Getting Your Business Unstuck with Barry Moltz
Barry Moltz gets businesses growing again by unlocking their long forgotten potential. Thanks to decades of entrepreneurial experience in his own business ventures as well as consulting countless other entrepreneurs, Barry has discovered the formula to get business owners “unstuck” and marching forward. He applies simple, strategic steps to facilitate change for entrepreneurs, and gets them growing their business once again. Barry is a recent inductee of the Entrepreneurship Hall of Fame, and has also taught entrepreneurship as an adjunct professor at the Illinois Institute of Technology.
SPEAKING.COM: Why do you have to be “a little crazy” to start a business?
MOLTZ: If many start-up entrepreneurs knew what it was really like to run a business, they would never move forward with it. The failure rate is so high and the chances of success are low so you do have to be crazy. However, if you have the passion and the drive for entrepreneurship, there is no other profession that is a better ride!
SPEAKING.COM: What are the main reasons small businesses “get stuck”?
MOLTZ: Small business owners have been running their company with just enough success. Most have created just a job for themselves and not much else. Since they are on the inside, it is hard for them to see how to get unstuck and grow their business. Most owners get stuck, because they don’t have consistent sales and a marketing plan that establishes their presence when customers are ready to buy. They are unable to grow and retain an excellent team. They also struggle with being busy as opposed to being productive.
SPEAKING.COM: What factors should entrepreneurs look at when assessing the health of their business?
MOLTZ: The biggest factors are:
1. Cash Flow
Having a cash flow positive company is critical for success. This means the business has more cash at the end of the month than the beginning.
2. Quick Ratio
This simple balance sheet formula divides current assets minus current liabilities. Ratios greater than one mean the company has enough current assets to pay its current bills.
3. Customer Annuities
This means repeat customers pay the company automatically every month. This ensures that there are sales at the beginning of the month even without marketing.
4. Fixed Overhead Expenses
High fixed overhead expenses do not give companies flexibility as sales and profit changes. Keep as many expenses as possible variable with sales.
5. Management Team
Strong companies are not about their owners, but their team leaders. Build a culture that can make a profit while the owner is on vacation.
6. Employee Turnover
Loyal employees generate more profit for companies than those with high turnover. If your turnover is higher than 25% a year, there is a problem.
SPEAKING.COM: What are some common ways that businesses might be wasting money?
1. Pay per click Advertising
It seems simple and cheap, but tons of money gets wasted on this type of online advertising due to a lack of expertise on how to run an effective campaign.
Solution: Copywriting, demographic targeting, and choosing the right keywords can trip up the novice. Get help from a search engine marketing professional like Hubspot and Dex One before launching a campaign.
2. Travel expenses
Small-business owners shop hard for the best airline, hotel and car deal before they leave for any trip. Unfortunately, once they get on the road, they waste a great deal of money. This includes $5 coffees, $12 alcoholic beverages, $5 sodas from the mini bar, city parking and taxi rides—not to mention that client dinner that went way over budget.
Solution: Look at public transportation from the airport. Many times, this can cost 10 percent of a taxi or rental car. Ensure that the hotel is near planned appointments so there’s less costly commuting to and from those locations. Book hotels that have kitchens in the room or pack food for the trip.
3. Wrong Smartphone Data Plan
Due to the fear of overages, most small businesses use the unlimited plan. According to Consumer Reports, 48 percent of consumers use less than 300 MB a month.
Solution: Check your company’s plan and negotiate with the provider to get one that matches usage. Telephone bills are also ripe for renegotiation, or you can move to using a voice over IP solution (VoIP) from companies like Nextiva that offer a flat rate per phone per month.
4. No Follow-up Procedures in Place
Small businesses spend tons of marketing money generating leads for their company that they never follow up on to get the sale.
Solution: Have a process in place that tracks every lead, not just for the initial contact, but on a monthly basis. Having a customer relationship management system (CRM) like Salesforce or Infusionsoft is critical for success.
5. Non-retail Office Space
This fixed expense is too big or extravagant for what the company needs. Small-business owners overpay and overbuild because they miscalculate how fast their companies will grow. Large or fancy office spaces also can feed their egos.
Solution: Can the company be virtual? What is lost if everyone works form home? Determine what investments need to be made for a virtual office to work and compare those figures to the current cost of office space.
6. Website Design
Most small-business owners focus on a unique website design and pay handsomely for it. They also invest too much in branding and logos when their company launches.
Solution: Pick a template for an open sourced Web tool like WordPress. Focus investments in keeping content updated, reviewing website analytics, using CRM and e-commerce.
7. Bad Hires
Hiring the wrong employee typically costs 20 percent of his or her annual salary. This doesn’t even include the lost productivity that a successful person would contribute to the company.
Solution: Be slow to hire and quick to fire. Make sure prospective employees match the company culture before testing their skills.
8. Large Investments in Technology
Too many small-business owners invest in large hardware and software solutions that need to be customized. Their business changes, and then they need to migrate to a different system.
Solution: Use applications in the cloud that charge a monthly fee. This technique matches a variable cost model more closely. Reputable vendors will constantly innovate their technology, and their small-business customers will benefit with little cost.
SPEAKING.COM: Your formula for increasing profits at any company is PxP=P. Could you explain this formula for us?
MOLTZ: People times Process Equals Profit. Businesses are not about ideas, but the execution of those ideas. Therefore, the best team always wins. When you give these people a great process to follow, it’s like they are doing their work with the aid of a jet pack! People and process will always produce the most profit!
SPEAKING.COM: Drawing from your experience, what advice do you have when it comes to hiring and firing the right people?
MOLTZ: Slow to hire and quick to fire. Too many small business owners are too quick to hire anyone just so the position is filled. This results in many poor matches for new employees. In addition, when one person is not a good fit for the company, they delay firing them even though they know they are not helping the business.
SPEAKING.COM: What are some actions leaders can take to revitalize employee energy when business seems to be at a plateau?
MOLTZ: Employees band together to form a team when they believe in achieving a mission that is greater than themselves. The leader needs to get others to buy in to this vision and have them add to it! This happens with roundtable discussions and participating in activities that get them closer to the goal.
SPEAKING.COM: An article in Inc. magazine listed providing health insurance to employees as one of the biggest issues hampering small businesses in 2016. What are your thoughts on how business owners can manage this challenge?
MOLTZ: Healthy and less stressed employees are productive ones. Business owners need to find a way to provide access to reasonable health insurance for their team members. At the same time, it does not mean that they need to bear the entire cost. Alternately, they can work with independent contractors and outside consultants to avoid the health insurance issues, but risk a higher fee and the consistent availability of the resources they need.
SPEAKING.COM: You’ve said businesses often only worry about marketing when things get slow. How do you recommend then that small businesses approach marketing?
MOLTZ: Set up a marketing system that gets your company’s message of expertise out there consistently. This can be done by using a content management system for social media like Meet Edgar or a customer relationship management system (CRM) like Infusionsoft for email campaigns. These tools are used to load all the marketing content at the beginning of the week, so no matter how busy things get, the message still gets out there to attract and retain customers.
SPEAKING.COM: How can small businesses leverage social media for marketing without overusing it?
MOLTZ: Find out which tool your customers are using the most and focus on that one. Listen to the conversations on problems they are having and offer expert advice. Use a content management system as described in #9 to consistently participate on the platform. Don’t use social media to directly sell products; instead, use it to attract customers that are good prospects.
To bring Barry Moltz to your organization, please contact Michael Frick at: Mike@Speaking.com
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