Tag Archives: Impact

How Do You Create Consistency in a Business? Six Suggestions

Situation: A CEO feels like he is on a roller coaster ride with unpredictable revenue and processes month to month. His ideal outcome will be to be able to go on vacation for 4-6 weeks, and have the business running better when he returns than when he left. Have you managed to achieve this? How do you create consistency in a business?

Advice from the CEOs:

  • Make your managers live up to their titles.
    • Insist that they go to each other to solve problems first, instead of always asking you.
    • When they ask a question, answer how to solve it – but don’t give them the solution.
    • Require them to present solutions rather than problems.
    • Be willing to spend money on their solutions.
  • Answer all questions with questions.
    • Ask them for their recommendation.
    • Keep asking until they come up with the answer.
  • You should not be doing jobs or tasks that are really your employees’ responsibilities.
  • When you start to delegate, it hurts for a while but it will work itself out.
  • What has been the impact on other companies when they’ve made these changes?
    • Businesses have become more diversified.
    • CEOs are focused strategically vs. tactically.
    • Businesses are more successful and profitable.
    • CEOs enjoy coming to work again.
  • How do you work with younger workers, millennials?
    • Allow flexibility – where appropriate – on hours and how they do their jobs.
    • Responsibility will vary by pay level – with the understanding that higher pay equals more responsibility and most likely longer hours.

How Do You Optimize a Financing Pitch? Seven Suggestions

Situation: A company is drafting a pitch for their next round of funding. They want to reach both current and a new set of investors and highlight the improvements that they’ve made since their last round of funding. How do you optimize a financing pitch?

Advice from the CEOs:

  • Work on a quick demo of the site. This is critical for a software company. The site must clearly and quickly show what differentiates you.
  • When you sit down with potential investors, start your pitch with a catchy statement, e.g., “We’ve all heard about ‘pay it forwards’. I want to talk to you about ‘Job-It Forward’.”
  • Start the presentation with an overview and a simple illustrative explanation so that the audience instantly gets what you are doing. For example, “we’re about generating social capital and here’s an example of how we do this.”
  • Be careful not to drown your audience in detail. Limit yourself to 3 bullets per page. Use graphics rather than words as much as possible. Most people can only absorb a limited amount of verbal information, but they remember pictures.
  • If you’ve already started talking to potential investors, what are your results? What feedback have you received to date? Analyze this and adjust your presentation and pitch accordingly.
  • Can you show a potential funder ROI? For example, if you give us $X, we will generate $Y in terms of return. You want to demonstrate IMPACT! Those who will support you want to see the advantage of investing in you vs. other options available to them.
  • Include a slide showing sources and uses of money spent to date. Show how you will use the money that you wish to raise.

What Impact Will Rising Interest Rates Have on Business?

Situation: A CEO notes that the national debt has nearly doubled over the last 8 years and the Fed is talking about raising interest rates. It’s not clear what impact the debt, or rising interest rates will have. Has this impacted your business and how are you coping? What impact will rising interest rates have on business?

Advice from the CEOs:

  • Impact on business and customers.
    • The prospect of either rising interest rates or taxes increases uncertainty – customers are taking longer to make purchase, expansion and other decisions.
    • Companies are not spending the cash that they have out of concern over possible future expenses or the possibility of a downturn. Large companies have trillions of dollars of cash on hand. Some of this is held off-shore because of the tax consequences of repatriating the funds.
    • Lack of consumer demand holds back investment in production expansion.
    • Feeling of loss of control.
    • More concentration of wealth in fewer hands.
  • Other impacts
    • More people, old and young, are opting out of the business economy.
  • What are you doing to cope?
    • More involved in collections to keep this under control.
    • Delayed payments from big customers are part of the problem – conservative financial management.
    • Manage liquidity and cash – cash is king!
    • Adjust lifestyle and delay purchases – for example buy smaller cars.
    • Scrutinize contract terms – especially AR.
    • Scrutinize our business model. For example look at subscription models or Great Game of Business models.
    • Utilize those who are normally unemployable but trainable for repetitive task jobs. They work hard and produce good work.

How Do You Communicate Your Value Proposition? Four Methods

Situation: A company offers a service that can potentially boost clients’ revenues by 50% or more. However, the CEO has found it difficult to communicate this value proposition to potential clients. While some clients understand and have bought the company’s service, too many others have not. How do you communicate your value proposition?

Advice from the CEOs:

  • Not everybody will buy any service, no matter what advantages it offers. Here are steps to take:
    • Make a list of clients that you have closed, and those that you have not.
    • Identify whether there is a difference in the profile of the clients that you’ve closed and those that you didn’t.
    • From the commonalities among those clients that have accepted your value proposition, create an ideal customer profile.
    • Use this profile to pre-qualify potential new clients and assure that they meet this profile before investing in sales efforts.

By focusing sales efforts on those clients that you are most likely to close, you will improve your close rate and also reduce your sales cost to revenue ratio.

  • As you cultivate a new prospect, identify those individuals within the client company who can block your sale. Make these individuals heroes for supporting your offering. Offer them appealing learning retreats. Offer augmentations that appeal to the unique needs of the client. Raise your prices to fund these augmentations, but more than cover these costs with boosted revenues to the client.
  • Focus on the key WIIFM – “What’s in it for me” – that will appeal to key purchase influencers. Enlist these people as your evangelists within the client.
  • Emphasize not just financial benefits, but quality of life benefits that will accrue to clients through your service. Back this with a guarantee that you feel comfortable making.

Are You Planning Salary Increases This Year? Five Thoughts

Situation: A company’s staff is highly paid. Historically, annual raises have been 4-5%; however some individuals are above industry salary ranges. The CEO doesn’t want to lose key individuals who would be expensive to replace. The company is planning salary increases for the end of this year. If the level is lower than historic averages they are concerned about the impact. Are planning for salary increases this year? How will you communicate your decision to employees?

Advice from the CEOs:

  • What’s the problem? Even in an improving economy your employees are lucky to be making what they do! On top of this, you need to consider profitability compared to last year as well as historic levels. Selectively share financial data with your employees as well as financial realities – your and their top priority are to keep the company healthy.
  • Gather data on salary ranges for roles in your industry. Good sources are Salary.com for national data (it may be dated) or Assets Unlimited’s Silicon Valley Survey for up-to-date salary information by industry and position. This will help you to prepare for conversations with employees who are currently paid above the range for their positions.
  • If you have employees above the range and do not want to give them raises, give them bonuses or spot bonuses for work well done.
  • Formalize your bonus system – base bonuses on performance metrics. Consider tying bonuses to net margin performance for the company or for departments that can impact new margin.
  • Whatever you decide, make announcements about salary levels a positive event.

How Do You Keep Customers and Employees Updated? Five Points

Situation: A company wants to keep both customers and employees up to date on what is happening within the company. This includes announcements of new products, services and initiatives, changes in personnel policy and benefits, and other information important to both customers and employees. The CEO is considering a company newsletter. How do you keep customers and employees updated and what benefits do you accrue from the effort?

Advice from the CEOs:

  • Customers and employees are two different audiences and require different communications. Externally focused company newsletters are a value-add from a marketing perspective and enhance the image of the company in the eyes of clients and prospects. Internal company newsletters are valuable to reinforce vision, understanding of company policy, and inter-departmental alignment.
  • Both efforts are justified from a time and expense standpoint, and perhaps deserve even more focus.
  • Within the companies represented around the table, frequency of both internal and external newsletters varies from semi-annual to monthly publications.
  • Both print and online newsletters have value. Employees respond positively to both. Print media make it easier for them to share important updates in benefits and excitement about company developments with their families. Online media can be updated more frequently and inexpensively, and the HR department can track the number of views to measure impact.
  • Emailed external newsletters are valuable because they enable you to measure ROI from the effort by building in tracking mechanisms and correlating web page hits to business development and revenue.