Teeming: Verb, describing industrious full productive activity. For instance ‘the department was teeming with activity motivated by awareness of  goals and methodology of contribution’. Adjective, meaning abundant, alive, bursting, fruitful to name a few.

All it takes is improving the motivational quotient by 1.  If you do not know what motivates your team then chances of improving their productivity will be zero.  The days when edicts such as  ‘the beatings will continue until morale improves’ are gone.  Management by fear is not likely to improve morale let alone productivity; workers are not slaves building pyramids they are contributors but those with the greatest performance play to their strengths not their weaknesses.

Signs of departmental teeming are:

• Laughter amid banter; Banter requires trust and no fear of reprisal
• Allowing individualism within protocol; Individualism lets employees know they can be who they are inside the organization
• Improved internal relationships; leads to greater collaboration
• The better the relationships down-up the better the morale
• Improved morale improves customer relationships and increases sales
• Results abound from a team that is teeming.

So why aren’t more managers and business owners developing a strategy around understanding motivation?  From early days our report cards highlighted strengths and weaknesses.  Consequently our parents and teachers sat us down to ‘correct’ the weaknesses.  This laid the foundation for developing a culture that only focuses on weakness correction and judgements based on finding the weakness in workers.  Consequently I would argue that we spend too much time on trying to correct weakness when we should be focusing on strengths.

Planning your goals and assigning duties therefore might benefit from a greater understanding of your worker’s strengths.  For instance someone who is not comfortable dealing with people but great at behind the scenes administration and bookkeeping should not be out front selling for your organization notwithstanding their educational background.  We should not be putting square pegs in round holes.

Most workers want to get ahead and move up the ranks, make more money and develop skills for their future.  They work harder and smarter when they know they have made a contribution based on their strengths so why tear them down on their weaknesses if the contribution is real?

Do you have an understanding on how to get your team teeming?

Image courtesy of Paul Martin Eldridge at FreeDigitalPhotos.net

  Question from Kona, H.I “How Can I Attract Investment at Start-Up?

Follow these SEVEN KEY disciplines.

1. You MUST be extremely passionate about your idea and concept, “The Project”;  you want to execute this plan;
2. You MUST do research to convince yourself  and others your Project will be a successful venture; the most noteworthy is proving demand for your product/service  with existing SALES or bonafide orders;
3. You MUST articulate your Project into a written Business Plan that makes sense; based on your researched and reasonable assumptions; no ‘Pie in the Sky’ delusions; having a sales track record backs you up;
4. You MUST leverage all that you bring to the table; who you are & why you?  Financial background, Managerial expertise – Start-Up Capital; cash & assets, your ‘Skin in the Game’;
5. You MUST be able to explain your Project in sufficient detail to be understood;
6. You MUST be knowledgeable about the industry and environment in which you will operate; competition, barriers to entry, regulatory controls, non-controllable factors; how will you battle the negatives?
7. You MUST convey the REWARD; what will the return on investment be? Your forecasts based on early track record must prove profitability.

If someone else were asking you for money to fund this project would you buy-in? Know your audience; those who are invited to participate in The Project, friends, family investors and banks will be testing your ability to properly execute the plan. Can you deliver?

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

     Question From Paul, Minneapolis, Mn. USA

At a quick reckoning Revenues minus Expenses should equal profit.  Profit will boost the amount of cash a business has available to meet oncoming expenses.

Expenses however can take different forms;

• Depreciation is a non-cash expense meaning you do not write a check to the government for allowing this deduction against revenues.  It is a “write-off” without real cash cost.  This translates into being taxed on a lower profit number.  It is prudent for business owners to depreciate their major capital expenditures like vehicles and buildings.  The idea behind this favorable tax code is to build up cash resources so these assets can be replaced.  In the process you will owe less to the government.

• Then there are discretionary costs; those that owners choose to spend on or not.  For example; when revenue is lower in a given period the entrepreneur may chose to take less from the business thus “discretionary” expense.  This has the effect of preserving cash leaving more for non-discretionary expenses such as rent, hydro etc.

• Timing differences too are a major part of cash flow.  A contractor may have a profitable job at hand but has to put out cash to cover costs in front of being paid.  If you don’t get paid for 90 days then you may have a profit but a negative cash flow.  You have to find a method of financing the timing lag or collect your money faster.

While cash flow is positively linked to profit it really represents the movement of money through the business. With modern cash management services now available at low cost, business owners can determine which checks have not cleared and which invoices have been billed and collected. This results in a method of monitoring your flow of money and eliminates a situation where a business owner applies for credit by writing a check against insufficient funds.  The responsibility for managing cash flow rests with the business owner not the financial institution.

Therefore Cash Flow is different from Profit; however more of the latter and quick collection of receivables will improve cash flow.

Image courtesy of sscreations at FreeDigitalPhotos.net

        Question from Marla, Vancouver, B.C.

This is a common question usually followed by a remark such as “banks only lend money to those who don’t need it”.  While it may seem that way to unapproved wannabe borrowers there are two sides of the issue to reflect on.  Part of it is in the level of preparedness of the borrower and the other is in understanding the role of the bank.

First and foremost; if you develop a good relationship with your banker you should receive the coaching necessary to help you get to the qualified level.  Your banker must understand you and your business.  This means mutually sharing financial data and information about the progress of  your business and the industry it is in.  If you are reluctant to share information that is a very big first strike against you.  If you come in last minute for a loan tomorrow then that reflects poor planning.

Secondly banks want to  play a role and help you graduate from depositor to borrower and to help you leverage your skills and assets into higher wealth building.  In fact banks will want to make you a customer for life by being there when you do need their support including mortgages, personal loans, wealth and tax investments etc.  The banker’s job is in effect to help you grow your wealth over time.  But it is a two way collaborative venture.  It is a question then of when do you start building the relationship with your bank?  How about now?

SIX key points to work on when approaching your bank for a loan are:

• Be willing to share updated financial information about you AND your business;
• Demonstrate you have a track record in your field of expertise, management etc;
• Demonstrate your business is profitable and has a plan to sustain profitability;
• Demonstrates sufficient cash flow to service the proposed debt;
• Demonstrates your “skin in the game” meaning what equity do you have at stake;
• Be willing to provide collateral to secure the loan.

Remember your bank is not an Angel Investor and does not share in your future profits it only rents you money based on your overall risk assessment and in spite of favorable credit scores still needs collateral as a cover to the risk of lending.

If your business is new and just starting out talk to your banker about other options to help you move forward.  Begin the coaching sessions early so your bank can be there when expansion is necessary.  But first prove who you are and why your business is worth a look.  Starting now may secure a better future even though a business loan in early days may not be in the cards.

Image provided courtesy of FreeDigitalPhotos.net Stuart Miles

Question from Winnipeg, M.B.  From the ASK ROGER menu.

First and Foremost is having a product or service that your customers want and will keep coming back for.

Second is the profit margin you charge over the cost of sales.  For instance, the restaurant industry has to consistently contribute 65 per cent or more of their sales to their gross profit before operating expenses in order to meet industry standard. Do you know your industry standard? What is your acceptable margin over cost? If your costs erode too much of your revenues, then three things might be happening:

1.    You are not buying your inputs cheaply enough; and/or
2.    You are not charging enough for your product or service; and/or
3.    You are not doing enough to draw attention to your business and what it offers

Your challenge is to do your research and not be afraid to charge what your product or service is worth.  If you indeed treat your customers with the respect and courtesy they deserve they will come back because you ADD VALUE to what you deliver.

Question from Kamloops, B.C.  From the ASK ROGER menu.

Follow these eight KEY disciplines.

1. You have to be extremely passionate about your idea and concept, “The Project”;
2. You have to have done enough research to convince yourself  The Project will be a successful venture;
3. You have to articulate The Project into a full written Business Plan;
4. Your Business plan MUST leverage all that you bring to the table; who you are & why you? Financial background – your skin in the game;
5. Your Business Plan MUST explain The Project in sufficient detail to be understood;
6. Your Business Plan MUST include the context in which you will operate; industry, environment, regulatory controls, non-controllable factors; nothing can be all positive what will you do to battle the negatives?
7. Most importantly you MUST convey the Reward; what will your return on investment be? Add forecasts with conservative assumptions;
8. If someone else were asking you for money to fund this project would you buy-in?

Besides the foregoing, those who are invited to participate in The Project,  friends, family investors and banks will be testing your ability to properly execute the plan. Can you deliver the Rewards?

Research…research and more research!  Do not let your preconceived notions about what your product or service is get in the way of really understanding the industry and the market you are about to enter.  The research if honestly undertaken will reveal to you whether your idea has enough merit to break out into an executable business plan.

At the start-up phase the largest contributor to failure is lack of capital.  You know… the money you thought you needed to get started.  Guess what you need more! Most inexperienced self employers tend to think only in terms of the equipment and tools they need to start-up like, renovation costs, display cases, shelves, computers etc. but fail to take into account they may not be profitable on day one.  Everyone knows you need gas and water to cross the desert so when planning your start-up make sure your investment includes not only the hard assets but your carrying costs to last at least six months.

The second reason even established businesses may fail is lack of sustainability.  In a word profit margins are not sufficient to cover all operating expenses thus erosion of your investment in equity and earlier profits kill you.  Take the courage to make sure you keep up with market trends and charge enough to cover your costs.  Remember you have to be profitable before you hire more staff to alleviate the work load.