My Thoughts by Rick Stephens

Getting a Grip on Your Business

Posted in Business Control,Developing Processes by Rick on the May 11th, 2007

Get a GripI 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 –
Rick's Signature

Where Has All My Money Gone?

Posted in Business Control,General Business by Rick on the April 3rd, 2007

 

Burining MoneyI 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 -

Rick's Signature