What's This Thing Called "Culture"?

A culture statement is used as a guide for a business entity to foster a congruent relationship with the people it works with. The culture within an organisation will attract a certain style of person to it (good or bad, productive or non-productive) and you can control this attraction by having a stated or desired culture and management working to maintain that culture within the organisation.

Culture / Values are beliefs which owners, management and employees hold in common and endeavour to put into practice. The culture guides management and employees in performing their work. Specifically, you should ask, "What are the basic beliefs that we share as a business?"

Just imagine a business employing a manager to operate the business. How dramatically would the business change under the following two different management styles!

General Manager #1

Manager #1 has an autocratic style and has always believed that employees steal from them, don’t work toward the best interest of the business and are only there for their self-interest. This manager does not believe that any of the staff are responsible enough to take on any task without full supervision. Manager #1 believes that their suppliers are trying to overcharge and under deliver and are always late with delivery. They also believe that their customers are out to take advantage of them and are always accusing them of wrongful dealings.

General Manager #2

Manager #2 involves the supervision staff members in their decision making process and treats all staff with respect. Manager #2 still makes the decision and does so with efficiency and the full loyalty of their staff members. Manager #2 understands that 95% of most problems arising in the workplace are system related and finds ways to combat and correct any problems. Manager #2 believes that the staff are doing the best that they can and given the choice only want to see the business improve.

In the example above the manager would create a culture for the business. If a culture is not designed for the business and that culture adhered to then the culture will be randomly selected by the management staff in place … mainly by their undying personality.

Icon Business Solutions have designed a culture for the business to foster growth and cooperation and believe that we will all benefit from adhering to the cultural attributes in place… therefore a culture statement has been designed to support us in our endeavours.

What’s yours?

A One-Page Strategic Plan? Yes - It Is Possible

A guest spot this week on PLANNING by Verne Harnish from www.Gazelles.com

Verne is the author of “Mastering the Rockefeller Habits” and runs a consulting firm in North America that provides executive education, coaching and technology services to help mid-market companies around the world build and execute a strategic plan.

VISION – A DREAM WITH A PLAN – Most people don’t have visions, they have

dreams. The one-page planning document guides you to answer 7 simple questions

around your dream – Who, What, When, Where, How, Why and the always difficult

“but Should we or Shouldn’t we?”

You’ll see these anchor questions at the top of each column of the one-page planning document and bolded below to provide you a verbal and visual clue to match the “how to” sections with the appropriate columns on the form.

TWO OVERARCHING IDEAS – Alignment and Simplicity. The one-page planning

document is designed to encourage simplicity (there’s not a lot of space to write, so you must be concise and focused) and alignment (think of the document as a crossword puzzle, where figuratively“4 down” needs to align with “7 across.”).

FOUR KEY DECISIONS to help you move forward with purpose and direction – Essentially the “bottom lines” of the form:

1) Getting the Right People (aligned with the Core Values and Purpose)

2) Long Term Goal – BHAG

3) Strategy – Brand Promises and X Factor

4) Short Term Focus – Critical Number(s) for the year and each quarter

If you get these decisions right, everything else falls into place much easier. And you’ll likely dominate your industry, have three to five times industry average profitability, have a lot of cash, and will grow revenues at twice the industry average. In addition, customers and employees will be attracted to your business.

DOWNLOAD PLANNING DOCUMENT here and contact Andy to help you put together your one-page plan for YOUR business.

Andy Burrows

Icon Business Solutions - Coaching in Business

Cash Flow: The Lifeblood of Your Business

The latest MYOB Business Monitor Survey for April showed that the leading concern for most of the 1000 owners they surveyed was around cashflow issues. With current estimates indicating that approximately 90 per cent of business failures are the result of poor cashflow, the level of concern is hardly a surprise. Don’t let your business be one of them.

Maintaining smooth cash flow requires juggling nearly every facet of a business, from staying on top of accounts receivable, to extending lines of credit, to managing inventory. The essence of successful cash flow management is regulating the money flowing in and out of your business, to reduce the amount of fixed capital that you need to support the given level of your business.

A lot of business owners we talk to often suggest that the way they want to increase cash flow is to increase sales. Strange as it may seem, this can kill a business faster than by doing nothing. The reason is that the business may be “cash negative” (consuming more cash than it generates) and so the extra sales generated need to be financed by additional borrowing or capital injection by the owners. This can drive the business into a worse position than it already was. It is essential that a Net Variable Cash Flow analysis is done on the business FIRST before additional sales are chased.

I can do this for you at no cost so either email me to make an appointment or contact me through the website here: Cashflow solutions

So, what can be done to turn a negative Net Variable Cash Flow situation into positive territory? Try these ideas to start:-

1. Organize your billing schedule

The faster your receivables turn over, the more capital you'll be able to spend on growing your business. Make sure you send bills out promptly each month and put in a system to flag any overdue accounts for immediate follow-up. Put in a documented credit management system and stick to it.

2. Stretch out your payables

Take the maximum amount of time allotted (often 60 or 90 days) to pay your suppliers. Think of these terms as an interest-free line of credit from your supplier. It gives you sufficient time to collect receivables without spending money on short term credit lines. Perhaps use the interest free period afforded by credit card companies and use your credit card for purchases. Just make sure you pay it all off on the due date!

3. Take advantage of early payment incentives

If your suppliers offer you a discount for paying early, take them up on it. Think of it this way: a 2% on a 30-day invoice is equal to a 24% annual return if the money was invested. If your suppliers don't offer this kind of incentive, ask for it; they may be willing to offer the discount in return for speeding up their receivables.

4. Balance your client base

Is there any opportunity to change some of your clients into a regular paying regime (retainer for a set number of ongoing services), rather than a project-by-project basis only? This may reduce profitability a little, but will help to smooth out cash flow. Institute a deposit system for larger projects where the client pays something up front and regular progress payments.

5. Check your pricing

When was the last time you raised your prices? Many small businesses hesitate to increase their rates because they're afraid they'll lose customers. However, customers actually expect their suppliers to institute small, regular price hikes. Also, check out your competition on a consistent basis. If they're charging higher prices, you should too.

6. Reduce your inventory

Liquidate older inventory by having a sale and turn that stock into cash. Once you have done that be careful of bulk offers by sales reps that can result in becoming over-stocked again. It is tempting to take advantage of a seemingly great offer by a persuasive sale rep, but how fast can you sell all that extra stock and what extra margin will you make?

Once some of the strategies listed above have been implemented and the business is stable and has a positive Net Variable Cash Flow, you can go out there and chase those extra sales, safe in the knowledge that the bank balance will be going up, not down.

You can find out more here: Coaching in business

Andy Burrows

Senior Advisor - Icon Business Solutions

Email: andyburrows@iconbusinesssolutions.com

Web: www.iconbusinessolutions.co.nz

Icon works with the owners of independent businesses to help them make more MONEY, build better TEAMS and allow the owner to spend MORE TIME where they want to.

Up Your Quality Game for a Big Jump in Business Profits

Research shows that most SME’s lose between 5%-15% of sales revenue as a result of the lack of attention to quality¹. Lose this much revenue and a significant portion of net profit is lost as a result, holding companies back from growth and providing a decent ROI to its owner. In addition, buyers in domestic and international markets are demanding that their suppliers operate quality management systems as a means of ensuing strong commitment to quality, productivity, cost competitiveness, and customer satisfaction.

So what can an owner do about this? Traditionally organisations throughout the world are using tools such as the ISO 9000 series of standards to help them achieve high standards of quality. However the ISO9000 standard is a big beast and requires a company to commit considerable management and financial resources to implement it. After all the ISO 9000 standards were originally developed for large manufacturing companies supplying products and services to the defence, aerospace and nuclear industries.

A more workable option needed to be developed that better suited the small business situation in NZ where the owner is often driving such initiatives. A good example of such a model has been put together by Telarc Limited, a New Zealand management systems certification body. They have developed the Q-Base Code quality management system for SME’s in the early 1990s. If improving your quality game, eliminating mistakes and satisfying customer requirements for a quality guarantee is needed in your company, then this Q-Base code should be looked at.

There are seven clauses in the Q-Base Code. To become registered you need to meet the requirements of each clause. You will need to write down what you do in a way that works for you. Briefly, here’s what you need to do:

• Assign a staff member to the job of Quality Coordinator

• Have a way of controlling critical documents and records

• Have a way of understanding your customers’ needs

• Have a system for purchasing

• Train staff for the work that they do

• Have plans for inspecting work, both in progress and when finished

• Have a method for continual improvement.

Even this Q-Base code will take some time and effort to implement, but the great thing about improving quality control processes is that any savings in production costs and reduced mistakes goes STRAIGHT TO THE BOTTOM LINE. To achieve the same increase in profits by focusing on growing revenue is likely to take much longer and take far more resources. Aim on working smarter, not harder.

Find out more here: Small business coaching

¹Sirma Karapeeva, Ministry of Economic Development