Leadership in tough times

Take care of your clients

I called a fellow business owner recently.
A cheerful young woman answered the phone.
“Could you wait a minute?” she asked.
“Yes, if not too long,” I answered.
She put me on hold for four minutes.
Four minutes. That’s like four hours.

Ordinarily I would have hung up.
I stayed on the line because the owner is a friend.
I wanted to see what would happen next.
After four minutes, she came back on the line.
I asked if she had in stock what I needed.
“Hold on,” she said, “and I’ll check.
Seven minutes later she confirmed that they had it.
She kept me on hold for 11 minutes.
For a Type A like me, that’s an eternity.

Now here’s the lesson for all of us.
How are your employees handling client calls?
Are they putting them on hold?
Or do they offer to take a number and call back?
How do you know what they do?
If they do this, whose fault is it?
Yours, of course. You haven’t taught them better.

Make this a lesson at your next staff meeting. 
Talk with everyone who answers incoming calls.
Discuss how to handle calls, requests or complaints.

Why is this so important? Look at reality.
Washington has run up $17 trillion in debt.
And it was done it in only five years.
The White House wants to add another $3 trillion.
What this means for your business is NOT good.

Forecasters predict that over the next three years:
• We’ll find it extremely hard to make a profit.
Government regulations will cripple us.
• We’ll need better ways to generate leads.
We’ll also need new skills to close sales.
• Our competition will be in the same fix.
They will be willing to undercut our rates.
• We’ll work harder to keep our most loyal clients.
We must offer the best choices for them.

Next: One owner turns around a losing business.

Protect your business, Part 4

There are many ways you can be victimized.
Here are three safeguards to take.

1. Accept no postdated checks.
Believe this: Most of them will bounce.
If the check writer refuses to pay, you can go to court.
But there’s a major legal danger.
The judge may rule against you for taking the check.
You knew there were insufficient funds.
What made you think the money would be there later?
Make sure anyone else knows this is your policy.
Make sure they check dates on checked received.
By mail or at the front counter.
Any make sure they are signed.
A favorite ploy is mailing an unsigned check.

2. Watch for changes in behavior.
Is your bookkeeper acting differently?
Has there been a crisis in the bookkeeper’s family?
A sudden need for cash in an emergency?
Is she receiving emergency personal phone calls?
Has the bookkeeper just bought a new car?
Has she upgraded her wardrobe dramatically?
These are warning signs.
Keep a careful eye on anyone who handles cash.
The same goes for checks and credit card payments.

3. Make sure payroll taxes are paid.
As the owner, this is your responsibility.
Check to make sure these are paid weekly.
Both federal and state payroll taxes.
This is complex so get advice from your CPA.
State and federal tax officials are not forgiving.
They don’t want to hear your excuses.

We once walked away from a business sale.
The sellers owed five figures in back taxes.
We did not want tax people seizing our assets.
Either they paid the taxes or we weren’t interested.
A deadline for tax clearance came and went.
We cancelled the closing.
I don’t think they ever resolved it.
They closed the business months later.
Don’t let this happen to you.

Next: Leadership in tough times.

Protect your business, Part 3

Savvy business owners check their balance sheets.
Your sheets should have two-year comparisons.
How much money do you have in your account?
How much did you have this time last year?
Is your cash down from last year?
The warning bells should be ringing in your head.

Is your cash up only marginally?
That’s another warning sign.’
Businesses must have cash to keep operating.

Are you margins shrinking? That’s alarming.
It may be the fault of a poor economy.
It may mean your sales people are letting you down.
It may mean they aren’t taking care of customers.

A car dealer you know had to take drastic steps.
He took over a dealership with sagging margins.
He watched the sales staff sit around the showroom.
They drank coffee. Compared golf scores.
Waited for customers to come to them.

He compared their sales records.
Three sales people produced 80% of the sales.
The other 12 produced less than 20%.
He fired the 12 poor performers.
He worked with the sales force to produce results.
They stepped up advertising, phone calls, direct mail.
Showroom traffic increased. Revenues rose.

How often do you make bank deposits?
Daily? Weekly? Even less often.
Undeposited checks slow your cash flow.
Work it out with your bank to deposit by scanner.
You can scan checks in and send them electronically.
Our bank wanted to charge us for this service.
A rival bank waived the fee and won our business.

Here’s another safeguard tactic.
Check your bank deposit slips.
Compare them with your bank statements.
Make sure the two documents match.
Make sure the payments go to your account.
Not someone else’s account.

Next: We’ll discuss three more safeguards to take.

Protect your business, Part 2

Are you checking your financial statements?
As an owner you have major responsibilities.
You control the future of your business.
You assure your clients are cared for properly.
You make sure your employees get paid.
You cannot let go of the tiller.
It’s your ship to sail . . . or sink.

Is your bookkeeper often late with your P&Ls?
Do you have to ask for them?
Make it policy that your P&Ls come on time.
Good bookkeepers are proud of their work.
They run the profit and loss statements on time.
Expect the P&Ls the day the month closes.
That does not mean two weeks later.
It means the first business day of the new month.
We close the books for the month right after lunch.
We then prints out our cash and accrual P&Ls.
We print out and check our balance sheets.

They tell how our company performed right away.
P&L statements and balance sheets are critical.
They cannot be ignored.
They should be comparative.
Each line item should show this month’s gain or loss.
A second column should show this month last year.
A third column should show percentage changed.

Were your income lines up over last year?
If not, why not? This is a danger sign.
Were your expense lines up from last year? This may be a warning sign or something else.
It may be only that it cost more to produce more.
Rising revenues often raise expenses.

So what do you look for? 
Your margins. Are they consistently profitable?
How do you know? What’s standard in your industry?
Is a 10% margin an industry standard?
Then aim for 12% to 15%.
Aim higher than competitors  in your industry.

Next week we’ll discuss your balance sheets.
You do check your balance sheets, don’t you?

Protect your business

Here are major strategies from a pro.

Her name's Ruth King.

Ruth is a business woman, author and consultant.
These are in her “The Courage to be Profitable.”
This book can make you a better business owner.


You trust your employees, don’t you?
Sure you do, You hired and trained them. Right?
They’re like family. Loyal and honest.
99% of them are. Don’t bet on the other 1%.
They can succumb to temptation.
They have problems they think your money can fix.
Are you going to give them a chance to steal?
That may be more temptation than they can stand.

A friend of ours disappeared recently.
He was a respected community leader.
It took the police a week to find his body.
He had left a suicide note blaming himself.
His bookkeeper had embezzled thousands of dollars.
He finally caught it and blamed himself.
She ruined her life and drove him to suicide.
He could have taken three simple steps.
As a business owner, you should take them, too.

Are you alone authorized to sign checks?
Take care who’s on your bank signature card.
You should guard this like the key to your lock box.
It’s better if only your signature is on the card.
Only you can sign payroll and other checks.
Do you have partners?
They will want to be on there, too.
Be careful about who you partner with.
How about your spouse? Trustworthy, right?
Spouses have cleaned out bank accounts.

Are your bank statements mailed to your home?
Why not? Then fewer people can tamper with them.
Go over them carefully. Look for:
• Late fees and payments and bounced checks.
• Excessive payments to your vendors.
• Anything that looks suspicious.
But your sealed bank statements come to the office.
That’s where they can be steamed open.
A dishonest bookkeeper could alter the statements.

Ruth has filled her book with other safeguards.
It’s in print and Kindle editions at Amazon.com

Next: Is your bookkeeper often late?

Got a burning  business question?
Contact me at JerryBellune@yahoo.com