Engage your Employees to Beat the Recession

"I have recently had to let some people go. They were great people, but with our financial projections, we had to downsize. Some of my current staff has begun to get a bit discouraged about the company as a result of slowing sales and their friends no longer working here. What are some ways that I can make sure my remaining team stays excited and engaged during a tough time?" - Worried Business Owner

Get your people involved in the come-back.

Have a meeting and show them the numbers – where revenue was the last few years, and how much it’s dropped off. Explain the relationship between sales, headcount, and profits. Take questions, give straight answers, and encourage discussion.

Share your vision for the future. It might be emerging from the recession stronger than ever, or simply surviving. Regardless, give them the unvarnished truth. And, be sure to set the tone as positive and optimistic.

Ask for their active participation and support. First, banish the rumor mill and negativity. If your people have concerns or complaints, they should voice them in company meetings, to a supervisor or to you. No grousing around the water cooler.

Put a mechanism in place to collect ideas for improving the situation: Customers. Marketing and sales activities. Cost of goods. Overhead expenses. Productivity. Receivables. Cash.

Of course, your team will want to know how things are going. Have regular follow-up meetings and post results on the wall. Show them that their ideas are being implemented. Share the results, and acknowledge those who submitted ideas. Learn from mistakes and celebrate even small wins.

That’s it. Transparency, engage your team, be smart and work hard.

www.collierbiz.com

Tax Day Blues: Economic Stimulus or Handout?

It's April 15. Do you know where your tax return is?

This year, congress passed and President Bush signed an economic stimulus bill. The package will pay $600 to most individual taxpayers and $1,200 to married taxpayers filing joint returns, so long as they are below income caps of $75,000 for individuals and $150,000 for couples.

So, many (most) owners of small to mid-sized businesses will not be receiving said checks because we earn too much money.

That's right: Those who work the hardest - those who pay the most taxes - will not be participating in this "stimulus" program.

And yet, those on the lower end of the income spectrum - some of whom have virtually no earnings and no taxes paid in - will receive "rebate" checks. My question: How can you rebate something that wasn't paid in the first place?

If the real reason for the checks is to stimulate the economy, why not get them in everyone's hands?

If they really are rebate checks, why not issue rebates to those who have paid the most taxes?

Please don't misunderstand ... I'm not berating those with low incomes. I'm berating the government for engaging in "social engineering" and trying to pass it off as economic stimulus.

If Congress wants to give handouts, they should have the courage to call them handouts. If our elected officials want to buy votes, they should have the courage to say so. To do otherwise is to insult the intelligence of the American people.

And, our elected officials should show appreciation for American entrepreneurs. We take the risks, work long hours, create jobs, innovate, train people, and otherwise stimulate our economy.

Instead of their thanks, they frequently show disdain for business owners by piling on high tax rates, fees, and unreasonable amounts of regulation and red tape. To add insult to injury, they withhold tax rebate stimulus checks from us.

It's not about the twelve hundred bucks. Most of us could care less about the money. It's the principle. It's the appreciation and acknowledgement - or lack thereof.

Leaving high achievers out of the tax stimulus program is a slap in the face and a kick in the gut.

Maybe we need a "no entrepreneur left behind" program.

What do you think? Please post your comments and let me know!

Bill Collier
www.collierbiz.com

Maybe You Need a Loan

Maybe You Need a Loan
8:26 AM PDT, March 29, 2008

Many entrepreneurs tell me some variation of the following:

At our current size, we can't generate enough revenue and gross profits to cover expenses and be profitable. I need to hire help, but cash flow won't support the additional expense. So, I feel stuck. I can't stay where I am and I can't grow. What should I do?

The answer may be: Go get a bank line of credit.

Most small business owners try to avoid debt, with good reason. Of course most of us would prefer to grow organically, and keep our balance sheets squeaky clean. But that's not always possible.

By the way, the kind of loan I'm talking about here is a bank line - also called a working capital line of credit - not a long-term installment note. Your line's balance goes up and down with cash flow. When cash is good, you pay down some or all of the line. When cash is needed, you draw from the line. We're talking about a tool used to even out cash flow.

When you need to purchase fixed assets (vehicles, computers, equipment, etc.) or make other high-dollar investments like facility improvements, that's when a term note or even a lease might be appropriate.

By using a combination of a credit line to help with your daily operational cash needs, and financing or leasing for your more expensive purchases, you can get over the cash flow hump and be on your way to growth and success. Proactively plan for your needs in advance, rather than when you're in cash distress. Use borrowing sparingly and wisely to fund and fuel your growth.

Just remember ... you've got to pay the money back, even if your growth plans don't work out.

Bill Collier
www.collierbiz.com

Small Business Resolutions for 2008

Consider adopting the following ...

1. I will set personal goals and will use my business as a tool for achieving those goals.
2. I will set business goals, and will have plans for achieving those goals.
3. I will analyze my company's financial statements at least monthly.
4. I will use my time wisely.
5. I will "hire hard" so I can "manage easy."
6. I will spend quality time with my employees.
7. I will delegate.
8. I will spend quality time with my customers.
9. I will make smart use of technology to improve my business.
10. I will make 2008 my best year in business ever.

www.collierbiz.com

The Bonus Trap

You did it again this year, didn’t you?

You gave your employees a nice year-end holiday bonus that was totally unrelated to the performance of your business.

Or, maybe you gave bonuses because had a good year, but you didn’t take the time to explain to your employees things like:

• the company’s financial results.
• how each employee impacted those results.
• what they need to do more of in the new year to get an even bigger future bonus.

It’s a trap, this year-end bonus thing. Most of us business owners fall into it at some point.

After all, you want your employees to be happy. You want them to like you and the company. Heck, it’s the holiday season. Anyone would rather be Santa than the Grinch. Plus, because you’ve handed out bonuses for years, it’s become an expectation.

In fact, it’s turned into an entitlement.

Before you go thinking that I’m Scrooge – let me explain. (Actually, old Ebenezer was a good guy - after the three ghosts gave him an extreme make-over.) I love giving bonuses. I think they’re great. But if you’re using bonuses only to reward your employees for their efforts, you’re not getting enough bang for your buck. A little education is also needed.

Which of the following bonus-giving levels are you on?

Level 1: We had a rough year. Cash is tight. But, I’m afraid to not give year-end bonuses, so I’ll give them anyway. I won’t share our results with the employees because if they know we’re not doing well, they may leave.

Level 2: We had a good year, but I don’t want the employees to know how good. I give bonuses only because I’d feel guilty if I didn’t, and because the employees expect them. I won’t share our results because the employees would ask for raises if they knew how well we did this year.

Level 3: We had a good year, largely due to my employees’ efforts. So, I’ll give bonuses accompanied by my genuine thanks for their hard work. But, I won’t talk about our results because I doubt the employees will care or understand.

Level 4: We had a good year, largely due to my employees’ efforts. So, I’ll give bonuses accompanied by my genuine thanks for their hard work. I’ll also explain our results and let everyone know how they can help ensure an even better year ahead.

If you are on level 1 or 2, get a clue. Your employees aren’t dumb. They know whether your business is thriving or circling the drain. The signs are everywhere.

The business owners at level 3 believe their employees don’t care about or understand the numbers. So, why bother to share them?

You may be right – they don’t care or understand… yet. That’s because it’s up to you to help them care and understand. It benefits you to do so.

Fixing both the “don’t care” and the “don’t understand” problems is easy and straightforward. You want your employees to care about the company’s success, so give them good reason to care. This is where the education comes into play.

Get everyone together for a meeting. Explain to your employees that your expenses are going up (I assume they are.) Then explain that you can’t simply raise your prices as you see fit, because many of your customers would go away. (I assume they would.)

Continue the discussion by talking about benefits and health insurance rates. Discuss the ongoing need for new computers, vehicles, tools, software, furniture, and other business necessities. If you want to be really candid, talk about raises. All these things – and bonuses - are funded by the company’s growth and financial health.

Done correctly, the light bulbs will start to come on for your employees. They’ll start to understand, and they’ll start to care.

Do you see how you can use bonuses to good advantage by tying them to the company’s success? It’s important to appreciate and thank your employees, but don’t stop there. Help your employees understand how it benefits them if the company makes money. Everyone wins.

Get out of the bonus trap.

- Bill Collier
www.collierbiz.com

Annual Business Planning Tips

Annual Business Planning Tips
You have started planning for 2008, haven't you?

Here are some ideas for ideas for getting the most out of your annual planning activities, and for getting a jump-start on 2008.

1. Get others involved. Include your management team in the planning process. Also, consider asking your rank-and-file employees for their input. Provide an option for them to answer anonymously, because otherwise some may not participate and others may not share their true options. Ask questions like, "If you owned this company, what you you change?" and "What can we do to improve our marketing, sales, production, and customer service?"
2. Salary Planning. This is a good time of year to deliver employee performance reviews and then build compensation changes into your new year's budget. Use each employee's job description as a guide for the review ... rate the performance on each assigned duty.
3. Review your Benefits program for possible changes. When thinking about compensation-related expenses, don't forget your benefits. Thinking of making a change for the new year? Work it into your budget figures.
4. Fixed Assets. What new property and equipment does your company need? What old assets need to be retired or sold? Again, solicit input from the employees. They probably know best what they need to properly do the job. Don't have the cash flow to buy what's needed? Consider borrowing or leasing for fixed asset purchases to conserve cash.
5. Your Unique Selling Proposition or USP. Do your customers perceive your product or service as a commodity? Do you and your people sell as if you were offering a commodity? If so, revisit what makes your company and your products & services unique. Ask the question, "Why should a customer buy from us rather than from our competitors?" If you don't have a good answer, keep working at it.
6. Marketing Planning. If nobody knows who you are, what you sell, or how to buy, the results will be predictable. Advertising is fine but there are lots of ways to market: networking, speaking, article writing, customer referrals, telemarketing, direct mail ... the list goes on and on. Do some homework and determine who your primary customer targets are, and the best ways to reach them. Then, tell them about your unique selling proposition. All this needs to be part of your annual plan.
7. Learn from the past. What worked well in 2007 and in prior years? How can you build on those successes? What didn't work so well? How can you learn from and avoid those mistakes? Make a list and use it when working up your 2008 plan.
8. Get out of town. Go on a 1-3 day "planning retreat." Take all the info you've gathered, and all your financial statements, and go somewhere away from the office to immerse yourself in the planning process. Think about the business - where you came from, where you are, and where you want to be. If appropriate, take your management team along and invest some time in this valuable work.
   

Employee Incentive Plans for a High Turnover Environment

Employee incentive programs. Bonus programs. Do they work, and really provide a good return on investment?

I’m sold on them. I have successfully used incentives and bonus programs in my own businesses - particularly in my first company. But, that was a medical electronics company with a stable workforce. What if you're in retail or other high-turnover, short attention span industries – maybe with a teenage workforce?

Most bonus programs run all year, with either a quarterly or year-end payout. But if you have a high employee turnover rate, the incentive you're trying to create goes out the door with each employee who goes away. Even the folks who stay until the end of the year may not have a long-range attitude, so it can be very difficult to get their attention and to use bonuses to accomplish a change in their performance.

Regardless of your industry and regardless of the reasons why a year-long bonus plan hasn't worked for you, try a shorter-range plan to get tangible results.

I recommend a monthly theme or focus (choose the word that you prefer) with corresponding targets and rewards. Here are two examples:

April’s Theme: Customer Satisfaction Surveys
Target: Collect at least 50 surveys this month
Reward: Pizza & soda lunch

May’s Focus: Flyer Offer Response
Target: At least 100 customers redeem the offer on this month's flyer
Reward: $25 gift card for each employee

The possibilities are endless, but here are some commonalities and issues to consider:

• If you have more than one location, the target and reward can be for the entire operation, or for each location. In other words, one office might win and the other might not. A little friendly competition between the locations is OK as long as it remains positive. You'll have to decide how to handle rewards for employees who move between multiple locations. Inside each office or location, avoid competition and work to foster an environment of cooperation and teamwork.
• Once you achieve a target and move on to the next month's focus, it doesn't mean your employees can say "mission accomplished" and now ignore the prior months' themes. You've now proved you can achieve a certain level of performance in that area, and you should reasonably be able to expect that level of achievement going forward. This will take some education, reminders and maybe some residual incentives to accomplish. For instance, if you hit a target when it is the monthly theme, each person gets a reward. Going forward, each time you hit that same target again, they may get a smaller reward PLUS the reward for the current month's theme. Do what it takes to avoid backsliding once you’ve worked hard to achieve a target.
• Targets can be operational (like the examples above) or financial (revenue, overhead expense, profit), but many employees will more readily understand and relate to operational measures. Using financial measures is good but plan on doing much more training to make them meaningful to your staff.
• Choose themes that are critical to moving the operation forward – drive out a weakness, capitalize on a strength or an opportunity, and so on.
• Consider having 12 themes - one for each month. Repeat every year, and change the targets and rewards as appropriate.
• Rewards can be money or non-cash, like movie tickets, food, or gift cards. Mix it up.
• Keep the rewards in proportion to the target. Try to make this program "self-funding" - which means the benefit derived outweighs the cost of rewards. This is not always possible in the short term, but don't get carried away with big rewards.
• Use the program as a teaching tool. It’s a great opportunity to teach your employees how the business works, how to help it succeed, grow and make money, and how to solve problems. Show the employees a “line of sight” between their work and the target.
• Keep it in the employee's minds. Create excitement and “buy-in” when you roll it out, and use signs, meetings and emails to keep it front and center as you go along.
• Keep everything comic book simple! Make it simple for employees to understand and easy for you to administer.

A program like this takes a fair amount of thought and work to implement. It should not take a lot of work to run once it's in place. Consider having the employees measure their own results. In fact, have them create their own “scoreboards.” Tracking their own results like this has many benefits. It gets and keeps them involved, they learn about the business, and it adds fun to the equation.

Done right and tailored to your company’s workforce, your employee incentive program can increase revenue, productivity and profits while reducing waste and employee turnover.

Grow to the Next Plateau

It's been said that the hardest task in sports is hitting a fast ball. Clearly, the folks who say this have never tried hitting a golf ball.

Anyway, here’s my nomination for the most difficult task in small business: Growing to the next level when you have fewer than 5 employees.

Consider ... if you have twenty employees and add one, that's only a 5% increase in headcount and payroll expense. If you have ten and add one, that's a 10% increase. But, if you only have four employees, adding one is a whopping 25% increase. What if you're the one and only person in your new company? Bringing your first employee on board is a 100% increase in headcount and payroll expense.

Most start-up and very small companies are long on things to do and short on people. The owner is frequently overwhelmed, is involved in all aspects of the business, and is in constant "fire fighting" mode. Help is desperately needed, but there isn't time to figure out how to best use another person, and there usually isn't enough money for the additional payroll. (Heck, the owner is usually underpaid at this stage of a company's growth.)

Sound like your situation?

As you make your business plans for yet another year, resolve to avoid disappointment and finally get on track. Growing beyond this awkward "adolescent" stage is tough. It's sort of like a NASA rocket building up the speed to overcome the Earth's gravity. Once in space, it's smooth sailing. But, an incredible amount of energy is needed to get to that point. And so it is with growing your small company.

Here are some ideas for getting up to "escape velocity":

First, Work Your Tail Off
What? This advice from the author of a book on having a life outside your company? Yep. I wish I had better news.

When your business is in its infancy, there's no shortcut and no substitute for good, old-fashioned effort. If you want to someday enjoy the fruits of your labor, there first must be some labor. Make sure that you make the most of every available minute.

The trap some folks fall into is letting this approach become a long-term way of life. Work hard but have a plan for eventually pulling back, so that soon you're working on the business rather than in the business.

Promote Your Business Like Crazy
Getting your business up to "critical mass" takes a major sales and marketing effort. Here are some things to keep in mind:

• Everybody sells. One of the main responsibilities for you and for every single employee is to attract and retain customers.
• Perform at least one significant sales or marketing task every single day. There are roughly 250 business days (allowing for holidays) per year. If you follow this advice, growth will happen. Do more than one a day and things will happen even faster. Discipline yourself and set aside the time.

Systemize
Create "comic book simple" procedures for as many business processes as you can. Follow them yourself, and lay the groundwork for future employees to use them also.

While you're at it, create simple job descriptions for each major role, even if you're filling all of them.

These two tasks will make hiring decisions and new employee training immensely easier and more efficient.

Use Free and Low-Cost Help
Consider hiring high school "co-op" students or college interns. Pay an entry-level wage. Develop a relationship with the faculty and advisors at your nearby schools, and have them watch for good prospects for you. Chances are, these will be short-term employees, but you never know. You might hire some long-term staff members right out of school.

What about family? Does your spouse have skills and time to spare? How about your kids or your cousin Elmer? Look close to home before going out on the street for help.

Use Part-Time Help
Stay-at-home Moms and retirees are frequently looking for part-time work with flexible hours. So, be flexible.

You need a full-time employee? Why not hire two part-timers to share one job? (Hint: Part-timers usually get limited or no fringe benefits.)

Farm Out Assembly Work
If some of your work involves light manufacturing or assembly, can you send it out to a sheltered workshop? The cost is generally very reasonable, and you'll feel good about doing it.\

Borrow Money for Hiring
Sometimes, the only way to afford growth is to fund it with short-term loans. Arrange for a line of credit with your bank. Don’t think in terms of paying this sort of loan off over a long timeframe. The balance should go up and down weekly as you “sweep” money between this account and your checking account.

Yes, this is a risk. Even if your company doesn’t grow you still have to repay this money. So, approach it with a healthy mix of caution and confidence, and execute a well-thought-out plan.

As you get bigger – 6, 8, 10 employees and beyond – challenges remain, but you’ll have enough people for delegating and separation of duties for more efficiency. That’s when the real fun begins, so don’t give up or you’ll miss the best part. Stay positive. Keep your small business dreams alive by growing in spite of the challenges.

Business Lessons from a Bride

My daughter Katie recently got married. Something dawned on me as the planning wound down and the big day finally arrived. (Actually, two things dawned on me. One was the almost machine-like efficiency with which this extravaganza reduced our bank account balance. But that’s not what I’m writing about now.)

Here’s what I noticed: Everything came off exactly as planned.

Before you say, “So what?”, consider … There were dozens of people involved and hundreds of details to manage. Tuxedoes. Dresses. Photographers. Videos. Down-payments. A cake. A reception hall. Invitations. More down-payments. Decorations. The church. The vows. Bridesmaids. Groomsmen. You get the idea - the list goes on and on.

It was a truly impressive display of planning your work and working your plan.

Here’s what I saw:

• 
  It started with my daughter’s personal vision for her perfect wedding. (A long-range vision.)
• Then, she started making lists and putting her thoughts down on paper. (Establishing goals and written plans.)
• This, in turn, led to Katie asking various people (including me, but especially my wife Joyce) to handle assorted aspects of the operation. (Delegating - Assigning specific tasks to specific people with specific timeframes and outcomes.)
• Katie followed up with the people involved and on the planned activities to ensure all was proceeding as expected. (Using Key Performance Indicators to measure progress and success.)
  

I saw a potential lesson for small business owners. What if a small business owner planned and managed his or her business this way?

Now, I know that this is not a perfect analogy. A wedding is a one-time event, and a business runs continuously. I understand that. But isn’t there something to be gleaned from such an example?

For the most part, entrepreneurs know what needs to be done. The shortcoming isn’t in the knowing; it’s in the doing (or not doing.)

Suppose Katie had established her vision, and maybe even went so far as to develop written goals and plans, and then dropped the ball. No follow-through. No delegation. No execution. The results would be predictable.

Instead, she was passionate about her vision, was focused on her goals like a laser beam, and was committed to executing her plans.

And so, I ask again: What if a small business owner planned and managed his or her business this way?

Back to “knowing and doing” … Let’s assume that you know what you want to accomplish and you know what needs to be done to get there. You’ve got the “knowing” part squared away.
Turning “knowing” into “doing” starts with a plan. Many business owners get tripped up at this stage. We entrepreneurs are natural optimists, and as a group we have no shortage of self-confidence. As a result, we sometimes tend to anticipate unrealistic outcomes. I frequently see small business owners whose to-do list would choke a horse. A relatively short list of major initiatives is plenty for anyone’s annual plan. Better to set optimistic yet realistic goals and achieve them than to set yourself up for disappointment by expecting too much.

So a plan is written and now it’s time to execute. Now what?

In my daughter’s case, she still had to deal with the ordinary, day-to-day stuff ... her job, socializing, paying her bills, time with family, time with her fiancé, errands, and so on. Yet, because she was passionate about her vision, was focused on her goals like a laser beam, and was committed to executing her plans, she pushed through the clutter. Pushed through the distractions. Pushed through the interruptions. Discipline allowed her to turn her vision into reality. (I’m a down to earth, nuts-and-bolts guy, so I don’t want to sound too mushy, but I believe that your level of discipline is directly proportionate to your level of passion.)

She did much of the work herself, but she also delegated much of it to my wife and to others. For many business owners, one of the following scenarios comes into play. See if you can see yourself in any of these:

• Nobody can do it as well as I can. Therefore, I may as well do it myself.
• By the time I show someone else how to do it, I can go ahead and do it myself.
• I don’t trust my employees with the information they need to handle this task, so I’ll do it myself to guard the information.
• I try delegating to my employees, but I just can’t let go. I’m there micro-managing every step of the way. So I’m 100% wrapped up in all the details, and no time is saved.
  

Learning to delegate effectively is a critical skill. It was a big part of this event’s success. Fail to delegate and your enterprise will suffer.

Finally, as time passed my daughter followed up with the various players to ensure that tasks were accomplished as planned. When needed, plans were adjusted and corrective action was taken.

You can do the same in your business. Use your passion for your vision to muster up the discipline needed. Set optimistic yet realistic goals, develop written plans, and then focus on them like a laser beam. Commit to executing your plans, and don’t allow yourself to be stopped by day-to-day distractions. Delegate. Measure your progress and make adjustments as needed.

Here’s my challenge to you: Make 2007 your break-through year. Despite past set-backs. Despite previous lack of discipline. Despite prior lack of progress. Give it your all – your best effort – for one year, and see what it does for your business.

I’ve seen first-hand the dramatic changes that can take place in a small business in one short year. 2007 can be the launching pad for your future success. It can give you the confidence and the momentum (and the cash) to build upon for years to come. Make it your best year ever.

Bill Collier's 3 Small Business Truisms

I'll use this first excursion into the world of blogging to write about my "small business success" formula. It centers around my three "Small Business Truisms", which not coincidentally are the three sections of my book, "How to Succeed as a Small Business Owner ... and Still Have a Life."

Small Business Truism #1: Your business exists to serve you; not the other way around.

I call this the "Purpose" for being a business owner.

Basically, you're not in business for the sake of being in business. You're in business to enhance your life and the lives of your family members. Your business is simply a tool - a means - for achieving that end.

This concept is easy to understand but even easier to violate. I meet small business owners all the time who say things like, "Someday I'll be able to start a retirement fund, after the business is doing better." Or, "I hope to someday get my personal income back where it was when I worked for someone else."

The first year or so after starting up, working long hours and taking a pay cut are to be expected. But, there's a big difference between getting stuck in cycle of struggling endlessly to get your business up to speed and making continuous, noticeable progress through the (hopefully short) start-up period.

If you are stuck on dead center and can't get over the hump into the land of profitability, first make sure you're cut out for the role of business owner. Are you passionate about being an entrepreneur? Assuming you are, next check your attitude toward Small Business Truth #1.

Struggling for a short time before pushing through to prosperity is noble and heroic. Struggling for a lifetime is senseless. If your company is stuck in an endless cycle of too little cash and not enough hours in your day, you can almost certainly find the solution in Small Business Truths 2 & 3 - if you have the discipline to apply them.

Best Practice: Take a hard look at any gap that may exist between your current circumstances and where you'd like to be. This includes income, net worth, time off work, or any other way you'd like to measure success. Do you realistically believe you can close that gap within an acceptable period of time? If not, what is needed to get you there? Be brutally honest with yourself. Resolve to muster up the discipline and do the hard work needed to make significant progress toward closing this gap in the next year.

Small Business Truism #2: If you don't know where you're going, any road will take you there.

This is the "Preparation & Planning" piece of business ownership.

Here, in a nutshell, is the process I recommend:

• Set personal goals. What do you want out of your business, now and in the future?
• Establish a long-range vision for the business, consistent with your personal goals.
• Establish a 3 year business vision, along with specific 3 year goals, consistent with the long-range vision.
• Develop a brief (1-2 pages max) 1 year business plan, consistent with your 3 year vision and goals.

This annual business plan is your company's guiding document. It literally guides your quarterly, monthly, weekly and daily activities. It includes the specific strategies you'll use to reach your goals, and lays out clear accountabilities - who will do what by when. Accompanying your annual plan is a marketing plan - also 1-2 pages max.

Can you imagine a house being built without a plan to guide the workers' activities? The very idea is absurd. So, why operate a business that way?

For most Americans, their home is their biggest asset. For most of us small business owners, though, our company makes up the majority of our net worth. Each of us depends on our business for our present income, our future retirement, and our family's general well-being. Yet, many small business owners drift aimlessly - letting each day's emergencies pull them in various directions.

The difference between success and failure - even between success and mediocrity - starts here. The old saying says it best: "Plan your work, and work your plan."

Best Practice: When working on next year's plan and budget, don't let total compensation-related expenses for your staff grow faster than revenue. This includes salaries, payroll taxes, benefits, and work comp insurance.

Small Business Truism #3: If you put in long hours, have trouble getting away from work for more than a day or two at a time, and don't make any more money than you did when you worked for someone else, you haven't created a business. You've created a job.

This is the "Execution" piece of business ownership.

Finally, after all the goal-setting and planning, action is the thing that pushes you across the goal line.

In my book, I identify 11 key areas in which small businesses must execute in order to achieve outstanding results. They include hiring, retention, delegation, use of key performance indicators, and 7 more. I offer a free self-assessment tool - more on that below.

Michael Gerber coined the phrase, "Work on your business, not just in your business", in his classic business book, The E-Myth. (You have read it, haven't you?) Much of the stuff you'll find in my 11 key areas of execution requires you to do exactly that.

Yes, it's hard work. Yes, it's tough to find the time to get all your other work done and also do all this "business-building" stuff. But the results 1 year, 5 years, and 10 years from now will be astonishing ... and well worth the effort.

Best Practice: Set aside a specific day and time each week for working on your business - even if it's only 30 minutes at a time. This may include planning, reviewing results, improving systems, coaching your employees ... whatever proactive activities will get and keep your business on the road to success.

www.collierbiz.com