35 Great Business Questions

by Dan Lacy - January 28th, 2015

One of the biggest questions that is continually in the forefront of a business owner/managers mind is – how do I become a better ____________ (you fill in the blank).

So how do we become better? Not long ago, I had a learning break-through. I was in a training session and the leader (Aaron Prickle at Lushin) made this comment: “it’s not the statements you make, it’s the questions you ask.” Aaron was specifically talking about selling, but this applies across the board to just about everything.

Questions ignite imaginations, avert catastrophes and reveal unexpected paths to brighter destinations. Inc. magazine, in the April 2014 issue, has compiled a list of 35 questions from great business leaders that will stimulate your thinking about your own business.

1. How can we become the company that would put us out of business?

2. Are we relevant? Will we be relevant five years from now? Ten?

3. If energy were free, what would we do differently? Or if not energy, then choose another key word that drives your business (labor, storage, fuel).

4. What is it like to work for me?

5. If we weren’t already in this business, would we enter it today? And if not, what are we going to do about it?

6. What trophy do we want on our mantle? Is growth most important? Profitability, stability?

7. Do we have bad profits? Some products/services look attractive, but are they taking the company capital and focus away from its main line of business?

8. What counts that we are not counting? What tangible and intangible assets truly differentiate your business that you currently have no means of measuring?

9. In the past few months, what is the smallest change you have made that has had the biggest positive result? What was it about that small change that produced the largest return?

10.Are you paying enough attention to the partners your company depends on to succeed?

11. What prevents me from making the changes I know will make me a more effective leader?

12. What are the implications of this decision 10 minutes, 10 months, and 10 year from now?

13. Do I make eye contact 100 percent of the time?

14. What is the smallest subset of the problem we can usefully solve?

15. Are we changing as fast as the world around us?

16. If no one would ever find out about my accomplishments, how would I lead differently?

17. Which customers can’t participate in our market because they lack skills, wealth, or convenient access to existing solutions?

18. Who uses our product in ways we never expected?

19. How likely is it that a customer would recommend our company to a friend or colleague?

20. Is this an issue for analysis or intuition? If it’s a decision that’s important, recurring, and amendable to improvement, you should invest in gathering data, doing analysis and examining failure factors. If it’s a decision you will only make once, or if you cannot get the data or improve the decision making process, you might as well go with your experience and intuition.

21. Who on the executive team or the board has spoken to a customer recently?

22. Did my employees make any progress today? Forward momentum in employees’ work has the greatest positive impact on their motivation.

23. What one word do we want to own in the minds of our customers, employees and partners?

24. What should we stop doing? Peter Drucker is famous for this question; he was also a great teacher and he always re-enforced the importance of asking questions.

25. What are the gaps in my knowledge and expertise?

26. What am I trying to prove to myself, and how might it be hijacking my life and business success?

27. If the board brought in a new CEO, what would he/she do?

28. If I had to leave my organization for a year and the only communications I could have with employees was a single paragraph, what would I write? Pat Lencioni states that “determining the substance of this paragraph forces you to identify the company’s core values and strategies, and the roles and responsibilities of those hypothetically left behind.”

29. Who have we, as a company, historically been when we’ve been at our best?

30. What do we stand for – and what are we against?

31. Is there any reason to believe the opposite of my current belief?

32. Do we underestimate the customer’s journey? Matt Dixon explains “often, companies don’t understand the entirety of the customer’s experience; how many times have they searched for a solution on our web page, only to go to the Contact tab out of frustration, which is where the company thinks is step one for the customer?”

33. Among our stronger employees, how many see themselves at the company in three years? How many would leave for a 10 percent raise from another company?

34. What did we miss in the interview for the worst hire we ever made? (Here’s one I learned – if you are looking to hire an organized highly detailed person, walk with them to their car after the interview and look inside.)

35. Do we have the right people on the bus? This is very important – your key people could be in the wrong seat.

Dan Lacy
Growth & Profit Coach, Financial Strategist, Cash Flow Doctor, CEO Mentor
dan@dynastybuilder.com
phone: 765-644-8887

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Five Effective Ways to Appreciate Your Best Customers

by Tony Rubleski - December 29th, 2014

#1: Hold thank-you events. When you show appreciation and sponsor or host an event, it’s a great way to not only meet with your best customers, but also catch up on how they’re doing. I’ve always been amazed that more people don’t employ this strategy. The amount of goodwill, fun, and positive word-of-mouth far outweigh the costs to host the event.

#2: Send birthday cards. This is old school marketing 101 that so few businesses employ. When someone gets an unexpected card in the mail it leaves a huge impression. In the age of email, texts and Facebook, the temptation is to choose the easiest path. Good old-fashioned birthday cards still go a long way to building goodwill.

#3: Thank customers for their referrals. Referrals are powerful. I’m an advocate that you should not only track where referrals come from, but more importantly thank the person who sent them to you. I love hand-written thank you notes along with a small gift such as a box of cookies, a book, or gift certificate. In addition, a phone call is always a smart idea.

#4: Send them business. Besides doing business if possible with your best customers, you should always be seeking ways to help them grow. By getting to know who they work with, you can often think of and refer people in your circle of influence to them. I do this a lot. It not only show that I appreciate them, but that I believe and trust them enough to send people I know their direction.

#5: Offer them new products and promotions first. People love the feeling of being exclusive and special. Anytime I roll out a new service, talk, event, or book I bring it to my best clients first. In addition, as a thank you I include special promotions just for them as a thanks for their ongoing patronage and referrals. It’s amazing to me how many businesses create special promotions for new customers only and then completely skip over their current ones. This to me short-sided thinking and foolish.

I hope this short, yet effective list, has inspired you to make appreciating your customers a priority now and in the future!

Tony Rubleski
Mind Capture
616-638-3912
www.mindcapturegroup.com

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Current, Former Carmel Signarama Owners Both Come Out Ahead

by Jason Sophian - November 17th, 2014

Carmel Signarama owner Jay Patel

Carmel Signarama owner Jay Patel


(Carmel, Indiana)—One of the most basic axioms of a successful business deal is that the smoothest transaction is the one which leaves all parties happy. Current Carmel Signarama owner Jay Patel and former owner Joel Hall can both tell you firsthand how true that statement really is. In March, 2014, Patel purchased then-owner Hall’s successful Signarama business where he has since worked to both maintain business continuity to keep existing customers happy, while also putting his own stamp on the business as he seeks continued growth.

From his side of the transaction, Joel Hall, the store’s previous owner, found the process to be just as painless. “I worked hard to build a solid business and increased the value of this location by 400%,” says Hall. “United Franchise Group, the parent company for Signarama, values the overall business ownership process as an exit strategy.”

That’s the purpose of Signarama’s Mentor Program, which Hall headed up for the world’s largest sign franchise. “We found that experienced business buyers value the mentor program. Franchisee peer support and transition planning comes from our group and the new franchisees benefit greatly from taking part in it during a resale such as ours,” Hall adds.

In fact, Hall enjoyed his part in the Signarama Mentor Program so much, it was one of the reasons he sold his business and says, “This is the Best Exit Strategy One Could Have.” He is now pursuing his passion of educating college students on entrepreneurship and owning a business or a franchise.

Former Signarama owner Joel Hall

Former Signarama owner Joel Hall

Patel is working to keep—and grow—upon Hall’s success. “First and foremost, I placed an emphasis on keeping the customers that have been coming here for years,” says Patel. “It was nice to own a business that had already proven to be successful.” No stranger to entrepreneurship, Patel has business acumen gained from over 18 years of successful ownership experience, beginning with a single dry cleaning company which expanded to five by the time he sold the operation, as well as experience as the owner of a non-emergency medical transportation business.

For his part as both a former owner and reseller, Hall shares his advice for the next-generation of franchisees. “There is an incredible amount of work that needs to be put in to running and growing a business. At some point the business will transition into new management or ownership and many owners worry about ‘what am I going to do?’ after the business sells. During my ‘journey’ I found out that I like to teach. So, after 14 years of building a successful business and then selling it, I now teach full time and love it. The hard work does pay off.”

ABOUT SIGNARAMA
Signarama, www.signarama.com, the world’s largest sign franchise, offers branding and messaging solutions in addition to comprehensive sign and graphic services to consumers and commercial customers – from business signs, vehicle wraps, and digital signs, to advertising and marketing services. Signarama is part of a successful system of business-to-business franchise brands and development services under the United Franchise Group. As part of the $49-billion-plus worldwide sign market, Signarama has been at the forefront of the sign industry for more than two decades. Approaching 900 locations worldwide, the company expects to have more than 1,200 locations worldwide by the end of 2016.

For additional information, contact:
Jason Sophian
Sanderson & Associates
jason@sandersonpr.com
312-829-4350

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Buy-Sell Agreements Should Protect You, Your Co-Owners And Your Company

by T. Ray Phillips - November 5th, 2014

Presented by T. Ray Phillips

Imagine, on the eve of your wedding, that you plan to divorce, on a friendly basis of course, in 15 years or so. During those 15 years, you will work diligently, and quite successfully, to build a business.

On the preordained day that your marriage ends, you announce that you are willing to give your soon-to-be ex-spouse one-half of your company’s business value—in cash. And you let your “ex” value your company because those are the terms of the agreement the two of you signed a year after you were married.

Sounds ridiculous, no? Yet, you may have done something quite similar (and similarly ridiculous) in your business with your co-owners.

Few owners begin working together with an expectation of future acrimony, much less litigation. Fewer still give thought to one day leaving the business—even on friendly terms. Indeed most exits are not precipitated by a disagreement among co-owners; instead owners leave for a variety of reasons and simply want to do so with their share of business value.

And remember, one day you will leave your business.

Over time, in business as in marriage, partners can grow apart. We’ve all witnessed the resentments, discord, and wastefulness of a friend’s or acquaintance’s needless nasty divorce. Business divorces can be equally unpleasant—with an added twist: One may be unable to leave the business, or force a partner to leave, without appropriate tax and legal planning.

When you or a co-owner wants out, what will happen? Chances are that when you turn to your company’s buy-sell agreement, you will find that it is woefully out of date. You may also find that it controls the terms of your (or any owner’s) exit from the business not only upon death, but also during lifetime.

If you haven’t looked over your company’s buy-sell agreement since you signed it, dust it off and check out at least four key provisions:

Lifetime and death transfers of ownership:
When must an owner sell, or offer to sell?
When must an owner (or the company) buy and when does it have the option to buy?
How will the value of the company and the value of a departing owner’s interest be determined?
Does the agreement mandate the use of an independently determined Fair Market Value at the time of transfer? If not, the valuation will favor you or the other owner. It will not treat you even-handedly.
What are the terms (length, down payment, interest and guarantees) of the buyout?
We generally assume that buy-sell agreements control the transfer of an owner’s interest when he or she dies or becomes disabled. Indeed, they do that. But they usually do much more and if you don’t appreciate how much more, disaster looms.

At his annual physical, Steve Hughes complained that he was bone tired. After a battery of tests, Steve’s doctor observed that, while there was nothing physically amiss, Steve did seem depressed. After some introspection, Steve was able to articulate that he had no interest in continuing as a partner in a successful CPA firm. Like many owners, Steve had lost the passion and commitment to the business that still stoked his younger co-owners. He decided to sell out before his partners demanded it.

Steve broke the news of his departure to his two partners and noted that their buy-sell agreement controlled only a buyout at death and an option for the company to buy Steve’s stock if he were to sell it to a third party. Attempting to sell a partial interest in most businesses to a third party is always a difficult proposition, but current economic challenges made that course of action impossible.

Steve and his partners were left in a classic dilemma: remaining shareholders want to purchase the departing shareholder’s interest so that future stock appreciation—due solely to their efforts—would be fully available to them. Conversely, because the profits of a closely-held corporation are either accumulated by the company or distributed to the active shareholders in the form of salaries, bonuses and other perks, the departing shareholder (now an inactive owner) rarely receives significant income in the form of distributions or dividends.

Naturally, Steve wanted and needed maximum value for his interest while his co-owners were convinced that the company’s cash flow could not support Steve’s buyout.

So, look again at your business continuity agreement: If you are the one leaving, is it as fair as it is if you are the one left behind?

When you sit for the first time across the bargaining table from your partner, you will want that table set with a fair valuation method, a thoughtfully designed lifetime buyout provision (that may well reduce the cash flow required for a buyout by 20 to 30 percent), and manageable payment provisions. Since it is exceedingly difficult to design these provisions when buyer and seller are at the bargaining table, agree to and document the valuation, cash flow, tax, and payment provisions long before potential discord or differences of outlook arise.

DISCLAIMER: The information contained in this article is general in
nature and is not legal advice. For information regarding your particular situation, contact an attorney or tax advisor. This newsletter is believed to provide accurate and authoritative information related to the subject matter. The accuracy of the information is not guaranteed and is provided with the understanding that none of the providers of this newsletter, including Business Enterprise Institute, Inc., is rendering legal, accounting or tax advice. In specific cases, clients should consult their legal, accounting or tax advisors.
The example provided is hypothetical and for illustrative purposes only.

It includes fictitious names and does not represent any particular person or entity.

To contact T. Ray Phillips Re: subject matter in this article, call
(317) 208-6312 OR e-mail trphillips@finsvcs.com

Please do not leave trade instructions over e-mail, as they cannot be processed.

Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS under circular 230, we inform you that any U.S. Federal tax advice contained in this communication, unless otherwise specifically stated, was not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing, or recommending to another party any matters addressed herein.

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