The Up and to the Right | Small Business | Practical, Actionable, Sustainable Improvements

See the full Show Notes: https://b50p.info/uattr052
What did Newton Know about Creating Impact as a Small Business?
Everything we need to know about making an impact as a small business... Newton knew in 1686!? Really?
Newton’s 2nd Law states that Force = Mass * Acceleration.
How can understanding one of the fundamental laws of physics help us make an impact as a small business?
Is changing the world as easy as Force = Mass * Acceleration? Well yes... and no.
Let's rewrite that a bit. 
Mass = Resources
Acceleration = Momentum
Force = Impact
How about Impact = Resources * Momentum?
You get the idea. There are advantages to thinking about business from the perspective of physics.
Let’s get… mechanical!

Everything we need to know about small business communication... Newton knew in 1686!? Really?

An object at rest tends to stay at rest unless acted upon by an outside force.

An object in motion tends to stay in motion in the same direction unless acted on by an outside force.

If these trends sound familiar ... 

A customer who is happy tends to stay a customer unless there's a sale at a competitor.

A rock star employee tends to stay a rock star unless we eliminate performance bonuses.

You get the idea. There are advantages to thinking about business from the perspective of physics.

Let's get... mechanical!

Show Notes: https://b50p.info/uattr050

Consuming content has become a byword. We all want to learn and grow personally and professionally. To that end, we read or listen to books, watch videos, take online courses, and consume any number of other types of content.

Have you ever stopped to consider whether or not the content you’ve consumed has actually generated a beneficial transformation in your business?

How do we get the most benefit from the information we read, watch, or listen to? How do we drain these content creators dry?

Let’s get… draining!

Show Notes: https://b50p.info/uattr049

A small business startup can be overwhelming. So much so that many people choose not to and many of us who do start small businesses often miss a piece of the small business puzzle.

In this episode, I’m going to share three things you need to do when you’re starting your business that might not be on your list… yet!

Let’s get… started!

Full Show Notes: https://b50p.info/uattr048

When Should I Hire a Consultant?
Hiring a consultant is bringing an ‘outsider’ into your business and can be an intensely personal experience.

What’s in this episode for you?!

When should you hire a consultant?
We’ll talk about hiring consultants in small businesses and my own 2020 adventure in bringing help into my own business.
There are 3 consultants every business owner should have… what are they?
You’ll find highlights below. Watch the livestream recording or listen to the podcast version on your favorite podcatcher for all the details!

When Should I Hire a Consultant?
What is a Consultant?
In order to understand when it’s time to bring in a consultant let’s talk, first about what a consultant is.

This may seem basic but it’s important to be clear about it.

A consultant is someone from outside your company that brings needed expertise or resources that will benefit your business.

Most often we think of engineering services, marketing or business management ‘consultants’ with varying degrees of trepidation or even loathing.

The trepidation and loathing is a product of consultants who don’t take their craft and customers seriously. I’m sorry if you had that experience.

For what it’s worth… to me small business is as serious as the 50% of the economy that it represents (which means I take it seriously).

When Should I Hire a Consultant?
I have found two criteria that make this very simple.

When you find yourself needing to accomplish something that you’re not objectively qualified for.
If you don’t like doing it but it still needs to get done.
How Do I Know What to Hire a Consultant for?
Break down what needs to be done, what skills are needed to achieve those goals, and then match those to your own skillset.

Get referrals from colleagues who have experience with a consultant in an area you need who got results similar to what you’re looking for.

Get to know the experts you're considering. You’ll get a lot more benefit from someone you enjoy working with.

Let's roll up our sleeves and get to work!

Jeff Allen, Allen Service, Plumbing, Heating, and Air

Jeff, his brother Mike, and the team at Allen Service, Plumbing, Heating, and Air, have been operating as an ‘essential business’ through the current crisis. A small business succeeding during the COVID-19 pandemic, Jeff and his team prioritize employee and customer safety while still providing quality services. 

I’ve always thought that heating, ventilation, and air conditioning (HVAC) systems in our homes were for comfort and convenience. I learned from Jeff that our indoor air often has more contaminants than the outside air and that modern HVAC systems can clean the indoor air we breathe, making it safer. They have been able to not only operate during the current crisis but offer products that can reduce the contaminants and contagions in our homes.

As you can imagine, after nearly 60 years in business Allen Service has been through a lot, and Jeff shared his experience and practical action you can adapt to your business situation.

Contact Jeff & Allen Service

Allen Service, Plumbing, Heating, and Air

“The name you know and trust.”

970-286-0359

https://www.allenservice.com/

A Brief History of Allen Service in Northern Colorado

Jeff introduced us to Allen Service as the name you know and trust in plumbing, heating, and air in Northern Colorado, serving only residential (non-commercial) customers. After nearly 60 years as a local small business, it was interesting to hear how and why they chose to move away from commercial customers.

One of the key takeaways was they have optimized their business, processes, and training to focus on and deliver the best possible service for a specific customer segment. By concentrating their efforts, they have been able to consistently grow their business while maintaining high-quality service.

Allen Service as an Essential Business

Colorado classified the plumbing, heating, and air conditioning industry as ‘essential’ during the economic shutdown. This designation allowed Jeff and his team to hone their business processes to deliver critical services during this challenging time in a way that has minimized the risk to Allen’s customers as well as their team members.

As we all spend more time in our homes to reduce our exposure to the pandemic, we become more aware of issues related to our HVAC or plumbing systems, which Jeff and his team can address safely.

Additionally, as I mentioned earlier, I learned that our indoor air quality is often lower than the air quality outside. There are modern solutions that can reduce allergens, contaminants, and even contagions from our home environment. 

Zero Contact

When the pandemic began to impact business operations in the US significantly, Jeff and his brother Mike made adjustments to their work processes to create a ‘zero contact’ service. They achieved this by adding additional personal protective equipment (PPE) such as masks to their existing practices.

Customer Safety & COVID-19

Allen technicians have a defined procedure that Jeff details during our conversation that allows them to contact the customer and perform the service in a way the eliminates contact between the technician and the customer and minimizes the technician’s impact on the home.

Employee Safety & COVID-19

While keeping zero contact between the customer and service technician is an excellent step to keeping employees safe, the management team at Allen Service has also taken steps in their offices to reduce employee interaction and possible contamination. Jeff and Mike’s extra precautions have reduced the risk of transmitting the virus among their team with excellent results.

Indoor Air Quality

I’ve known Jeff for a while, and I knew he would have a lot of great experience and expertise to share. I didn’t realize that there is technology available to us through our HVAC systems that will help remove the allergens, contaminants, and contagions from our indoor air. Jeff shared that by installing these economical add-ons to homes, their team has an immediate impact on the health and quality of life of Allen Service customers.

Managing a Remote Workforce

Many of the Allen Service team members are now working remotely to minimize the risk of exposure. While this takes some getting used to, it has provided the opportunity for Jeff and his team to experiment with operating processes that offer benefits that employees enjoy, improving the work experience for his team.

Actions & Results

Jeff and Mike Allen have demonstrated that small businesses can create ways to operate safely during a pandemic. By taking stock of the facts, they developed policies and processes that keep their customers and team safe while still delivering the quality service northern Colorado expects from Allen Service, Plumbing, Heating, and Air.

• Look at the facts, not the fear.
• Identify how your business can have a meaningful impact.
• Take care of your customers and your team.

Wrapping it all Up

Do you have an innovative solution to a COVID19 problem or another difficult business situation? Email me at [email protected] to be a guest on the show… share your message!

Click the link above or use your favorite podcatcher to listen to the full episode.

Thanks for watching or listening!

Up and to the Right is live weekly - check the Podcast Page for details about when we're live and where!

You can subscribe to the Up and to the Right podcast on iTunes, Stitcher, Google Play, TuneIn, and now there’s even a playlist on the Beyond 50 Percent youtube channel!

Full Show Notes & Resources: https://b50p.info/p2p001

Being a small business owner is challenging in the best of times. During periods of economic uncertainty that challenge becomes more difficult. In 2020 we're faced with those economic concerns but they are combined with a serious global pandemic and the groundswell of difficult but necessary social and cultural shifts.

Any one of these would be stressful enough on its own but combined it is understandable that many of us are under a great deal of stress.

Social distancing has, in large measure, removed some of our traditional coping tools, many recreations and social support.

I hesitate to use the term 'unprecedented' which seems to be getting thrown about; however, it's clear that we are living in a difficult time. 

As I thought about all of this I wanted to find a way to pull back the curtain on our isolation. Rather than just finding solace in shared difficulty I wanted to produce a show that allowed business owners to share their own experiences and thoughts with other owners as well as share with the customers the best way to safely support local businesses.

Let's pivot to profit!

Introduction to the Pivot to Profit Segment

In this first episode of my new segment I just want to let listeners know what to expect and share a bit of my own experience on the two businesses I own and operate.

My Three Goals:

1. You are NOT Alone!
2. Share Experience & Successful Actions
3. Share Safe Ways to Conduct Business

First of all the regular episodes of Up and to the Right will continue. Pivot to Profit is a supplementary audio only production designed to complement the regular show.

The focus of Pivot to Profit is to have real, on the ground, discussions with business owners just like you. I want to make sure that business owners know that they are not alone during this difficult time. There are a lot of us out there coping with similar problems. We can learn from each other and that’s a huge part of the value of this segment.

The second piece is the opportunity to share actions both successful and less so in order to help each other learn and grow and continue to operate during this crisis.

Finally, I want to provide business owners the chance to share safe ways for their customers to purchase products & services. This may provide listeners with ideas for their own business as well!

My COVID19 Experience

As you probably already know I own and operate two distinctly different companies; Directed Energy & Beyond 50 Percent.

Directed Energy provides high voltage & high current pulsed power equipment for a variety of international markets. It’s a niche business but relies on the international economy and the needs of a relatively narrow list of customers.

Beyond 50 Percent is a service based consulting practice I started to help entrepreneurs and small business owners.

Directed Energy

The impact of the pandemic on Directed Energy has been very serious. Our sales dropped substantially and after a few months of reduced income I had to make the decision that business owners never want to make. I had to let team members go. 

These were people I’ve worked with for over 10 years so they are friends as much as coworkers. One thing that made the situation better was that I have always been very up front about the financial position of the company and going into 2020 that made it clear that employment positions would have to be eliminated.

I’ve reduced expenses and worked with vendors to put Directed Energy in a cash neutral position. The good news is that we are able to continue operating, serving customers and shipping product.

The takeaway is being able to recognize the action required and taking it even when you really… really… don’t want to.

Beyond 50 Percent

The business for Beyond 50 Percent is significantly different than that of Directed Energy. As a professional consulting services company there is no inventory to hold and no direct employees aside from myself. I use carefully selected independent contractors for accounting, marketing, graphic design, web development and other business services. This provides much more flexibility and reduces the direct impact of COVID19. However, I had decided to put more of my time into Beyond 50 Percent and arrange Directed Energy so it needed less of my direct input.

For Beyond 50 Percent I’ve had to change my growth expectations for 2020… not what I’d hoped for but I’ve taken time to hone my messaging, tweak the website and take care of other ‘background’ business operations so I’ll be better positioned to move forward.

You’re Not Alone!

As I mentioned before and I want to say it again because business owners often feel isolated.

“You’re not alone!” There are a lot of us out there and we really are all in this together as a small business community.

Actions & Results

The actions I’ve taken have been:

Stay in Control of Cash

Reduce Costs (even when it hurts)

Reminder: What is a Business Principle?

When I talked about what made a business principle I ended up here:

A business principle is a concept that is both foundational and relevant to all businesses.

This set a pretty high bar when it came to identifying what were business principles and what were strategies, missions and tactics.

Profit made the cut and that’s what I want to cover today.

Why Profit?

Profit is the standard measure by which companies large and small are evaluated. While profit alone doesn’t create a full picture of a business, it is used frequently as a shortcut or first order tool to determine how a business is doing.

More importantly, profit is a good indicator of the direction of future cash flow. As a rule, if net revenue is positive and our business is profitable then it is generally true that cash flow is also positive. Of course, there are a lot of factors that impact this but it’s a good start. 

A Note about Non-Profits

Are non-profit organizations (NPO) exempt from profit concerns?

Yes… and no.

While it’s true that non-profits don’t have to worry about making a reportable profit, they do have to worry about the direction of their cash flow.

When it comes to NPOs the ‘profit’ they need to be concerned about is how well they are able to magnify the effect on a cause of a donor’s contribution over the ability of the individual donor to make an effect themselves.

Get OK With Profit

Before  we go any further we need to get okay with profit. There’s a lot of misunderstanding and misinformation about business and profit in general. The term ‘profit’ itself seems to have gathered a negative connotation in today’s popular culture. If a news story comes out about a large company doing something that appears to put profit before people then it reinforces this negative stereotype.

Well, I’m here to tell you that businesses need to focus on, be comfortable with and even seek (yes… SEEK) profit.

We use the cash generated by our well run business to:

• Run the Business
• Pay Down Debt
• Increase Working Capital
• Fund growth
• Create an Emergency Fund
• Give to Charity
• Create Owner Value

These and all the ones you can think of that I didn’t list are reasons that we need to be comfortable with and plan our businesses around profit.

Factors That Put Pressure on Profit

As you can imagine there are a number of factors that put pressure on profit. Some put pressure to reduce profit and others add pressure to increase it.

Downward Pressures

• Competitive Landscape
• Customer Expectations
• Economic Environment

Upward Pressures

• Growth Funding
• Owner Return & Benefit
• Operating Costs
• Savings & Emergency Planning
• Future Company Valuation

Ethical Considerations - How Much is Enough?

So… the inevitable Question… “How much is enough?”

Honestly, this is a question only your conscience and your customer base can answer. 

My input on this is pretty simple. If you offer a product or service that is either unnecessary or easily replaceable with an economic alternative then you are free to profit to whatever extent the market will bear. 

If you sell wakeboards for boating or jewelry you can let the market forces guide your profit. This is because neither of these are necessities.

I like the example of a Rolex vs. a Timex. Rolex is free to profit as much as their customers will allow because Timex and other watchmakers offer economical alternatives so customers are now bound to the Rolex product.

When you offer necessities like food or medical products/services there is, in my opinion, a moral duty to develop a business model around ‘reasonable’ profit.

I realize that ‘reasonable’ is ambiguous and represents a moving target. I think of this as a thought experiment and guideline to consider depending on your business.

Basically… something to think about.

Service Based Businesses & Profit

Is it possible for service based businesses to achieve 100% profit? You know… Revenue - Expense = Profit with “0” Expense?

Well… no.

Your service based business will always have one expense and that’s you. If you think you’re achieving 100% profit you are not paying yourself.

To better understand the operations of your business pay yourself a competitive salary and evaluate your business with its true costs in mind.

Practical Action

Watch Your P&L

Regularly review your Profit & Loss Statement (aka Income Statement) and look for profitability and trends over time.

Use this information to restructure the parts of your business that impact your profit.

Use Profit to Test Business Changes

You can use profit to test new products, price points, markets and customer segments.

Plan for Profit

Whether you offer physical products or professional services start with the idea of profit when you design your offering. If a product can’t meet the profit requirements of your business it needs to be redesigned, replaced or simply discontinued.

How do you achieve profit? Drop a comment with your thoughts. Connect with me to keep in touch and share ideas!

Reminder: What is a Business Principle?

When I talked about what made a business principle I ended up here:

A business principle is a concept that is both foundational and relevant to all businesses.

This set a pretty high bar when it came to identifying what were business principles and what were strategies, missions and tactics.

Cash management made the cut and that’s what I want to cover today.

Why Cash?

Using cash instead of a form of barter system allows us the flexibility to delay purchases, store value and sell goods & services to one market while purchasing goods and services from another. This provides for a wide variety of products and services and flexible timing for purchases.

Why is cash management a business principle?

Managing cash is essential for business. Without proper cash management businesses cannot continue to pay employees and vendors; purchase inventory or expand and grow.

Additionally, cash management is applicable to all businesses since all businesses must have transactions in order to continue operations.

Cash Considerations for Business

• Cash vs. Profit
• Cash In
• Cash Storage
• Cash Out
• Cash Planning

Cash vs. Profit

We need to get this right from the beginning cash and profit are related… but not directly. Positive cash flow means that the cash you have coming into the business is greater than the expenses, investments etc. that you must pay and does not take into account a number of transactions like depreciation that will affect your profitability but not your cash.

If you’re not clear on this, discuss it with your accountant so you get a general understanding of these differences.

Profit is an accounting construct used for business analysis and taxes. 

Cash In

How cash is collected can have a significant impact on our cash management and our expenses. Delayed cash in from customer credit and credit card fees add to the complexity of cash management.

While there’s no ‘one size fits all’ plan it’s important to understand the consequences of your cash collection and to be intentional about it.

Cash Storage

In many ways the literal storage of cash is less an issue than it once was there are still a number of considerations to keep in mind if you do store actual cash as well as where you put your money (checking, savings, money market, investments, safe… etc.). 

Cash Out

One of the most important aspects of our relationship with cash is how we use it. Who has access and authority to distribute cash (write checks, pay bills etc.). Who has access to using the company credit card (yeah… that’s cash too really)?

Cash Planning

As important as understanding how cash is used another key is when it is used. Business owners must stay in control of the ‘when’ of cash. Remember that you have control of your cash until you’ve mailed the check!

Practical Action

1. Don’t take cash or cash management for granted!
2. Understand how cash moves in your business and why.
3. Keep and eye on trends and act quickly to changes.