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20 Powerful Principles to boost your bottom line IMMEDIATELY. By Bob Vitamante, SCORE Counselor and Chairman of Santa Barbara Chapter of SCORE. GOALS/Promises FOR TODAY (ambitious, risky, gutsy ). Learn insights to change how you: View your business as the owner Measure its success
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20 Powerful Principles to boostyour bottom lineIMMEDIATELY By Bob Vitamante, SCORE Counselor and Chairman of Santa Barbara Chapter of SCORE
GOALS/Promises FOR TODAY(ambitious, risky, gutsy) • Learn insights to change how you: • View your business as the owner • Measure its success • Walk away with ideas to increase Your Bottom Line starting today
You, the audience, will help dictate Direction & Scope • This will be interactive • Where are you in your personal business cycle • Stage of business: concept only? Starting? Running? • Employees • Goals: Have them? Are a beginning, not an ending. They will change over time. • Who are you? • Entrepreneur or Leader? Key manager? Sole worker?
First, a little about me Well known companies Not-so-well known companies RJ Vitamante & Associates TickerBuddy.com 3D Shopping.com Royal Cigar Society BAC Trading MLM’s: HUB (Humanity Unites Brilliance); Rexall Pharmaceuticals • SelectRemedy Temporaries • Pinkerton’s, Inc. • Olsten Temporary Services • Columbia Pictures Industries • KPMG, Peat Marwick CPA’s
Principle #1 Know thyself • Strengths • Weaknesses • Special skills & Talents • Passions • Likes • Dislikes Questions: Have you done a self assessment? Are you applying it in your business?
Principle #2 Know thy (Personal) Goals What are your personal goals for work or business • To lead or to follow? • To work alone or with others? • Inside or outside? • Creative expression? • Contribute to society? • Make a living for self and family? • Very little stress? Safety? • To build? • To get rich? By when?
Principle #3 Know thy (Business) Goals [aka Your Bottom Line] • What results do you want? • Must be specific • Must be actionable and measureable • Must be time bound • What is your business cycle - Daily? Weekly? Monthly? • Why? • What needs do you want fulfilled? If you don't know where you are going,you'll end up someplace else.Yogi Berra
Principle #3 (cont’d) Some Examples of Personal Bottom Lines: • A specific income stream/salary • A business expressing who you are, with money as a secondary concern • A sustainable business that can grow & build value • A ‘get rich quick’ technology play • A ‘fix it and sell it’ play • A business to grow and give to family members in one year, in three years, at some other future time • A business that does ‘good’ in the community
Principle #3 (cont’d) What’s your Personal Bottom Line? • For 2013 • For 2014 • 2020 • Beyond
Principle #4 Need Help figuring this out? Get a mentor! Who or What is a Mentor? Some History
Principle #4 Characteristics of a Mentor • Real life experience • Subject matter expertise • Demonstrated achievement • Cares about you and your growth • Objective, neutral • Honest and open, and knows their limits • Solution oriented • Can meet you where you are; been there, done that • 'Reduced ego' - Limited personal investment of 'self' • Big picture oriented
Principle #5 Follow your bliss • Know who you are and want to be • How does it fit with your skills, talents, passions, etc.
Principle #7 Define your role, realistically • Start at the top - Entrepreneur or Leader? • Dick and Mac McDonald • Worked hard and made a good living • Ray Croc • Bought the Franchise rights • Took little from the business • Hired the best • Creation, Production or Administration? • You need all of them!
Principle #8 Do the right thing, personally • What are you now doing that you should do: • More of? • Less of? • The ultimate test – what will move the business forward toward Your Bottom Line
Principle #10 Seek the truth (about performance), and it will set you free(financials have limited value for measuring achievement) Accountants may hate this! • Balance sheet (B/S) does not show true value • P/L ‘bottom line’ has very limited use • Doesn’t indicate earnings potential or sustainability • Is easily/readily misleading • Can create a false sense of calm or alarm • Can be useful with some important ‘tweaks’, but proper timely interpretation is a ‘must’ • Does not measure Your Bottom Line
Principle #10 (cont’d) (financials have limited value for measuring achievement) Some examples of financial data that can be misleading • B/S: • High or low cash balances or receivables • High or low customer deposits & trade payables • P/L: • Investments treated as expenses • Staff training • Addition of staff and Recruiting costs • New supplies and equipment • Advertising and PR programs • Timing for recurring expenses, such as insurance, workers comp, taxes, property taxes, incentive payments,
Principle #10 (cont’d) (financials have limited value for measuring achievement) Some cures begin with Proper analysis of B/S & P/L: • Cash is king: collect more frequently, pay less frequently • The trend is your friend: compare current period to prior months, prior year months, budget, competitors • Eliminate (or separate out) distorting items and owner’s compensation (in its full glory) • What to measure and when: key metrics • Identify items of continuing value in the context of your goals, and ‘suck it up’ • Increase income and reduce expenses – in a word, Negotiate • Create the story of your performance each period – explain what’s happening against ‘goals’
Principle #11 You can’t manage what you don’t measurePeter Drucker • Define Your Personal Bottom Line • Change your measures of success • Plan the necessary steps, such as: • Hire two sales persons • Purchase new equipment or software • Add X number of clients • Measure attainment of the plan
Principle #12 No man is an islandJohn Donne Who’s on your team? • Staff? • Family and Friends? • Professionals – CPA’s, Attorneys, etc.? • Mentors? • Board of Advisors? • Investors?
Principle #13 Put First things First • Crawl before you walk, walk before you run… • Develop your idea as a concept • Identify the things required to make it happen • Ask your mentor for advice
Principle #14 Focus, focus, focus • Daily question – are my activities today moving the ball forward • What you focus on will grow, positively or negatively • What am I avoiding – Deal with it. • Ask your mentor for advice
Principle #16 The Team • The right skills for the right roles • Hire the best you can, and invest in them • Where do you fit in • What do you love and what do you hate • What will make the difference
Principle #20 The Systems • Must have certain disciplines to enable repeat performance • Results must be tested • Spartan training • Demonstrated results
To Summarize Our focus today was on: • New, broader measures of success • Your role • Your business priorities • Your planning, goal setting, etc • Your staff • Your external team – Mentors