Philip E. Elworth, B2B CFO®
Providing CFO services in Palatine, IL and surrounding areas

I am an avid reader and I especially like to focus on business books.  After reading them I blog about them; because I have learned by teaching others, I learn more myself.  I recently had the chance to meet Brent Allan, who is the author of a new book entitled Stand Out.  It is a very practical read on the topic of marketing and is very applicable to networking for a new position as well as the real target of the book, building a business.  Brent uses the Acronym FAST to describe his marketing technique, which I will unpack below.

The F stands for follow up.  Follow up is defined as what you do in response to direct communication with someone.  Whether it is a meeting or a phone call, you need to respond with a simple thank you that is personal in nature.  In addition after this first follow up you need to find ways to communicate multiple times over coming weeks or months.  Brent, in his book, refers to a McGraw Hill study that found that 2% of sales occur after the first point of contact; 3% of sales occur after the 2^nd contact; 5% occur after the 3^rd contact; 10% occur after the 4^th contact; and 80% of all sales occur between contacts number 5 and 12.  It is clear from my own experience, if I do not make a sale after the first opportunity that often down the road the sale comes back to me, if I appropriately follow up.  As a partner and coach with B2B CFO® I tell those I work with that this follow up is critical.  There is a tendency to think after a good meeting that you have won the deal or the job.  It often does not work that way and it is the follow up that gets the job done.  I have personally obtained clients a year or more after initial contact because I followed up and was top of mind when the opportunity was right.

The A stands for Adding Value.  What do you do that goes above and beyond?  When I am networking with people and especially when I am speaking with a potential client,  I look for opportunities where I can be of help to that person no matter if they are interested in my service or not.  This adds value.  When I have a client, I always look for ways to add additional value to the relationship outside the scope of what we are doing.  I do not care if it costs me something in the near-term; I am looking for a long term relationship that will pay dividends for many years.  One of the easiest ways to add value is with information.  One thing I do with every prospective client is to provide them a free benchmarking study of their business; this is information that is not readily available to them.

The S stands for Standing Out.  How do you separate yourself from the competition?  One way is by creating a niche for your services.  The leader of my local FENG chapter tells the story on one person who came through the group, who labeled himself the Energy Guy.  That was his background and the direction he was looking for a new position, by using the label everyone remembered him, he found a way to stand out.  A guarantee is another method.  Can you provide a money back guarantee for your service?  Brent, as a marketing consultant, provides a money back guarantee or continued service for a year at no charge if the customer is not satisfied.  My personal experience has been if a client is dissatisfied with my service, I did what I needed to do in order to satisfy him.  I would rather lose a few dollars than a client and all the bad will that follows.  If you are networking look for ways to help the person you are meeting with.  If you are proactive in soliciting information you can find a way to help them and thus stand out.

The T stands for touch.  If you are not constantly in touch with your key connections and customers then you are leaving sales on the table.  I recently picked up a new assignment with an old client because I have been in constant touch with him since I finished the assignment over a year ago.  When he was ready to proceed, I was top of mind.  I look for ways to stay in touch that are totally outside of the normal.  One thing I like to do is help clients or contacts find people to hire.  This is a total win-win situation.  I help a contact and allow someone else to make a recommendation that leads to employment for someone.  This is a feel good situation for everyone and keeps me in front of a large group of contacts.  Brent in his books uses greeting cards.  He sends cards to celebrate odd holidays.  Things like a Un-birthday or Ground Hogs day.  When people get cards at unexpected times with no selling involved it becomes a very positive touch.

Most of these ideas are easy to implement and cost very little but can pay big dividends.  I hope you try them out.

I was sitting in church recently in South Barrington, IL, listening to a message on spiritual growth.  I thought the concepts were so universal that I would share them with you, because no matter what part of your life you may be working on, growth is growth.  The speaker’s point was that in order to grow we need to consider two things.  What do we need to stop doing and what we need to start doing?  So now let’s unpack how this applies to business.  One of the things I speak a lot about with my clients is metrics.  Growing a business is all about increasing sales, so how do these tie together?

What are you currently doing that is not yielding results?  Do you think about it?  Are you tracking the results of your sales efforts?  If you are asking for the sale, are you successful?  Do you ever try new approaches? Do you ever look at changing your message, your appearance, or your delivery?  In other words is there something you need to stop doing because it is not working?

The flip side is what do you need to start doing?  When I work with clients on selling strategies, it really comes down to a numbers game.  Who are your best customers?  How did you obtain them?  How many times did you have to connect with them before they moved forward with you?  What are you doing to replicate this?  From here you can build the numbers around how many touches do you need to find a prospective client or job?  Are you working all the avenues available to you or are you concentrating on just one.  There are personal meetings, phone interviews, networking, and the use of social media and advertising.  Everything has a place.

So what do you need to stop doing and what do you need to start doing? Give it some thought and if you need help with that, give me a call.

Phil Elworth

Partner

B2B CFO®

312.203.8918

pelworth@b2bcfo.com

With the passage on January 1, 2013 of the tax bill to pull us off the politically made fiscal cliff, there are many questions pertaining to how this legislation affects you individually. In addition there are a number of other taxes, not included in this legislation that will affect you just as much.  While I am not a tax expert, nor am I offering tax advice, it is helpful for me to understand these changes since the clients I deal with in the Chicago area want to know how to plan their businesses in the upcoming year.

First the highlights of the new tax structure:

• The top federal tax rate is now 39.5% for singles earning over $400,000 and $450,000 for joint returns.
• Personal exemptions, which include state income tax, mortgage interest and contributions are phased out starting at $250,000 for single filers and $300,000 for joint returns.  This will increase the tax for many others in addition to those making over $400,000.  This also allows Mr. Obama to say he increased taxes for those earning more than $250,000 per year.
• The gift tax exemption stays at the $5 million mark but the tax rate goes up to 40% from 35%.

There are many more provisions to this legislation and if you have questions on specifics please contact your tax advisor.

The second group of tax changes that went into effect on January 1 and not a part of this legislation will affect many more people.  They include:

• The social security tax holiday of 2% was not renewed.  Everyone’s tax on social security increased by this 2% going to up to full historic 6.2% of salary up $113,700.  There is no limit on the 1.45% Medicare tax.
• The limit on FSA accounts was reduced from $5,000 to $2,500.  This is the amount you can put away tax free to pay for medical expenses.

All this is just to remind everyone that planning is critical, not only for your business but how the changes in these laws, as well as a slew of additional regulations will affect how you operate in 2013.

Philip Elworth

Partner

B2B CFO®

pelworth@b2bcfo.com

Patrick Lencioni, author, consultant and speaker recently published the book, Getting Naked, which describes his vision of the way a professional service firm should operate.  His approach is basically one of fear avoidance.   His views mirror so many of my own and how as a partner with B2B CFO® I have been trained to provides services, that I thought I would wet your appetite to investigate this topic at a deeper level.  Previously, I have written that many more businesses provide professional services than is normally recognized.  You can manufacture a product but still provide service to your customer in the design and manufacturing process.  Thus this topic applies to many organizations.

Patrick simplified his view of providing service into three simple fears:

1. The fear of losing the business
2. The fear of being embarrassed
3. The fear of feeling inferior

You become successful by getting past the fear.

The fear of losing the business is negated by demonstrating your competence and ability to help the client, showing them that you care about them instead of just growing your business.  You do this by giving away your service. As a partner with B2B CFO® I provide, what we term, a phase I analysis.  In order for me to understand the problem faced by a business owner, I ask for permission to dig deeper into the underlying cause of the issue.  I do this at no charge.  When I have completed my analysis, I provide a written report showing where the business is today and how we together can move the business forward.  During this entire process I am looking for opportunities to add value and help the client, long before we have spoken about price.  By the time we get to the discussion of fees, the conversation is more about getting started.

You get past the fear of being embarrassed by being willing to face your own inadequacies.  As an advisor, I do not know everything.  I will freely admit that I do not have all the answers, but as a partner with B2B CFO® I have, as of this writing, 184 partners with 5,200 years of experience which means together, we can solve the problem.  I have also had situations with clients where I have been wrong.  When this happens I will quickly own it and depending upon the circumstances apologize for it or make fun of myself, but in all situations I will fix it.  Never back down from asking questions you do not know the answer to, no matter how elementary they are.  No question is a dumb question; if you do not know the answer.  Be willing to take a bullet for the client.  I have been in situations where my recommendation was to terminate or lay off employees.  I readily volunteered to be the bad guy; to help deliver the message or to be the fall guy so the owner could save face.

The third fear, of being inadequate, goes to our own attitudes.  As an advisor you must be able to honor and celebrate your clients work if you are going to take on the assignment.  If you have a problem or a moral issue with the client’s business; then refer the work on to someone else.  You must be fully in your client’s camp.  You can show this by being willing to do the dirty work, whatever that may be.  Be vulnerable, humble and transparent with your client.  If the client asks you to do a task, associated with your assignment, but something you consider below your station, be willing to do it and do it willingly.  That is transparency.

Bottom line; find the way to help your client and lift them up, even if it means diminishing yourself.  If we put our client first and ourselves second it will only lead to success.

Have you ever awoken at night with the thought that you need to do something, and are sure you do not have it written down somewhere; therefore it is not possible to go back to sleep?  This is sadly, an all too common occurrence.  So how can you avoid this situation?

David Allen, author of the book Getting Things Done, claims that if something is on your mind, then your mind will not be clear to do what it needs to do at that moment.  Clear to sleep or clear to work on a project, the issues of distraction are the same as waking up at night.  So, how do you clear your mind?  According to Allen, you clear your mind by transferring the issue to a trusted system, outside your brain, that you are sure to come back to over and over.   Let’s work through this concept in three parts using a project as an example.

As with any project you first need to clarify what the project is to accomplish.   Next, you need to decide what steps are necessary to accomplish the project or at least to make progress toward completing it.

Second, record these steps in a system that you can review on a continual basis.  They do not need to be detailed, only enough to keep you on track.

Third, keep reminders of the steps you need to accomplish in order to finish the project but more importantly to concentrate on the one next step you need to complete to keep the project moving forward.

This concept of the next step is the most important part of any system.  When you are looking at a large project or commitment it can be overwhelming.  If you concentrate, however on the one next step you need to accomplish to keep the project moving, it is not so intimidating.  This is especially important when you are managing multiple commitments.  If you have say, five projects, you could have 25 or more steps to accomplish, but if you concentrate on the one next task to be accomplished with each of them, you will not be overwhelmed with 25 steps but can concentrate on only 5.  This is much more manageable to our minds.  When this task is complete, then establish the next one task to be accomplished.  It is easy to keep progress moving forward, one step at a time.

Everyone works differently with this process.  Some people like lists where they can cross things off, others are more big picture oriented and want to see the whole project.  There is no right answer here.  I happen to use a white board on the wall of my office.  I work with multiple clients and projects, plus my own life issues.  I create boxes on my white board then put the critical tasks to be done under each project, but then mark or highlight the one next step for each project that needs to be done.  This allows me to keep each area of my life working toward that particular goal and frees my mind to work the process rather than worry about what I missed.  I encourage each of you to find the system that works best for you and remember the one next step you need to do.

I have long held to the belief that employees will accomplish the work they perceive they are being compensated for.  As an example, if you were to pay commission to you sales people only to bring in sales– that is what they will do.  They will do whatever it takes to bring in the sales, whether it helps the company or not, whether the sale is profitable or not.  You are paying them for sales, not profitable sales.  This may be an extreme point but I make it to help you think differently about rewards.

Daniel Pink, in his book entitled Drive, unpacks two research studies from 1940 and 1969 that seem to turn on its head the long held belief that rewarding performance leads to higher levels of performance.  The study, in 1940 used monkeys and 1969 used humans; I will let you draw your own conclusion from that.  But the results, interestingly, were the same.  When test subjects were given a task to perform they were motivated to do so with no reward other than the accomplishment of the task.  When rewards were introduced for either faster performance or a higher level of performance, or food in the case of the moneys, then performance actually went down.  It appears that even the monkeys were motivated by the accomplishment of the task alone.

As a business owner, what can you take away from this study?  I refer back to the first paragraph where I drew attention to the notion that people perform what they perceive they are being compensated for. In my opinion the concept of bringing in any sale versus a “good” sale, is actually an interpretation of the studies previously mentioned.  To state this concept another way, it is important for a business owner to provide a fair base compensation for the job being performed.  Then it is up to the business owner to create a work environment that encourages growth and participation in the core of the business, to provide the motivation to do the work.

To further unpack this concept that people are not always motivated to perform work for higher pay I w draw your attention to a number of free, very cutting edge products that were developed with no compensation to the participants nor are charges made to the end users.  These include Linux, computer operating systems that competes with Microsoft; Wikipedia, a free encyclopedia that put Encarta, a Microsoft product, out of business; Apache, a free open source web Server.

Companies like 3M, allow their employees to use up to 20% of their time doing whatever project they want, whether it is part of their job or not.  3M, in turn, lives off the new products created by this totally unmanaged process.  Your business is not 3M but if you could turn your employee time into productive time, what would that do to your business?  To give you a practical example, when I worked for a real estate company a number of years ago, I saw the need to provide a sales tool to our leasing agents to help them better analyze the profitability of a deal.  The market place solutions to this issue were good, but expensive.  So I took it upon myself to develop a product that they could use to better their analysis.  I had little time in my day to do this so I did it all on my own time.  I was not compensated for it, nor was I told to accomplish it.  I did it all on my own.  To this day, many years later, I still take pride in accomplishing this and likewise to this day very few people understand what I did and how it helped the company, but our environment encouraged growth and improvement so I was just willing to put in the effort.

How can you rethink how you motivate your employees?  How can you create an environment that encourages growth and development?  If you would like some help figuring this out, as a partner with B2B CFO®, I am ready and willing to help you accomplish your goals.