Where does a business coach look to improve your business?
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This tutorial by business coach Andrew Priestley outlines four key problem areas that impact business profitability. It emphasizes the importance of identifying and categorizing problems related to revenues and costs, helping business owners to gain a clearer understanding of their challenges. The document provides strategies for recognizing these issues and the potential benefits of coaching to improve business performance.
Where does a business coach look to improve your business?
- 1. “Great tutorial if you run a business.” 4 Problems That Will Impact Your Bottomline A lot of people think that if their business is successful they will not have any problems. The truth is if you run a successful business you will have more problems! Problems come with the territory of having a good business. This is very handy information to know. In this tutorial, award-winning business coach Andrew Priestley talks about the four key places where most of your problems will show up no matter how big or small your business. In addition, you will discover how those problems impact your bottomline.
- 2. Where your main problems live and how they impact your bottom-line Help and distinctions Andrew Priestley is an award-winning internationally recognised business coach, mentor, speaker and author. I have two types of clients: those who need help and those who need distinctions. High performance really comes about as you make that shift from needing help … to wanting distinctions. In this interview, he gives you a really useful financial context for high performance. As you read on, you might ask yourself ‘Which one do I need the most, right now?’ I’m frustrated. I need help now … Typically those clients who need help, need help now and in either two key areas: business and/or personal. If you’re frustrated because you’ve got a great business that could or should run better, then you need help. You’ll recognize things like sales problems, staff issues, stuff not happening on time, as agreed or at all, or you’re not profitable or growing. All of these symptoms indicate the need for help in your business. If you are worried or anxious a lot of the time, lack confidence in your role, if your partner says you work too much and neglect your family, if your values and behaviors are misaligned or you feel defensive and angry then you need help with your personal game. Business When I work with any client I start by getting them to complete either a a) 90-minute strategic session; or b) a pre-coaching assessment tool called the Business Leadership Profile (BLP). This gives you a very clear picture of what’s working and what isn’t and why. c) Or both. The 90-minute strategic session In this session we perform an eight point strategic review of your business. This may not sound like a lot but there are really only eight big strategic questions that need to be clarified. If you’d like to do one of those 90-minute strategic sessions contact me. © 2014 The Coaching Experience www.andrewpriestley.com 1
- 3. The Business Leadership Profile (BLP) The BLP gives you a great heads up on your strengths and weaknesses in a business leadership role. You answer a questionnaire which generates a series of charts. You then receive a comprehensive 2.5 hours feedback session. (We can include a full or mini 360 staff feedback appraisal as well, to add additional depth to the baseline assessment.) The purpose of the 90-minute strategy session and/or BLP is to clearly identify business related issues. And that’s when we narrow thing s right down to four main areas. If you’re going to experience problems it will be in these four key areas. So very handy to know. Ok … Problems in your Business The BLP enables me to identify key problems in your business and importantly how you will typically handle those problems. As a coach we need to clearly identify the issues in your business if you are to get any benefit moving forward. I believe most coaches guess at this, but very few can actually nail this with any degree of accuracy. time or resources to do that activity well or at all. Invariably it created delays and frustrations. Eventually we would get there but collating that information was an obstacle and a barrier to moving forward. The assumption was we couldn’t proceed unless we had that information. I found a way around that. (Understand we still might request a full review later) but it was no longer the stalling point to progress). Here’s what I realized. If I ask you. You can give me a reasonably accurate snapshot of your business. You pretty much know what was happening in your business and industry especially if we contain it to four key areas. It’s the way you accountant or an investor looks at it anyway. As an example, if you watch shows like Dragon’s Den or Shark Tank, they ask four types of questions. Specifically, the questions relate to four areas of your business. Here’s how your accountant or an investor looks at your business So I started to look at your business the way an accountant or an investor would. Particularly an investor. When I first started coaching I would do a very detailed business ‘audit’ not unlike a fullblown SWOT or gaps analysis. If you look at the executive summary of a standard business plan it will include: • • • • • • Marketing and sales The economy Anything to do with political/legal/compliance/environment al/ workplace health and safety obligations Your marketplace Technology Competitors …and so on. Last Christmas, I read 60 business plans. You know what? After a while, you stop reading in detail. You can skim read the business plan and get a very clear idea of the potential of that business. I’ve worked with one of the UK’s savviest venture capitalists and he rarely reads past page one! He’s pretty much ‘got it’ within a few minutes of scanning the executive summary. I’ve worked with several of the most proactive business accountants and they can size up a business very quickly too. But how? What are they looking for? The problem was it took so much time and money to do that analysis well. I had to gather loads of data before we could proceed. And often clients didn’t have the © 2014 The Coaching Experience www.andrewpriestley.com 2
- 4. What they look for At the most basic level they look for opportunities and inhibitors to Growth, Profit and Liquidity. • • • Growth is about the Value of the business Profit is about the Vitality of the business. Liquidity is about the Health of the business. Revenues and Costs The two drivers of Growth, Profit and Liquidity are Revenues and Costs – so they are looking for what makes money and what will cost (or lose) you money. Revenues is about making money and typically includes marketing and sales. (But it also includes product creation and servicing). Costs is about saving or keeping money and includes management and administration; operations; and financial control. So those are the four areas: 1. 2. 3. 4. Marketing and Sales Administration and Management Operations Financial Control And if you have problems in your business that’s EXACTLY where they will show up. You don’t have to look or think too hard about it. It seems like investors have inbuilt radar that detects problems in those four areas. Importantly, that’s where I start looking. And that’s where you should start looking, too. To make it easy here’s all of that information in a simple table. Growth Revenues Profit Costs Liquidity 1. Marketing Sales 2. Management, Admin, HR (By the way, accountants will generate management accounts to assess the same information. You assess growth and value when you look at the Balance Sheet. To assess Vitality and Profit you look at the Income Statement. To assess Health and Liquidity you look at the Cash flow Statement). Here’s an example Poor sales is a Revenues problem … that will impact Growth, Profit and Liquidity. Poor operations is a Costs problem. Problems here will impact Growth, Profit and Liquidity Problems in either area are costing you a lot of money. One last point. You might have great sales … but waste a lot of money delivering the product or service. In other words you spend $1.39 to make a $1. So when I start working with a business coaching client I start by looking at these four areas. Here’s what you can do. Start collecting problems 1. The first thing I get you to do is collect problems in your business. My clients carry a small notebook and simply write down as many problems that they encounter over a six-week period. 2. Next I get my clients to categorize the problems into the above four key areas. For example, a truck that breaks down is an Operations problem. Slow-paying customers is Financial Control problem. Staff who arrive late for shifts is a management problem. (You might notice that a staff member who is arriving late might also be an Operations problem too.) 3. Operations, Logistics, IT Keep it simple though. Don’t think too hard about it just yet. After a while you get pretty good at identifying where your problems live. 4. Financial Control Now why do I do this? Need an example? © 2014 The Coaching Experience www.andrewpriestley.com 3
- 5. Because most of my clients have mountains of problems. By the way, don’t think that if your business becomes more successful your problems will stop. The reverse is true. The more successful you become the more problems you deal with. Coaching initially is about recognizing where your problems live – most; and then handling them effectively. You will already know that your problems will live on a scale of benign to serious but no matter what shows up, write it down and categorise it. Pit Stop A great idea would be to stop reading and take a few minutes to reflect on what I’ve been saying. Grab a piece of paper and draw line down the middle and write revenues on one column and costs on another. Under Revenues write Sales … leave a gap and write Marketing. Under Costs write Mgt/Admin; leave a gap and write Ops and ditto for Fin Control. Then write down any problems you can think of under those headings. Just pick the obvious ones. Don’t go too deep for now. But generate a quick list. Revenues Costs Marketing Poor social media Management, Admin, HR Filing issues Sales Not enough sales Operations, Logistics, IT Loads of waste on deliveries, mistakes Financial Control Late paying customers Get the idea? Its important to see that problems impact your business and the most powerful insight I can deliver a new client is to get them to clearly see that problems are either revenues or cost problems. © 2014 The Coaching Experience www.andrewpriestley.com I’ve run businesses and when you are responsible 24/7 for the success or failure of a business this activity gives you a healthy dose of commercial reality or a rude wake up call! Your eyes open. You start to see how a late arriving staff member is actually an inefficiency and a cost that IS impacting either growth, profit or liquidity … or all three. Train your brain: benefits The great by-product of this very simple activity is you start to think more strategically. It’s just like taking a helicopter ride above your business. As soon as that happens you start thinking more clearly. From this perspective problems change from appearing as a complicated mess to clearly defined issues to be handled … with a great context for sorting problems. And problems become projects. As a rule of thumb I start working on any cost related problems. Here’s an example. Case Study: Adam started collecting problems. At first his notebook was empty. He forgot to write them down. They slipped by. (As his coach I followed up each week to ensure he was ‘collecting’). After about three weeks he was jotting down problems as he became aware of them. Each week we simply segmented them into one of those four categories: marketing and sales; management and admin; operations; and financial control. For example a truck that breaks down was an operations issue. (It might also be a management issue or a financial control issue too). Over time you will easily start seeing those relationships as well. After about six weeks, Adam reported that he felt a lot calmer. Not because his problems went away but because he knew where they were! 4
- 6. Problem Generators Interestingly, he started to notice who the problems affected, impacted or circled around. He noticed that a very small number of people actually generated most of problems (customers, suppliers and staff). 3. Pick somewhere to start; pick something small and easy There is an old coaching rule I’ve followed for years based on a mountain of research about change and motivation1. Basically it says pick about three things to work on but pick two easy things and perhaps one bigger project. This approach comes from working with serious behavior change cases i.e., drug addicts. Adam decided to get a full list of late paying customers and amounts and start chasing them up. He could have focused on a major IT issue but the wrap up date was something like six months. I wanted a quick win – a quick run on the board. The momentum he gained from that quick win spurred him on to resolving his next problem. The BLP shows how you will consistently handle problems in your business under pressure. Our job is to decide if that’s working for you or not. When a client completes the BLP questionnaire, I generate a set of charts and spend about 2.5 hours going through the report. Basically, we show you want’s working for and what isn’t and clearly identify some coaching targets. A case will illustrate. Nice guys finish last Bill (let’s call him Bill) runs a great business but his ‘valued customers’ are almost uniformly late paying. If you understand Accounts Receivables and Aging of Debts his average Debtor Days was 90 days plus. That’s a problem that lives in Financial Control. Say he sends an invoice on January 1. That invoice won’t get paid until about March 30. 4. Pay attention to who brings problems to you. You cannot run a business like this without cash flow problems that impact Operating Cash Flow. Bill’s solution is to keep extending his overdraft (bank loan). Once you get the hang of identifying problems your next step up is to observe who generates the most problems … most often. Problems can come from internal or external sources. That is a real problem that lives in the Costs column under financial control. When I asked Bill why he didn’t chase late paying customer he said, “I don’t want to upset them. They are good customers.” For example: I think the definition of a good customer is someone who pays their bills on time. And a good customer will understand if you ring up and ask to be paid. If they don’t, then they aren’t really a good customer which means you should chase them harder! Internal External Staff Suppliers Customers Government Bill couldn’t do this. Let’s wrap it up. Its very handy to know where your problems live. In coaching what I’m more interested in is how you typically handle those problems. Solve the real problem Do you get the idea that late-paying customers aren’t the real problem? In this case Bill IS the problem! !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 1 Prochanska. J, Norcross, J and Diclemente, C. (1994). Change for Good.. Collins Living. © 2014 The Coaching Experience www.andrewpriestley.com 5
- 7. The BLP identified that Bill is a massive nice guy. It shows up as low assertiveness, fear of conflict and putting the needs and priorities of others way ahead of his own … Need help? You might want to do either the strategic session or the BLP. If so, email me at Andrew@andrewpriestley.com … beyond good judgment. And Bill applies this ‘nice guy’ strategy to just about everything situation especially if he’s under pressure. Bill is still very successful but if he can avoid what he feels is conflict, he will. Here’s the thing. Bill knows he does this. Plus he knows what to do about late-paying customers. And he can do something about it. But he doesn’t. I work with clients worldwide, face-to-face and via skype – so I am literally a call away. Testimonials If you think this material was useful I’d love to hear how you used it and how it benefitted. In short love to include your comments and testimonials on the reprint. “Brilliant. Suddenly got a very clear picture of this business.” Dr Brendon M, Dental practice. If Bill knew how to fix this, he would have done so. That’s why he needs a coach. The BLP clearly identifies why Bill has problems in his business it also tells us how Bill behaves under pressure. How you handle problems – and behave under pressure – is the subject of my next ‘white paper’. Before you go • Take a moment to understand the Revenues/Costs model and where your problems will show up. Most of my clients are very savvy people but this one little tool saves them loads of time and helps them take a snapshot of the business. • Try collecting problems for a week and see what shows up and where it shows up most. • See who is the main problem. • Pay attention to how you are handling those problems. What do you typically do under pressure? About Andrew Andrew 1-2-1 coaching, workshops and training he works with owner/managers usually managing directors - running established mid-sized companies across the UK, Australia and the USA. Typical results are certainly increased revenues and profits and higher performing teams. And the coaching definitely helps you resolve challenges or problems associated with business leadership. Andrew developed this coaching programme after working with senior managers in highcompliance environments. He discovered highly effective leaders are doing five things really well. He now applies what he learned in those environments to his coaching clients. Contact Andrew Priestley Web: www.andrewpriestley.com or www.the-coaching-experience.com Email: info@andrewpriestley.com Hope that helps. Facebook https://www.facebook.com/TCE.HQ Andrew Priestley PS Love to hear any feedback. Twitter @arpriestley Skype: priestley1 Phone: +44 (0) 7879 330060! © 2014 The Coaching Experience www.andrewpriestley.com 6