How to Increase Your Cash Power - E-Myth

How to Increase Your Cash Power

http://www.e-myth.com/cs/user/print/post/how-to-increase-your-cash-power

2011 | Nov 30 in Home Page News , Money

By Jamison Hollister, E-Myth Business Coach

CASH = OPPORTUNITY

Having extra cash on hand allows you to do some pretty essential things in your business, like:

• Purchase equipment
• Hire employees
• Maintain inventory
• Conduct market research
• Innovate and improve your products and services
• Attract new customers
• Open new locations
• Have a hedge against unexpected economic or market changes

So, why is it that when it comes time to seize these opportunities - when the excitement to grow is stirring within you - that it can feel like such a struggle to find the cash to do so?

The truth is that many business owners don't plan ahead specifically for their cash needs.  

CASH = VALUE

When you have an accurate vision for where your business is heading, and what you need to do to get it there, then cash becomes a tool by which you can create a better experience – or provide more value – for your customers.

CASH = VALUE = MORE CASH

You already know it takes a certain amount of cash just to get through the day, but it is that 'extra' cash that you build up through careful planning and strategic thinking that funds the steps you need to take in order to move your business to the next level.

If you are going to grow your business, then you must learn to manage your cash carefully and strategically in pursuit of your vision.

Two Starting Questions

There are two questions I ask every new client and you should be asking yourself as well:

"What do you want to accomplish and how committed are you to actually doing it?"

These questions are critical, not just as they relate to cash management, but because they define the essence of your discipline in whatever venture you're considering:  losing weight, reducing debt, buying a new house, improving your golf game, learning a new language, or creating a successful business.   

You have to know why you're pursuing any given goal to begin with. What is the value that you will get from the end result? Is it worth the discipline it takes to get there? Usually it is.

Then you have to admit that if you've attempted it before, but haven't made much headway toward achieving your goal, it might require some serious soul-searching to understand where the problem lies.  

You may find that it requires you to take a new approach, as uncomfortable as that may be...   

You need to own it.  

And so it is with cash. Strong cash flow is a goal that most business owners have, and sincerely aim to achieve, only to look back and realize that they're in the same place as they've always been.

You might have to ask yourself how you personally relate to cash.  How do you manage it? How do you mismanage it? What are your goals in acquiring and using it?  

Once you've defined your goals and recognize where change needs to happen, you can begin to see how to properly leverage your cash to get more of what you want. 

Who's Minding the Store?

How you relate to cash is largely determined by which of your business personalities has been dominating your thinking.  Your inner Technician, Manager, and Entrepreneur all relate to cash in different ways.

Your inner Entrepreneur knows there will be exciting opportunities in the future that you'll want to take advantage of and that you'll need a cash cushion that will give you the available funds to do so.   

Your inner Manager needs to be able to generate profit.  This is the person who implements the steps to ensure that you can track and monitor your cash flow and have a plan in place for using cash productively.  You may not be, and in most cases should not be, the person who actually does the cash planning and reporting work, but you need to be coordinating and guiding those activities. The ultimate accountability for making sure that work gets done rests with you as the Manager.   

For the inner Technician, cash is simply what you get in exchange for a certain amount of time and material.   It is short-term, immediate, and easily taken for granted. Your inner Technician does not have the capability to think strategically about cash.  If your inner Technician has been minding the store, it is not surprising if your cash is used indiscriminately, with little awareness or interest in the actual strategic power it holds.

It shouldn't surprise you that, in my experience, those clients who have the greatest challenge in harnessing their cash power are those who have allowed their inner Technicians to be the guardians of the cash; whether it is to their accountant or bookkeeper, they have abdicated and conveniently ignored the critical part that their inner Manager and Entrepreneur must play in fueling their vision.

This is not an insurmountable challenge by any means.  It simply underlines the need to commit to a change of perspective and a shift in power.

Power Shift

Every successful small business runs like a high performance machine and it takes cold, liquid cash to fuel it. 

As you seek out new opportunities to drive your company growth, consider the following guidelines about cash flow management that can help you take charge of your business and your future – note which of the three business personalities apply:

1. Answer the first two critical questions:  What goals do you have for your business and how committed are you to actually making them a reality?  (The Entrepreneur)
2. Plan out how you might use any extra cash to improve your business. Have fun - make a list of things you want to see implemented. (Manager and Entrepreneur)
3. Decide if the benefit of these improvements is worth the discipline it will require to get you there. (The Entrepreneur)
4. Then, if you are in fact committed to achieving greater cash power, plan how you might generate, budget for, and save up the extra cash you need.  (Manager)
5. Be continually questioning how you relate to cash and be always willing to visit new ways of thinking. (Manager and Entrepreneur)

Shape Your Financial Destiny - E-Myth

Shape Your Financial Destiny

2011 | Nov 23 in Home Page News , Money

By Adam Traub, Senior Business Coach

http://www.e-myth.com/cs/user/print/post/shape-your-financial-destiny
Are you committed to shifting luck into certainty?
E-Myth Worldwide is.
Most business owners have a lack of financial understanding in their businesses and so leave their financial future to chance.
Some business owners have a fear of numbers. Some are overwhelmed. Most feel intimidated or embarrassed to admit that they don't know what they're looking for when they review financial documents.
Fortunately, you're reading this now.
The good news is you do not need to know everything about accounting in order to define and strategically manage your financial data.  
The truth is, you only have to be proficient in understanding 20% of the financial information that you generate, and informed enough to know who to go to for the other 80%.
With the right resources and mindset, you can dramatically transform the financial performance of your business, and increase your feeling of control and confidence in this area.

Let's Define the Roles

As CEO you are responsible for the success or failure of your business. 
For you to be fully successful at that, you must build a financial team around you, and leverage the information provided by the rest of the team.
Your team includes:

• A CFO
• A Controller
• A Bookkeeper
• A CPA

A CFO advises the CEO on trends that may impact the business, supports you in analyzing financial reports and helps to establish and monitor the systems used by your accounting department.  
A Controller oversees the personnel in your accounting department, prepares reports, and makes recommendations to improve the financial outlook of the company.
The bookkeeper is the technician on your team handling the day-to-day tasks of organizing and inputting data.
The CPA's main role is to advise you on tax-related matters.

Is This a Business or a Hobby?

Are you using a CPA?
If so, are they analyzing your income statements for you?
If your answer is no to either of these questions, you are missing a key player on your financial team. You're also missing tools that are vital to the control of your financial future.  
The key to being motivated to shape your financial systems is to think about what you really want in return for the time you're investing. It is critical to acknowledge whether you have a hobby or a business.
If your answer is authentically a business, then you need to begin to think about it differently.
If you have been avoiding responsible, comprehensive financial management and burying your head in the sand, there is no better time, as the New Year approaches, to adopt a new, healthy attitude towards it, and resolve to take action.  
If you want your business to give you more life, and are committed to fulfilling your financial goals and taking control of your financial health, then making this shift is essential.  

The Essential Steps

1. Be open and curious about how your financials and your business activities are connected.  Every decision and action you take shows up somewhere on your financial reports.  Understanding what is underneath those numbers will allow you to have increased clarity and make better strategic decisions.
   
   
2. Have a financial team around you that provides support, direction, and recommendations. Each position brings a different viewpoint, and it may take some time to put it together, but don't wait to start. They do not have to be full time staff.  Start with your CPA because they might be able to provide additional resources or give you suggestions as to where you can find the rest of your team.
   
   
3. Regularly review and analyze your income statements and balance sheets. Your financial team can play an important part with this. This review needs to be done monthly. Being consistent is critical; repeated, regular, disciplined exposure will increasingly alert you to trends and anomalies, and progressively increase your "financial intelligence" and comfort level.
   
   
4. Establish a budget and a system for using it. It does not have to be complicated. Determine when during the month you will review your budget and the variances between your plan and what actually occurred. Your budget is a plan to make you profitable and you can - and should - adjust it periodically to reflect the shifting realities of your business activities.
   
   
5. Set up a way to track and manage your cash and make it a routine. Generally speaking, you need to have 2 – 3 months of expenses set up as a cash reserve. Even if you can only put a little away at a time, do it because it will add up quickly.  Cash management is about knowing what you have now, what is due to come in, and what is due to go out. It seems simple because it is!
   
   
6. Use accounting software.  Simply relying on your checkbook, bank statements or spreadsheets is just not comprehensive enough. Although we don't endorse any specific software, make sure it includes the ability to run income statements, balance sheets, create and manage budgets and has the ability to track and manage cash flow. It should also be able to provide variance reports for your budget and cash flow.
   
   

If you acknowledge what is in your way of being fully accountable for your own financial health, set up a team around you, and follow these 6 guidelines, you will begin to develop a financial management system that will direct you on the path to building and having a healthy and thriving company.  
If you choose to keep doing what is not working or continue to avoid what is, in fact, your responsibility as CEO, then be prepared to forever ask yourself why there is so much month left at the end of the money.
If you've been inspired to start this shift in thinking and take control of your financial destiny, then click here to learn more about where you can start.

Emotional Marketing - E-Myth

Emotional Marketing

http://www.e-myth.com/cs/user/print/post/emotional-marketing

2011 | Apr 27 in Home Page News , Marketing

By E-Myth Business Coach,

Teresa owns a veterinarian practice. She's been in business for nearly 30 years (about as long as E-Myth!), and she still loves every minute of it. Lately however, business has been slow so Teresa reached out to a local marketing consultant for some help.

One of the things the consultant suggested was that she attract new clients by using coupons and discounts. Teresa approached me with some concerns about that approach. She'd worked hard to establish her practice as a high-end, high-quality care facility and she charged accordingly. She worried that offering discounts would attract a "less than ideal clientele." At the same time, she wondered if the word of mouth marketing she'd always relied on was simply not as valuable as it was when she first began her practice some 30 years ago.

We started our discussion with a clarification about the E-Myth definition of marketing and how it differs from advertising. Advertising is what E-Myth refers to as lead generation, which is the magnet that you use to attract the customers that you want for your business. Marketing, from the E-Myth Point of View, is the process you use to determine who and where those people are, what they buy from you, why they buy from you, and how they think.

Before Teresa can begin to answer her question about coupons and discounts, or whether word-of-mouth lead generation is still effective for her business or not, we have to take a strategic look at hercustomers first. Small business owners often leap to advertising activities before they've thought through a strategy from their customer's perspective. This is like putting the proverbial cart before the horse (perhaps the literal horse, in a veterinarian's case.)

Who Are You Talking To?

Marketing is the process of discovering the truth about your target market—the market segment that has the highest probability of purchasing your product or service. Teresa was right on track when she mentioned wanting to attract the ideal clientele. So the first thing we did was some exploration and research into her past and current clients. We analyzed who her most profitable primary client truly is. Then, based on her vision for the business and its strategic direction, what her ideal client will look like going forward. We examined what product/services they were most likely to buy (that also have the highest profit margin). We identified their demographics (age, education, marital status, income, education, occupation, etc.) and location in relation to her office.

Once we knew the demographics of her target market, it was time to speculate about how they think, their purchase preference profiles, and ultimately what they need to hear and feel from her in order to do business with her.

What Do They Need From You?

I asked her to put herself in her clients' shoes.

"Imagine your beloved dog is seriously injured. You're distraught. You're emotional. You're in a state of panic. You need to get help right away. You can't imagine life without your canine companion and can't bear to see your dog suffering.

Now you're holding your injured pet in your arms sitting in the waiting room at the vet's office. What are your needs at that moment? You must begin to think of your clients as emotional beings first, and consumers second—or you won't be able to effectively attract them (and service them!) at a level that is really going to hit them where it matters most."

For most of my Mastery coaching clients, this is a real eye opening process. You're typically so busy; you don't stop to "walk a mile in their shoes." And you must. It's a very powerful and necessary piece of the marketing puzzle.

Armed with all this knowledge about her target market—who they are, where they are, and how they think—Teresa can begin to create a strategy for the best way to attract them through lead generation activities. Only with a finely tuned marketing strategy that focuses with laser precision on the market that is most likely to purchase what she most desires to sell, is she ready to take the next step.

How Do You Reach Them?

Will discounts and coupons appeal to her target market? In this case, the answer is quite easy; the psychographics of her target market find reliability and quality of service to be more important than price. The discount and coupon strategy might bring in some business, but it also has her competing for an audience that is most interested in price, and that's not going to attract the kind of clients her business needs to thrive.

When we examined word-of-mouth referrals from the perspective of her target market, we felt strongly that this was the area to leverage for Teresa. Her customers were the sort of folks that needed to hear an emotional message delivered through the channel of someone they trust. The question then became, how could she be more proactive about asking for referrals?

And that's the question she can now pose to her marketing consultant. With a very clear picture of who her target market is and how they need to hear from her, she will give that consultant the parameters they need to deliver the results she's looking for.

Further Reading

Advertising is Not Marketing
Tips to Drum Up Sales Now

Are You a Reluctant Manager? - E-Myth

Are You a Reluctant Manager?

http://www.e-myth.com/cs/user/print/post/are-you-a-reluctant-manager

2011 | Apr 20 in Entrepreneurship , Business Development , Home Page News ,Management , Leadership

By E-Myth Business Coach,

When was the last time you had an "aha moment" in your business? You know that moment I'm talking about. The one that comes along and knocks your socks off. It is that moment when inspiration strikes. When the puzzle pieces suddenly come together. When you realize an underlying truth that will change how you do business forever…

One of the most rewarding aspects about working with my business owner clients is that I get to facilitate and be a witness to those moments. When it happens (and it happens a lot) I know that I have the best job in the world.

Take for example, Rick, a physical therapist client of mine. Last month he had an aha moment that will transform his business in a very profound way. It wasn't about his vision for his business or his entrepreneurial aspirations; nothing as glamorous as all that. This revelation was about something very practical and often overlooked. It was about management. Yes, Rick had an aha moment about how he was managing his employees.

For a long time Rick showed up in our coaching calls complaining about how hard it was to work with his team. He didn't consider himself a good manager and I sensed that he didn't want to be 'the manager' any longer. His common complaints:

• I can never find the 'right' people.
• I'm uncomfortable interviewing employees.
• My employees don't understand what I want them to do.
• Even when I know it's the right thing to do, I have trouble firing people.
• I'm not sure when to give employees raises or how much of a pay increase they should get.
• When I've tried performance reviews in the past, they led to more trouble than they were worth.

Sound familiar?

Guidelines for the Reluctant Manager 

Rick felt burdened by the idea of being a manager. He had zero interest (nor did he particularly excel at) managing people. When we explored the concept of management, he was full of grumbles, "blahs" and sighs.

Rick is a strategic thinker. He's an entrepreneur at heart. He thrives on the thinking and the dreamingbehind his business, not necessarily the doing. Given this, I suggested that he might have more success if he simply approached the whole idea of management from a strategic perspective. He could be 'the manager' in the sense that he could create a management strategy for the business, without actually doing the management work.

And there was the aha moment. Ultimately, Rick only needed to define the management work that needed to be done; then he could let others do the managing.

But first, Rick had to get clear on exactly what it was that he wanted from his employees. He also needed to examine what his employees needed of him. He had to take a few steps back to look at things objectively. This process was uncomfortable for Rick, but he persevered. We worked through lots of ideas, and it took some time, but ultimately he determined the exact results he wanted to achieve and the standards that would guide his actions.

Here are two examples from his quite exhaustive list.

Hiring

Result: To attract the right people to grow and succeed with the business.

Standards:

1. I will only hire when I'm sure the position is really needed.
2. I will only hire if the company's payroll budget allows for it.
3. I will only hire people who are aligned with my vision for the business.

Employee Development Meetings

Result: To establish clear and open communication and productive working relationships between employees and managers.

Standards:

1. Every manager will meet one-on-one with their reporting employees on a weekly basis in an Employee Development Meeting.
2. Employees and managers will establish a clear agenda for the meetings and use them to stay on the same page and stay on track.
3. Employee performance evaluations will be a part of the Employee Development Meetings, and all effort will be made to keep employees informed about their progress and eligibility for appropriate raises on an ongoing basis.

You might think these things are simple, or go without saying, but they aren't… and they don't!

Business is busy. Life is busy. Standards and guidelines keep your business moving forward.

For Rick, if he's thinking about hiring a new employee, he now has a place he can go to do a "gut check." He has written standards that remind him how to do it properly and in keeping with his management strategy. He now sets the tone of the employee/employer relationship right from the very beginning. He has a strategy for hiring, establishing payroll and providing appropriate raises for employees that is integrated into his financial management of the company as a whole. He has stopped giving inconsistent and ineffective employee performance reviews in favor of ongoing Employee Development Meetings that keep managers and employees informed and on the same page about where things stand all the time.

Rick's growth as a leader and manager highlights some important points that all business should be aware of:

1. As the business owner you are the one who is most accountable for creating a high performance environment and positive company culture!
2. Your business is a systemic organization. All areas of the business--including employee management and financial management--need to be in alignment.
3. The most important thing a business owner can do is make time to think strategically about how the business needs to work as a whole, recognize the changes that need to be made, and then to have the courage and confidence to make those changes happen!

6 Tips to Better Email Marketing - E-Myth

6 Tips to Better Email Marketing

http://www.e-myth.com/cs/user/print/post/6-tips-to-better-email-marketing

2011 | Apr 6 in Podcast , Guest Contributor , Home Page News , Marketing , Lead Generation

By Erin Duckhorn,

In 2010, it's estimated that more than 1 trillion emails were sent in cyberspace. That's a staggering number. And of course, you have to ask yourself: with the plethora of emails being sent every minute of every day,how can you rise above the inbox clutter to reach your prospects?

In this podcast, featuring Mastery client Cameron Madill, owner of Synotac Web Design, you'll learn:

1. Why you should separate your work & personal email accounts
2. The best day and time to send email
3. Why you should make your email mobile device accessible
4. How often you should send emails
5. How many links you should include in each email

(Download MP3)

Resources Mentioned in this Podcast

10 Billion Emails Can't Be Wrong - The latest in email research 
Litmus.com - See how your email looks in various platforms from Outlook to an iPhone