Mar

Failing Forward

Unfortunately too much of our childhood is focused on passing tests and being “perfect”.

The reality is that:

- Barry Bonds missed a lot more pitches than he hit home runs.

- Edison failed at building the light bulb many many more times than he succeeded.

- The founder of IBM, Thomas Watson, got drunk one night and lost his entire inventory to theft.

- Einstein clashed with school authorities and didn’t believe traditional schooling could succeed.

- Neither one of the Wright brothers received their high school diplomas, and think about how many planes they crashed before the first one flew.

Maybe you are focused on the wrong thing. Success is not likely to find you on your first try. However, if you keep trying, keep failing, and keep getting up and trying to reach your goal, then you can count yourself among the list of great men above.

Don’t give up. Giving up will ensure our ultimate failure, but if you keep trying, keep failing, and keep learning you will eventually have the experience, wisdom, and tenacity that it takes to succeed in a very big way.

Genius is one percent inspiration and ninety-nine percent perspiration. ~ Thomas A. Edison

79 days ago Short URL Comments

Inspirational/Strategy

failure/growth/skills/success/truth

Jan

How Much is My Business Really Worth?

What Is My Business Really Worth? From a financial point of view, considering what your business’ real cash value might be is a valuable exercise. It’s always worth understanding the reality of our business world so we can act responsibly and lead wisely.

There have been thousands of books and articles written on the subject of business valuation, so I’ll leave the in depth explanations to those authors. The simple calculation you can do to look at your value right now is this:

Income -(minus) Expenses x(multiplied) by a factor of anywhere between 2 and 6 based on your industry.

As a small business owner in most cases you’re really looking at what you draw as a salary and profits out of the business. So if you did $500,000 in sales last year, and your net profits and salary totalled $75,000 your purchase value could be anywhere form $150,000 to $450,000.

What Factors Make My Business Sellable?

If you walked into the business down the road from you and it was for sale, what would you look for? There are a two things that I would look for before I would consider purchasing a business. Without these two items clearly in view I wouldn’t even ask for a full financial statement, or take any other steps towards purchasing the business. If these pieces are in place it makes it much easier for you to court interested buyers. Even if you aren’t looking to sell taking this approach will make it easier for you to get financing, and grow your business in other areas.

1. Do You Have Solid Systems in Place?

If you can’t immediately answer yes and bring to mind the systems that help your company operate smoothly then it’s time to look at implementing a systems approach to everything. Anyone that I have ever seen implement systems into their business benefits in the short term and long term. When you research and develop systems for each area of your business you build your business’ value as well as the value of you and your team. Systems thinking and implementation is often the difference maker between struggling to make it and succeeding as a small business owner.

2. Can You Identify Profit Centers in Each Department?

Instead of just looking at your business as a whole, consider what each different department or segment does individually. If you have a product division and a service division then you should be able to justify each divisions existence based on it’s individual profit and loss sheet. If one of the divisions only exists to boost your core business and does not make a profit, be clearly aware of that. This question really ties back into the first question about having systems, but it’s an important thing to consider as your grow and stabilize your business.

When I can have an intelligent discussion about these two questions with a small business owner, systems thinking and profit centers, I know that they’ve been planning and implementing growth strategies for a long time. Personally I always have to consider my own actions on a daily basis to be sure that my daily objectives line up with my long term goals in the area of growth and stability.

We have just scratched the surface of business valuation today to help you begin thinking about it. What are you doing to implement systems and more focused profit centers in your business?

488 days ago Short URL Comments

Finance/Small Business Resources

business valuation/goals/growth/objectives/profits/sales/systems

Dec

What’s Next on GabeArnold.com

Around this time of the year I like to take time to reflect on what I’ve done and look forward to the coming year. I lay out my goals and take time away to think. That’s why you haven’t heard from me in a few days. I hope you had a terrific holiday and that you are coming back to a productive and profitable week. Here’s what’s coming next (my rough outline of the next few weeks of posts):

Setting and Achieving Goals:

1. What is the goal?

Describe it clearly
What will it take?
What is the time frame

2. What objectives will it take to reach the goal?

Break down the steps
Daily review
Weekly review

3. Accountability

Be public about your goal
Track it publicly
Ask someone to personally hold you accountable

What is an Entrepreneur?

1. Thinking Large From the Beginning

Building with systems
Building to scale
Mass market appeal

2. Someone Who Provides for Others

Grow your business for others
Grow other leaders around you
Impact your community

3. Resilience

Mistakes are our education
We know businesses fail
We can remake ourselves

Small Business Financial Success

1. Five Things I Wish I’d Known About Finances

Pay yourself first – no one else will
It’s your money, you decide when and where it goes
Monthly expenses will eat you alive
You don’t have to pay your bills on time
You don’t have to pay “prevailing wage”

2. How Much is My Business Worth?

It’s not worth much unless you have systems
Rule of thumb 1.5 times revenue
Are you building to sell?

3. Five Ways To Save More Money In Your Business

Review Your Checking Account Thoroughly
Eliminate Services You Haven’t Used Within 30 Days
Trim Down Existing Services
Turn Down the Heat
Eliminate Wasted Labor

4. In Depth Cash Flow Analysis

Review Your Statements and Categorize Expenses
Look at Actual Collection Amounts
Build a Spreadsheet
Split Revenue Into Categories
Check Your Pulse Monthly

5. Make More Money Without New Products, Services, or Customers

Negotiate better pricing from vendors
Ask customers if they need more
Ask Your Team How To Make

That’s your sneak peak! If you have any thoughts on one of these points specifically, or if you have something else you’d like me to cover, please let me know.

Here’s to your continued growth and success in 2011!

508 days ago Short URL Comments

goals/Small Business Resources

business/customers/goals/growth/management/sales/small business/success

Dec

Balancing Care With Candor – From John Maxwell

Over the years I’ve found John Maxwell to be an incredible inspiration to me. His words of encouragement to me as a leader have a lasting impact. I don’t usually repost, but I feel like this message needs to be shared anywhere possible. Here is an excerpt. You can read more at his blog.

Every person makes mistakes at some time in the workplace. Everyone needs someone to come alongside them to help them improve. If you’re a leader, it is your responsibility and your privilege to be the person who helps them get better. That often begins with a candid conversation. But before you have it, it helps to ask yourself what the nature of the problem might be.

My friend Sam Chand says that when he is having difficulty with a person he asks himself one simple question, “Is this person a can’t or a won’t? Can’t is about abilities. We can help these kinds of people in most cases—not in all cases, but in most. But won’t is about attitude. If the issue is attitude, the time to let that person know there is a problem is now, because here is the deal: we hire people for what they know and fire them for who they are.”

I believe that people can improve their attitudes and their abilities. And because I do, I talk to them about where they’re coming up short. If you’re a leader and you want to help people, you need to be willing to have those tough conversations. So how does a leader handle being relational while still trying to move people forward? By balancing care and candor.

Care without candor creates dysfunctional relationships.

Candor without care creates distant relationships.

But care balanced with candor creates developing relationships.

Here is how care and candor work together in leadership:

Caring Values The Person While Candor Values The Person’s Potential

To lead successfully, it is important for you to value people. That is foundational to solid relationships. Caring for others demonstrates that you value them. However, if you want to help them get better, you have to be honest about where they need to improve. That shows that you value the person’s potential, and requires candor.

Gabe Arnold

Tagged with growth …