CategoryUncategorized Archives — C. Lynn Northrup, CPA, CPIM
Building success in business and in life requires five essential ingredients. First, you need a vision of where you want to go and what you want to accomplish. Then you need to establish goals and objectives, otherwise you’re just wandering aimlessly with no direction. Goals and objectives form the foundation for action plans and steps that are needed. Finally, you need to measure your progress. It seems simple, but amazingly many businesses don’t follow these steps.
I have coached and taught the tools and techniques needed to achieve business success to hundreds of businesses and thousands of students over the years. Now these tools and techniques have been combined into affordable self-paced programs. The programs include Creating Success, Accounting Basics, Basics of Business Financial Management, and Basic Business Skills.
In addition, I created the Boot Camp for Small Business to establish a foundation for small businesses to grow and increase their value. These self-paced training programs provide the secrets to building business success and provide a roadmap to start a journey to results. The Boot Camp says that when you get the strategy right, the profit will follow. When there is profit potential – there is access to capital.
Accounting is the language of business. Business success is dependent on accounting. Accounting Basics teaches business how to measure results, how to analyze business transactions, and manage cash flow. It also spells out the techniques for budgeting and planning, how to understand profit and loss statements, and how to read balance sheets.
The Basics of Business Financial Management focuses on how to use financial reporting tools. Students learn how to manage debt, management of cash flow, and how to create a budget. The training program provides all the steps needed to create financial plans and forecast financial results.
The Basic Business Skills training program provides the tools needed to grow your business. Businesses learn how to sell and market their products including the techniques of pricing. The essentials of business law are spelled out. Business operations and the basics of managing inventory are also included in the program. This program helps businesses achieve success, maximize profits, and cash flow.
These training programs provide the secrets to building business success. The Boot Camp provides the following essentials:
- Attract more customers
- Get them to come back more often
- Get them to spend more each time
- Get them to recommend you to their friends
Sadly, very few businesses have a strategy focused on these growth steps.
Businesses and individuals can benefit from the knowledge provided by these programs. That’s why I created them.
I have been taking some time to listen to my own advice. What do clients and prospective clients want from me? What makes me different from all the other advisors and coaches trying to gain client trust?
This lead me down the path of trying to understand what people want from me and how can I do a better job of helping them. Here are some of the things I think business want and need.
Businesses want to get things done. They want their advisors to anticipate their needs. They want fast results because there is a lot to get done. They want advisors to tell them how to “improve profits” and “gain a competitive advantage.” Try to talk to them in language that they understand and that is not tech-talk.
Advisors and clients need to plan their work together. Businesses want help in measuring and monitoring everything, so they can achieve better results. Tell them like it is and don’t fudge the facts.
Make sure that you’re available and around. Ask them questions about non-accounting and non-technical things and make sure that you understand their objectives.
Help them learn from you. Also, train their people so they can share the expertise you have to offer. Be out front and dig into the operations. Think about the problems and give business owners access when they’re worried.
Give them something new and different. Make them stand out. Give in from time to time, but don’t ever give up. Yield on means and methods, but NOT on their goals.
Clients want your help to build better a business. They want help with their commitment to grow and create a vision of what truly can happen. Finally, help them access the resources and systems to make it happen.
Provide high quality problem evaluation, assessments, planning, education, and solutions for individuals and businesses. The solutions network ranges from tax and estate planning, business succession, financial planning, financial management, business strategy and operational guidance. My focus is on the creation and protection of wealth for business owners.
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There isn’t an individual or a business that doesn’t have problems of some type. In many instances we’re not aware of the problem or the exact nature of its components. It’s difficult to solve problems when we’re not sure that we have one or why we have it. Therefore, identifying problems and finding solutions to them is critical to success.
I’m a CPA, a consultant, and a businessman. My job is to help identify problems and find solutions to them. Developing relations with individuals and businesses enables me to provide a wide range of advice to take advantage of opportunities and tackle problems.
Achieving these objectives develops from understanding a business or an individual’s situation. By asking the right questions and listening carefully we can develop an understanding of your situation, problems, and opportunities. One of the tools used to accomplish meaningful understanding is by reviewing and assessing the situation. Information gathering helps reveal the problems and in many instances, provides solutions.
I was fortunate to be exposed to a wide range of professionals when working in the consulting department of a large national CPA firm. This experience enabled me to learn about the full range of available services offered and receive training from these pros. These experiences helped me develop programs for Thompson Reuters and the Boot Camp for Small Business.
Services for individuals include estate planning, retirement planning, risk management and educational programs. Business services include planning ranging from strategy, family business succession, and annual business planning. Other services range from marketing and sales to operations.
I have been able to take my experience as a controller and chief financial officer to help businesses improve management of their financial operations and accounting. Teaching accounting, financial management, and a business skills course through Villanova University added another level of management expertise to help identify problems and solutions to business issues.
These experiences have allowed me to help individuals and businesses succeed. It starts with a needs assessment to determine problem areas. Once problem areas are identified, the process of finding and implementing solutions can begin. In instances where I don’t have the expertise to deal with a problem, I have a network of professional resources that has the capability of implementing a solution.
It’s important to realize that finding solutions is the way to create success.
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Effective thinking is what separates superior performance from average performance. It is a mindset that allows your talent to excel. Thinking effectively is not something you have or don’t have. It is developed from experience and coaching.
Effective thinking is like confidence, composure, and mental toughness. When you think effectively it shows based on how you look, feel, and behave. Think of effective thinking as a state of mind and a way of performing and reacting mentally. It is not etched in stone and can change based on the situation.
Think about what you want to have happen versus what you don’t want to happen. Thinking effectively is a choice you make every day. Try to reward your effective thinking just like you would any other performance. It takes practice and perseverance to achieve effective thinking on a consistent basis.
People tend to spend energy on things that are non-productive. It is essential to place your focus and energy on what you need to do and avoid things and situations that don’t matter and that you can’t control. One way to get control over how your energy is focused is to identify and document all the factors that you cannot directly control. Then list all the factors that you can control that impact your thinking and actions. Finally, identify areas over which you have some control.
For items where you have no control there are three ways to deal with these thoughts:
- You can worry about these factors and let them negatively impact your thinking and performance.
- You can forget the uncontrollable factors since you can’t do anything about them.
- Or you can “just let go” of the non-controllable factors and make up your mind to overcome them with your thinking and performance.
For factors where you have some control, the key is to handle these situations in the best way possible and not let them negatively impact your thinking and performance. It is important to realize that there will always be things over which you will never have complete control. This is a fact of life so do the best you can and move on.
Effective thinking requires that you regularly assess your thinking and performance. This helps to figure out how to improve and get better. By understanding factors affecting your performance you can commit and respond to them appropriately. This process will take some time, so be patient. Just remember, your decisions, not the surrounding non-controllable factors will determine your destiny, your thinking, and performance.
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Learning is the process of acquiring knowledge. It is an opportunity to understand yourself and the environment surrounding you. It prepares you to respond effectively whenever you face similar situations. Learning boils down to realizing what you did wrong and taking steps to make sure it doesn’t happen again.
Learning is a never-ending process and you’ll never “learn it all.” But if you don’t try, you will fall short of what’s possible. You may not learn everything there is to know about a topic, but you’ll end up with more knowledge just by putting forth the effort.
Learning isn’t a top-down process so try and be open to everything and everybody. This approach allows you to accumulate knowledge and information you never imagined was possible. Learning is acquiring new knowledge and doesn’t need to occur in any set fashion. Try listening to people you thought had nothing to teach. You might be surprised regarding the knowledge gained by following this approach.
Figure out what process works for you. Then, decide on what doesn’t work. The key to success is to then do what works. Learning gives you an assessment and validation of what works and what doesn’t.
When assessing learning needs, address the topics and issues that you need to help improve your life and advance your career. Learning can be in the form of books, courses, video, or images. In some instances, you might engage multiple formats in the process.
The key is to keep an open mind regarding your needs and requirements. Think about the possibilities that will improve your capability and situation. However, be realistic relative on your ability to absorb and utilize new knowledge. The goal should be continuous improvement in areas that make sense and fit with your objectives.
Approach learning with the proper mental attitude and a positive outlook. There always is going to be something new to learn. The secret to success is to never stop trying to improve.
Since we’re on the topic of learning, here are business programs I have developed:
- Creating Success
- Small Business Success Program
- Small Business Boot Camp (covers the essentials all business owners need to understand)
- Accounting Basics
- Basics of Business Financial Management
- Basic Business Skills (a mini-MBA program)
These programs will help take you and your business to new levels of success.
Click below to get the 4-Step Strategy for Success and subscribe to my newsletter.
Effective management risk is crucial in today’s world of uncertainty. Dealing with uncertainty in the pursuit of value is a constant that applies to all business. It’s a process of dealing with the unknown. Risk involves uncertainty and affects everyone’s decision-making process. It has a direct impact on your strategy and achieving your objectives.
You can’t eliminate or completely avoid risk. No business can grow without taking risks. The famous management consultant, Peter Drucker, identified four types of business risk:
- Risk that is built into the very nature of the business and which can’t be avoided
- Risk that the business can afford to take
- Risk that the business cannot afford to take
- Risk that the business cannot afford not to take
The key to managing risk is having a process for balancing exposure to risks against the opportunities with the goal of enhancing your capacity to create, preserve, and realize value. Risk impacts business objectives which in turn results in a process of aligning objectives to support the strategy.
Every business needs to establish its appetite for the amount and types of risk it is willing to assume. Once this is established consider developing a profile for risk based on risk appetite and how you will respond to risk. Based on the risk profile, you can implement an accept, avoid, or pursue approach in considering a risk response.
Accept means to take no further action on the risk. Avoid means to include steps to remove the risk. Pursue means to act to accept the risk and seek opportunities for increased performance. The steps of accepting, avoiding, and pursuing risk will have the impact of analyzing business performance relative to business strategy and objectives. The idea is to minimize variability in performance.
Monitoring risk performance indicates how well risk management is performing. It also reveals the severity of risk in addition to changes that might be occurring. Based on this information management can then decide on to how best respond to risk. Achieving an understanding of the current and future state of risk management provides baseline information for improving efficiency and effectiveness. By constantly monitoring, businesses take advantage of improvement opportunities.
New improvement opportunities for improved efficiency and effectiveness can occur in any of the following areas:
- New technology
- Shortcoming of past failures
- Organizational change
- Competitive bench marking
- Rate of change
It is essential to understand where there are opportunities for improvement. By monitoring, businesses can then take advantage of opportunity situations that best fit their strategy and objectives. It also helps them develop effective responses to risk based on the severity of risk.
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The reality is that many businesses don’t have a good grasp on where they are making their profits. You wouldn’t think this would be the case, but 60 to 70 percent of CEOs are wrong most of the time when it comes to knowing the source of their greatest profits.
Why and how does this happen? Here are the top four reasons:
- Firefighting takes top priority. Being too deep in the forest makes it tough for managers to see the trees.
- People do what they like. Human nature means that business owners and managers tend to favor the area of the business they like and know the best.
- They’re making money. Many companies that don’t know where they’re making money are still profitable businesses. If businesses are making enough money to support their lifestyles and paying employees, being the most profitable business isn’t necessarily a top priority.
- Some of the value is hidden. Inventory and materials need to be tracked and costs need to be correctly allocated to product lines. When you visit the warehouse, you shouldn’t just see goods and materials, you should see cash.
Knowing how your business functions and where profits are earned is critical. Here are some things you can do to better understand your business:
- Don’t be afraid to ask questions, especially when there is the potential to improve profitability and the business.
- Get outside your comfort zone and be willing to explore alternatives, it could pay big dividends.
- Challenge yourself to go beyond traditional ways of solving problems
Many times, making improvements is a matter of changing your mindset. Rather than be satisfied with status quo, be proactive about improving profitability. Here are some ideas:
- Benchmark against competitors and perform a serious, metric-based analysis. You may have an idea on how you are creating profit, but do you know what the competition is doing? What is the competition doing differently and what can you change?
- Get the numbers. Get the facts and the numbers. Track everything and do it consistently. Measure, and measure again.
- Talk to employees. Most people don’t really tell you where you are making money. You’ll find that digging in with deeper analysis can really pay off.
The bottom line is understanding where true profits are made and is the key. Improving productivity, performance, and effectiveness should be an ongoing process that is consistently applied. You’ll find that focusing on the key things that drive your profits will result in creating a competitive advantage that is real and sustainable.
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Benjamin Franklin was one of the fathers of our country. He provided wisdom we can use effectively today. His 14 Lessons were provided in our newsletter and I thought it might be good to review them here. They’re listed below:
- Less Talk, More Action
- Don’t Procrastinate
- Be Prepared
- Don’t Fight Change
- Get Moving
- Avoid Busywork
- Give Yourself Permission to Make Mistakes
- Act Quickly on Opportunities
- Continue to Grow
- Keep Going
- Know Yourself
- Don’t Self Sabotage
- Don’t Give Up
- Wise Up
While all the lessons should be followed there a few that I would like to highlight.
First, “don’t procrastinate” links to less talk and more action. Just think about how much time goes by thinking and talking about what we are going to do. Just do it will save a lot of time and produce more results.
When you’re trying to create success, you are constantly dealing with change. Change is a constant challenge. The cycle of change occurs in stages. The tendency is to do the right thing and do it well but you discover that the right thing is now the wrong thing. Then you do the new right thing, but do it poorly. Eventually you do the right thing well.
Implementing successful change requires creating high-impact and inescapable confrontations. The key to successful implementation is focusing on the core contrasts and engaging all five senses in the experience. Confront issues and don’t avoid them. Find and see the new direction or destination. Then believe in a path to take you to doing the right thing and doing it well.
The other lessons I’d like to highlight is keep going and don’t give up. Make sure the destination or target is clear. Then acquire the skills resources, and tools to reach the destination. If the destination isn’t clear, what’s the chance of getting there. Be clear on each step of the journey so you know where you are going.
Believe in your vision and your destination, keep going, and don’t give up.
We don’t like change, but there are times when change is essential. Fear is a great motivator because it can be quickly converted into positive urgency. Urgency helps to sustain change.
How high is the urgency regarding problems you are facing or opportunities that have been presented? Answering these questions should dig into feelings and behavior because logic and words don’t always provide answers. What creates the behavior and your underlying feelings?
Creating a change vision may require looking at the obvious. As you consider the obvious try taking a new look at the problem under a different light. Look for cheap and easy opportunities and solutions. Sometimes the obvious will produce results you didn’t expect. Take a disciplined and focused approach directed toward the right issues.
Ask what changes are needed? What is our vision of where we are going? Also, consider that some things don’t need changing. What strategies might be dangerous? As you consider your vision, think about the best way to make it become a reality.
Here are some thoughts about vision. Strategies show you how to achieve a vision. A plan specifies step by step how to implement a strategy. The vision shows you the end state where all the plans and strategies will take you.
You need bold strategies to match bold visions. Bold can be threatening, and the obvious might be threatening. Making necessary changes requires action. There will always be a tendency to hold back. It’s essential to avoid this corrosive behavior. So, move forward with confidence and determination.
Literally try to see the future. Make your vision so clear that it can be expressed in a page or less. The vision should be moving and bold. Then create a bold strategy to make your vision become a reality. Stay focused, pick the low hanging fruit, and start by getting some short-term wins that are visible and come fast. Most importantly, take things one win at a time. And don’t let up!
Strategic thinking is a diagnostic and situational analysis of the business. It is used to gather information and summarize it into a format for evaluating business possibilities. While strategic thinking isn’t planning, it represents the initial stages of developing a strategic plan.
The strategic thinking process is a tool to help management formulate their thoughts and ideas into a plan. Just engaging in a process of strategic thinking provides a benefit and adds value.
Here is the six-step process that represents the flow of strategic thinking and creation of a strategic planning framework:
- Understand the present
- Establish a Vision of the Future
- Identify the Critical Issues
- Establish Objectives and Goals
- Develop Action Plans
- Plan for and Allocate Resources
These six steps might be different based on the approach. Everyone has their own spin. However, it is a formal or informal process that every business uses to engage in a strategy.
Strategic thinking focuses on understanding the present and identifying the critical issues. This is a worthwhile effort since it gets management and business owners to think about their business. Business owners tend to get too immersed in day to day issues and fail to think about a vision for the future.
Spending more time thinking strategically about the future produces increased profitability and increases business value.