PROFITS AREN'T EVERYTHING, THEY'RE THE ONLY THING - PART 2

Last month, I provided some points from a Track Session I attended at the National Convention. George Cloutier was the presenter and he provided some thought provoking points from his latest book which are particularly relevant in today's world. Although his book and his talk are geared to larger businesses, many of the points can be utilized by small businesses and in our personal lives as we work our way through these troubling times.

Mr. Cloutier suggests that the reason your business may be failing, or at least not meeting your expectations, may well be your fault every bit as much as the country's economic situation. He posed some very specific questions to assist the business owner in evaluating where they are, and where they might improve by taking a different path.

Here are the remaining points of his session

9.       Pay for Performance. In the current economy do not consider raises - for yourself or an employee. His philosophy is that the whiners will walk; the winners know they will make more money this way, and they are the ones you want to keep. Review performances monthly and quarterly and adjust accordingly. It should not be an end of year bonus.

10.     Mr. Cloutier makes the bold statement that "you are not in business to pay your vendors. Never pay your bills on time. You are in business to make money and build your personal wealth".

Managing your outgoing and incoming cash is a daily combat. Every day you are fighting to cover your costs and there never seems to be enough for modest improvements, pay yourself a reasonable wage and, if you have employees, cover payroll.

11.     Mr. Cloutier states that there is a source of reliable cash - your vendors, although usually overlooked or misunderstood. The source is created by not paying vendors on time and stretching out payments in an orderly manner from 30 days to 60 days. Your vendors are your best source of interest free financing. Use them appropriately.      

         Keep an A list, a B list and a C list of vendors. Pay the most important suppliers and service providers first, but still late. However, be honest and fair. Get on the phone and negotiate politely. You will be surprised at the concessions you get - especially in a recession.

         If you rent an office or store, the same thing applies. The landlord will not evict you if you are 30 days late. He needs you as much as you need the walls.

 12.    If bankruptcy is your only option, do it early. Timing is everything in a successful Chapter 11 Reorganization. Make sure you have enough assets and sources of income to survive and rebuild. Put survival first. See Chapter 11 as a legal and financial measure to help you deal with too much debt. It takes time, hard work and sacrifice but you will come out stronger.

 13.    "Don't Treat Sales Like Your Mother-in-Law". Focusing on sales is the best way to grow your business, both in good and bad times. Collect names and build a database of customers. Expand your footprint and diversity. Wrap your clients in a warm and fuzzy cocoon so no one can steal them from you. Stop being "fat, dumb and happy - get lean and hungry".

 14.    Mr. Cloutier also recommends that you resist trade shows. He says that no real business gets done at trade shows. He also suggests that you stop attending motivational seminars as another way to cut costs. Money doesn't care how warm and fuzzy they make you feel.

15.     Don't let the recession be an excuse. If you are not surviving, you were not doing all you should have been doing when times were better. So now is the time to go back and reassess - make changes - move forward, even if it means some drastic changes you would not have dreamed about a year or two ago. Cut costs - be aggressive. Continue to invest in areas that will generate growth. AS LONG AS YOUR BUSINESS HAS A PULSE IT IS IN YOUR POWER TO CHANGE IT.

I would like to thank the Board for contributing half the attendance fee so that I had the opportunity to attend the 60^th National Convention; and I hope that these excerpts from Mr. Cloutier's talk have provided you with some ideas for your business, and also given you an insight into the type and quality of information you can acquire by attending the conventions.