Cincinnati, OH – January 5, 2005 – “How
can I improve my business?” is the most frequent question
heard from CEOs, owners and entrepreneurs. Thirty years of business
success combined with learning from some of the world’s top
business school finance professors have shown Bulletproof Your
Business author Brad Forsythe three key management control levers
small business leaders and entrepreneurs can pull to improve success – Improving
Profit Margin, Increasing Asset Turn, and Improving Financial Leverage.
These levers are built into the following top business tips and
Forsythe says are practical for use by every small company, empowering
them to make more money and enjoy a more rewarding business experience.
Great executive brilliance isn’t required for using these
tips, he says. “They are simple – just like great companies,” Forsythe
said. “You need only focus, passion and common sense to use
them well, and risk management is at the cornerstone of these tips.”
Tip #1 – Keep your business simple and focused
Every success begins with a simple, focused strategy. Even with 100 or more employees
you can only deliver one or two product or service lines with excellence. You
probably based your original business plan on a single product or service concept
and focused all your resources on that one thing. Then reality arrived and distractions
pulled you in a dozen different directions.
Distractions are the kiss of death for small businesses, scattering focus on
those few activities that truly make your money. Risk, which comes from employees,
suppliers, clients, and financial stakeholders, is your most common distraction,
arriving in the form of threats and off-focus opportunities.
Hold fast to your simple, focused strategy. Control risk and distraction by implementing
a proven risk management business process specifically designed for small companies.
The benefits of risk management aren’t reserved just for the Fortune 1000
anymore. Excellent, cost-effective, simple risk management models are now available
to small businesses and are relatively easy to implement. Well-managed risk relates
directly to the management control lever called Improving Profit Margin. A recent
USC study shows up to 100 percent increases in Return on Assets for companies
that effectively manage trouble before it arrives.
Tip #2 – Culture is magic – and YOU are the culture
No matter how many hours you put in, your employees will still do most of your
company’s work and serve most of your customers. Each employee is a precious
and expensive key to your success. Before hiring a new employee, clearly communicate
your corporate culture by explaining which behaviors will be rewarded and punished.
Then follow through without fail or you will confuse the message.
Mixed messages create enormous, profit-robbing confusion. Equally important,
never forget that YOU are the culture. Employees will emulate YOUR behavior.
Smart employees don’t listen to what you say; instead they watch you and
follow your behavioral example. If you are an example of superb execution of
your work process, then you have every reason to expect them to produce consistent,
high quality and profitable work.
You rarely find employees who naturally think and act like you – you must
teach them and carefully manage their work. Managing employee-related risks is
critical. Use proven business models to recruit, hire and train your employees,
assess their performance and quickly terminate those who fail. Consistent use
of good process assures quality control, greatly reducing your risk of employee
problems and resulting legal expense. Improving employee management efficiency
relates directly to the management control lever of Improving Profit Margin.
Tip #3 – Keep your promises
Many customers, suppliers, financial stakeholders and employees will initially
grant the quality of integrity to you and your company. This invaluable quality
will be yours to lose -- but can rarely be recovered if you blow it. Without
integrity your culture is dead and your company will follow close behind. Make
integrity a cornerstone of your culture. Keep your promises in a public way so
that employees, customers and suppliers see it. Integrity will draw and ally
the best customers, suppliers and employees with you. My experience proves that
customers will pay a little more to deal with high integrity companies, related
directly to the management control lever of Improving Profit Margin.
Tip #4 – Speed is life
Identify those few activities that truly make your money. Then make them happen
flawlessly and quickly -- ever more quickly. Speed delights your customers, frustrates
your competitors and makes it fun for the best employees to work with you.
Speed translates directly into the management control lever called Increasing
Asset Turn -- the second of those three key levers. Two vital clues to increased
speed are to strip away every business element that isn’t necessary and
manage risks that waste resources and slow your speed. You’re never fast
enough -- so never be satisfied with the status quo.
Tip #5 – Innovate, don’t hesitate
Yes, innovation is risky and difficult. But failing to change and improve is
almost certain to kill your company. Innovate before competitors force you to
do so. Manage the risk by keeping most of your innovations close to home; advancing
directly from the critical lessons and core resources you’ve already developed
to deliver your current business plan. Focus your best resources on innovations
that will truly make a change in customer buying behavior, while tasking all
your people to find improvements in speed and cost control.
These five tips are all about making your business less risky and more profitable.
The best customers and commercial lenders are increasingly attracted to your
company as your risk drops, because you also lower their risk of dealing with
you. Attracting these two groups lets you use the third management control lever
called Improving Financial Leverage. Better customers buy more, pay reliably
and have substantially lower maintenance costs.
Better banking deals increase your access to more capital at a lower cost and
strengthen your cash flow. Risk management is the cornerstone for realizing all
three of these fundamental management control levers.
Brad Forsythe is the author of Bulletproof Your Business – Cutting
Risk
for Small Business Owners and Managers, and founder of Best Practice Advisors,
LLC., which teaches risk management for companies with 500 employees or less.
More information can be accessed at www.bradforsythe.com.
Bulletproof Your Business is a plain-English guide that shows companies how to
simply and cost-effectively conduct risk management on a do-it-yourself basis.
The book is available online at www.bradforsythe.com and retails for $59.95.
Brad Forsythe holds a certificate from the Harvard Business School in small business
strategic finance and is a 1975 honors graduate from Augsburg College in Minneapolis,
completing his bachelor’s degree in communications. Forsythe began his
career as an incentive travel manager and later moved to group sales manager
within the hospitality division of American Airlines. In 1981, he co-founded
Frequency Marketing, Inc. and served as its executive vice president overseeing
legal, human resources and risk management. In 2003, Forsythe founded Best Practice
Advisors, LLC., and teaches the professional practice of risk management for
companies with less than 500 employees. He released his debut book, Bulletproof
Your Business – Cutting Risk for Small Business Owners and Managers,
in
2004. More information can be accessed at www.bradforsythe.com,
and the book
is available for purchase via the website.
###
Editors Notes
Forsythe Available for Interview
Book Available for Review
Bylined Articles Available
Graphics and Photos Available
Contact
Rodger Roeser, APR
Vice President, Justice & Young PR
513.388.4700 x3012
rodger@jypublicrelations.com
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