Small Business Trends Magazine - Planning Edition 2019

February 2019 • Planning Edition

YOUR PLAN for a SENSATIONAL Year

5 THINGS TO DO BEFORE YOU RETIRE HOW TO CREATE A BUDGET WORK ON YOUR BUSINESS, NOT IN IT IMPORTANT TAX PLANNING INFO INSIDE

PLANNING EDITION STAFF CEO and Publisher Anita Campbell Executive Editor Shawn Hessinger Magazine Editor Joshua Sophy

4

Magazine Operations Joshua Sophy

Your Plan for a SENSATIONAL Year The new year is already in the rear view but it’s never too late to get a new start.

Here are a dozen ideas to make this year too incredible for superlatives. You may not need to implement all of them, so choose the ones that will help you the most—and get going!

6 How to Overcome The following 7 techniques will help

Business Budget You’re running a successful small business

12 How to Create a Financial Business Plan A financial business plan is essential to help

COO Staci Wood CTO Leland McFarland Social Media Marketing Amanda Stillwagon

Obstacles to Success

10 How to Create a Small

Sales Tamar Weinberg

16 5 Planning Moves to Make Before You Retire Small business owners focus most of their energies on starting

14 10 Things Business Owners Should Know about IRAs

Individual Retirement Accounts (IRAs) were created

18 How to Work ON Your Business, Not IN It

How often have you heard a trainer or consultant say

20 3 Keys to an Effective Business Plan Effective Business Planning is more than deciding

Staff Writers Annie Pilon Gabrielle Pickard-Whitehead Rob Starr Michael Guta David William Antony Maina Advertising Inquiries advertise@ smallbiztrends.com Copyright 2019 - Small Business Trends LLC, All rights reserved.

Images under license from Shutterstock.com, unless noted.

Contact Small Business Trends 15272 Collier Blvd. #201 Naples, FL 34119 888.842.1185

February 2019 -- Planning Edition

3

YOU R P LA N F OR

A SENSATIONAL YEAR

The new year is already in the rear view but it’s never too late to get a new start.

Here are a dozen ideas to make this year too incredible for superlatives. You may not need to implement all of them, so choose the ones that will help you the most—and get going!

Clean Up Your Act

screen to just the ones you need.

Give Your Business a Makeover

Go through your old files — both digital and paper — and purge what you don’t need. You’ll feel lighter and more energized. Plan a company wide cleanup day for all your employees to get their work spaces in order, too.

Get On Schedule

If customers come to your place of business, January is the perfect time to give it a new look. Decide if you need new signage, a new coat of paint, or new furniture and fixtures to update it for the coming year.

Is your calendaring solution working for you? If not, find a new one.

(Maybe it’s a paper calendar — that’s OK. The point is to find the system that’s most effective for you.)

Simplify Your Tech Life How many apps do you have on your phone? How many of them do you actually use? Ditch the unnecessary apps and streamline your home

4

Small Business Trends Magazine

Ditch the unnecessary apps and streamline your home screen to just the ones you need.

Revisit Your Plans from the Past Year When last year started, what goals did you set? Have you achieved them? If not, do you still care about them? If you do care, figure out what stopped you from following through in 2018 and what you can do differently this year.

Keep In Touch Drop a quick note to your 10 most important contacts, letting them know how much they mean to you and why.

Reconnect with colleagues and prospects. Maybe you talked about a big project with a colleague last summer, but both of you dropped the ball. Reach out to the person again to see how you can work together in 2019.

Commit to Learning To stay on top of your industry’s news and trends in the coming year, find a new blog, publication or newsletter in your field to follow.

Sign up for an upcoming industry conference or event.

companywide weight loss challenge is also a great idea.

Get the Team Focused Don’t Overwhelm Yourself Set up a date this month to meet with each of your employees and discuss their goals. Set measurable goals for each person; if possible,

If you’re the type who likes to make New Year’s resolutions, it’s easy to overburden yourself with dozens

Drop a quick note to your 10 most important contacts. tie their success to a bonus plan or other reward. It’s a great way to keep employees motivated.

Help Your Employees Be Healthier Employee health and wellness are increasingly important to worker satisfaction. Figure out ways your company can support employees in reducing stress and becoming more physically fit.

For instance, you could schedule twice- daily “stretch breaks” or invest in standing desks. A

of unrealistic goals. Keeping your resolutions manageable will make them easier to live by. Try making one resolution each for your mental, physical and emotional health, or one resolution for your business and one for your personal life.

Along those lines, make time this year to occasionally relax and recharge. It will help you stay energized and focused throughout 2019.

Rieva Lesonsky Expert Contributor

February 2019 -- Planning Edition

5

HOW TO OVERCOME OBSTACLES TO SUCCESS The following 7 techniques will help you dig your way out of the Trough of Reality. Consider these triggers to inspire you and help you overcome barriers. They are designed to help you take action … and get momentum going.

Set Small Goals – and Achieve Them Give yourself small goals regularly. Problems are easier to solve when you break them down into small chunks.

In other words, put one foot in front of the other. And focus on taking a single step. After you take that step, focus on the next.

When you achieve a small step, you get fast positive results. Give yourself or your team a pat on the back for the achievement. You’ll get positive reinforcement immediately.

6

Small Business Trends Magazine

It’s so important to feel successful. By focusing on small goals, rather than one big hairy audacious goal (BHAG), you develop a steady stream of positive achievements and successes to feel good about. That’s crucial to keep you motivated during the Trough of Reality. Motivation spurs action — and that’s what overcomes inertia.

Compartmentalize Simply tell yourself you will address a non-urgent problem or issue later. And then put the non-urgent item on a calendar for next week or next month.

In: “What’s Money Got to Do With it?” he points out, “Many a wonderfully creative, self-promoting, innovative, passionate and seemingly successful entrepreneur has stumbled mightily when it comes to … making money ….” All because deep down, entrepreneurs think making money in business is somehow bad. That attitude holds us back from success.

Some small businesses get mired down in the Trough of Reality because they make enough to just “pay the bills.”

But they are not generating enough profit to invest in the business, hire some help or pay themselves a salary.

No wonder the business is going nowhere!

Get over it. Raise your prices. Charge what you and your company are worth. You will value your business more.

And so will others. That will drive a sense of purpose for your company.

Seek Out a Shared Experience Network and talk with business owners and entrepreneurs. You will realize you are not alone. What you are going through, someone else has been through.

And survived.

Go to an industry conference. Attend a Chamber of Commerce meet and greet. If you can’t talk with your peers face to face, then connect online. Find others on social media or forums. Join a mastermind group.

I’ve used this technique to save my sanity as a business owner.

How often have you felt overwhelmed with too many things to do? Each item may be a small thing individually. Piled up they are like Mt. Everest!

This will give you a boost of confidence. You will realize the Trough of Reality is not unique. You’re just living out a typical life cycle of a small business.

You will get fired up with enthusiasm again.

Use Data to Solve Your Problems Every issue doesn’t need to take up your valuable mindshare right now. You are in control of what you let clutter your mind. Set issues aside until later. Besides, by then you may realize you can delegate the issue to a staff member.

Compartmentalizing will keep you from feeling overwhelmed. When you feel overwhelmed, inertia sets in. Compartmentalizing positions you to act — but later, when you can focus.

We small business owners don’t use enough data to solve problems. Data — and the right data — can help you “see” the solution to your problems.

In fact, all too often we can’t even clearly define our problem. Sometimes the exact nature of the problem is clouded in the mists of daily activity.

Overcome Your Fear of Making Money

Take, for example, a common issue in many small businesses: sales are slow. But how often do we dig underneath? Do we know why sales are slow?

Get over your fear of making money.

Is it a temporary situation caused by seasonality?

John Jantsch of Duct Tape Marketing fame examined how deep-seated attitudes toward making money hold us back.

Do we have too few leads coming in?

Is the problem that we’re just not overcoming objections

February 2019 -- Planning Edition

7

and closing a high enough percentage of leads?

Or could it be a business model issue — selling big ticket items only, taking 9 months to close a single sale?

All of these are very different challenges requiring different solutions.

There’s another complication in small businesses. You know all that data that big enterprises have at their fingertips? In a startup or small business we don’t have that data.

Many small businesses have not implemented systems such as a CRM. Heck, some entrepreneurs don’t even update their accounting records except once a year at tax time!

We don’t have a report to tell us things such as how many leads we generated last quarter compared with prior quarters. We may not have the data measuring how long our past sales took to close. And so on.

Without this information what do we do? We figuratively sit and wring our hands. We let vague worry sap our energy.

Armed with data and analytics, we would know what to do to take action and trigger momentum.

Persist, Persist, Persist H. Jackson Brown, Jr., author of Life’s Little Instruction Book, offers three words in his 21 suggestions for success: persistence, persistence, persistence.

But here’s the positive side: 50% are still in business!

Somehow, the surviving 50% managed to get through the Trough of Reality.

I’ve often wondered how many of those who failed might have survived, had they persisted a little while longer.

Were the businesses really failures — or did the owners simply lose interest? Did they get tired? Did giving up seem easier than giving it another try?

We’ve all felt like giving up at least once. Don’t let anyone kid you.

If you are tempted to give up, try to stick it out another month or another quarter. When you commit to sticking around, you may uncover new and exciting opportunities.

Persist just a little while longer to overcome obstacles to success. Don’t give up until you honestly can say, “I tried everything.”

Act. Now. Do something, even if it’s wrong. Most missteps can be undone later.

Boldly take a step forward. And another and another.

Action triggers momentum and breaks through inertia.

Don’t allow your business to just “happen.” Run your business purposefully.

Set out to break down barriers and overcome obstacles to success. Seize the day!

Anita Campbell

Did you know that 50% of small businesses fail after five years?

8

Small Business Trends Magazine

Small Business Trends Publisher

Break the Revenue Up into Recurring Income and Expected Income

How to Create a Small Business Budget NEEDS A HEAVY EDIT FOR CONSISTENCY You’re running a successful small business, but things aren’t ideal.

Everything is ticking along nicely, though, in an ideal world, you’d like to see greater profit margins. The answer to earning more profit from your small business venture could be a better business budget.

Every successful business needs a budget for knowledge and insight into costly waste and how to make bigger profit margins faster.

If you’re wondering where to start in compiling a budget for your business, you’re in the right place.

Check out these steps for creating a budget for your business today.

Figure Out How Much Revenue Your Business is Making

When creating a small business budget, you should break the revenue the company is pulling in into two separate categories — recurring income and expected income.

Recurring income is the regular and reliable revenue the business generates from the likes of contract work and client retainers.

Expected income, which is important when compiling a small business budget, is a prediction of future earnings. Expected income is essentially a forecast of what your small business is likely to earn is three, six or even 12 months from now.

Determine Your Fixed Costs and Regular Expenses

It’s virtually impossible to budget for a small business if you haven’t any clue how much the venture is earning you on a regular basis.

The first step to small business budgeting then is to identify this amount or at least a monthly average.

What expenses do you have to pay for your business each month? It might be the salary of a small team or employees, costs to rent your business premises, IT costs, travel expenses etc. If you’re a start-up, you’re probably having to fork out for a number of unavoidable startup expenses, such as technology, administration and marketing costs.

If you’re already running a small business, you can find out how much the business is making by looking at your sales figures.

When creating a small business budget, take a look at your accounts and statements and figure out what your fixed business costs are and

10 Small Business Trends Magazine

the total amount these unavoidable expenses cost you each month.

Calculate Your Variable Expenses As well as fixed costs, most small businesses have variable costs they have to pay out, which don’t have a fixed price tag and are more haphazard than regular expenses.

One example of a variable cost might be outsourcing work and using a freelancer to manage projects that may come in — thus the cost may change frequently from month to month.

Many variable expenses can be scaled up or down depending on how your business is doing. For example, if your business performed better one month than you had forecast, you could use the additional profit to increase your variable expenditure, subsequently helping you grow at a quicker rate and make greater profit in the long-term.

Separate One-Time Expenses All businesses have one-time spends they can’t avoid. It might be a new computer to replace one that’s crashed, a new company vehicle or new machinery for your operations.

No matter what your one-time spends are, by creating a small business budget, you’ll be able to factor in such expenditures. Without doing so, these expenses can come as a nasty surprise and be a huge financial blow to a small business struggling with cash flow.

Put This All in “Writing” Once you know exactly how much the business is pulling in, how much you’re spending and on what, put the figures down on a spreadsheet. Make separate columns for your income sources. These could include regular costs such as utilities, office rent and salaries. It could also include variable expenses such as commissions, raw materials, contractor wages and one-

time spends. It should also include hardware, software, furniture and office supplies.

Be Efficient With all the payments and expenses put down on a spreadsheet, you can see if you have more revenue coming in compared to costs going out. This will give you a clearer idea of what profits your business is making.

Similarly, you can see, at a glance, if your business is actually suffering a loss. A short-term, one-off loss, might be manageable, but long-term losses are certainly not sustainable.

Use your budget to see what cutbacks you can make on expenditures, whether they are fixed costs, variable expenses or one-off payments.

Utilitize your budget to fine tune your small business and help turn it into a significantly more profitable venture.

Gabrielle Pickard Whitehead Staff Writer

February 2019 -- Planning Edition 11

How to Create a Financial Business Plan A financial business plan is essential to help your small business. These important documents are put together to help your business plan for the future. Make no mistake. This part of your business plan might look like accounting but a financial business plan is designed to look forward.

HERE’S HOW TO PUT ONE OF THESE PLANS TOGETHER.

rejigger your estimates for expenses and sales.

First off, it’s important to remember these don’t necessarily follow any kind of sequence. Although they include profit and loss statements, a balance sheet and cash flow statements, you might jump back and forth when you first start putting one of these together.

That said, there are some important benchmarks you’ll need to cover when you’re putting together one of these financial business plans.

For example, when you put together a cash flow, the numbers might tell you that you need to go back and

SALES FORECAST Using a spreadsheet is the best way to put together a sales forecast.

You’ll want to forecast the sales for your small business over the course of three years to attract investors

12 Small Business Trends Magazine

and lenders. For the first year, you want to set up columns for sales monthly. Afterwards, you can go to a quarterly basis for years number two and three.

EXPENSES BUDGET Putting together and expenses budget will help to balance out your sales forecast. In a nutshell, this will tell you how much money it’s costing to produce what you’re selling. This will have a variety of different categories including leased

equipment and utility payments. Of course, you can’t forget other items like payroll and rent as well as depreciation on any equipment that you use.

CASH FLOW STATEMENT When you put the sales forecast and the expenses budget together, you get a cash flow statement.

“The cash flow statement is often overlooked but it provides a good summary of what’s going on in the other financial statements. It tracks the changes in the balance sheet as well as incorporates PL and Equity statement items,” Steven Vertucci, CPA Audit Partner, MaloneBailey, LLP, wrote to Small Business Trends.

This is one of the underpinnings of any financial business plan. It’s the fulcrum that many lenders will look at that you can use to gauge your projected success or failure going forward. The cash flow statement is important to show you where you need to tweak your business model — what you can keep and what needs to be discarded.

It’s based at least partially on all the other elements in your financial plan. Experts suggest that if you have a business that’s been running for a few years, you can use profit and loss statements and balance sheets from the past.

financial ratios to see where your business is going. Try to look at your financial statements every month to see where you are at. Its great information to help you succeed in Business.”

INCOME PROJECTIONS Once you’ve put these pieces of the puzzle together, you can start making some income projections.

The idea here is to round up the numbers that you put together in the previous categories. In a nutshell, this is the money that you think your company will make in one year.

It’s important for potential investors, lenders and your own plans as a small business owner.

PROJECTED BALANCE SHEET As you’ve probably guessed by now, putting together a good financial business plan is a step-by-step process and it needs to include a projected balance sheet. This is another way that you can cover all the different bases and take educated guesses at your money situation looking forward.

liabilities you haven’t already covered so you can come up with a projected net worth at the end of your fiscal year.

These are all educated and researched guesses about what your money situations going to look like for your small business. Putting a good financial business plan together gives you a roadmap of the money trends that you can expect.

The idea is to be able to pin down a breakeven point as best as you can. That’s the financial pinnacle where sales equal expenses. If you’re looking for a business loan, investors will be very interested in how all these numbers come together.

Here’s a final piece of advice. Many small businesses put one of these financial plans together and then leave it in a figurative drawer where it’s forgotten. It’s best used as a financial tool and a reference point. In fact, filling in the numbers in some areas like the profit and loss statement monthly and then comparing them to the income projections is a good idea.

Rob Starr

You need to deal with assets and

Staff Writer

If you’re a start up you need to break down this part of your financial statement into 12-month pieces.

Robert Riordan is a CPA. He also emailed some comments to Small Business Trends on the importance of putting a financial business plan together.

“Learn to go over all the numbers and watch where the expenses are going. Know what a budget is and follow it. Learn how to apply

February 2019 -- Planning Edition 13

10 Things Business Owners Should Know about IRAS

Individual Retirement Accounts (IRAs) were created by the Employee Retirement Security Act of 1974 (ERISA). Since that time, IRAs have undergone considerable change, although the Tax Cuts and Jobs Act of 2017 didn’t introduce any new rules. Still, you may not fully appreciate the importance that IRAs can have to you and your staff or some of the pitfalls that could apply.

Here are 10 things business owners should know about IRAs:

It’s Easy to Increase Retirement Savings If your business doesn’t have a qualified retirement plan, it goes without saying that you probably should be putting money into a personal IRA each year. If you have a spouse who doesn’t work outside of the home, you can also contribute to an IRA for your spouse. While the contribution limit for an IRA is modest (currently $5,500, plus $1,000 for those age 50 or older by year end), over time the savings plus the tax-deferred earnings add up considerably. For example, a person puts in $5,000 each year starting at age 40. After 25 years, contributions total $125,000; with just a 7 percent annual return, the savings would amount to over $338,000. At 10 percent, the balance would be nearly half a million dollars!

If your business has a qualified

retirement plan, you can still add money to an IRA, but only if your modified adjusted gross income (MAGI) is below set limits. Check out the MAGI limits for 2017 and 2018.

Age Matters You can only add money to an IRA if you are under age 70½ at the end of the year. This is so even if you are still working. But if you’re past the age limit while your nonworking spouse is not, you can still add funds to his/her IRA with your earnings from a job or self-employment.

Consider Tax Deduction Now Versus Tax-free Income Later Decide whether you want the tax deduction for a contribution now through a traditional IRA or taxfree income from a Roth IRA funded with after-tax dollars. In making this choice, factor in your savings

14 Small Business Trends Magazine

time frame, tax bracket and income limits for contributors with what you know now (you can project but can’t be certain about the future). For example, if your income is too high, you are barred from making Roth IRA contributions.

Payroll Deduction IRAs Help your Staff If your business doesn’t have a qualified retirement plan, you can help employees save for retirement through a payroll deduction IRA. They set up their accounts; you withhold funds from their paychecks and deposit them in their IRAs.

Certain Investments are Barred Most IRA owners invest their savings in publicly-traded stocks, bonds, mutual funds, exchange traded funds and bank certificates of deposit. But if you use a self-directed IRA, you can have other types of investments,

including gold and silver bullion.

However, no investments can be made in collectibles, and there are considerable restrictions on investments in real estate and closely-held businesses. What about bitcoin? The IRS hasn’t said yes or no yet.

Certain Investments Trigger Annual Taxes Generally, income from a deductible IRA is tax deferred; it isn’t taxed until distributions are taken. But if an IRA holds certain master limited partnerships (MLPs), there may be current tax. The MLP issues a Schedule K-1 to the IRA; the owner picks up the income reported on the K-1 on his/her personal return.

However, no losses reported on the K-1 can be taken currently by the IRA owner.

RMDs Can’t be Delayed for Working Once you reach age 70½, you must begin to take required minimum

distributions. This is so even though you’re still working.

Tax-free Transfers Can be Made to Charity When you reach age 70½, you can make direct transfers from an IRA to a public charity each year up to $100,000. The amount transferred counts toward RMDs but isn’t taxed.

However, no charitable contribution deduction is allowed. After 2018 when more individuals will be using the increased standard deduction and won’t care about not deducting charitable contributions, this transfer option likely will become even more attractive.

Loans are not Allowed While qualified retirement plans can permit participants to take loans from their accounts, IRAs cannot. If a loan is taken, the account loses its tax-exempt status and the

entire balance becomes taxable to the owner. However, if funds are withdrawn and replaced within 60 days, the IRA remains intact and no taxable distribution results.

Tax Rules for IRAs are Unchanged Again, the Tax Cuts and Jobs Act made major changes in the tax rules … but not for IRAs. The ability to deduct IRA contributions or make after-tax contributions to Roth IRAs has not been changed.

Conclusion For more about IRAs, see IRS Publications 590-A (for putting money in) and 590-B (for taking money out). If you have questions, talk to your CPA or other financial advisor.

Barbara Weltman, Expert Contributor

February 2019 -- Planning Edition 15

5 Planning Moves to Make Before You Retire Small business owners focus most of their energies on starting, running, and growing their businesses. Some do not plan to retire, but others assume that at some point they will retire … and, of course, they will die.

is? The only way to know for sure is to get an expert appraisal. Appraisals can be pricey, but are necessary if you want to start a gifting program for your interests as part of an estate planning strategy (explained later).

Unfortunately, according to a MassMutual study, nearly 40 percent of owners don’t have a retirement income strategy; they assume the proceeds from the sale of their business will provide them with financial security. This is so even though only half of all businesses have had any appraisal within the past three years.

However, you can get a general idea of value by using an online tool, such as BizEquity, BizEx, and Free Valuations Online. A ballpark estimate can help you move ahead with your post-retirement plans.

Assumptions and lack of action can undermine a secure retirement or cost heirs dearly. There are important things to do before you retire. Below are some actions to take – now.

1

Get an Appraisal of Your Business

How do you know whether your business is worth what you think it

2

Decide What Will Happen to Your Business When Something Happens to You Even if you make plans for retirement, disability or death may suddenly intervene. What happens to your business if you can no longer work? What happens to the business when you die? Do you want co-owners to carry on without you? Do you have children or key

16 Small Business Trends Magazine

employees ready to step in? Give these questions thought so you can craft plans to implement your answers.

3

Sign a Buy-Sell Agreement

A buy-sell agreement is a legally binding contract among owners, or among owners and the company, that ensures business continuity despite changes in ownership.

According to the MassMutual survey referenced earlier, only 44 percent of business owners have buy-sell agreements to spell out what happens when a contingency — retirement, disability, divorce, personal bankruptcy, death— occurs.

Buy-sell agreements can have a valuable estate planning benefit: If the agreement is made at arms’ length and fixes value, it can be used for estate tax purposes, provided that no party can unilaterally make any change.

5

Fund Your Succession Plan

Deciding who inherits what or whether co-owners accede to your interests is only part of the planning process. You have to make sure that you provide the means to put your plans into effect.

For example, say you have a partner and agree that she can buy out your interest when you die, and you address valuation in a buysell agreement reflecting your understanding of what will happen at death. Be sure to have sufficient insurance to cover the cost of this buyout so your heirs are protected.

The MassMutual Survey found that only half (52 percent) of existing buysell agreements are funded with life insurance; only 5 percent are funded for a disability buyout.

4

Create a Succession Plan

A comprehensive succession plan contains both lifetime and postdeath actions to transition business ownership to your children or others. The plan is comprised of a variety of actions:

that you’ve provided other property to the child who does not inherit the business.

Be clear to avoid any family disputes that can lead to lengthy and costly litigation which decimates family wealth. Case in point: Famed jeweler Harry Winston’s two sons fought for decades over financial interests in the company, costing more than $10 million in legal fees and much more in family acrimony.

Conclusion Focusing on your business is great, but it may be time to focus on yourself and your family. Meet with a knowledgeable estate planning attorney to address succession plans that satisfy your needs and take care of these things to do before you retire.

During life. Actions include signing a buy-sell agreement discussed earlier. For those with estates valued at more than the federal estate tax exclusion amount ($5.43 million in 2015), tax-saving strategies, such as lifetime gifting of business interests, may be warranted.

At death. Make sure your will and any trusts you’ve set up reflect your succession planning intentions. For example, if you have two children and want ownership to pass to one child, be sure that the family understands your intentions and

February 2019 -- Planning Edition 17

How to Work ON Your Business, Not IN It

How often have you heard a trainer or consultant say that as the owner of the business you should be “working on your business not in it?” I’ve said it often myself.

Fortunately, no one has ever asked me exactly what that meant. It appears to be a cliche or phrase that has become accepted although not clearly defined or understood.

What Does It Mean to Work On Your Business Not In It? So, what’s the difference between working on your business versus in your business?

•

•

Employees work in the business.

Most have specific duties or tasks to accomplish on a regular basis. Most know what to do.

They know what is expected of them.

The “boss” however, doesn’t have such a clear path. Few were trained to be bosses. Their tasks are self appointed and,

based on my observations, quite varied from owner to owner. The result is that many owners work in the business sometimes, and on the business at other times.

It appears to be a matter of priorities and fires.

All too often the boss spends much of his or her time fighting fires.

Rather than an owner working on the business they have become crisis managers. Many sit in their offices and wait for someone to come through the door with a problem that needs attention or resolution — now.

Most owners seem to be pretty good

18 Small Business Trends Magazine

at handling crisis problems. Some even call them “opportunities.”

The reality is that some owners have trained their employees to bring all problems that need immediate attention back to them. This, of course, takes the responsibility away from the staff. It puts responsibility squarely on the owner’s shoulders.

I see extreme examples when a store is being remodeled or expanded.

The owner then becomes the construction foreman, the architect, the designer and the one who knows where all the materials can be found.

Through it all, the store keeps on running. Sales continue to be made, orders for inventory are placed.

Each department does its tasks. The employees know what to do on a day-to-day basis.

The Problem With Working IN Your Business You might wonder, “what’s the

problem with that?” After all, things are still running.

The problem is, there is also no leverage.

There is no long term planning. No one is looking at what could happen (or should happen) next year or three years from now.

The owner has no continuing education. The owner is getting little input other than from staff members.

And most of that is negative. Soon the owner’s skills and outlook get stale. We all need to sharpen our saws occasionally.

No one is focusing on the big picture.

Everyone including the owner is down in the weeds. All the focus is inside the four walls. No one is visiting with customers and using that feedback to improve and evolve.

No one is tracking the competition to see what has to change.

Spending all your time working IN your business can harm it. Why? Because it’s not about what you’re doing. It’s about what you’re not doing.

How to Work ON Your Business Okay, so what would change if the owner started working on the business?

be attending regular meetings to become an integral part of the community.

The owner would be expanding his or her circle of associates and yes, even friends, outside the industry.

He or she would be spending “think time,” that quiet time spent thinking about the future. The owner would be finding ways to use all that knowledge bottled up inside but not exercised because of day-to-day pressures.

As I travel and talk to owners I often hear them complain that they don’t get as much time to do the things they like anymore. They say they are working longer hours than ever. They say they are beginning to suffer from burnout.

Well, Bunky, burnout is not uncommon. It’s not something only a few suffer. If you’ve been in the business for a decade or more you’ve probably suffered some level of burnout, distress, angst that seems to be almost impossible to resolve.

Why? You’ve been spending the majority of your time solving other people’s problems. You’ve come to accept it as just part of the business.

It doesn’t have to be that way.

People don’t learn by doing repetitive work. They learn by making judgment calls that are not always right. They learn by being given the authority and responsibility to do a better job.

Next Steps As an owner it is your responsibility to mentor and coach your managers.

Give constructive feedback. Have them do the same for those who report to them.

There is an adage that says: “If it can be measured it can be managed. If it is measured it can be improved.”

Working on your business should mean that you have the tools to measure and manage. Just as importantly, your managers need the training and tools to measure and manage those who report to them.

Computers and phones have evolved, freeing you up to be out of the office more. Software gives us reports and data that just five years ago we might only have dreamed of getting.

Now your business must evolve. You have the hardware. You have the software. Now, as the owner you must learn what those digital reports mean. You must learn what you need to do to implement and monitor them.

Benefits You Get

First, the owner would not be the first one in and the last one out. He or she wouldn’t necessarily come to the store or office every day.

Only you can change you. Your quality of life has to be a high priority. You have to let go of some things.

The owner would be circulating in the community making contacts with other owners of small businesses getting ideas. He would seek out organizations made up of like-minded business people in his community.

She would be joining industry associations, or local associations like the Chamber of Commerce, the Rotary Club, and the Lion’s Club.

Once a member, the owner would

When you do, you may see your business take off.

Some owners have discovered that once they give their subordinates more latitude to make critical decisions those staff members rise to the occasion. Staff members become better managers themselves.

On the people side, you need to hone your mentoring and coaching skills. Fact is, your staff is closer to an extended family than a working team. Like it or not you are the Daddy or the Mommy as well as the Chief of Police and coach.

However, you shouldn’t be the sole fireman.

This is what it means to work on your business not in it.

Anita Campbell Small Business Trends Publisher

Will they make mistakes? Count on it.

February 2019 -- Planning Edition 19

3 KEYS

to an Effective Business Plan Effective Business Planning is more than deciding where you are going and setting a plan to get there. In my estimation we need to look at it holistically, from a 30,000foot view. What are all of the components to being successful?

Summed up, I would say they are Vision, Action and Monitoring.

Vision Where are you going with your company? What are the goals? How does your department play in that vision? No matter if you are the owner of the company, the head of a department, or a supervisor of a group of people, you need to know the overall goal of the organization, and how you play a role.

Most organizations have a vision, a mission statement. That is

the guiding star around which all decisions should be made.

Business planning happens in direct relationship to that mission. When you know where the company is going you then ask the question – What is it going to take to get there?

part of a greater goal, stick with the greater goal for a moment.

Take a moment and ask yourself – what is your goal? It could be the company goal, or the goal of your department. There might be more than one goal. If so, consider whether they are part of a greater goal or really separate. If they are

If you are responsible for a department within a company, one of the questions you want to be sure you can answer is what impact will your success have on the company as a whole. Your success should be directly tied to the overall mission

20 Small Business Trends Magazine

If they are separate, you will have to consider them separately, and consider the plans for them separately.

and goals of the company. Your goal is a significant part of the whole.

One of the most important questions you now have to answer is: Who is involved in helping you make it a reality? Staff, vendors, clients, resources ...

It’s important to know who you need to help you make your goal a reality because they have to be included in your plan. Even if you were a department or company of one, you still will have people or companies whose help you will need to enlist.

Take a moment and make a quick list of the people and or companies that come to mind. Remember, these can be coworkers, associates, employees, contractors, or vendors.

It could be your superiors. Often times we need to enlist their help so we can meet our goals.

So, now you know where you are going and who you need to help you get there. A critical component of effective business planning is communication.

How will you communicate with each of those constituencies? I submit this is an area that falls down a lot in business. We get so caught up in the doing that we don’t think about communicating. And we think everyone knows where we’re going, how we are getting there, and their role in the process.

In addition, talk with each person or company about how they play a role. When you are clear about what you need from them, and the impact they will have, you gain their buy-in, and energy.

them to be sure they are making progress as well.

If they don’t know, they won’t be passionate about it; they won’t work toward it in the way you need and want them to. So tell your story. Tell it a lot. Talk about progress, about challenges. Pull them in to the decision making and problem solving where you can.

One of the reasons I like shorter term goals is they are easier to monitor and track. And they make it easier to adjust your plan based on how things are going.

Action We can get so involved in the day to day that we aren’t doing the things that will really move us forward. Have you ever stopped and realized that you weren’t any closer to the goal? It might be because while you had a goal, and maybe even a plan, you didn’t have that plan mapped out in a way that you could work it effectively.

And, sometimes the goal seems so big that we have a hard time deciding how to accomplish it. so we just do stuff. But that stuff doesn’t get us where we want to go.

Try taking your goal and breaking it down into smaller sequential goals.

One step at a time. Ultimately, those smaller goals will get you to your goal. The ultimate key point here is to put those steps on your calendar – not on a todo list.

I don’t believe that people really embrace a mission, and their role in achieving it as quickly as we’d like.

I believe it is our responsibility to communicate consistently, clearly, and in a compelling way.

When you want to be sure you get them done, you want to make them actual things, actual appointments on your calendar. Keep them small – no more than 30 minutes.

You’ll notice how much you are accomplishing.

It starts with sharing your vision and your plan with everyone. Don’t leave it to chance. You want to be talking about this early, and often.

And remember – when there are other people who impact your progress you want one of your small steps to be checking in with

Monitoring

I like a 30-day short term goal.

I think it’s enough time to make progress but not so much time that you won’t be able to identify what, if anything, you need to change.

When you use a 30-day plan, you schedule a time to review. So on the last day of the month for instance, you take a look at the previous 30 days and ask yourself 4 questions.

1. What worked?

2. What didn’t work?

3. Did I hit my goal?

4. What am I going to do for the next 30 days?

Having the answers to these questions will help you to move forward. You may find that you have the wrong people in the wrong places. Or maybe a process you are using isn’t working. Having a clear monitoring system will really help you identify in real time what’s going on and therefore, help you reach your goals.

Your goals and your plan are things you should be talking about a lot.

With everyone! The plan should be broken down into smaller goals with action steps that are small, and scheduled on the calendar. And monitoring your progress should be a way of life.

Diane Helbig Expert Contributor

February 2019 -- Planning Edition 21