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How the Kaaawa Floods Can Save Your Business

March 9th, 2006· Filed Under: General Posts · Small Business Systemization · Your Business Coaches in the News

As the rocks came tumbling down the mountain, through the streambed in the backyard, water came rushing down, heading straight for our offices.

During the lull before the rockslide, we walked up the hill with our rottweiler to check out how the water was flowing through the natural streambed. John-Paul pointed out that his concern was where the water kept hitting the top sides of the embankment, “If the water breaks through this, we’re going to be in a heap of trouble.”

At that moment, we started hearing rocks tumbling through the stream, getting louder and louder. Bells started going off in our heads, warning us that if we didn’t get out of there, we might become a statistic on the evening news.

We got out of the way just as a boulder burst through, and water came gushing down heading straight for our office doors below. We followed our rotti’s lead, as the four-legged, sure-footed canine found a safe path to get to the bottom.

Grabbing the industrial-sized broom, I began to sweep the foot of water that came down as a result of the rockslide, while John-Paul went to the top to plug the source of the problem.

What seemed like an exercise in futility, sweeping and sweeping in order to prevent water from seeping through the house, I kept thinking that until he fixed the source of the problem where the water was coming from, I’d be sweeping into perpetuity.

Catching my breath, trying to stay on top of the water flow that wanted to form a stream through our office to make it to our neighbor’s, I realized that I needed help if I was ever to catch up. Minutes after calling the fire department, praying that help would soon be on its way, our neighbors showed up offering to help any way they could!

MaryJo helped me sweep, while her husband, Scott, went up the mountain to help JP plug the source of the problem. Finally, it looked like MaryJo and I were able to keep up with the water flow, so I went to see what the men were doing – and sure enough – they had repaired the source of the problem. Whew! We were safe!

Pictures of the Hawaii storm in our town - flooding damage - majestic mountain waterfalls

I kept thinking of one small-business owner in our coaching club who came to last month’s mastermind call. He talked about how he couldn’t hire a virtual assistant because he had so much on his plate and didn’t have time to train another person.

But, just like the raging torrent of water that came down the mountain, his workload will continue to build, never allowing him to catch up or catch his breath – until he addresses the source of the problem – and finds some outside help to handle the workload.

Once he creates the proper systems to handle the workflow, he’ll not only make life better for himself, he’ll make life better for all the people his business helps or employs.

Everything we do affects those around us. As long we did our job to hold back the waters, the rest of the neighborhood was protected. The same is true for all the small businesses in our community. When we all work together toward a common goal, everyone benefits.

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Here’s How Small Business Owners and Professionals Can Keep and Grow More Clients

August 29th, 2005· Filed Under: General Posts · Sales Strategies for Small Business · Client-Centric Service · Small Business Systemization · Small Business Marketing · Small Business Growth Strategies

There’s one fact we always encourage our business coaching clients and members of the Business Owners Coaching Club to remember — the fact that 90% of your money, energy, and effort goes into getting the first sale with a client.

After that it takes very little time, and even less money to maintain and grow that relationship. But sadly, this is something that very few small business owners or professionals take to heart. Most business owners move on to “getting more clients” instead of nurturing the ones they already have. When they do, they’re losing more than just symbiotic opportunities. They’re losing their reputation.

One simple way to reassure your clients, reinforce their decisions to do business with you, and honor them for their loyalty is by instituting an intentional follow up plan. A series of small events, messages, or interactions to keep your company name associated with positive thoughts in the minds and hearts of your clients.

What small business can learn from the most successful auto dealer in the world

One company that fully understands the concept of reinforcing and rewarding client loyalty is BMW.

BMW mini with business coaching client

I’m sure you’ve seen one of those cute new “Mini” coupes or convertibles that hit the roads a year or so ago. Well, a friend of ours bought one recently, and she raved about their client care and follow up. She told us that she received more gifts and follow up letters since she bought her car than she did from most boyfriends… never mind any other company she’s ever dealt with.

These aren’t necessarily big, luxurious gifts. They’re more like small tokens of appreciation to share with your friends and family who like your new “toy.” Mugs, postcards, notepads, and other small gifts, ALWAYS coming with another variation of a “Thank You for being our valued customer” letter inside the package.

Think about it. Who doesn’t enjoy receiving surprise gifts in the mail? Not too many people, I’m sure you’ll agree.

Business Coach’s Corner:

    - If the majority of people experience buyers remorse, then why don’t the majority of business owners have some type of plan to address this for their own client base?

    - What type of system do you have in place that prevents buyers remorse and builds better relationships with your clients?

    - If you don’t yet have a system, what is some small step you can take in the next seven days?

Take that step and make it the first step in a complete system for building better client relationships. When you do, you’ll keep more clients longer, spend less on marketing, and turn your current clients into raving fans!

John-Paul Micek is known as the “Click-and-Mortar Business Coach” by business owners around the world thanks to members of the Business Owners Coaching Club™. He’s a published author and weekly columnist for the business section of the Honolulu Star Bulletin, and a managing partner with the international small business coaching company RPM Success Group Inc.®


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The Small-business Owner’s Secret Success Weapon - Part Three

June 25th, 2005· Filed Under: General Posts · Small Business Start up · Small Business Systemization · Personal Performance For The Business Owner · Small Business Management · Small Business Growth Strategies

In part one of this series you took a hard look at the performance of your business in seven different areas. And in part two you learned the top three reasons why most small business owners fail to achieve as many goals as they have potential to. Now in part three of this article series, you’ll learn about the secret weapon that successful business owners like Oprah, Sir John Templeton, and Tiger Woods use to grow at an exponential rate — and how you can do that same!

The power of the professional view from “outside your box”

If I had listened more to my mentors and business coaches along the way, I would have ended up moving from New Jersey to the paradise island of Hawaii years earlier than I did. (And with more money in the bank too!)

You see, in preparing for the sale of two of my previous businesses my CPA and I made a somewhat disparaging discovery. He pointed out that I could have put at least another $1.2 million more in my pocket if I just handled the “people-side” of the businesses differently during the last four years of my ownership. I was pretty ticked at myself to say the least.

I, like most owners and managers out there, was way too close to my business to clearly see the solutions to challenges and opportunities for growth right in front of my nose. I was so focused on the day-to-day operations of the business and addressing the urgencies of running my businesses that I didn’t always reserve the time required to work on my businesses.

Thank God my mentors were at least able to knock some sense into me when it came to severe issues. When they alerted me to the danger or potentially serious situation that lay ahead, I’d take a week or two off to concentrate my time to working ON my businesses, instead of IN them. Admitadly not the most efficient way to handle things, but it worked. And more imporatantly it gave me a tremendous advantage over competitors.

How to take that “outside” insight to a whole new level

As helpful as my own mentors have been, (and believe me, they saved me from hundreds if not thousands of costly mistakes) they didn’t follow any set program or have a systemized approach. Things would have to reach a critical point before I’d recognize the need to reach out for guidance or to dedicate some serious time to the long range goals of my businesses.

If I only had the advantage of a set schedule and a structured coaching program I would not have had to take two weeks in a row to focus ON my businesses. I could have achieved more, done it in less time, and had more fun too!

These are two of the big differences between having a mentor, and having your own business coach - accountability and structure. For example, when I partnered with my first business coach, he helped me with that structure in three specific areas that my mentors had not.

    1. My business coach helped me set a schedule that worked for me. He consistently reinforced me to focus 20% of my time on my business. This allowed me to leapfrog past competitors with ease.

    2. With my business coach I had a level accountability that I didn’t have with my mentors. Not only was it my hard-earned money invested with my coach that motivated me to get results, he would hold my feet to the fire and make sure I followed through on actions I committed to doing.

    3. My business coach helped me save countless hours of trial and error trying to reinvent the wheel. With regularity he showed me how the answers to my greatest challenges were right in front of my face. I was just too close the see them.

If you’re not satisfied with your answers to the questions in part one of this article, now may be the time for you to put this secret weapon to work for you. Find a business coach for yourself. Your search does not have to be a matter of luck either.

No matter what action you take today, make sure you remember that you must ask better questions in order to get better answers. If you don’t like the answers you had to the questions at the beginning of this article, then you have to gain insight from a trusted person outside your business who can help you ask yourself better questions in the planning stages, before you take action. If you let life “just happen” you’ll never have control over the answers you get.

John-Paul Micek is known as the “Click-and-Mortar Business Coach” by business owners around the world thanks to members of the Business Owners Coaching Club. He’s a weekly columnist for the business section of the Honoulu Star Bulletin, and a managing partner with the international small business development company RPM Success Group Inc.


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The Small-business Owner’s Secret Success Weapon - Part Two

June 22nd, 2005· Filed Under: General Posts · Small Business Start up · Small Business Systemization · Personal Performance For The Business Owner · Small Business Management · Small Business Growth Strategies

In part one of this series, we looked at some crucial questions that business owners have to give serious attention to if they want to create a company that’s a rock-solid cash flow machine. How did you do with your answers to those questions? (Click here to review the questions from part one.)

If you’re honest with yourself, I would hallucinate there were at least one or two areas that you could have done better in. That’s been my own experience, and it’s something I’ve seen proved out with our business coaching clients over and over again. Focusing on improving existing systems, or optimizing strategies you already have in place can yield surprisingly big returns.

You’d be amazed at how easy it is to add $25,000 or more in six months right to the bottom line of a company with just a $200,000 per year gross! And it’s not at all unusual for us to see a 400% increase in cash flow for start-ups in 90-days or less! It’s pretty darn exciting when you think about it! Those type of untapped increases exist in every business — and some companies hold much more potential than that. If you’ve had your head down, working hard in your business, I can assure you the same potential is lurking right there in your own business as well.

There are business systems, sales or marketing approaches, employee hiring/motivation techniques, and customer service procedures that you could have implemented or leveraged better. It’s quite likely you could have added thousands more to your bottom line, uncovered more hours each week, and had more fun running a fully systemized business. Yes — the right business running the right way is really fun to run!

So, back to the questions… why didn’t you do better in some areas?

I know it’s not for lack of trying. More than likely it’s simply because “life happens.” In today’s fast moving marketplace, it’s tough to stay focused.

And it’s probably not a lack of knowledge either. Many small business owners who’ve made costly mistakes state they “should’ve known better.” And in fact — most do. The reason for sub-par results is a little more insidious than just “working hard” or even “working smart.”

The top three causes of sub-par results in small businesses

During the the last five years coaching small business owners, we’ve found the #1 most common cause is NOT “too much going on.” (That’s the #2 cause of poor performance returns - being controlled by your business instead of you controlling it.)

It’s NOT “hiring the wrong people”, and “motivating the right people the wrong way” (that’s the #3 cause.)

The #1 cause for making costly mistakes and getting poor performance returns is — being too close to your situation and way too familiar with your work environment to see the best solutions.

In my next post in this series I’ll share the secret weapon successful business owners are using every day to reach more goals in a year than most owners do in a decade!

John-Paul Micek is known as the “Click-and-Mortar Business Coach” by business owners around the world thanks to members of the Business Owners Coaching Club. He’s a weekly columnist for the business section of the Honoulu Star Bulletin, and a managing partner with the international small business development company RPM Success Group Inc.


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The Small-business Owner’s Secret Success Weapon - Part One

June 20th, 2005· Filed Under: General Posts · Small Business Start up · Small Business Systemization · Small Business Marketing · Personal Performance For The Business Owner · Small Business Management · Small Business Growth Strategies

How can you do a better job of reaching your full potential as a business owner? How can you achieve more, do it faster, and make fewer mistakes? We’re all looking for that edge, that competitive advantage that will equip you to take a leadership position in your chosen niche. As a matter of fact, it’s your expertise in your chosen niche that can often be the biggest stumbling block.

As busy business owners, we’re often too close to the problem to clearly see the solution. It’s just an unavoidable natural result of being an expert in your niche. I experience it myself, and I see it with our business coaching clients from cultures all around the world.

And on top of that — when you’re passionate about what you do, it’s tough to maintain a clear perspective as your life seamlessly blends with your work.

What you’ll learn in this three-part article series

The good news is that there are solutions that successful business owners are already using to overcome this challenge. And there is one secret weapon you can use to quickly apply those same solutions to take yourself to higher levels of performance, profits and personal fulfillment. (Yes, you can have all three…. really!)

In this article series you’ll learn what the secret weapon is, and how you can use it to put yourself on the fast-track to lasting success.

But before we do that, it’s critical that you to take at least 10 to 5-minutes to take real hard look back at the last 12-months.

Print this post out and ask yourself …

    - Could you have better systems in your company, systems that help run the business whether you’re there or not?

    - Can you take off a month or more and still have your business hum along without you?

    - Could you have spent more time growing your business, and less time letting your business run you and your life?

    - Could you have done a better job identifying under utilized resources and optimizing the top profit centers already in your company?

    - Could you have attracted more of your “ideal client” instead of just taking any client who walked through the door?

    - Could you have done a better job turning your new clients into raving fans - for life?

    - Could you have hired or motivated your team a little better? Hired employees that would be “round pegs” in “round holes”?

Give these questions some serious thought, then in part two we’ll take a look at what may be getting in the way, and how you can remove that barrier to exponential growth.

John-Paul Micek is known as the “Click-and-Mortar Business Coach” by business owners around the world thanks to members of the Business Owners Coaching Club. He’s a weekly columnist for the business section of the Honoulu Star Bulletin, and a managing partner with the international small business development company RPM Success Group Inc.


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How to Make BIG Business Growth Gains Easy in Your Small Business– Part 2

May 19th, 2005· Filed Under: General Posts · Small Business Systemization · Personal Performance For The Business Owner · Small Business Management · Small Business Growth Strategies

In part one of this business coaching e-session, we looked at why planned incremental improvements are the sure path to BIG success. You also learned why making improvements in your business in small bite-sized pieces is the way to keep yourself from “should-ing” all over yourself. In part two, you’ll learn a practical four-step process that you can use to make it easy for you and your team to put small incremental improvements into action each and every week.

Let’s get right to it!

Here’s a simple, incremental process that’s we’ve proven time and time again with our business coaching clients to accumulate BIG gains in the real world of the busy business owner. It starts with four simple steps.

    Step 1. Once per month, you (and your team) create a master list of five improvement targets (tasks or projects) that you’d like to make in the next 30 days – one for each category in the list below.

    Step 2. Decide how you’ll know when each target has improved to an optimal level. (Coach’s hint: To make this easier, always make sure that your plans and actions are linked to measurable results. To help with that, just think about how your clients will be able to tell when you’ve achieved the improvement you wanted in this target area.)

    Step 3. Every week, choose one small step you can take in each improvement target that will help you reach your ultimate goal. Focus your attention ONLY on taking that one small step in each improvement target area - no more! Do this for all five areas listed below.

    Step 4. Before planning your small steps for the upcoming week, review the previous week’s actions and see how you’ve improved. Once the month is up, repeat the process again for the following month.

5 key for your to focus on for sustained business growth

When working with our business-coaching clients we help them to focus on 12 specific areas of business development. That can be a little overwhelming when starting out on your own, so here are five general areas with which you can start. These are core areas that every business owner should focus on improving, no matter what your industry or niche is.

    1. Systems and organizational structure
    2. Click-and-mortar marketing
    3. Consultative selling
    4. Client service
    5. Delivery of your product or service

After just four weeks of consistently practicing this process, you’ll be amazed at what you’ll begin to see. You’ll have proved to yourself how easy it is to make significant and measurable improvements - one small step at a time. And, if you’re like most small-business owners who faithfully follow this process, you’ll have tons of new ideas for improvements in your business.

Most of our coaching clients have developed so many incremental improvements that we’ve developed special Organizational Structure and Task Management Maps to help them keep moving along at warp speed — even with hundreds of bite-sized improvements in the lineup! This is something you can do for yourself too.

If you’re feeling overwhelmed or want to really accelerate your achievement of BIG gains with simple small steps, then it’s time to move up to working with your own business coach. You can do that with one-on-one RPM Business Owner’s Coaching, customizing this process to address areas specifically related to you and your business. Or, gain peer support and masterminding along with practical guidance by joining the Business Owner’s Coaching Club.

This process of incremental progress is too valuable a tool for you not to have in your growth and success arsenal. Like many of our business-coaching clients, you’ll find that this proven incremental process works in any area of your business and life.

If you want exponential returns on your time, money and effort, STOP “should-ing” all over yourself. Create your own success – and do it one small step at a time.

John-Paul Micek
The Click-and-Mortar Business Coach
Business Owners Coaching Club


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How to Make BIG Business Growth Gains Easy in Your Small Business– Part 1

May 13th, 2005· Filed Under: General Posts · Small Business Systemization · Personal Performance For The Business Owner · Small Business Management · Small Business Growth Strategies

You don’t have to make BIG changes in your business to be a HUGE success!

Does that shock you? It really shouldn’t, but don’t feel bad. Unfortunately most small business owners and entrepreneurs get fooled into believing it takes BIG improvements to make it BIG.

Take a closer look at the lives of the most successful business owners in the world. You’ll see how their current level of achievement is the result of a massive number of small, almost unperceivable actions and decisions consistently over time, not one-time dramatic events.

The “BIG change” business growth trap

Have you ever found yourself looking for some groundbreaking event to make a dramatic improvement in your business? I know I’ve fallen prey to that thinking at times. It’s the best way to get stuck in the status quo and to feel sorry for yourself. And, it’s the surest way to fall behind your competition too!

Running your business (or living your life) with this type of thinking is the sure way to live a life of “shoulds.” You know what I’m talking about.

“I know I should do ‘x’, but ‘y’ hasn’t happened yet.”
“I should do ‘this’, but I can’t without ‘that’.”

You keep it up and pretty soon you end up with more excuses, delays and justifications for not reaching your goals than you can shake a stick at. Before you know it you’ve got so many piles of “should” lying around that you can’t walk through your office without getting it stuck to your shoes. Before you know it you’ve “should” all over yourself and you’re a stinking mess.

I don’t want you to let it get to that point, it just makes for a real dirty job cleaning it all up. I know because I’ve been hardheaded enough to revisit that type of situation a few times in my 25+ years of entrepreneurial pursuits and business ownership. :)

There is a better way to business growth

It doesn’t involve really BIG improvements, it’s practical for the even the busiest business owner, and it’ easier that you might think.

Here’s a powerful principle that will revolutionize your approach to business growth. If you put this principle into practice I guarantee it will transform your business development and allow you to make what will end up being radical, yet lasting improvements in your company.

Instead of always trying to make something dramatic happen, concentrate your efforts on planning for, scheduling, and taking action on one small improvement in each one of the 12 key roots responsible for your business growth every month.

If you strive for the business improvements you want in incremental “bite-size” pieces you’ll make remarkable gains in as little as 90-days. Best of all, once you’ve seen what you’ve achieved, it’ll seem effortless. You can do this on your own, or really supercharge your business growth by involving your employee team.

It’s only common sense — right?

After all, think about it. If you’re not happy about something in your business or life right now, that’s how it got that way to begin with, right? Small actions (or in-actions) stacked one on top of another, day after day for years – minute after minute — intentionally or not, you are creating your own future.

It’s the smaller incremental changes you make on a consistent basis that determine where you’ll be a month, a year or a decade from now. If you dedicate yourself to improving just one small component of your business (or life) every month, you’ll rocket ahead of 94% of the population. That being true imagine what you could accomplish if you focused on boosting your performance in one targeted area per week!

In part 2 of this article I’ll show you a practical four-step process you can use to make it easy for you and your team to put small incremental improvements into action each and every week.

(If you haven’t already grabbed the RSS feed for this site and added it to your RSS reader/or your “my.yahoo.com” home page — do that now so you won’t miss part 2. You can also bookmark the page, but when you subscribe via RSS the RSS feed will let you know automatically every time we post new info and strategies. If you’re not yet familiar with RSS feeds and how to subscribe using them, visit www.AdvancedBusinessBlogging.com for introductory videos and coaching on using RSS readers and aggregators. You can also learn more about blocking and RSS there too.)

John-Paul Micek
The Click-and-Mortar Business Coach
Business Owners Coaching Club


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The Number One Reason Small Businesses Get Refund Requests — And How you Can Avoid It!

April 5th, 2005· Filed Under: General Posts · On-Line & Off-Line Marketing · Client-Centric Service · Small Business Systemization · Small Business Marketing

In our coaching with small business owners around the world, I see it over and over again. Inexplicable refund requests are one of the most frustrating things for well meaning companies. But do you know what single factor is responsible for almost every refund request and nearly every piece of returned merchandise?

Buyer’s Remorse!

Since this is an emotional problem that causes the dissatisfaction, you need a high-power, emotion-based solution.

When does Buyer’s Remorse take place?

The minute the cash has transferred hands, fear enters the heart of your client. Warning sirens sound, and their subconscious starts prodding them, “Did you really make the right decision?”

This happens because most client’s have been burned before, so it’s only natural for them to have thoughts of skepticism and concern. Plus, it’s human nature to look for something negative in a situation. The bottom line is that most people are almost expecting something to go wrong.

Studies have determined that 90% of the problems we worry about never come to pass. Never! Yet, we all fall prey to worry despite of this fact (some more than others.) The question is though — what are you doing to answer all that’s going on in their head?

It’s your job to put your client’s fears and concerns to rest. Why would you let them worry when you know you’re going to take care of them - no matter what? (You’d take care of any problem they had anyway — wouldn’t you?!)

What you can do to minimize or even totally eliminate buyers remorse

One of the best ways small business owners can put their client’s concerns to rest is to offer an iron-clad guarantee. Not just a guarantee to induce prospects to buy your product or service, but using that guarantee to reassure your client immediately after the sale.

For many business owners this seems a little daunting when I first suggest the strategy, but fear and confusion quickly melt away when they see how easy this powerful reassurance tool is to put into use.

When they see the results on their new clients and cash flow — I often have to stop these achievement driven men and women from kicking themselves around their office for not developing a structured guarantee system sooner.

A simple strategy that changes the entire mindset of your clients and prospects

This simple gesture curtails potential fears in the minds of your clients. They are able to tell themselves, “Hey, if something does go wrong, I don’t need to get all worried because all I need to do is come back, and they’ll replace it for free.”

The other thought that goes through their mind, and often seals the deal more easily than you might imagine is, “Well, if they’re going to offer a lifetime guarantee, than this must be an excellent product. They’re willing to stand behind their product/service 100%, and the risk is squarely on their shoulders.”

After a little internal conversation, the next thing they hear their brain say is, “This is a no-brainer decision. I’m buying!”

Business Coaching Corner:

So now it’s time to take action. Here are some serious questions to give you motivation to get rolling right now.

    If the majority of people experience buyers remorse, then why don’t the majority of business owners have some type of plan to address this for their own client base?

    And if the majority of your competitors are offering some vague, namby-pansy guarantee and you come along with a rock-solid detailed guarantee the inspires confidence — how big will your competitive advantage be?

    So … what type of system do you have in place that prevents buyers remorse in your customer?

    What are you willing to put into place in the next 30-days?

If you don’t yet have a structured guarantee system in place that protects both your clients and your company, Coach Deb or I would love to help you out. A few private coaching sessions and you’ll be ready to thrill your clients, and leave your competitors heads spinning asking “how can they do that?”

About the Author: Known as “The Cash Flow Coach,” John-Paul Micek works with business owners and entrepreneurs to help them achieve the freedom, fulfillment and financial independence they want. If you’d like to learn how to boost your personal performance, supercharge your communication skills and create a “systems driven business” that delivers the type of net profits you want, John-Paul would love to help you set your own rules so you can win the game of business success. Learn more about working with J.P. one-on-one at http://www.BusinessOwnersCoaching.com. You can reach him directly at “JPM-at-RPMsuccess-dot-com” or toll free at (888) 334-8151.

© Copyright 1999-2005 by RPM Success Group ®, All rights reserved. Reproduction in any form without the express written consent of RPM Success Group ® is prohibited. You may use this article/post in part with an active trackback, or in it’s entirety as an RSS feed without previous permission, so long as it is published with the full authors tag and copyright notices. Call RPM Success Group toll free at 888-334-8151 for offline reprint permissions, or by email editor@rpmsuccess.com.

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Three Keys to Building a Salable Small Business

March 11th, 2005· Filed Under: General Posts · Small Business Systemization · Business Owner's Mindset · Building Your Financial Fortress

It’s 6 a.m. Hawaii time as I begin my phone appointment with a new business-coaching client from Pennsylvania. Joe sounded frustrated as he related his story. “I’m 57 and I’ve been running my own company for 30 years. Now it’s time to sell my business, and I realize it’s not worth what I thought.”

Like so many other small-business owners, Joe was utterly dismayed why something he had worked so hard at for so many years had so little value. The good news is that it’s a story that you can totally avoid telling yourself.

After selling two businesses and helping many other owners prepare their small businesses for sale, I’ve found there are three basic keys to building a high-value company. Here’s a quick overview.

Key #1: Cash Flow

When it comes to valuing a business, cash flow begins with “net” taxable income. Then you add back things like depreciation, taxes paid, owner’s salary/benefits, and other ownership “perks.” A multiple is then applied against your cash flow based on your industry and geographic area.

Although those “add backs” will always be a factor in any small business, when you’re preparing to sell — the cleaner you can make your cash flow the better. Start backing off your perks two to three years out from when you intend to sell your business.

Key #2: Retained Earnings

This is the profit that your company keeps each year. A track record of steadily increasing retained earnings not only increases the value of your business, it also lowers the risk potential for buyers.

Here’s how it works for most small businesses. Owners often begin in the red when they start up. By the third year, most businesses will reach a breakeven point. Then a year or so after, the business begins to show retained earnings.

That amount will range from a couple thousand dollars to 10,000 or more depending on your industry. But what’s important is that from then on, your books should show a steady climb in your retained earnings.

Key #3: Operational Systems

Formalized systems for hiring, managing, marketing, and operations are critical in creating a high-value business. Having policy and procedure manuals, written operational systems, and customized software systems will not only improve the profitability of your company — they will turn your small business into an asset that someone will want to buy.

Without formalized systems, all you have is a “job.” And no one wants to buy a job!

If you want to build a salable small business, you need to start taking action now

Put together an advisory team with your business coach, CPA, and a business broker. Develop a plan, and then work that plan.

The sooner you do it, the more value your company will have when it comes time to sell. And, the more rewarding business ownership will be for you until that time comes.

About the Author: John-Paul Micek and his partner Deborah Cole Micek are Business Growth Coaches. They help small business owners like you, achieve profit-doubling growth in one-third the time it would take to do on your own.

In just 12-months with your membership in the www.BusinessOwnersCoachingClub.com you can bridge the digital divide and transform your small business into a click-and-mortar powerhouse that delivers the profits, personal fulfillment, and free time you want.

© Copyright 1999-2005 by RPM Success Group ®, All rights reserved. Reproduction in any form without the express written consent of RPM Success Group ® is prohibited. You may use this article/post in it’s entirety as an RSS feed without previous permission, so long as it is published in it’s entirety with all copyright notices. Call RPM Success Group toll free at 888-334-8151 for offline reprint permissions, or by email editor@rpmsuccess.com.

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