RG Stephens & Associates Blog

Getting a Grip on Your Business8
Rick posted in Developing Processes, Business Control on May 11th, 2007

I am adamant about the use of processes. I believe that everyone who is organized and interested in minimizing grief in their business as well as their personal life uses processes. For me, processes are an integral part of my life. I use them everywhere and often. Some people would say that I am too process oriented at times, and maybe I am. I, however, find that my life is simplified by processes and they allow me to spend my time thinking about the important things in my life instead of the routine.

I first realized the value of creating and following processes way back in my youth and have allowed them to be a part of my life ever since. When I was in the military, I found that while in basic training many of the recruits, as well as myself, were struggling to respond to verbal commands from the drill instructor. He would fire these orders out rapidly and with a vengeance. “Left Face. Column right.” When a recruit would turn left instead of right or right instead of left the drill sergeant would get right in his face and make him look and feel like a fool for not knowing right from left.

The problem is, that when you are under stress and responding to rapid fire orders it is very easy to make that type of mistake, turning the wrong way. So I realized that to keep from making that mistake, I had to create a process that would allow me to turn immediately in the correct direction without having to think about it. It had to be subtle and consistent. Here is what I did. While standing at attention I would slightly grip the seam of my right trousers. While marching I would grip my right index finger and thumb together as if I were gripping the seam of my trousers. (Because your arms move while marching, I could not keep a grip on my trousers, so I gripped my fingers to get the same feel.) I then told my brain that when ever I heard an order to turn right I would turn in the direction of my gripped fingers. It worked, and I never had to endure the drill sergeant yelling at me for turning the wrong direction again.

I don’t know why this worked, but it did. Your brain is an amazing thing and when given a process to follow, it will take over for you. This is why it is so important to have processes in your business as well. Your company must be able to run on autopilot for all of the routine situations. This will allow you to concentrate on the important things in your business, such as customer service, product development, marketing strategies, etc.

If you will establish processes for all of the routines in you business, amazing things will happen. So taking a lesson from my military basic training let me just say, “Get a Grip!”

To Your Success -

Do You Know the Rules?Click Here to Post a Comment - 0 So Far
Rick posted in General Business, Leadership on May 2nd, 2007

I’ve been watching my local basketball team, the Dallas Mavericks, struggling in their first round of the playoffs, hoping this is the year they take it all. I still have confidence that they can win, but an interesting thing occurred to me during last night’s game. I was talking out loud to the TV as I often do during ball games (I think it’s a guy thing) and many times I would shout something like “That looked like goal tending to me!”, or “That wasn’t Charging!”.

My wife patiently read her book as all of this was going on but finally she looked up from her book and said “How do you know all these rules?” It made me take a moment and think as to why some people know the rules better than others, not only in basketball, but in all sports. I examined my own knowledge level of sporting rules and quickly determined that even though I may watch all kinds of sports, baseball, football, golf, Hockey, etc., there are some sports in which I understand the rules better than in others.

I tried to think about why that was so, and eventually I came to the conclusion that the sports that I actually participated in as a youngster were the ones in which I had the most knowledge of the rules. I believe this is probably true with most people. If you have ever played baseball you probably understand what an infield fly rule is all about and why it exists. If you have never played golf you probably don’t completely understand when and where you can take a non penalized drop or how it is done.

I believe this is true in the business world as well. Those of us who have gone through the trials and tribulations of running a business have made enough mistakes that we are quite familiar with what will work and what will not work, the rules so to speak. Just because we might have an advanced business degree doesn’t mean that we know all of the rules. A degree by itself is probably similar to watching the sport but never playing it.

This brings me to the point of this article; never underestimate the value an experienced advisor can bring to the table. Many business people will fail simply because they did not know the rules they were playing under. Keep your business advisor close and consult with him/her frequently. Their EXPERIENCE will make a significant and positive impact on your success. You’ll soon be playing the game of business with a high level of knowledge. It is a lot more fun when you understand the rules.

The last thing you want is to hear the referee blowing his whistle, pointing at you, and slapping a penalty on you because you did not understand the “3 seconds in the paint” rule!

To Your Success -

Do People Really Make the Difference?Click Here to Post a Comment - 3 So Far
Rick posted in Business Thoughts, General Business, Developing Processes on April 15th, 2007

I was having a discussion with a banker friend of mine who suggested that businesses that were successful were good at identifying and hiring high quality people. I disagreed. Ouch! That is totally against the grain of conventional wisdom, right? Not really.

More important than hiring high quality people is establishing solid and proven processes that make your business work. Take a look at McDonalds. This business is successful, not because of the quality of the people, but because of the quality of the processes that the people follow. This is why over 75% of franchise businesses succeed while 90% of start-ups fail.

So what is the lesson here? As a small business owner, you should focus your attention on defining what works and what doesn’t in your business. Measure your activities to a point, so when asked, you will know exactly how long it takes for the fries to cook, when to flip the burger and exactly how much secret sauce to put on the bun. If you have defined your business processes to this level, all you need are employees willing to follow your rules. The rest will be automatic.

That’s not to say that you should hire just anybody. On the contrary, as you grow you will want to hire people that are loyal, trustworthy, innovative, and talented. These people will become the backbone of your company. In the beginning, however, what you need are technicians, workers who can free up your time so you can work on growing the business.

In the early days, the secret is loyalty. Employees that are willing to follow your rules are more valuable than experts that think their experiences will contribute to your success. If you have done your homework, you already know what works and what doesn’t. Hire those who are willing to follow and your profits will be better than those who pay a premium for the experts.

To Your Success -

Where Has All My Money Gone?Click Here to Post a Comment - 0 So Far
Rick posted in General Business, Business Control on April 3rd, 2007

I had spent several weeks working with my client getting their books in order and we were now finally able to review a pretty decent Balance Sheet. By that I mean one that was accurate, not necessarily pleasant to look at with tons of money lounging around in the asset area.

I spent a few minutes reviewing with my client what each of the areas were representing, liabilities, assets, equity, etc., when I saw a confused look on the business owner’s face. “What’s the matter?” I asked. “Well”, he said, “I don’t understand why the Balance Sheet shows that I am making pretty good money, but I don’t seem to be taking any of it home.”

So we printed a copy of his Profit & Loss Statement for the year and began to review it as well. Again, this document was an eye opener for my client, a document that was not available prior to this time because of all of the inaccuracies in their book keeping system.

As we began to go over the details I commented to him that one of the biggest culprits causing money to disappear was not controlling expenses. “But we don’t spend money on things we don’t need.” he said. “As you can see, we buy equipment for resale, pay our employees, buy needed office supplies, pay our accountant, attorney, and of course you, but we don’t spend money on unnecessary things. So why don’t I have more in the bank?”

“Are you sure that you only spend money on necessary things?” I replied. “Have you filed your taxes for the year yet?” “Not yet.” he said, “We had to file an extension because we were not ready.” “Oh” I said, “An unnecessary expense because your books were shabby, and how about your payroll taxes? Looks like those were paid a little late last year as well.” “Yes” he said sheepishly, “Another unnecessary expense, I guess.”

I went on to explain to my client that controlling expense means more than just the obvious areas of the business, because it is the hidden, extra expenses, that erode your profits. Keeping your books in order is essential to controlling these types of costs.

Running a business is not easy, if it were, everyone would be doing it successfully.

When I was going through basic training in the military (A while back!) we were made to polish our soap after each shower. I thought it was pretty stupid at the time, but in retrospect, I understand the symbolism of that task. Don’t allow the things you use daily (financials, client records, invoices, etc.) to become unattractive and in disarray. Showering with a clean bar of soap will not only make you feel better but will demonstrate that you are a stickler for details, an essential ingredient for success.

To Your Success -

Loyal Customers Will PersevereClick Here to Post a Comment - 0 So Far
Rick posted in General Business, Customer Service, Developing Processes on March 23rd, 2007

Being in business for yourself is tough. It gets really hard when you come to realize that you need to make a significant change to the way you do business and this change will impact the customer. Perhaps the change is an increase in price, or a change to the way you extend terms, or maybe your product line has to be updated.

When this happens, owners will formulate what I refer to as SID, Self Induced Doubt. They become afraid to make the needed decision to improve their business practice for fear of loosing their customers.

Loyal customers (and you do have loyal customers, right?) may show some resistance, but that is a natural response by everyone when it comes to change. Astute owners will recognize that loyal customers have chosen them as their company of choice, and hopefully you have nurtured that relationship and demonstrated that you truly care for them as customers. Loyal customers will understand that change is necessary to stay competitive, to continue providing top quality products or services, and to ultimately stay in business.

The trick to successfully transitioning in these instances is to position the change as a benefit to the customer. Give them notice of the change and offer assurance that the change is a good thing for them. Your loyal customers will stand by you, your satisfied customers will complain, but stay, and your unhappy customers may leave. So, am I saying that some customers will leave? Possibly, but those that do were probably problem customers anyway, late with payments, asking for unreasonable service, etc. If they leave, perhaps it will be a good thing. Your company will be stronger for it.

Don’t be afraid to change. Without change there is no improvement, there is no progression, there is no growth.

To Your Success -

What Did You Say?Click Here to Post a Comment - 3 So Far
Rick posted in Personal Growth, Continual Improvement, Communications on March 14th, 2007

I was watching American Idol last night (I know dog, it sounded a little pitchy to me too) and one of Motown’s greatest performers, Diana Ross, was coaching the contestants on their performances. I admire and respect Diana Ross for what she has accomplished, both as a performer and as a person, so I was surprised to hear her explain to one of the contestants that she needed to be careful and “pronunciate” her words correctly while singing. I looked to my wife and said, “Did she just say ‘Pronunciate’?” I thought Ms Ross had inappropriately combined Pronounce and Enunciate to create a non-existent word “Pronunciate.” To my surprise there is a word “Pronunciate.” Though rarely used in our language, it means exactly what Ms Ross meant for it to mean and was used correctly.

Hearing Diana Ross use a strange word caused me to think about the importance of good communication skills in business. I believe that how we communicate to our customers and clients can directly influence our success or failure in business. When consumers hear slang or improperly structured sentences, they may subconsciously discount our credibility as a business owner and make their purchase elsewhere. Structuring sentences and using words correctly can be very influential in this area and it should not be taken for granted.

I am not an English teacher, nor do I want to pretend that I never make mistakes in grammar or word usage, but there are a few very common things that everyone should avoid.

One of the words I have heard many times from otherwise educated people is “Irregardless.” Hearing this said, for me, is like scraping finger nails across a blackboard. The proper word is always, “regardless.”

Another common mistake is the usage of the pronouns I and Me. Many people think that using the word “Me” is inappropriate, when in fact, it is the only proper grammatical word for the sentence. Example: “It is important for you and I to speak correctly” is an incorrect usage of the pronoun “I.” In this case “Me” is the proper word. Another example: “It is important that you and I speak proper English” is the correct usage of the pronoun “I.”

There is an easy way to determine which pronoun to use. Take the other person out of the sentence and see how the pronoun sounds. In the first example the sentence would be, “It is important for I to speak correctly.” You can see that “I” does not work here and is therefore improper in this example. In the second example the sentence would read, “It is important that I speak proper English.” The use of “I” works fine in this sentence and the pronoun “Me” would sound awkward. Therefore, in this example “I” is being used correctly.

It can be difficult to use the English language correctly, simply because it is very complex and at times illogical. The culture we grew up in can also influence how we speak, and if English is not your native tongue, it can be an almost impossible task learning to speak it properly. For those who have learned English as a second language, I admire you and I can appreciate the challenge you must have, and are facing, to grasp its nuances. For those who speak English as a native tongue, it is even more important that it is spoken correctly. Do not accept that your childhood environment or lack of education excuses you from this vital skill. Learn to speak the language correctly and you will impress more often than not. People do notice what you say and how you say it.

An employee of mine was explaining to me one day why the Hispanic cleaning crew in our building failed to follow some cleaning instructions we had left for them the night before. He explained, “They just don’t speak no good English.” “I guess not” I said, and went about preparing his performance review.

To Your Success -

Small Business EthicsClick Here to Post a Comment - 3 So Far
Rick posted in Leadership, Ethics on March 4th, 2007

Ethics in business has become big news over the past several years. We read about the escapades of the executives at Enron, WorldCom and other major companies and shake our heads in astonishment thinking, “How could that happen.” We marvel at the unethical behavior of these leaders while at the same time never considering our own behavior.

The truth is that business leaders, regardless of the size of the company, are faced with ethical pressures everyday. The scale or impact of the ethical decision may not measure up to the likes of an Enron, but nevertheless, they do exist. How a business leader handles minor ethical issues is a precursor to how larger decision will be made as the business grows.

Many of the ethical issues we may face are not clearly black or white. In fact, two people faced with the same issue could quite possible make contrary decisions, while believing they each have made the best ethical decision. Why? Because ethical decisions are based upon one’s moral character. When it comes to moral behavior, we each march to the sound of different drummers and as such will make different decisions on similar issues.

As a business owner you must set the bar on ethical behavior. Make integrity a core value, be honest with your customers and employees, always follow the rules, never compromise your principles, and remember that the right thing is not always the opposite of the wrong thing. Do these things and your customers will respect you and your employees will remain loyal, essential ingredients to a successful business.

To Your Success,

Scalable ProcessesClick Here to Post a Comment - 1 So Far
Rick posted in Developing Processes, Continual Improvement on February 25th, 2007

I talk a lot about the importance of having solid processes in your business operation. Establishing processes that have been tested, refined, and continually examined for improvement is probably, in my humble opinion, the most important thing a business owner can do to insure success in the business enterprise. When you have good working processes in place, your business runs more smoothly and the stress levels associated with the “daily grind” are minimized.

I was working with one of my clients the other day and we began discussing a process that he had put in place to display his product in the show rooms of some of his buyers, on consignment. His plan was simple and seemed like a good one. He would allow the buyer to show off his product in their showroom without invoicing the buyer until after the product was sold to the end customer. There is nothing really unusual about this process except that my client’s product was the only one that the buyer was keeping on consignment. Because this was not a normal practice for the buyer, the buyer had no process in place to notify my client when the item was purchased by the end consumer. So I asked my client how he would monitor that.

My client is a small startup company and is currently doing lots of marketing by hitting the streets and knocking on doors. So he said to me, “While I am out cold calling on new prospects, I can just drop by and see if the item is still in the show room. If it isn’t, then I’ll invoice them and send them another.” He added, “This will also be a good way for me to stay in touch with my new buyers.”

This sounds like a good idea until you begin to scale this process into a larger version. There are two important concepts one must keep in mind if you are developing a good process. The first is that it must be simple and easy to follow. The second is that it must be scalable. By scalable, I mean it must work when you are small and also work if your business explodes and becomes extremely huge. In this example just given, my client’s process would work fine while he is small, but if his business suddenly expanded and instead of two or three businesses displaying his product on consignment, there were hundreds, the process would fall apart because there is not enough time in the day for him to visit all of these businesses. Eventually he would lose track of where his products were and whether or not they had been sold.

Sometimes we will develop a process that appears to be a good one, and over time we discover that it does not work as our business changes. That is ok if you are continually examining the process and improving it as you grow. The important thing is to have the process, make sure it is scalable, and continue to improve it.

To Your Success -

Your Image Makes a DifferenceClick Here to Post a Comment - 0 So Far
Rick posted in General Business, Marketing Strategies, Attitudes on February 14th, 2007

The other day I watched a very compelling movie produced and directed by Clint Eastwood called “Flags of Our Fathers.” It was the story of the WWII battle of Iwo Jima and the resulting media coverage in the US promoting the famous picture that resulted from that event. The message that came from that movie was interesting and one that we as business leaders should understand if we want to be successful.

The message was that image is more important than reality. According to the movie, the celebrated picture of the six Marines raising the flag atop the pinnacle of Iwo Jima was not taken when the flag was first raised, but in fact, at a later time after the battle, during a relatively calm moment. Although not staged, the raising of this flag did not occur during the heat of battle, as implied, and the men who raised it were not the same ones that planted the flag initially.

Our leaders at the time were quite aware that this photograph, and the men portrayed, was not as it seemed, but they seized the opportunity to create a gripping image of our brave Marines at a time when this country needed hope and the support of those at home. It worked.

As a business, it is vital that you maintain an image that reflects exactly what it is you want the public to see. If you own a restaurant, you don’t want patrons to walk in and see dirty tables, floors, or counters, the negative image will stay with them and your business will suffer. If you own an auto repair shop, you want your employees driving clean undamaged vehicles. If you own a florist, you want all of your flowers to be fresh and attractive. If you are a doctor or a lawyer, you want your clients to see you as being successful by creating images of professionalism in your office or waiting area.

Be very careful when making decisions about your image. What people see is what you will become. It only takes one moment for your prospects to decide if you are credible or not. The image they see will determine your success or failure.

Hanging in my office, is a picture of Pete Rose, the baseball player and manager, sliding into home plate in the style that made him famous, headfirst. He was once quoted as saying.” …And there is one more important reason that I slide headfirst. It gets my picture in the newspaper.” Be careful with your image, it is more important than reality, because it defines reality.

To Your Success,

Everything is BrokenClick Here to Post a Comment - 0 So Far
Rick posted in Developing Processes, Attitudes, Continual Improvement on February 10th, 2007

Have you ever heard the phrase, “If it ain’t broke, don’t fix it?” I was attending a seminar just last week when I heard the moderator say exactly that. Of course, everyone in the room understood his meaning, as we all do, but in the business world, doing things the way we always have can cost us customers, money, and good employees.

Instead of allowing processes to go on just because they seem to work, we should adopt an attitude of Continual Improvement, always looking for a way to make the process better, even if “it ain’t broke.”

There is an old story about a young girl helping her Mother cook dinner. As the Mother was putting the ham into the pan, she cut off a small piece on each side. Curiously the young girl asked, “Why do we always cut the ends off the ham before we put it in the oven?” The mother replied, “I don’t know dear, it’s just the way Grandma always did it. Let’s call and ask her why.” So they did. When asked, the Grandmother responded with the same answer, “It’s the way my Mother always did it.” So they called the young girl’s Great Grandmother and again asked, “Why do we always cut the ends off the ham before we put it in the pan?” The Great Grandmother replied, “I don’t know why you do it, I did it because I never had a pan big enough to hold the whole ham.”

So you see, we can go along forever doing the same thing, the same way we always have, even though nothing seems to be broken, when in fact, if we would adopt the attitude of Continual Improvement we would begin to ask important questions, the biggest one being, Why?

If you want to make your business “the best it can be”, to borrow from the Army slogan, look closely at those processes that “ain’t broke” and improve them, and the next time you hear someone say, “If it ain’t broke don’t fix it”, let it remind you to fix something today.

To Your Success,