A friend of mine once decided he’d try his hand at consulting. “What’s your objective as a consultant,” I asked. “Simple,” he replied, “to sell more consulting!”
I have to admit that consultants have earned a bad rap with attitudes like this. As a business owner, you’re not going to get value from hiring someone to nod their head and tell how great you’re doing. Rather, a real Trusted Advisor should be able to help reveal issues, obstacles or solutions that aren’t clearly evident to you and that can add to your revenue, your cash flow and your bottom line.
A recent Manchester Consulting Group study of Fortune 100 executives found an ROI of 5.7 times the money paid for coaching services. Imagine paying out $2 and getting $5.70 in return – pretty good odds at the track, but an astounding return on investment for a business!
And Entrepreneur Magazine listed included the following as top reasons business owners hire a consultant:
To obtain specific expertise.
In an escalating market such as this, there are likely areas where you’d like to engage, but don’t have the experience or skills on staff to get the job done. Social Media, product development, or merchandising are areas that few businesses have sufficient expertise in house to be effective, and where hiring a consultant could yield a strong ROI.
To identify problems.
Face it, most of use are too close to our businesses to see all the issues. We might think we know what they are, and can feel the effects of any inefficiencies, but it often takes a more objective perspective to help us see beyond the weeds.
To act as a catalyst for change.
Company cultures, even in the smallest businesses, are inherently anti-change. Oh, we want better results, but want others to change, not to change ourselves. It’s just human nature. An outside advisor can often provide the needed ‘kick in the pants’ to effect needed change.
As a business owner, you want to be the best leader you can be; to evolve and grow. But running a business allows little time for self-growth. A business coach can help you focus on the right areas, and learn best practices quickly. You believe in ‘OJT’ for your staff, right? This is on the job training for you!
To bring new life to an organization.
Even the best teams can get stuck in ‘the way we’ve always done it’ thinking. Brining in an outside expert can often break through old thinking by implanting and nurturing more current processes and systems.
So, there are five reasons why you may want to consider hiring a consultant, coach or advisor. If this makes sense, and you’d like some help finding the right advisor for your needs, well that’s what we do here at Cash Flow Engineering. Just give us a call and we’ll make a qualified recommendation based on your companies size, location and needs.
If you don’t know your 7 Key Numbers, you’re not alone – but almost certainly losing money that you should be pocketing!
The 7 Key Numbers concept is one of the foundational elements of Cash Flow Engineering®. These are the seven specific areas of every business that control your cash flow. They are simple, universal, and yet nearly always overlooked (ask your accountant what they are and you’ll get a blank stare.)
But knowing these seven numbers – and understanding how to use them – unlocks the power to ensure consistent, predictable and sustainable cash flow in your business. So it’s worth a few minutes for you to learn what they are – and to identify YOUR 7 Key Numbers.
Here they are:
Know that you know them, how do you use them? That’s what our company, Cash Flow Engineering, LLC is all about – teaching business owners, entrepreneurs and key managers how to use these tools to increase revenue, control costs, reach higher goals, and build stable, thriving companies with consistent cash flow
We currently offer three levels of engagement, one of which will be perfect for you. Click the links below to learn more about our services and how you can master your cash flow quickly and permanently.
Cash Flow Mastery – Learn on your own through this entry-level online course.
Cash Flow Mastery–Platinum – Advanced course includes monthly webinars, Q&A calls.
The 90-Day Cash Flow Makeover – A 13-week crash course in gaining and maintaining control of your cash flow.
Not sure which course is right for you? Give us a call at 606-416-2078!
Objectives are the stepping stones – the measurable results – that tell you where your are in relation to your vision. While the vision statement expresses where you want to be quantitatively, objectives clarify and quantify the components that will get you to your ultimate goal.
The key to setting meaningful Objectives is to identify goals which are:
Why create measurable objectives?
Measurement leads to obvious insights into what works and what doesn’t, so decisions become easy to make.
Measuring gives you numbers you can trust and that trust turns into confidence about your decisions. Confident decisions lead to rapid profit increases. Confidence also leads to peace of mind. It makes operating your business so much easier, with less stress, less pressure, more clarity and results. However, you should write objectives only for your most important goals – more is NOT better!
And here’s the best part: By creating these metrics you can focus on “finding money from nowhere”. Every business has it, and you will “find” this money by knowing what, when and where to measure in your business. Measuring always releases money, like magic. The more you measure, the more magic you create and the more profit you find.
Remember when you made that decision? Maybe it was a long time ago, or maybe you are still struggling with taking action. Either way, the passion you had is likely still palpable. But is it still as strong?
Now, move back to the present. You’re the owner of your own company. You’ve taken the action and made the commitment. What does your company stand for? What’s its purpose?
You will likely answer that question in a factual, non-emotional way: “Our business exists to provide X to Y.”
The purpose of your business is expressed in your Mission Statement. The Mission Statement describes your target market and the key benefit (or unique selling proposition) that you offer. It answers the questions:
But is that mission in alignment with your passion – the reason you started your company to begin with? That passion – what you want to do, become and accomplish – is described in your Vision Statement.
Vision statements are passionate, future-based and internally focused – they are meant to motivate, inspire, give direction to and unite your employees and team. The Vision Statement answers the question, “Where do I see my business going?” Your mission statement is externally focused. It is about your relationship with your customers, and answers the question, “Why does my business exist?”
Without a vision statement, you can lose your focus and stray from your passion. It’s not uncommon for a business to ultimately become something far different from what was envisioned at the start. For those that keep following their passion, that becomes something wonderful and exciting. But without a clear vision statement, one can lose control. And lack of vision is the destroyer of passion.
How to write a Vision Statement: http://www.cashflowengineering.com/how-to-write-a-vision-statement/
Cash flow management has three distinct parts – cash coming in, cash going out and use of cash reserves and resources. Managing each of these is achieved through setting up processes in the three primary areas of your business: Marketing & Sales, Operations & Organization, and Financial Controls.
In most businesses the great majority of revenue in generated by attracting buyers and selling your products or services to them. Whether you’re a dentist, a homebuilder or a florist, the business is supported by selling your services to people that need them. So, a great part of cash flow management goes toward managing the processes that generate sales, i.e. revenue. In fact, of the 7 Key Numbers that we use in Cash Flow Engineering, five of them measure marketing and sales activities, and each of those has a series of clearly defined processes to streamline that part of the business:
#1: Number of Leads
#2: Sales Conversion Rate
#3: Customer Retention
#4: Average Transaction
Unless you have well-defined processes in place to manage each of these, your cash flow probably isn’t optimized and you’re losing money.
A cash flow optimized company is perfectly balanced – not too big, i.e. carrying extra weight or overhead for the current need, and but not over-stressing the workforce and resources either. It takes finesse and continual tweaking to keep that balance, particularly during growth cycles. These costs are often the focus of accountants and consultants, and are represented by the last two of the 7 Key Numbers:
#6: Variable Costs
#7: Fixed Costs
While managing costs is important, continual cost-cutting can become counter-productive. Rather, growth comes through expansion, which often means increasing investment in marketing and sales.
Great companies don’t just watch money come in and go out, they have strategies to use their resources to for maximum benefit. Your CPA or financial consultant can be worth their weight in gold if they are helping you discover better ways to use your existing resources to enhance the value of your company. More on this in our next post!