnerships that can add more to your bottom line. Not everything requires additional resources. Sometimes it is a matter of reallocating the resources that you have. There are opportunities out there. Don’t stick your head in your sandbox; go find someone else’s sandbox to play in.

Threats (external) – let’s face it. You only have to pick up the paper to know that business, particularly small business, is under attack on a great many fronts. If you read the paper, watch TV, or browse the web you can’t help but have the opinion that the business, economic, and political landscapes are a shambles. Oh, and let us not forget your competitors who, in the face of declining revenue and profits are on the attack. Your competitors are looking to get into your sandbox. Do you know who ....

Why should you consider adding a coach to your business team? - Aug 1, 2011

Posted by: Patrick A. Cowan in Articles

Why consider adding a coach to your business team? The simple answer is that it could just help you achieve your goals and objectives.

Perhaps a story can illustrate it better.

A long, long time ago in a galaxy… oops that’s someone else’s story. A good story, but mine is true. Anyway, a long, long time ago I was playing little league baseball at West End Little League in Ontario, California. I was eleven years old and was playing for the A&W Papermakers. The way I remember it, I came to bat with a runner on first base and we were trailing by a run. After a couple of pitches I hit a shot to the fence in left field and made it around to score for an inside-the-park homerun. Or, so I thought. The runs were called back. Apparently, the first base umpire had called time out. I was devastated. You see, that was my first homerun.

Well, the best coach that I ever had, Mr. Barber, called me over and said “don’t worry about it, you can do it again, hit the ball to the opposite field”. As I was walking to the plate, still thinking about what might have been, my dad, who was my biggest fan (along with my mom of course),yelled from the bleacher in this big booming voice, “do, it again Paddy, I know you can”. At this point, I pretty much changed my attitude and got back in there with the intent of hitting another homerun. Guess what? I did. All I heard as I ran around the bases was my dad yelling “Run, Paddy, Run”. If any of you are wondering, I am indeed reminded of this when I watch the movie Forest Gump. I hit two inside-the-park homeruns in the same at bat. This may be the only time in the history of the game the feat has been accomplished. At least I like to think so. And it is definitely one of my top 10 precious moments.

This article isn’t so much about business as it is about the power of coaching. It certainly applies to both your business and your personal life. I had the skills. I could hit and I was pretty fast in those days. But what I was lacking at that moment was focus and the belief that I could, in fact, have the same positive outcome. The coaching that I received at that moment made the difference. I try to remember this story every time I lose focus or run into something that seems improbable if not impossible to me.

A good coach not only has the relevant skills to teach but the ability to motivate, to help you achieve focus, as well as helping you define your goals and objectives. A great coach will tell you what you need to hear and not always what you want to hear.

When picking your coach follow these three rules:

1) Choose wisely. There can be expense involved but if you choose wisely the returns will far surpass the cost.

2) Be sure that they bring the skills and attitude you need. Don't choose someone that you know will simply agree with you. You don't need another "yes" man. I am sure that you can find plenty of those. I also don't believe that you need to sign a contract.

3) And then, and this is important, don’t be too quick to fire them when they tell you something you don’t want to hear. Coaching isn’t just “ra-ra-shish-boom-ba”. There is serious work to be done and you need them to help you stay in the game. Sometimes you need to hear “Ok, so that didn’t work, let’s try this. I know that you can do it”, or even “look Joe, if we do not do something different your business will not survive”.

Even if you do have the skills, sometimes, you just need someone pointing out where to hit the ball and helping you believe the skills that you have can get the job done. I am sure that most if not all of you have had coaches that made a difference in your performance. Perhaps it is time to bring them back into your life, work and play.

Business Continuity And Disaster Recovery Plans A Matter Of Economic Survival - Apr 23, 2011

Posted by: Patrick A. Cowan in Articles

Like many of you I watched as the disaster was unfolding in Japan with a great deal of sadness for the people of Japan. The awesome power of Mother Nature yet again unleashed. As you watched did you think to yourself “what would I do?” Did you run through several scenarios that you would put into place if you were in that situation?. Did your scenarios start with: “my family would survive because…”, or my business would survive because…”? Did you even think of your business’ survival? How about your employees?

Here in the Louisville area we have become all too familiar with the effects of major weather events. Ice storms, wind storms and flooding. These obviously are not on the scale of the recent Tsunami or Hurricane Katrina but if you are under one of the events when they happen, the effect on you, your family and yes your business can be just as devastating to you. For purposes of our discussion, business survival, we will define disaster as any event (man-made or natural) that causes a significant disruption to the operation of your business.

“Due to the highly publicized storms in the past we have compiled much information regarding disaster recovery plans. However, a disaster can be something as small as a failed switch or computer virus. These seemingly minor events can have a shocking impact on a business, often bringing operations to a standstill.” –Terry Hyland ,V.P. Hyland, Block and Hyland Insurance.

How many of the businesses that have been affected by these disasters have a recovery plan in place that will actually allow them to recover? How many of these businesses have continuity plans the will allow them to stay in business? Does everyone else in your business know what to do? What if you are injured? Who will run your business if you are not there? Will the business your family relies on survive until you can return? These questions can all be answered by and effecting BC/DR plan. Mr Hyland provided the following steps for creating a recovery plan:

1. Asses your risk - both internally and externally

2. Assess your critical business functions.

3. Plan for an alternate location

4. Consider supply chain preparedness

5. Appoint a crisis manager and develop an emergency management plan

6. Back up your data and plan to restore your technology

7. Create an employee, vendor and key client communication plan

8. Assemble an emergency kit.

9. Take a look at your insurance coverage - Is your insurance coverage adequate? Sit down with your agent to assure that you are insured for potential risks. Consider business interruption insurance, which may compensate you for lost income should you experience a disaster. Make sure you keep photos of your building, equipment lists and policy information stored in a safe and secure offsite location.

10. Test your plan

In his book, “The Danger Zone, Lost in the Growth Transition”, Jerry Mills, the founder of B2B CFO^® describes the “unofficial” organization chart of a business. It is comprised of what he calls Finders, Minders, and Grinders. If you are an owner/president/CEO of your business and you are functioning as required for your business to prosper, it is almost certain that you are spending the vast majority of your time engaged in finding activities. Finders are people who steer the company. Jerry Mills defines them further as forward looking, visionary, relationship builders. Why am I focusing on Finders in an article about delivering something special? Because it is ultimately up to the Finders to determine what qualifies as special in their companies. When Finders quit providing this function for their company the company quits delivering “special” and eventually quits delivering altogether.

There can be many reasons why an owner quits the “finding activities” that Jerry Mills describes in his book. The Finder may not be confident in the Minders of his business and begins taking on these tasks. Minders are defined in Danger Zone as living in the past. They are the key administrators of the company (Bookkeepers, Accountants, Controllers, IT Managers, etc.) , The owner may be distracted by things outside of the business such as family, or health issues. Sometimes it is because the infrastructure has not kept up with the growth of the business and the Finder has to deal with the resulting issues. Any of these can be contributing factors for a business entering the Danger Zone (where cash flow is not keeping up with cash requirements). So what should you do if you have already reached the conclusion that you are in the Danger Zone? First, you want to get back to doing the activities that made your business successful in the beginning, i.e., during the “creation” phase of your business. According to “The Danger Zone”, these include: &n....