Five  steps to turning around a failing business; Simple but not easy.

  • By alycia.dabruzzo
  • 10 Oct, 2017

Businesses don’t always shut down immediately when they are failing. A business failure evolves over time and can be painful and damaging economically and personally long before the doors close.

There are many types of businesses but failing businesses have common characteristics.

1)    Quality revenues are tanking.

2)    Margins are insufficient to generate profitability.

3)    Key relationships, customers, employees and vendors are strained or broken.

4)    The business is worthless/liquidation value at best.

 

  While turning around a failing business is not easy, the steps to effect a classic business turnaround are simple. There are 4 critical steps.

1)    Cash flow must be immediately improved in a sustainable manner.

2)    Margins, Customer Satisfaction and profitability must be immediately increased synergistically.

3)    Key relationships must be improved; Clients, Vendors, Contractors & Employees

4)     The 8 KeyBusiness Value Elements must be measured, re- established or developed.


Our 13 minute questionnaire can help business owners understand how systematic improvement in these key elements has been proven to improve business value 71% or more.

                                          

                                                          Marvin Baker, EA, CVB and Licensed R.E. Broker

                              Contact us at info@mbapartners.biz for a free Value Builder Analysis





MBA Tampa Bay Blog

By 7017654322 21 Oct, 2017
               
Most entrepreneurs are not trained accountants. A majority rely on pre-packaged software for their accounting information. Most accounting firms do the same thing while utilizing trained bookkeepers and accountants. This is
not a bad thing but in either case it does not always assure good, accurate, reliable, useful or value-added business information.
 
Great accounting requires one essential ingredient. Every “accounting event” must be recorded accurately in real time (when it occurs).  Many entrepreneurs and bookkeepers record “multiple events” in a summary manner usually long after the events occurred. The higher the percentage of summary entries made in this manner the more likely an error will occur and with less ability for accurate detailed reporting.

Any system that captures accounting events as they occur is more likely to present accurate reports and more useful information. This reality has led to point of sale systems and fully integrated accounting software that strives to capture data accurately and timely. Most large and/or public companies are fully embracing these accounting solutions. Smaller entrepreneurs particularly in the e commerce world are embracing more often as well but unlike their large, public counterparts, they are more likely to utilize technology as a rationale for not having engaged accounting advice. This can create more limited value from real time information.

The key to maximizing accounting information value begins with understanding the four primary accounting methods and understanding the benefits of each.

1) Cash Based Accounting:  CBA is used by many small businesses even if it distorts financial information. It is deemed to be the “easiest to do and easiest to understand”. However, easy to do and understand has little merit and can be dangerous and expensive when it provides inaccurate or misleading reporting.

2) Managerial Accounting:  MA can and should supplement cash based accounting. It’s a simplification to call MA as information that eliminates the distortions of CBA. However, great MA should do much more. It must be timely, so decision making is timely, it must capture information accurately so management reports are dependable.

3) Accrual Based Accounting:  Most large companies utilize accrual based accounting because it is generally regarded as the “most accurate”. With today’s technology, cash based accounting makes little sense.  Most businesses that remain cash based do so because they believe it saves taxes…rarely the best reason and often not true.

4) Tax Based Accounting:  Business tax complexities and tax returns need clear relevance to financial reports. Doing everything legally possible to minimize taxes is simply good business. These are not conflicted objectives. Filing tax returns that are false is illegal and can be extremely costly. Understating income simply to minimize tax liability is not smart and usually more costly than smart tax reduction strategies utilizing good accounting methods.

Great business and tax advice does both.

                                                            Marvin Baker, EA, CVB- Small Business Consulting

                       For Newsletter subscription and special offers; Contact us at info@mbapartners.biz

By alycia.dabruzzo 10 Oct, 2017

Businesses don’t always shut down immediately when they are failing. A business failure evolves over time and can be painful and damaging economically and personally long before the doors close.

There are many types of businesses but failing businesses have common characteristics.

1)    Quality revenues are tanking.

2)    Margins are insufficient to generate profitability.

3)    Key relationships, customers, employees and vendors are strained or broken.

4)    The business is worthless/liquidation value at best.

 

  While turning around a failing business is not easy, the steps to effect a classic business turnaround are simple. There are 4 critical steps.

1)    Cash flow must be immediately improved in a sustainable manner.

2)    Margins, Customer Satisfaction and profitability must be immediately increased synergistically.

3)    Key relationships must be improved; Clients, Vendors, Contractors & Employees

4)     The 8 KeyBusiness Value Elements must be measured, re- established or developed.


Our 13 minute questionnaire can help business owners understand how systematic improvement in these key elements has been proven to improve business value 71% or more.

                                          

                                                          Marvin Baker, EA, CVB and Licensed R.E. Broker

                              Contact us at info@mbapartners.biz for a free Value Builder Analysis





By alycia.dabruzzo 10 Oct, 2017

Getting customer feedback is important to better understand how customers feel about your business, your products and your services. That includes listening, understanding and improving the relationship with the customer. Approaching or responding to customers with a complaint or a bad review requires four steps.

1)     Apologize.   It does not need to be profuse but it must be sincere. The assumption is always that the customer was truly disappointed and for that we should be truly sorry; Express it directly.

“I’m truly sorry.”   Apologies cost nothing but they are worth nothing if they are not sincere.

2)     Seek to understand their point of view of why they were disappointed, unhappy or dissatisfied. Do not try to dissuade or counter their opinion of what happened. Hear them out and recognize they have every right to not be satisfied.   Do not seek to find ulterior motives in their dissatisfaction. Let them know you understand what they are communicating. In an on-line review respect the comments as expressed.  Deeper clarity may not be possible.

“I understand what you are saying. “

3)     Allow them time to consume what you have communicated.   “I am sorry and I understand what you are saying.” Do not immediately try to “fix it.” Usually some tension will be reduced by your sincere apology and your indication that you understand what they are telling you. In an online post, providing a manner to follow up directly may be necessary.

4)     Listen, frequently at this moment the customer will tell you what they would like for you to do about the complaint if you give them time and space.  In a review, if a remedy is not expressed, a direct follow up may be called for.

  a) I want my money back.

  b) I want a replacement.

  c) There is nothing you can do- I am so disappointed.

  d) I appreciate you taking the time to hear me out… I will be back, I will try again, I will buy something different next time etc.

5) Your next step should be clearly considered in advance- it should represent a policy or practice designed to regain your goodwill even if you have lost the customer.

a)    I will or have refunded your purchase price. I want you to know I appreciate you taking the time to tell us what we did wrong/how we can do better/issues we need to address.  We have taken steps to eliminate this issue in the future.

and/or…….

b)    I want you to know our policy is to discuss a customer issue internally and we donate an amount equal to the purchase price of any product or service that was not satisfactory to one of our customers. We support the local food bank/shelter/animal rescue etc. and will add the price of your purchase to our next donation. It's not meant to replace the other steps we need to take but a way we try to make something negative create a positive.  Be sure you do it.

 

Frequently complaints are resolved, forgotten and we move on. Resist this temptation, keep a list or journal of every complaint or and review frequently. It will energize your quest to always get better.

For performance-based solutions to small business problems affecting cash flow, business value and profitability, we can help.  We don’t earn fees if we don’t perform.   We Guarantee it!

 

                                               Marvin Baker, EA, CVB- Small Business Consulting

                For Newsletter subscription and special offers; Contact us at   info@mbapartners.biz

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