LEADING WAYS NEWSLETTER #57

MEMORABLE PRESENTERS UNDERSTAND ONLY TOO WELL THE QUESTION --
Can someone be a great leader, and not be a great presenter?

Most would agree that one of the characteristics of a great leader is the ability to motivate others, or inspire them to change.

So if a leader gets stage fright, or doesn’t shine during speaking or presentation opportunities, or worse, avoids them altogether, then probably that person will not become a truly great leader.

The good news is, presentation skills are not something anyone is born with. It’s a very “learnable” leadership competency.

MEMORABLE PRESENTERS REMEMBER how the best athletes, performers, and leaders get really good at anything. It has nothing to do with inborn talent. They are great at what they do because they use coaching, and “deliberate practice”.

So, leaders: are you ready to make the commitment to improve your presentation skills – and in doing so, become more effective ?

When we start a business or push hard to continue to grow an existing business we are usually wildly optimistic, otherwise we probably would not have taken on the challenge in the first place.

“I don’t care about awards and public image. We know the business of entertainment. We worship our work, we worship our clients and we worship profitability.”
- S. Singh

During our optimism we may lose sight of Cashflow and Profit issues. Perhaps as we move out of the recession we should bring these to front of mind.

Money mistake # 1 Little things financially can make a big difference down the line. You have heard of the “latte effect” of buying one or two coffees a day and how much that can cost the average person over a year.

So too in business – each little financial decision can add very quickly to our monthly overhead. “let’s have a water cooler, get our plants maintained, pay an outside cleaner or rent artwork.”

Think hard before you take these decisions. Will the decision enhance customer relationships or improve employee morale? If not then I suggest you ‘can’ the idea.

Money mistake # 2 Locking in long-term, fixed contracts. What happens if the price of your raw materials decline, or new, more cost-effective suppliers enter the market? Do you have flexibility to vary the terms of existing contracts?

Money mistake # 3 Running out of cash. I have talked about this in other Leading Ways.

Ø How much in the way of raw materials would you have to write off?
Ø What is the real cash value of remaining raw materials?
Ø How much in the way of finished goods would you have to write off?
Ø What is the real cash value of remaining finished goods?
Ø How much in the way of work-in-progress would you write off?
Ø How many (and $ value) of your accounts receivable are uncollectible?
Ø What is the real cash value of your receivables?
Ø What is the liquidation (not book value) of plant and equipment?
Ø How much do you have in the bank?
Ø How much do you owe creditors?
Ø How much do you owe the bank?

Given your current level of debt can you realistically repay it over 3 – 5 years, and still have enough profit to live on.

Remember, the bank is constantly monitoring both your ability and willingness to repay their debt. You may be willing, but not have the ability to amortize a loan over, say five years.

“Thanks, but that doesn’t apply to us, we are a large business.” Correct, so let’s look at what is important to a larger business ::

·         What percentage of your total customer list are your Top 10 customers?
·         What percentage of your total customer list are your Top 50 customers?
·         What percentage of your total sales dollars are your Top 10 customers?
·         What percentage of your total sales dollars are your Top 50 customers?
·         What have been the trends [increases/decreases] in sales to your Top 10 & Top 50 customers – by product or service line?
·         What have been the trends [increases/decreases] in Gross Profit margins to your Top 10 & Top 50 customers – by product or service line?
·         What life-cycle stage are your products in? Do you have new products coming on stream to replace those in the decline phase?

Businesses succeed because of one reason ::
High and growing Sales, at High Profit Margins
[it goes without saying that you have a motivated, engaged staff]

80% of your time should be in face-to-face contact with your customers and prospects. All the rest of your time is either mere preparation, or busy work.

Remember, the profit calculation for your business is your effective hourly rate. [ Net profit divided by 2040 hours] This will tell you for the effort you put in how well you are compensated.

My encouragement in the case of all businesses is to have a rolling 18 month, month-by-month Cashflow forecast, together with a close monitoring of both Gross and Net Profit trends.

What I have observed is companies doing as I suggest, and if everything looks rosy then they stop the discipline of monthly updating. Later of course they discover Cashflow issues.
Please, maintain the discipline, even if you have to pay someone to do it. A good financial person is more important than you think.

Money mistake # 4 As an entrepreneur, you just feel a desire to just grow, grow, grow and show top-line (increases).

There are times that you need to preserve fuel [cash] and be careful about how many growth opportunities [acquisitions] you pursue, because you burn capital too quickly.

Money mistake # 5 Selling a lot, but not making as much money for the business as you should have, because markups and GP margins weren't correct.

Never be frightened to take a profit.
Better in your pocket then theirs.
- Michael Levy

To remedy the issue, consider hiring an employee or using a contractor who can improve your product or job costing and financial result.

Consider all money-raising options including short-term credit lines; and don't get too excited by the first potential shareholder opportunity. Evaluate each option carefully.

Money mistake #7 Outgrowing your leased premises and deciding to own your own building.
I have this saying “When they decide to own their own building, it’s time to sell their stock.”

Why? Typically what I have seen are ego-decisions of senior managers or the CEO and their monument being to leave the building as a legacy.

Always ask ::
Ø Is building ownership part of our core business?
Ø Do we have the core competencies to own/maintain a property?
Ø Are there better uses for our capital, or credit sources?

Sound practical cashflow planning and management of both your gross and net profit margins are the foundation to your long-term business success.

“Success in business requires training and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were.”
- David Rockefeller

Looking for a speaker for your next business meeting?
For a list of typical presentations go here
or contact denis.orme@yahoo.com