Mike Michalowicz's Blog, page 90

Episode 24: Profit First In Germany With Benita Königbauer

Show Summary

Benita Königbauer, Tax Advisor and certified Profit First Professional, joins Episode 24 of the Profit First Podcast. Benita shares her story of implementing Profit First in Germany.

 

Our Guest

Benita Königbauer started her career in banking, but soon realized that the new world of banking and sales was not at all what she expected. She decided to become a tax advisor and soon after a business mediator; Benita was happy to provide advice and support to her service professional clients, however, she still felt something was missing – something that would really change her clients lives for the better… until she found Profit First. Now she has the perfect blend of skills to work with her ideal clients and really make a difference. Benita has spent her whole life striving to break through obstacles and continues to support others in doing the same.

 

Show Quotes 

There are 1.8 Million small businesses in Germany; 1.1 Million business owners make less than minimum wage.

It’s important discuss the problems in a clients business upfront before the business owner makes decisions on their profitability.

There is so much positive feedback about Profit First from small business owners and service professionals. When they start to see things going in the right direction there is so much relief for them, creating hope and a plan to fix their struggles.

If you are trying to implement Profit First in your business and your accountant or Bookkeeper is giving you push back, just say “trust me, just try it.” Until they have experience with it, they will resist it because we default to what we are familiar with.

It’s important to explain to clients that  not only should they make money for the work that they do, but they should get money for the entrepreneurial risks that they take. If there is no profit in your business then your essentially just another employee of your company.

 

Show Links

Benita’s Website: www.profit-first.de

Benita on Facebook: www.facebook.com/ProfitFirstDeutschland

Benita on LinkedIn: https://de.linkedin.com/in/benitakoenigbauer

Benita on Xing: https://www.xing.com/profile/Benita_Koenigbauer

 

Corporate Partners

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

The Element of Job Ads That Is Most Important (And Often Forgotten)

We’ve all seen (and maybe even written) those job ads that make it sound as though the staff is a sunny, smiling crew and the environment is full of high-fives and atta-boys. You know – those job descriptions that make it sound as though you’d practically pay for the privilege of walking through the door and being part of the team? Staff discounts, tuition assistance, team building….all can be yours if you’re the candidate lucky enough to be selected for the job.

In a way, it makes sense. You believe in your business. You’ve built it, and you know that it’s work worth doing. The trouble, though, is that employee retention is important, and if you’ve painted an unrealistic picture of what it’s like to work for you, then you run the risk of higher staff turnover. If you’ve mistakenly attracted candidates who aren’t even remotely qualified, then your ad hasn’t really yielded the desired results. It’s expensive to hire and train staff, and you want to work hard to find, hire, and retain good employees. Believe it or not, what you write in an ad can make a big difference in your retention rate. Here’s the secret…..

Use the vaccination technique. Rather than filling your ad with all of the wonderful things about the position you’re filling, do just the opposite. List all of the difficult and challenging aspects of the job. Think it sounds crazy? Here’s how it works: Let’s say that you need to fill a manufacturing position. You look at the troubles that previous employees have had and you list the obstacles that might prevent the wrong applicant from successfully completing the work. You’re up front and clear about what you’re looking for: a candidate who can stand for a twelve-hour shift and complete repetitive tasks. You clearly convey that you want someone tough enough to do the job properly.

You may be thinking that you’ll get far fewer applicants for your position, and you’re absolutely right. But here’s the key: The applicants you get will be the right ones. They’ll be informed. They’ll be qualified. They’ll be more likely to be competent for this specific position, and they’ll be much more likely to stick around longer. Think of it this way – you don’t need a hundred applicants for a position; what you need is the right applicants. The vaccination technique lets you sift out the candidates who wouldn’t be the right fit anyway. You don’t have to interview them, train them, or replace them when they don’t work out.

Let’s look at another example. You’re hiring for a weekend bartender for your restaurant. Now everyone thinks that being a bartender is the most fun job in the world, right? What’s not to love? Booze, food, people having fun…that’s what novices think the job’s all about. But you’ve seen those folks come and go over the years, and you know what you want in your new bartender. You want a professional, experienced, creative, serious bartender who knows the ropes. How do you find that person? You run an ad that clearly spells out that there will be: late nights, heavy lifting (a half keg weighs about 160 lbs, for those of you who didn’t know,) meticulous cleaning, difficult customers with pain-in-the-ass requests, and really busy holidays that will have to be worked. You’ve just weeded out all of the dilettantes who can’t make anything other than a rum and coke, and your frank ad will appeal to the professionals who’ll look at your ad and know that they’re the person for the job.

You vaccinate your applicants, knowing that the ones who make it through to the interview stage are far more likely to work out in the long run. Now I can’t claim all the credit for this technique; Dan and Chip Heath’s book, Decisive, had a real impact on me. Their overall point is not that we can ever become the perfect decision maker, but that we can become better, more deliberate decision makers. Taking steps to ensure that the folks you interview for a position are the most likely to be qualified gives you better options. Better options nearly always yield better results. If finding and retaining good staff is a challenge, then increase your odds of success by giving yourself a pool of candidates who understand the challenges of your business and are willing to help you succeed.

How To Cut Costs in Business Without Any Downside

You don’t have to go into debt, compromise quality or performance to cut business costs. There are significant ways to save money without compromise. How? Most of the techniques revolve around “productivity transfer,” where you get the same results by using alternative resources at a lower cost point. Here’s how:

1. The Power Of Pooling

Pooling takes some effort, but the savings can be huge. Contact other providers in your industry that buy from the same suppliers you do. Agree to work exclusively with one supplier for a period of time (I suggest minimally 3 years). Pool your combined purchasing power (and determine the savings you want – for example a 25% cut). Then go to the suppliers and tell them that you are all going to buy from the one vendor who offers the best price and the best deal. You and each of your providers will still buy with your money, but you’ll commit that money to that one vendor. The big numbers are very attractive to buyers and they may offer you a bargain.

2. Contractors 

Full time employees don’t necessarily work full time. If you don’t have work for employees, you’re paying them to be idle. Consider hiring contractors, and only pay for the hours worked. It is a win-win in many circumstances. Your contractor makes more per hour (and can serve multiple clients), while you pay for only what you use. Contractors are often extremely talented at what they do – so you get high quality services. I think it is still crucial to have a core talent – one derived from full timers. But, not everyone on your team should be full time.

3. Free Advertising

Unused advertising is one of my favorite methods of all time. Billboards, signs or websites where a business has gone out of business often have a number that’s still displayed, but disconnected. Call your local phone company and have that number redirected to you (if its been disconnected). Instant prospects! When customers call, let them know the business they were calling is out of business, but that you are there to service them. And yes, you can save tons of money by dropping the advertising you were paying for.

4. Telephone Costs

Telephone systems are expensive. Really expensive. But by combining a few free, and near free, services you can save tons of money, and the quality and flexibility of your system may increase. Try using Free Conferencing for free conference call services; Skype’s premium business phone (which is less than $3 a month) is great; and Grasshopper has a virtual phone system that can cover as many employees as you want.

5. The Office Space

The recurring cost of renting office space is usually the largest SG&A costs on an income statement. Good times or bad, every month you’ve gotta pay that rent. You have three options that can save you big money. First, convert your business to a virtual presence. You can have your employees work from home and get rid of the office in its entirety. Second, approach other spaces that already have tenants committed to long leases. More and more tenants have extra space, and you may be able to pick it up on the cheap (or in my personal case, I got the space for free). Third, renegotiate with your landlord. With a soft demand for office space, landlords are becoming more and more flexible on the rent, to keep you in.

6. Interns & Differently Abled Organizations

There’s a whole workforce of talent that most companies overlook—interns and people with disabilities. They have the talent and intelligence, but not much experience. Reach out to the local colleges for interns, and in exchange for pay, work with the college to give the student much need college credits. Contact organizations that can staff you with people with disabilities. Both represent talented, hardworking people, and often at a cost that is much lower than what you are paying now, simply because they don’t have the experience. We all started there!

7. Bottom Line Responsibility

One of the most overlooked methods of radically cutting costs, without compromising the business in any way, is to seek guidance from your team. Have a company wide meeting and educate your employees on the P&L and the need to cut costs. Empower them to bring suggestions to the table and to act on them directly. One company, for instance, had an employee who suggested everyone bring in a coffee mug from home instead of using disposable cups. It saves the company $100 a month. Similar ideas were implemented throughout the company, and the company turned profitable as a result.

How Noble Are Your Goals?

Jim Collins famously has taught us to set BHAGs (Big Hairy Audacious Goals) in his book Built To Last.  Together these goals define the big vision you have for your business’s future.  While I understand that the “Hairy” part is meant to be cheeky, it can take many an entrepreneur off course.

I suggest setting a new type of BHAG. I call it the Big BANG.  It stands for your Big Bold Audacious Noble Goals.  The keyword here being “Noble.”  How is your goal serving others and yourself? How well is your goal aligned with your life’s purpose?

Once you introduce nobility to your business’s objectives, it is unlikely ever to get hairy.  You are doing what you are meant to do, afterall.

Do It Now!

Great ideas are useless, unless they are executed upon.

Great initiatives are a waste if the initiative is not taken.

So whatever it is. No matter how hard (or easy) it is. It will only ever work if you do it.

Go. Do it. Do it now!

Episode 23: Pricing and Profitability With Matthew Perosi

Show Summary

Matthew Perosi, Chief Thinker at Sapphire Collaborative, joins Episode 23 of the Profit First Podcast. Matthew shares his story of when his company went into financial struggle and how he turned it around to become a profitable success.

 

Our Guest

Matthew Perosi is an internet analyst who examines existing and emerging technologies and figures out if they will be useful for business marketing; then acts as an individual consultant for people who want their business correctly positioned online for the future.

Matthew Perosi is an experienced entrepreneur, internet marketing consultant and mobile marketing consultant, SEO expert, educator and website developer. Founder of the Jeweler Website Advisory Group where all of his research provides scalpel sharp marketing and training for retail jewelry store owners and e-tail jewelry stores

During any face to face or telephone conversation Matthew freely offers innovative solutions for almost any internet marketing strategy as well as continually sharing his business experience and recommendations beyond the internet.

Matthew is the technical writer for the Retail Jewelry Magazine, and can often been seen speaking at trade shows like JA, MJSA, and JCK. His has also been found teaching jewelry photography at special events held at FIT in New York City.

 

Show Quotes 

The most difficult thing was realizing how to correctly price ourselves. It took us several years to realize our mistake that got our company into financial trouble. We were offering inexpensive websites and including consulting services… but we weren’t getting paid or compensated for any of the consulting work.

As the recession began we dipped into the line of credit to pay our regular bills, and only used the money that our customers were paying to pay our employees. We got to the point where we had to lay off everyone other than myself (Matt) and my business partner. Suddenly two of us were doing the work of 5 employees.

I went through every service that we were offering and completely re engineered all the software we were using, as well as creating new software that was easy to use. This allowed employees to manage more clients – which helped turn our company around.

Best tip to profitability: Kill the ego. Admit to yourself that you don’t know everything.

If you want to sell your business, figure out how you want to tap into the next generation of customers and how to turn your own pricing around.

When you seek the advice of someone, ask in return what has been their experience doing it. If they tell you they failed or they haven’t done it yet, don’t listen to them. If they’ve been successful and they say “don’t do it”, that’s the person you want to listen to.

 

Show Links

Matthew’s Websites:

Press Release & Speaker site: http://www.perosi.com

Blog: http://www.jwag.biz/nuggets

Coaching Company site: http://www.sapphirecollaborative.com

 

Show Sponsors

Nextiva – VOIP phone providers for small businesses.

Fundera – Single source online funding for entrepreneurs. Also offers an adviser program for CPAs, bookkeepers and business coaches.

TSheets – The #1 customer rated time tracking solution!

Start Your New Employees Off The Right Way

Hiring and training new employees is not only time-consuming, but is also costly. That’s why, when you bring someone aboard, you should be doing all you can to make it a great start. First impressions go a long way, and if you can get that new hire off to a great start, you will have a much greater chance of having them stick around.

Here are some ways that can help you get your new employees off to a great start:

Celebrate their arrival. Most employers have a going-away party, but you need to have a welcome party! This will help set the tone, make them feel special, and give everyone a chance to meet the new team member.

Advance notice. Let them know ahead of time if there is anything they should be aware of, such as where to park, your smoking policy, or how to dress. This can help prevent uncomfortable situations from arising.

Be prepared. Before they start work, have all the paperwork done. The first day should be about meeting people and getting integrated, not doing paperwork. You should also have the materials in place that they will need to do their job, like business cards.

Be there. Greet them as soon as they come in. Then start taking them around for a tour and to meet people. And, in addition to being there, make sure you greet the person by name, and act as if you were eagerly awaiting their arrival. The new employee will not feel very valued if they walk in and have to explain who they are and why they are there.

Heads up. Let the new employee know what to expect that day. It is weird enough, starting a new job, but when you add not knowing what to expect, all day, it can make matters worse. Let them know how you see the day playing out.

Time matters. Especially on the first day, try to avoid keeping them late. As it is, they have taken in a lot and will need some time to decompress. The last thing they need is to have to put in extra time when they are just starting.

Pair up. Trying pairing up the new employee with someone who knows the company well and is a good role model within your business. That way, there will be a dedicated person they can go to, when they have questions. And that buddy can also try to help them feel more at ease, along the way.

Go easy. Especially on the first day, avoid information overload. Too much information given to the new employee at once will just overwhelm them. On the first day, keep it simple. You will have plenty of time later for loading your new employee up with information. But the first day is not the time for it.

Follow up. At the end of the first day, or week, ask the new employee for feedback to see how they feel about the position, how they are settling in, whether there is anything they need, etc.

 

Settling In

One of the most important things you can do, to get employees off to a great start, is to give them the proper training they need to do the job you have hired them to do. Many people leave positions because they feel they are not receiving the proper training, which can make someone feel overwhelmed and stressed out.

The more you can do to welcome the employee and make them feel comfortable, the better start they will experience. And that’s a good thing for both your new employee and your business! From giving them a company shirt or hat to throwing a pizza party lunch for their first day, there are many things you can do to help get the ball rolling in a successful direction.

How To Handle Having Too Much To Do

Are you feeling overwhelmed? Maybe you’re having a panic attack, or a sudden desire to curl up under your desk in a fetal position and cry. Now what? First, recognize it is ok… overwhelm happens. There are millions of people across America right now crying in the restroom or screaming like little girls behind their closed office doors. It doesn’t have to be like this. You can lose that overwhelmed feeling without a prescription. It just takes a pad of paper and a pen. Let’s take action to get your overwhelm fixed.

1. Create a list. Write down (on paper) everything you need to do. This is critical, because a big part of overwhelm is the mental energy of constantly thinking of all the things you need to do. Once you’ve written it all down, it will release the need to remember, and the fear of forgetting, and a huge chunk of the stress will go away.

2. Next, look for “combo packs”— are there any tasks that can be done simultaneously or more efficiently if they are grouped? Maybe you can write all your emails and make all your phone calls at the same time. What about filing and mail? Make the first group by putting the number 1 next to each item that can be grouped together. Then make the next group and put a number 2 next to each item in that group. Keep repeating until the entire grouping is down. Now put a number next to each remaining items. This will tell you how many real actions you need to take. This often gives you even more relief since there is less to do then when you first wrote everything down.

3. Put a dollar sign next to anything that will result in income for you in the next 30 days. You can prioritize by date, amount of money, the likelihood a client will fire you, time it will take to complete the task or whatever other criteria will ensure you tackle the right project first.

4. Put a smiley face next to anything that is for a client or prospect. Note some things will have both a dollar sign and a smiley face.

5. Put a star next to anything that is due today. Some things will have a smiley face, a dollar sign and a star—like a Vegas slot machine, only without the bells and quarter slots. Start here… do these tasks or jobs first. I guarantee crossing them off the list will ease your overwhelm levels immediately.

6. When you start with the smiley, dollar, and star tasks, if there are other things in that group, do them too.

7. Next, do the dollar sign and star combo items, since this is stuff that will bring you money and keep your business alive so you have an office to scream in from time to time.

8. Next on your list are the smiley sign and stars tasks, since this is client stuff.

9. Next is not stars, believe it or not. This is urgent stuff but not important (it doesn’t impact your income or your clients), so your job here is to delay these items. Make the call or email to get you more time, do whatever you can do delay them.

10. Next do the dollar signs. Then next do the smiley faces. Then do the stars. And then do the rest of the list.

See? Your overwhelm levels have just dropped significantly and you’re back on track. You may not feel like you can kick back with a beer and a bag of chips just yet, but you’re getting closer.

How to Have Your Team Fix It Fast When Sh*t Hits the Fan

Have you ever seen the “Apollo 13” movie? If you have, you know what I’m talking about when I say that it really hit the fan in that movie! After they set out on a mission to the moon, an explosion changed everything, leaving the crew with no oxygen. But given the tools, power, and time frame, they were able to fix it fast, and the rest, as we know, is history!

One of the most memorable scenes in that movie is when the NASA director says, “This could be the worst disaster NASA’s ever faced,” and Ed Harris’s character replies by calmly saying, “With all due respect, sir, I believe this is gonna be our finest hour.” While the scenarios and problems may differ, this same attitude can, and should, be applied to unforeseen problems that happen in your own business.

Here is how you can effectively handle a big problem and get your team to fix it fast:

Clarity.

Explain the problem, being sure to give absolute clarity to the objective that must be accomplished. You will need to really spell it out and cover all bases, as some people may not be able to think of even the basics during high-stress situations.

Empower.

It is important that you empower the team to make critical decisions. If you are micromanaging at this point, you will only hamper things. They need to know that you believe in them to get the job done, and that the power is in their hands to do what they need to in order to make it happen.

Time frame.

People usually work better when they know what the time frame is, so be clear about what needs to be accomplished and by when.

Benefit.

Let your crew know the benefit of solving the problem. This way, they can see the clear picture of why it is important to the company. If they know the benefits to the company, they may also see how it benefits them and their job.

Food and drink.

Let’s be honest, nothing is more distracting than trying to work while you are hungry. You can easily prevent the headaches, distractions and crankiness that come as a result of being hungry by keeping a steady stream of food and drink delivered to your team as they are tacking the problem at hand.

Appreciation.

You’ll want to express appreciation for your team’s commitment to fixing the problem, both while they are working on it and after they are finished. This is the time that you want to focus on having an attitude of gratitude.

Reward.

Once the problem has been resolved, always reward the folks who worked so hard to fix it. Give them well-deserved time off, or some other form of recognition.

There is a really good chance that your team can fix most, if not all, of the problems that come their way. And your job of being an effective leader is to get out of the way and let them do it. But before you do that, you need to make sure they have the things they need in order to pull it off. Given the right information, equipment and time frame, along with being empowered, the outlook is good that they will do it to your satisfaction.

Problems are bound to arise in your business, even really big ones. But being prepared, by knowing what to do, can help ensure that your team can see it through to a successful outcome. Even the biggest problem doesn’t have to become a disaster you face; it can actually turn out to be your team’s finest hour!

Weirdos Wanted!

Next time someone calls you weird, revel in it.

It’s the weirdos who are different. It’s the weirdos who challenge the norm.  It is the weirdos who realize the foundation of success comes from the courage of being yourself unabashedly.

The world celebrates the weirdos and often pays them handsomely in the process. Here’s to being weird.