Can you picture someone in business whose days are so taken up with worrying about lack of cash and lack of profitability that they scarcely have time for family, or for the lifestyle that is supposed to come from owning or managing a business?  Someone who spends six or even seven long days shackled to their business.

Do you have to imagine this picture, or have you been there at times and know what it is like.  Many small business owners have been there of course, imprisoned in their business.

If you can do the right thing, that is, concentrate on those things which will make a real difference to the business (i.e. increase your effectiveness) and give you a better return on your efforts (i.e. increase your efficiency) you will increase your cash flow and profitability.
Once you are freed from the shackles and back in control of your business you will spend less time worrying about cash flow and profitability and have more time on your family and lifestyle.

So what is the right thing?

Elsewhere I've written about the five keys which help unshackle you from your business (http://www.profitsleakdetective.com/articles/12--how-to-increase-profits-and-cashflow).  

An interesting recent article in Business Spectator threw some light on the fifth of these keys - Productivity.

"The accountancy firm Ernst & Young has undertaken some fascinating survey work on productivity in Australia as seen by staff. About 20 per cent of the Australian workforce believes their organisation can be improved by reducing bureaucracy and red tape; another 16 per cent believe simplifying processes would help and 10 per cent suggest eliminating wasteful output.

The Ernst & Young analysis into the productivity of a worker's average day found only 58 per cent is spent on work directly as 'real value'. However, another 24 per cent of the day was spent on networking and personal development and other organisational curricula activities that are important to both individuals and business performance.

But then there is left a whopping 18 per cent, or almost a fifth of the day, on work that is wasted time and effort."

Consultants Aptech Pty. Ltd. had a much more dismal view of productivity.  They suggest:

• Only 40% of time is spent on value adding or necessary work;
• Another 40% is spent on unnecessary work; and
• 20% on not working at all.

Ernst & Young's 18% on wasted time and effort would fit into Aptech's unnecessary work, examples of which were given as:

• working on the wrong things (do you know what are your wrong things?),
• preparation of reports that no-one reads,
• meetings that are of no value to you,
• making errors,
• finding & fixing other people's errors,
• interruptions
• redesign.

Either way, it is still a lot of time, and money.  Given your annual wage bill, what would your total organisational productivity wastage be valued at?

Productivity may not be the first key you use, but it is worth looking at.

© Copyright 2012 Adam Gordon, Profits Leak Detective
2nd February 2012

Unfortunately small business coaches and mentors such as me often only get called in to assist a business when times are tough and the business is trying to recover or even save itself.  It was thinking about the owners and managers I have known in that situation that lead to the last blog "Is your business overwhelming you?"

At such time people usually feel overwhelmed by the flood of demands on them, on their time and the need to make decisions.  And the more they are overwhelmed, the more their decision making deteriorates, leading to even more pressure and stress.

The blog looked at five underlying causes.

I suggested there was also good news, that there are solutions, and promised some practical remedies.  

So let's look at some of these remedies.

The Power of "No" - one source of overwhelm and stress suggested in that blog was just not saying NO to the endless demands on you.  Learning to say No is a powerful tool in improving businesses.  But it doesn't just apply to saying No to requests from others, sometimes you need to say "No" to yourself!  

Take short breaks - Face it, when you are working intensively, whether it is dealing with others, in meetings, writing something or making those important decisions you are processing a lot of information.  But your brain needs time to absorb that information. It just needs a short break.  

If it doesn't get that break, it gets stressed.  So reward yourself and give the mind the opportunity to meander.  When you finish a task at which you have been labouring, take a short break.  Get up and walk around.  Do something else.  It need be no more than 5 or 10 minutes.  Take your mind off the immediate task at hand and just let your mind wander.  You will be good to go for another round of productivity after your brain recovers.  This is not an excuse for procrastination, but a refresher.

Create momentum by breaking a big task into a series of small tasks - I'm sure you know the feeling.  Sometimes a big task confronts you like a mountain.  It's easy to feel overwhelmed as you don't know from where to start.  By breaking that mountainous task into a series of smaller tasks, and tackling the small tasks first you build confidence and create the momentum to take on the more difficult tasks.  And once you have momentum you keep moving forward.

Take one step at a time - Part of the overwhelm problem is trying to do too many things at once.  Remember that you can only do one thing at a time.  Focus on just one thing, do it, and you'll be prompted to finish another.   One step at a time.

The importance of clarity - your mind becomes clouded by the task at hand when you feel overwhelmed.  Often the problem comes down to a lack of clarity about that is important, and what is just a squeaky wheel.  The feelings of overwhelm and stress causes people to lose sight of what they're trying to achieve and what they need to do to achieve it.  And in the end, they never get what they want.

You have all those decisions to be made, jobs to be done, which should be tackled first?  So you need to step back and decide what is important.
Here are two useful tools to determine those priorities:

• Use an "Urgency - Impact" matrix. Sketch a matrix on a piece of paper, labelling one axis URGENT and the other IMPACT. Scale each axis from LOW to HIGH. Then work through all those decisions and tasks and place them in the matrix. Don't agonise on where to place each one. Your first impulse is probably right. Obviously you are looking for those that are "High-High" to concentrate on. Get rid of or delegate the "Low-Low".

• 5 Whys - Another useful technique to determine what is important is to start asking the question of 'why' you should be doing a particular task next. Then ask 'why' of the answer you get, followed by 'why' again and so on. Asking 'why' five times will give you a clear understanding of the importance of a particular job or task and its priority in your decision making.

Now you can focus on doing things that are important to you, instead of lots of unimportant tasks that overwhelm you.

Offer

One of the problems in being overwhelmed and stressed in your business is that you are sure to be earning less than optimal profits.  Yet it is likely that there are hidden profits in your business.  

I've been pulling together everything I've learnt in the last 20 plus years of working with small businesses to help them transform their businesses, their profitability and thus their lifestyles.

It is in a f*ree special report "How to uncover the profits hidden in your business".   I give two case studies where clients have uncovered hidden profits in their businesses, profits which were leaking away instead of flowing into their bank accounts.

And I look at some of the tools and techniques Iused to uncover the profits and plug the leaks and suggest more than 27 areas you should work on to transform your business.

You can access the special report here.  Trial it NOW!

© Copyright 2011 Adam Gordon, Profits Leak Detective
8th December. 2011

What causes Overwhelm and Stress

Have you ever felt that there were too many decisions you had to make in your business, too many competing interests for your limited time, not being able to decide which were the important decisions or what you needed to know to make decisions?  In short being completely overwhelmed by the flood of demands on you in running your business.

The more fraught you feel, the more your mind locks up, unable to be able to make even simple decisions. "Researches show that when under stress, the part of our brain responsible for logic and decision-making degrades. Instead, the part of the brain responsible for emotional and instinctive responses takes over." (Lawrence Cheok)

And because you have so many jobs to complete and decisions to make, you work longer and longer hours, and take increasingly less time off. The result?  You get sucked into the never-ending list of to-dos and end up feeling overwhelmed and stressed.

That overwhelm and stress leads to poorer decisions, and so the cycle goes on.

Looking at this in more detail there are a number of factors which lead to these feelings.

Poor decision making - it happens.  We all do it; make a poor or even bad decision.  As they say, 'the person who never made a mistake, never made a decision".  The problem is that poor or bad decisions lead to less than optimum outcomes, and that ground has to be recovered, time in which you could be doing something more useful.

Expectation -A major source of stress and anxiety is your own expectations on a particular result.  Many people place unnecessary pressure on themselves In trying to satisfy that expectation, thus causing stress.

Overburdening yourself - People often take on too much, either because they don't delegate properly, or they are trying to please others.  Many people are just not good at saying NO.  Saying no is a powerful tool in improving businesses.  Good intentions are one thing, but not if they lead you to commit to more than you can realistically take on.  Your time and energy is just drained away.

Near enough is not good enough - Do you take pride in being a perfectionist?  Needing to do everything perfectly often leads to things not getting done at all, and not getting it done, finished, launched or whatever leads to feeling overwhelmed by the task at hand, and all the others piling up behind it.  More stress.

The Need to Control - Are you the type of person who feels they need to be in complete control of everything.  It is not an uncommon feeling when running your own business.  After all, you no doubt started small, even as a one person operation, and gradually built up the business.
The problem is, as the business grows you cannot do everything yourself.  But you may feel that others are not able to do the particular task as well as you, which may well be right.  

So you find yourself doing or wanting to do everything yourself, but at the realization not have the capacity to do it all.  The end result can be left feeling overwhelmed at the mountain of tasks that needs to be done - by you.

The good news is that there are remedies, and I'll suggest some practical remedies in your next blog.

© Copyright 2011 Adam Gordon, Profits Leak Detective
24th November. 2011

If it wasn't tragic it would be farcical

A recent report in Air Transport World (atwonline.com) on the crash of Yak 42 which killed 44 of the 45 people on board has some lessons, even for small business.  

First the report.

Russian investigators: String of circumstances caused Yak-42 crash

The Interstate Aviation Committee (IAC) investigating the Russian Yak-42 crash at Yaroslavl Airport (IAR) has determined that a series of circumstances-improper crew training, poor coordination between the crew, and the pilots' failure to follow standard takeoff procedures-caused the Sept. 7 crash.

The Yak-42 crashed on takeoff about 2 km. from the IAR runway, killing 44 of the 45 people onboard.   One crew member survived.

According to the IAC, during the preflight preparation, the crew did not properly calculate the take-off weight and weight balance and did not accurately compute the take-off distance for the aircraft weight. These miscalculations led to mistakes in determining the decision speed-190 km. per hr. instead of the necessary 210 km. per hr., IAC said.

During takeoff, the pilot or copilot inadvertently activated the brakes while pulling on the controls to lift the nose, slowing the acceleration of the aircraft, according to the Flight Safety Foundation's Aviation Safety Network (ASN).  (Not really made explicit in this article is that they had never sat in the cockpit with an instructor, and as a result one of them at least had his feet on the brake pedals thinking they were the rudder pedals and was pressing harder and harder trying to hold the aircraft straight while more and more thrust was being applied to try to overcome the brakes.)

The IAC noted the Yak-service pilots received their main flight experience on the Yak-40 aircraft, which has a different footplate construction than the Yak-42.

The investigation also revealed the first officer had health problems and took Phenobarbital, which is forbidden for pilots because it has a negative impact on the nervous system, according to the ASN.

The opening paragraph really sums it up:

• Improper training;
• Poor co-ordination and presumably communication
• Failure to follow standard operating procedures

In a recent newsletter (PLD 85, What if it all goes horribly wrong - and could have been prevented?) I wrote of a family business that undertook a major expansion and, within 15 months, had failed, at considerable cost to all involved.  

I said "What went wrong? It is often said that a business can stand one thing going wrong, and often two things going wrong at one time, but it cannot stand three adversities. This business got hit by three adversities."

In that case two of the three adversities were external.  The point of the newsletter was the need for proper risk management.  No attempts appear to have made any to identify what could go wrong and the likely impact of any such event. Building a sustainable business requires on-going risk assessment and management, a precaution that had been neglected in this case.

In the case of the Yak-42 all three adversities were internal, and therefore able to be directly remedied by management.

And just look at the three issues, training, communication and procedures, all critical to developing a sustainable business.

How well does your business fare looking at these issues? Are you likely to get airborne and successfully reach your destination, or fail at some point during your journey?

© Copyright 2011 Adam Gordon, Profits Leak Detective

Try and visualise this: your entire potential market can be represented as a dartboard.  Each of those coloured areas bounded by a number and by the rings on the board is a possible segment in the market place.  And each segment has a different score,  the potential value of that segment.

That dartboard with all its segments is everyone who could possibly be in your potential market.

There's just a couple of problems:

• Have you Googled 'everyone' lately? Try it. I bet you won't find anyone you recognise as a customer.
• "The most certain way to go broke, and stay broke, is by insisting that everybody is your customer. It could be true that everybody could buy your product but is never true that everybody is motivated to buy your product. Everyone is not your customer." Dan Kennedy

By targeting everyone you are likely to get no-one!

Let's come back to our dartboard. And our darts.  Imagine you have three darts, and those darts represent the time and money you have available to invest in winning customers for your business.

Are you just going to fling those darts at the board, and be content with whatever segment you hit, and the score it gives you?  
Or are you going to aim at those segments which give you the highest score.  Depending on the game you are playing that could be the triple twenty, the outer-bulls eye, and the bullseye.  

Clever marketers target their highest probability prospects, their ideal customer, the 20% who provide 80% of profits, and don't worry at all about all the other segments in the marketplace, the 'everyone".  You are playing 'blind darts' if you just throw and hope.

So how can you refine your targeting, to guide your darts with more precision?  Well, the obvious thing to do is to know as much as you can about that target;

Here is a good list of questions you need to explore:

1.    What motivates him/her?  
2.    What problems, issues, pain, predicaments or challenges are they facing?
3.    What are their needs and burning desires?
4.    What are their fears?
5.    What are their frustrations?
6.    What are their questions and doubts?
7.    What objections do they have?
8.    What are the triggers that prompt action?
9.    Where are they?

Knowing who and where your customers are empowers you to target them more effectively.  Once you can answer those questions you are in a good position to develop the marketing tactics you need to reach each of those targets.  

By marketing tactics I mean the 7 'Ps" of the marketing mix: position, product, promotion, price, place, process and people.

You will also be able to create the USP (Unique Selling Proposition) and Core Marketing Message that will apply to that segment.

The next step is to picture that ideal customer. In fact go beyond that; describe him or her.  Write a couple of paragraphs about that customer, their age, where they live, are they married, children, how do they dress, the car they drive.

The reason? When you come to write to your promotional material you will be speaking to them personally, a one-to-one conversation with the client most likely to buy your product or service.

A message targeting everybody targets nobody.  You are targeting those motivated to buy.

Use the dartboard to help develop communications that will speak directly and effectively to your identified audience... very powerful!

© Copyright 2011 Adam Gordon, Profits Leak Detective