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Aug 2011 - Vol 6, Issue 8
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Howdy All,
I will be in Toronto this week. Come out and see me at the Rental & Staging Roadshow. My topic is 21st Century Sales. Are you keeping up with the times?
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Roadshow Keynote Announced
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"Our first Roadshow of the season in New York City had a record turnout. Attendees heard my keynote on 21st Century Sales: How to Untangle Your Old School Model in which I explain using 1990 sales techniques on 21st century clients continues to under-deliver on revenue. But the problem is even bigger than that. We've created a system that unintentionally stifles growth, rejects great sales candidates, undermines project management, and dramatically cuts into our profits! Come learn how to unravel this mess we've made." - Tom Stimson
TORONTO REGISTRATION NOW OPEN! click here
- Toronto, ON | August 10, 2011 | The Capitol Event Theatre | Downtown Toronto
- Las Vegas NV | September 14, 2011 | Location to be announced soon
- Dallas, TX | November 16, 2011 | Location to be announced soon
Now more than ever it is important for the rental and staging industry to get together, network, and share information. NewBay Media is pleased to provide the Roadshow as lively means for doing so. In each city pros like you will enjoy a full day of awesome business and technical tracks, as well as exhibits, breakfast, lunch, and cocktail networking sessions. Registration is FREE for those who pre-register online!
And REMEMBER: Rental & Staging Roadshow Attendees now receive up to three InfoComm CTS Renewal Units
INTERESTED IN EXHIBITING? Click here for more information!
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The Numbers
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 Executive Coaching and Business Metrics Where you've been only matters if you know where you are going Highly evolved (mostly larger) companies have sophisticated tools for analyzing data - dashboards, instant updates, forecast reports - but they also have a team of analysts, finance experts, and executives to focus on results. What can the rest of us do?One-on-One Executive Coaching from The Stimson Group is an excellent tool for setting and achieving goals, building on successes, resolving short-term issues, and learning more about your craft. It adds an industry expert and veteran businessperson to your team. In monthly sessions we will review your financial results, discuss options for overcoming obstacles, and brainstorm on strategy. I will share my knowledge and experience - tips, tools, and shortcuts - to help you avoid mistakes. One-on-one coaching helps you stay focused, keeps you accountable for results, and makes being the boss a little less lonely. Learn how you can finally achieve your goals here. Super-Charge Your Financial Dashboard Can you check the health of your company instantly? Does anyone beside you understand the results?  Corelytics™ is a simple to use online tool that will not only help you visualize your business, it will benchmark your results against companies with similar profiles. Once a month you upload your latest financial info to your secure Corelytics ™ profile and it updates your financial dashboard, your goals progress, and how you compare to the industry. It's like having a CFO in the Cloud. The cost is extremely reasonable given how valuable this information is and it's the perfect companion for Executive Coaching sessions.  Why would you use Corelytics™ instead of what you have now? 1. Accounting programs are good for reporting, but poor at analysis. Graphical comparisons will help you understand which numbers are making the most impact (or are spiraling out of control). 2. Spreadsheets can pick up where accounting software leaves off. But, do you really want to design spreadsheets and then update them each month with new data? 3. Most small businesses lack the capacity to find and incorporate market trends in their planning. Corelytics™ includes statistical data from companies just like yours. Whether you want to keep up with your peers or surpass them - data is your friend. You can sign up and use Corelytics™ on your own, but as you will see in some of these blog posts - the real impact comes when you combine goal-setting and tracking with an external business coach. |
| Reader Comments | 
What Does The Cloud Really Mean to ERP?Note: In response to last month's Best Practices column, "The Elusive ERP Solution" I received many encouraging comments. Jeffrey Payne with Flex Rentals took the time to share his views on The Cloud, which I found very helpful. -Tom Tom, I'm frequently struck by the overall lack of understanding of what "the cloud" really is. There's also considerable debate among developers and system engineers about what it truly means. To begin, it's one thing to run applications in the cloud and it's another thing altogether to design applications to take full advantage of a cloud architecture. There are two approaches in play right now and they're very different. Here's what I mean: First, there's the Amazon approach where you buy computing resources directly -- server access, storage volumes, IP Addresses. Yep, it's the cloud, but unless you really change the way your software is designed, there's little practical difference between this approach and server colocation. You run the same operating systems, the same software and deploy it the same way. Unless you take extra steps architecturally, you're on the cloud in name only. The chief benefit of the Amazon approach is that you can rent the resources by the hour that you used to have to write Dell or HP a big check for. It's a cashflow management tool. Then there's the Google approach exemplified by the Google App Engine, in which server resources, storage, backups, redundancy, load balancing, and scaling are Google's problem. You merely deploy applications. The trick is you have to design these applications based on Google's API and architecture. So, in practice, it's impossible to take an existing piece of software and simply port it to Google's cloud. You have to start from scratch. And there are major challenges impacting software architecture that developers have to consider in order to truly leverage the 100% uptime promise of the cloud. Relational databases like MySQL, Oracle, SQL Server, etc... have to adapt to a whole new way of thinking about data storage. Data is not stored in tables, it's stored in shards scattered around the world. Features most developers are used to -- like table joins and aggregate functions -- don't exist because they can't be implemented in a truly distributed environment. In terms of database functionality, it's actually a step back. The tradeoff is 100% uptime and near infinite scale, but it comes at a big price. Many of the benefits customers want -- mobile applications and remote data storage -- are not dependent upon cloud computing. They can certainly be hosted on cloud systems instead of buying racks of servers, but the technology to support remote data storage and mobile computing has existed as long as mobile devices and the internet. The chief benefit of migrating to a true cloud architecture -- meaning virtual hosting environments where one instance of an application hosts multiple companies (instead of the one app per company model we all use today) will be reduced cost. If all data lives in a distributed database, reliability and scalability go way up, and cost drops dramatically. However, developing the applications to manage data in this fashion is huge undertaking and still out of reach for small business markets. But the fact that most folks are just starting to consider systems in which their data is stored remotely and accessible via an internet application means there is plenty of time to develop true Cloud applications for our industry before demand hits. By Jeffrey Payne Flex Rental Solutions, LLC |
| Best Practices Series | 
Low Margins? Let's Go Over This One More Time If you are addicted to revenue, you can't focus on profit Too often I find that revenue is a tool to buy management some time. It's is just cash flow that puts off the inevitable question, "How long can we survive without making money?" Don't get me wrong, I like revenue. But in order to form a lasting bond, I want to hang on to it and maybe take it out and play with it once in a while. In other words, I like that part of revenue that is profit. There are times when low margin work helps with cash flow, but often it is just a band-aid on a business that it too big for its own good. Managers tend to assume that if company profits are down, then ALL revenue was unprofitable, when in fact some portion of your clients and projects are giving you a good return. Operations tends to take the fall when at least half of the problem is sales-driven. Before you succumb to the illusions that 1. Customers won't pay higher margins, 2. High value projects don't exist anymore, or 3. My competition will keep undercutting me until I am out of business, take a hard look at your sales process. Are you writing 18% gross profit proposals when your overhead is 30%? Do you believe that you can make up the difference in volume? Observe your company, your sales forecast, the emails, the company meetings. How often do you cite revenue as a goal, target, achievement, or milestone? When is profit anything more than the byproduct of revenue - an outcome? If you think that revenue will solve all your problems, then maybe you don't understand what your problem really is? The solution of course is to make profit the goal instead of revenue. Measure success by profit, measure busy by revenue. Right-sizing profit often means lowering overall revenue. Fire the unprofitable customers? This is a last resort. First, try and turn low profit customers into acceptable profit. Customers ask all the time for better deals; when did you last ask for one in return? To say that our sales skills have not kept up with the times is an understatement. Let me make this clear: Anyone can sell on price. The math is very simple. Selling value, relationships, and solutions requires more than a well-written proposal. Do the Analysis Your business has multiple revenue segments. You may classify things one way for bookkeeping purposes, but to understand where profit is coming from may require additional analysis. Examine the types of transactions and the kinds of customers that make up your profit profile. Include your salesperson's identity with each entry. What you will get is a matrix of buyers, products, profit margins, and salespersons. Do you have customers that are profitable in one segment but not another? Do you have salespeople that are consistently profitable? What is the threshold to be considered profitable? What types of revenue should you focus on more often? Now look at your sales pipeline. Using the analysis you've now done - restate your sales forecast in profit AND revenue terms. Are there jobs you wish you hadn't sold now? Are there periods where a low-margin project might actually help? There are! Low margin projects and customers have a place in your business, but you need to decide when and how. A Word About Bid Work I won't say that you should never go after bid-spec projects. They can be valuable at the right time. However, I can say that you don't have to play by their rules. Bid work requires extraordinary discipline in both bidding and execution. It is the antithesis of service and differentiation. However, don't confuse true contract bid scenarios with price-shopping. These are two different animals. If you think you are spotting a price-shopper hiding behind a bid-spec, then maybe the buyer will entertain a high-value proposal instead the corner-cutting of a low bidder? Sure, in some projects you will be ejected for pitching outside the lines, but what did you have to lose anyway? Maybe you will discover a true client and that is worth more than all the bid-work you can imagine. My conclusion is very simple. You need to decide if you want to be a big unprofitable company or a slightly smaller one with money in the bank. And once you have decoded the profit matrix, you will learn to find more of the right kinds of business...and get big again. The first step is to put revenue in its proper place, just below profit. Questions/Comments? |
| Closing Thoughts |  Here's a few scribbles from the margins:- Responsibility vs authority. "Anyone who takes responsibility for getting something done is welcome to ask for the authority to do it." - anonymous AV executive
- Is your company really growing or are you just on the upward tick of an up and down trend? Graphing trends based on multiple years of data can help you see what's really going on.
- If you don't do anything counter-intuitive, aren't you doing the same as everyone else?
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About Thomas R. Stimson, MBA, CTS
Tom Stimson has thrived for over twenty-five years in the information communications technology industry. As a Consultant, Tom helps companies define their goals and then design a plan that will take them there. For more information visit the website.
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