C. Lynn Northrup, CPA, CPIM

Defining Success

For motivation Monday, I thought it would be good to talk about SUCCESS. Just what is success?  There are lots of opinions on success. Here are my thoughts.

I think success is how you define yourself and being ok with yourself. Success lies within your self-esteem and knowing that you are capable and worthy. It is accepting your uniqueness as an individual. Success is living within your identity and your character.

It is essential that you see the strength and courage of your identity and are comfortable that you have done your best. You have faced adversity and maintained control over your mind, thoughts, and how you feel. Success is making your own decisions based on how you think and feel about yourself.

Success is forgetting the past and looking to the future. Success is the journey to who you want to be, and creating your own identity. It begins with a dream that becomes your vision and your mission. This is how you create success. How do I get there? Well, as they say, sometimes all it takes is a leap of faith.

Success starts with a dream and committing to fulfilling that dream. Commitment requires that you have a process to get there. Trust in getting out of your own way and having confidence in your ability. Know that you will succeed. The process is doing what needs to be done and when it needs to be done.

Dreams are what you want to be, who you want to be, and where you want to be. The key to dreams is having them. Let your mind do what it can do and follow your dream. Don’t let other people’s thoughts and opinions take you off your track on where you want to go. Ask questions, listen, and then reach your own conclusions.

Commit to trusting the process and the never-ending pursuit of improvement. Turn your dreams into reality and SUCCESS!

Coaching Creates Success

I have developed a mini-program on Creating Success focusing on the 5 steps required to achieve success in business and in life. Creating Success provides a pathway on what you need to do to accomplish your success. The program takes less than an hour and is affordable.

My Business Coaching programs are available to help guide you through the process. They ask the right questions and get you to think about the right things. Having a coach pays big dividends. Forbes Magazine reports that an investment in coaching yields a ROI of 700%. In many cases the returns can be even higher. Imagine 10 to 49 times return from investing in a coach.

Check my videos on Business and Financial coaching. The Coaching Process provides:

• Training
• Coaching Support
• Goal Setting
• Setting Direction
• Advice
• Support and Motivation

My video on Creating Success spells out the process essential for creating a successful business and a successful life. The program is self-paced for your convenience plus I am available to answer questions via email at cln@northrupcpa.com.

Creating Success is an ongoing effort to provide additional training focused on specific areas that will help guarantee success. Topics will include change, mastery, business assessment, performance measurement plus other areas of learning.

Why Business Owners Get in Trouble?

Why business owners get in trouble is a question I’ve had on my mind for some time. Here are the prime reasons based on my experience over the years.

Firefighting takes top priority. Running a business is challenging and involves a lot of detail work. Business owners get too deep in the forest making it tough from them to see the trees.

People do what they like, it’s human nature. Some business owners love the finance part of their job while others gravitate towards the marketing aspects and still others favor sales or manufacturing. At the end of the day, the business owner’s interests will determine what gets the most attention.

They’re making money. Many companies don’t know where they make their true profits but are still profitable. They make money despite themselves. When people are making enough money to supporting their lifestyles and pay their employees, things tend not to change. This is a situation where if they’re making enough money to support a lifestyle, being the most profitable company possible isn’t necessarily a top priority.

Some of the value is hidden. Inventory and materials need to be tracked. Costs need to be correctly allocated to product lines. When a business owner visits their warehouse, they shouldn’t just see goods and materials… they should see cash.

Finally, another reason is the lack of training and knowledge. Business owners might not want to invest in training and coaching, but it could make a huge difference on the bottom line and value of their business.

I can help improve your bottom line and increase the value of your business. Contact me at cln@northrupcpa.com.

Coaching Case Study – Tim

Tim had a one-man wood working shop. His son, Arnie was his only helper. Tim asked me to help with a problem. The debt and bills were piled high. Tim didn’t know what to do or where to turn. To make things worse, Tim’s health was failing. We needed a plan.

First, we tightened up on receivables to get some cash flow. This bought time and some much-needed relief. Then we looked at expenses and started cutting back. It didn’t seem like much, but it put the business into the black.

Then I got Tim to secure a life insurance policy naming Arnie as the beneficiary. This was a key step in creating some peace of mind. Tim knew Arnie would be OK.

I think of Tim as I work at the desk he made for me. I look at the mantle over the fire place and the front door Tim crafted. They are constant reminders of our journey together.

Not long after our work together, Tim passed away. Arnie moved to Florida and got his college degree. Arnie is now pursuing his dream of being a football coach. Tim is looking down from heaven with a smile knowing that a coach made a difference.

Coaching Case Study – Jerry

Jerry built a printing business that always had lots of sales but no profits. I was introduced to Jerry by his CPA who thought maybe I could get Jerry to listen. I came in, wandered around and asked questions. That’s what I always do. It’s amazing how much you learn when people get comfortable and share concerns, questions and ideas.

People tend to get too close to the action and never take time to step back. We began analyzing the numbers to find out the little details that can lead to big results. These steps started having Jerry’s team building trust in my suggestions. By paying attention to the little details that matter, the company achieved record sales and profits. Jerry started to believe. Having the discipline and patience to focus on the right details can produce big results. That’s what coaching gives to business owners. Once they start seeing the results, coaches become part of the team.

Once I became accepted as a member of the team greater achievement became possible. We identified that a purchasing agent was taking kickbacks. Family members got new job assignments and a succession plan was put in place. The company went from almost going out of business to becoming the most respected printer in the region.

Overcoming the initial resistance can be an obstacle but the proof is in the results and on the bottom line. I went on to implement a team building effort and a management succession plan. I’ll tell you about this effort in another post.

Coaching Case Study – Harry and Susan

I would like you to meet Harry and Susan. They are a husband and wife team running a business that just couldn’t turn the corner. Their business was breakeven at best and paying the bills was a constant struggle.

In desperation, Harry and Susan asked me to do an assessment of their business. It was tough for them to ask a stranger for help. I asked questions, listened and observed. They quickly became comfortable with my low-key approach to identifying issues and solving problems.

Based on the assessment, we prioritized the problems and created an action plan to address them. The entire process was a team effort that was built on a foundation of trust. The coaching process allowed them to see the problems more clearly. Once you can see the problem, solutions start to emerge.

One by one, we tackled the issues. Things started to turn around and profits became a reality. Having cash to pay the bills was a nice bonus. After the initial wave of success, we began taking on tougher problems. Plus, we developed business plans and forecasts. Combined with the performance measurement systems we created it became much easier to manage the business.

Our initial team effort developed into a long-term relationship. Profits and cash flow have a way of building trust. Harry and Susan’s stress went away. The business grew and prospered. They became believers that coaches can make a difference.

Coaches Make the Difference

Coaches can be the difference between winning at business or losing. Every small business owner should have one. They keep you focused on the game. Coaches provide:

• Guidance
• Support
• Accountability
• Encouragement

I can hear small business owners now, saying “I’d like those things, but I can’t afford a coach.”

It probably should be the other way around, “you can’t afford to not have a coach.” Coaches facilitate transition, change, and success. Here are some tips for success:

• Take total responsibility
• Risk sharing your thoughts and feelings with others
• Bring your beliefs to a Conscious Awareness
• Develop an Awareness of Character and Persona
• Listen to Feedback
• Consider finding a Coaching Process
• Be Flexible

The job of owning a small business is a lonely place and there is no substitute for have a sounding board and receiving good advice. Some of the challenges facing small business owners include:

• What do I need to learn?
• Commitments to grow as a leader?
• What resources do I need?
• Potential Problems or Obstacles?
• Timeline?
• Measures of success?

Coaches are not teachers but they teach. They provide attention to all the little details that go wrong when you are trying to achieve peak performance. Coaches put more of the things we do into a routine so we can focus on results. They listen closely and keep you on track by providing feedback and let you know where you are falling short. A good coach breaks down performance into its critical individual components and then gets you to focus on the fine details that make a difference.

The essence of good coaching is to get you to think, and about the right things. When you find a coach that is the master of both the skill and coaching, the resulting impact tends to be enormous. Top athletes have coaches! Hire a coach and gain the winning advantage.

In addition to coaching support, I can deliver a full range of advisory services representing a more affordable and efficient solution.

Saving Time – 5 Keys to Results

Saving time is the pathway to greater productivity and profitability. Small business owners realize that time is money and both are precious resources. It’s what makes the engine run.

The 5 Keys to Results:

1. Set Goals
2. Create a Plan
3. Set Priorities
4. Be Realistic
5. Track and Measure Results

Setting daily to-do lists on what you want to accomplish is one of the main keys to achieving results, day in and day out. I use 6” x 9” spiral bound steno pads to keep my to do lists and notes. They keep everything bound and in one place giving me a chronological record of what I did each day.

Creating a plan keeps you focused on your goals and when you’ll need to accomplish them. Plans provide a roadmap letting you know if you’ll need help, acquire supplies, or add equipment. The small business plan should also document the results that are expected from your effort.

Planning forces you to set priorities. It spells out what get done first and how much time will be needed. Prioritization addresses the most important thing to get done. Some things will have greater urgency and force some tasks to be done at a later date.

Address larger projects and break them into a more realistic workload to avoid getting overwhelmed. Be realistic to avoid trying to put 10 pounds in a 5-pound sack. Knowing your capabilities and limitations is critical because small businesses always will have more work than time.

Tracking results and measuring performance sounds like an obvious step. It often gets put aside because small business owners have a tendency keep things in their head. There is no substitute for measurement. It forces a focus on results. It is essential to have a clear idea on what you’re doing, how you are doing and adjusting accordingly. This is where an accounting system can prove to be invaluable in avoiding mistakes and wasting time.

I think these five keys will help keep you and your business on track and focused on better results.

6 Rules for Managing Risk

Rule 1: The first rule of managing risk is to understand the value of today and how the future could impact those values. It is essential to measure how future change will create different scenarios and how they will impact today’s values.

Rule 2: is to decide on reasonable time horizons that fit your situation. Each situation will have a different impact on the time horizon. Getting the right fit is essential in making choices for the future.

Rule 3: is selecting a range of scenarios and possibilities that describe possible future events. This step means exploring both negative and positive possible outcomes. Try to assign values to each scenario in addition to the likelihood that it could happen.

Rule 4: is picking a benchmark for performance. This will help you evaluate the range of scenarios.

Rule 5: is weighing all the possibilities to determine the potential impact the scenarios might have on future values.

Rule 6: boils down to deciding on how much risk you are willing to accept after applying the various scenarios to future and current values.

Some thoughts and considerations:

Think about the possible upside to any decision in addition to the downside. Consider what could happen, the impact it could have, and the likelihood that it could happen. This step means really digging into the full range of possibilities. Most people don’t go far enough with this step.

What is your attitude toward risk? Is it high, medium, or low? This requires honest evaluation about the reality of your attitude.

Focus on the future – Not the past. The past might provide clues to the future, but things are never going to be the same. Change will occur. The past is over and your concern needs to be on the future. This is why it is essential to project yourself into the future.

Create Win/Win scenarios. This requires finding minimum payoffs that provide a positive risk-adjusted value that motivates another party to agree to the terms of the deal.

Effective utilization of these six rules allows you to be less likely to be surprised by unexpected outcomes. It is impossible to anticipate everything, but a more systematic approach to risk management helps to prevent disastrous results. Applying the 6 rules represents a better way to make tough choices.

Make Smart Choices

Not too long ago I spelled out the Five Steps for Better Decision-Making. While these five steps provide some guidance, the process of making smarter choices needs to be expanded. The first step in making smart choices and decisions is to create and clarify any uncertainties surrounding the decision.

Take time to think about your tolerance for risk. Just how much risk are you willing to assume. Link your decisions to gain an understanding of how one decision might impact another decision. Also, understand how the choices you make today will impact the choices you make tomorrow. Fast forward to future possibilities and consider the uncertainties regarding these alternatives. If things don’t work out what are the alternative options you can exercise and implement.

Gather as much data and information as possible when planning decisions. Go through the five step process in your decision planning process to gain clarification on the possibilities and the outcomes. Try not to place too much emphasis on the initial information received and gathered. Things can change as you dig into the issues. Finally, avoid the tendency of status quo which is protecting the present because the future is uncertain.

Another factor is to avoid falling into the trap of reaching quick conclusions regarding the accuracy of evidence gathered in the decision-making process. Try to avoid recalling what happen in the past and in overestimating the impact of a decision. This will help you achieve a sharper sense of awareness of the ramifications and possibilities of a decision.

Combining Five Steps for Better Decision-Making with these tips will result in better decisions and smarter choices.