Action Coach Portsmouth

Action Coach Portsmouth

Steve Mullins

Building the Right Team

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Building_the_Right_TeamEvery championship team begins with the first draft pick. The people you choose to surround yourself with will make the greatest contribution to your success or failure.

Profiling and Action’s Four Hour Hiring Process are invaluable tools when selecting “the right person for the job, and the right job for the person” – but also never underestimate your intuition.

Here’s a “sixth sense” test to use for potential candidates.

Ask Yourself:

1. Would I enjoy sitting next to this person on a transatlantic flight?

Chances are if you are calling the flight attendant an hour into the flight for seat change, they’re not a good candidate. Remember, you’re going to spend a  lot of time together.

2. Would I care if they worked for my closest competition?

If the idea of selling against them bothers you, snap them up right away!

3. If you were on a romantic dinner date would you want them to be your server?

Do they have an attitude toward service that can match the importance of any occasion?

To serve graciously, enhancing the experiences of others without having to be the center of attention, is a crucial indicator of a great team member.

Trust your heart and intuition, while using proven tools, in the hiring process. It’s how you attract, and keep, the people you love to work with, thereby, avoiding the expense and headache of turnover.

“I’ve always found that the speed of the boss is the speed of the team.”    – Lee Iacocca

Getting the Wrong People Off the Bus!

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Getting_the_Wrong_People_Off_the_BusMost business owners are afraid to let poor and mediocre team members off their bus (i.e. let them go/fire them). They rationalise their lack of action because the team member does some good work and sometimes is acceptable. The business owner spends hours stressing and worrying about them and spend even more time trying to get them to work to an acceptable standard.

My experience is that if your heart says that the team member is not going to work out it then you’re normally right. The day they are replaced is the day your business will starts to grow again.

However, to take this action – i.e. to remove a poorly-performing team member -you need to make sure that you act in a clear and fair way. I suggest the following process:

* Firstly, you need to ensure the rules of the game and the performance goals are clear. Team members need to know exactly what you are expecting of them.
* Then you need to ensure that they know how to do what you are asking and have the necessary skills to carry out the tasks.
* Once both parties agree on what is expected, performance measures should be put in place and achievement of these measures should be reviewed on a regular basis.
* If your team member meets the performance measures, then your heart will tell you they are changing for the good and deserve a second chance. If they do not, you have grounds for dismissal on the basis of poor performance.

What normally happens in these circumstances is that it becomes so obvious to your team member that they are not good enough that they will quit before you dismiss them.

Just remember not to take any rash action and seek professional HR advice before you act.

 

Power of Priorities

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Power_of_PrioritiesThere are two things that business people find very challenging: thinking ahead and doing things in order of importance. Doing these two things makes the difference between a successful business and just surviving. And the same is true for all areas of our lives.

Leadership trainer and author John Maxwell says, “Thinking ahead and prioritising responsibilities marks the major differences between a leader and a follower.”

Most people have heard of the Pareto Principle, more commonly known as the 80/20 Principle. Roughly stated, that in most businesses 80% of your business comes from 20 % of your customers.

Other examples of the Pareto Principle are:

Reading    20 percent of the book contains 80 percent of the content.
Job            20 percent of our work gives us 80 percent of our satisfaction.
Products   20 percent of the products bring in 80 percent of the profits.
Picnic        20 percent of the people will eat 80 percent of the food!

So… when it comes to your priorities, 20 percent of your priorities will give you 80 percent of your production, IF you spend your time, energy, money and personnel on the top 20 percent of your priorities. When you do this you are getting a 400% or fourfold return in productivity. Think what this would mean in your business!

Every business person needs to understand the Pareto Principle as it applies to the areas of customers, team and leadership.

In the area of customers, it is vital to identify the 20 percent of your customers who account for 80 percent of your business. These are your “raving fans” and strategies must be put in place to care for them appropriately.

For your team, you must identify the top 20 percent employees. They do 80 percent of the value that is brought into your business.

In leadership, take an honest look at the question “What do I have to do that no one else can do?” Remember a leader can give up everything except final responsibility. You can decide whether you will be reactive or proactive when it comes to the use of your time. The question is not, “Will I be busy?” but “How will I invest my time?” It’s not “Will my calendar be full?,” but “Who will fill my calendar?,” It’s not “Will I see people?,” but “Who will I see?”

Do this and watch your productivity and personal satisfaction rise to new heights!

Stop Blaming Time

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stop_blaming_timeHow many times have you heard people say “I don’t have enough time to do …” or “If only I could find the time to do …” Or “I am too busy to do …” Perhaps the person you heard saying these or similar things is the same person who stares back at you every morning in the bathroom mirror. Well, it is time to stop blaming time! Time is an absolute-there are 24 hours (1440 minutes, 86,400 seconds) in a day and that will never change. We cannot “manage” time. What we can manage is what we do during the next 60 minutes.

How we use time is one of the great determinants of how successful we are both as business owners and as individuals. Everyone from Bill Gates to the small business owner is given the same amount of time each day, 24 hours. Think of it like the auto races where they make all the drivers drive identically built and tuned race cars. The winner is then determined not by who has the fastest car but who can drive that identical car the best. Similarly in life the “winners” are those who learn how to drive their use of time the best.

So how do you take control of your time?

1. Accept that there is no such thing as too much or too little time. There is enough time available for you to be successful-others have been successful and they had no more access to time than you do. Take ownership of your situation. Be accountable for your results and responsible for your actions.

2. Decide what you want to accomplish. What do you want to be “successful” at? To some it may mean making a million pounds, to others it may mean being healthier while others may be looking to have better relationships with their family and friends. This is your goal. You must also understand the benefits to you of achieving the goal -how will it make you feel when you achieve it. Both the goal and your “why” must be written down with a timeframe.

3. Once you have decided the goal and your “why”, you must now determine the activities that will be necessary for you to accomplish that goal. What do I have to do? What time commitment will I make? What will I need to adjust/sacrifice/reduce/delegate in order to have the time to do the activities identified? Remember if it was easy everyone, including you would have already done it. What separates the successful users of time from the unsuccessful ones is the discipline and determination to obtain their goals no matter what. Winners never give up and they never quit on themselves.

4. Understand that life and business are about choices. You choose how you will spend your time- on what activities and how much on each. This is a marathon, not a sprint. Being successful in many different areas takes effort and time. Success comes from laser-like focus on one or two goals. Once they are accomplished you move on to the next set of goals and focus on those.

5. Prepare your calendar each week by creating “appointments” to do the activities that you have identified. These are defaulted into your calendar before anything else. Treat these as if the appointment was with your most important customer. Would you easily change your Monday 2-3pm “meeting” just because someone asked for that time slot? No, you would negotiate- “I am booked at that time. I can see you at either 1pm or after 3pm, which would work for you?”

6. Be militant about your schedule. If you don’t care how your time is being spent, why should anyone else? Learn to say “No”. In Stephen Covey’s book “7 Habits of Highly Effective People” he breaks activities into 4 categories- Not Important/Not Urgent, Urgent/Not Important, Urgent/Important and Not Urgent/Important. The danger for most people is the Urgent/Not Important category. This is when we are responding to other people’s urgencies, however the activity does not move us toward OUR goal- by definition it is Not Important. Beware of the time and effort devoted to those tasks. Conduct your own time usage study. Every minute that you can divert from not important categories to the important categories will move you closer to your goal.

7. Review your successes/challenges in meeting your schedule each week and adjust where necessary. Be honest with yourself and continually reinforce your “Why” – what are you trying to accomplish and how important is that to you.

8. Find an accountability partner or mentor to help keep you on track. We can all use help every now and then- it is a strength to admit this, not a weakness.

In summary, stop blaming time, take ownership of your time and commit to the discipline necessary to win the race by being the best “driver” of time you can be.

How to make your cash-flow faster

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rapidsIt is a fact that most businesses fail purely and simply because they run out of cash and are unable to pay their bills as they fall due. This is not just applicable to those that are “bad businesses”. Take for example the high profile bankruptcy of Lehman Brothers in 2008, the biggest bankruptcy filing ever in the USA. This was one of the most successful and oldest investment banks in the world and it failed not because it ran out of clients or sales but because it had insufficient assets to settle its liabilities – i.e. not enough cash to settle its debts. Ignoring this basic business principle brought down an organisation with $600 billion in assets.

So as you can see, not matter how big your business is, your cash flow is vital. You have probably heard the saying, “Turnover is vanity, profit is reality but cash is sanity.” This is so true and is the reason why the first thing I look at with my clients is how to improve their cash flow. Without the cash to pay your staff, buy stock and pay the rent on your premises, your business cannot function, no matter how fast sales are growing and how successful it may appear to be. Money is the lifeblood of a business; it needs to flow. If it stops flowing, then just like a river, pressure will build up at some point and trouble will follow.

The business word for cashflow is Liquidity and it is defined as: the ability to quickly turn assets into cash and pay liabilities when they become due. To improve liquidity you have to speed up the conversion of stock into sales, and debtors into cash, while keeping creditors to a minimum.

So the biggest blockages for most businesses are: (1) they are bad at collecting their debts, (2) they are slow at converting their stock into sales, (3) they are under-utilising their assets and not bringing in enough sales to cover their costs (here I am referring to people and equipment), or (4) they are running up more debt to keep the business afloat.

So how do we unblock the flow of money and improve our cashflow? Well, the first step is to measure what you want to improve. In his book “Keys to the Vault”, Keith Cunningham states that financial indicators are the score card of business. If you do not know how to keep score, you can’t play the game. The quicker your game is being played the more often you need to keep the score.

For some businesses it is sufficient to check the key financial indicators on a monthly basis. For some, it may be a daily basis. But remember to avoid “paralysis by analysis” – chose the key indicators that are going to give you the information you need and act on the information quickly when required.

Some key indicators are:

  • Liquidity ratio – current assets / current liabilities
  • Debtor days – average number of days your clients take to pay
  • Creditor days – average number of days you take to pay your suppliers
  • Stock turnover – average number of days you hold stock
  • Bank balance – how much cash you have
  • Cashflow forecast – projection of your daily/weekly cashflow requirements

The best way to monitor these is to create a weekly dashboard with the figures that are most relevant to you. You would not fly a plane without looking at the dashboard regularly, so why would you try to fly your business without doing the same?

So now you are measuring your cash flow regularly, how can you improve it? Some of the best and simplest strategies that I have used with clients are as follows:

  • Request or increase an up-front deposit from customers;
  • Ensure work is finished quickly and dispatched on time;
  • Invoice immediately or on a more regular basis;
  • Reduce your payment terms and charge interest to late payers;
  • Have a debt collection policy and apply it rigorously;
  • Review your overheads regularly;
  • Minimise stock holdings and order on a ‘Just In Time’ system;
  • Ask suppliers for better payment terms or discounts;
  • Realise old/slow moving stock and assets.

So now you know how, get out there and take action to sweep away those blockages and get your cash flowing faster!

Where are Your Profits Coming From?

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Where_Are_The_Profits_Coming_From_2The most important number in business is your Net Profit, yet how many of us look at this number when it comes back from the accountant at the end of the financial year and wonder how we arrived at that figure. One of the keys to creating a successful business is to constantly focus on the profitability in your business, in particular analysing and understanding what the main profit drivers are.

Few businesses rarely analyse the net profitability they derive from each of the different products or services they sell (and let me be clear that I am referring to net profit and not gross product). The exercise can be very revealing. When I have done this exercise with my clients they have frequently been amazed and yes, sometimes horrified to find out where the profits are coming from or in some cases – not coming from. Inevitably, within their stable of products and services there are some that are much more profitable than others. This revelation often results in significant changes in their pricing, business strategy and marketing focus.

Most of us know the net profit we make in our business each year but how can we calculate the net profit we derive from each of the different products or services we provide. Well in order to do this we need to fairly proportion our production and overhead costs to each product or service. The way in which I do this with my clients varies depending upon the nature of their business, however I have outlined below a fairly simple method, which best suits most service and manufacturing businesses. You will need to go repeat this process for each product or service.

Calculate The Gross Profit – From your sales price (excluding Taxes) subtract the Cost Of Goods and a charge for the time taken to produce or deliver the service. This will require an estimate of the number of hours it takes to produce or deliver the service multiplied by an average hourly production labour rate.

Calculate An Overhead Charge – We need to deduct an amount that represents a fair amount to cover the business overheads. To do this, divide your Total Annual Overheads by the Total Annual Production Hours. This will produce a figure, which represents the overhead cost per production hour. Multiply this by the number of hours required to produce or deliver the service (see step 1) and then deduct from the Gross Profit (calculated in step 1). The result will be an estimate of your net profit derived from that product or service.

Calculate The Net Profit Per Hour – So that you can compare each product or service, divide the Net Profit by the number of hours it takes to produce or deliver to calculate the Net Profit Per Production Hour. The products or services with the highest Net Profit Per Hour are the best.

There are alternative methods to coming up with this calculation and it may be necessary to use a slightly different approach depending upon the type of business.

The result of this calculation can yield some surprising results, which can horrify business owners. In one business I worked with, we were able to reduce their turnover from £1.3M to £1M, while turning around the business from losing £100K to making a profit of £100K, purely by eliminating non profitable product lines.

Business is a numbers game and there is no number more important than knowing your profits and where those profits are coming from.