Posts Tagged ‘profit’

Roger-Step1-PlanI’d like to invite you along on an author’s journey towards writing a nonfiction book. During the next 26 weeks, I’m going to share my progress towards my 39th book. I want to share with you some of the strategies and tips I’ve learned about book publishing and personal branding. I also want to share some of the changes that have taken place in publishing, as well as share the steps in the decision-making process that can save you time and help you avoid expensive mistakes.

Why do business professionals like you write books?

Certainly, it’s not the “big bucks” advances from conventional trade publishers. Celebrity 6 and 7-figure advances notwithstanding, direct income from book sales is likely not to become a significant income source for you and your family.

And, unless you self-publish, which requires you to spend money before you can earn money–you’re unlikely to profit from endless streams of recurring income from book royalties each month.

So, why do business professionals write books, if it’s not the money?

There are two ways to answer this question: the anecdotal approach and the statistical, research study approach:

  1. Post-1-MLevy-42Rules-TWO-5Anecdotal approach. The easiest and most readable way to learn why busy professionals write books is to pick up a copy of Mitchell Levy’s 42 Rules for Driving Success with Books. The 5 sections of this book provide concise, entertaining, and revealing real-world portraits of authors who have escaped the economic hell of anonymity by writing a book that positioned them as experts in their field. If you’re looking for believable role models of publishing success, this is the place to start at a very reasonable price.
  2. Post-1-RainToday_Rprt-TWO-5Research-study approach. RainToday, the research and publishing arm of the Wellesley Hills Group, has published a detailed, 2-volume, 300-page Business Book Publishing Series Report. Based on detailed interviews and surveys with published authors, these reports make a dollars and cents argument for writing and publishing a book to build your brand and attract qualified prospects.

The most telling statistic: 96% of authors reported that publishing a business book affected their practice either “Positively” or “Extremely Positively!”

So, why am I, again, beginning an author’s journey?

My last book, Design to Sell, came out in 2006, and my previous book, The Streetwise Guide to Relationship Marketing on the Internet, came out in 2000. My previous books sold over 1.6 million copies throughout the world. (My shelves are loaded with copies of my books I’ll never be able to read, i.e., Chinese, Polish, Russian, and Hebrew editions.)

My best-selling books came earlier, when it was easier to earn significant incomes from publisher’s advances and royalties on book sales. My first NY Times best-seller was Looking Good in Print: A Guide to Basic Design for Desktop Publishing, and the late 1990’s were subsidized by significant royalties from Microsoft Office for Windows 97 For Dummies, and others in the series.

Now, it’s time to write again, and there are several factors driving my decision. The relative importance of the following varies from day to day, but all of the following play a role:

  • Writing is fun. Isn’t that a crazy thing to say? Yet, it’s true. At the end of the day, there’s satisfaction to be found in whatever you’ve been able to accomplish. There’s a lot to be said for starting with nothing, and ending up with a page or two of convincing arguments that didn’t exist at the start of your writing session.
  • Repositioning my expertise. For many years, I was known as the “design guru of our generation who has taught desktop publishing excellence to hundreds of thousands,” as Ralph Wilson said. I continue to love graphic design, but at the present time, I’m more interested in teaching writing skills at Published&Profitable and writing about writing in my daily writing tips blog. The time is right for me to write a book about publishing that will attract more qualified traffic to my website and more invitations to speak.
  • Passion. I’m not only very passionate about the topic, I want to learn more about it and be able to teach it more effectively. Writing is the best way to enhance your understanding and ability to communicate it to others.
  • It’s a different world. There are some wonderful changes taking place in publishing these days. New tools are available that open up new frontier of opportunity for authors who are willing to adapt to the times. Never before have the barriers to entry been as open to entrepreneurial authors as they are now. I’m tired of writing about these changes, I want to take advantage of them myself!

I’m tired of writing about these changes, I want to take advantage of them myself!

I’m looking forward to putting today’s new writing and marketing tools to work writing and promoting a different type of book, one that only now makes sense for business professionals.

My new book also provides an opportunity for me to synthesize marketing and writing in ways that were impossible for most business professionals in 2000, and were only known to a few non-computing professionals in 2006.

I hope you’ll come along for the remaining 25 installments of this author’s journey; and, if you’re so inclined, I hope you’ll become convinced that it’s time for you, too, to begin an author’s journey.

In the second installment of this series, I’m going to address the first question you should ask yourself when writing a book: Who Do You Want to Read Your Book? The answer may surprise you.

Note: Drop me a line at Roger@publishedandprofitable.com and I’ll send you a PDF of the mind map I’ve created for my author’s journey plus a mind map of the contents of my next book!

strategic planningIn a recent post discussing how to build your company into an attractive strategic candidate with a process known as ExiTrak®, we advised the following.

  1. Have a trusted advisor interview key acquisition executives in 15-25 prospective buyer companies.
  2. From these responses, put together the profile of the attractive strategic acquisition candidate from the perspective of the buying marketplace.
  3. Conduct a “gap analysis” comparing the marketplace profile with the strategic profile of your company.
  4. Based on this analysis, make decisions regarding which strategic assets to acquire and/or enhance in order to bring your company’s strategic profile as close as possible to that of the marketplace.
  5. Create a strategic plan to implement these decisions in the context of improving operational performance.

This blog will review in detail the strategic planning process.

Overview

A solid strategic planning process will take the participants from the “10,000-foot level” to the place where “the rubber meets the road.”  {No more metaphors, I promise.}  The most critical element for a successful strategic plan is the extent to which everyone in the company can see a direct link between high performance in what they do every day and the long-term prosperity of the company.  Achieve this and “the world is your oyster.”  {Man, that promise had a shorter shelf life than the average New Year’s Resolution.}

Who Should Participate?

This is both a “who” and a “how many” question.  One of the best ways to overcome resistance to change is to have those who will be implementing the changes participate in determining what those changes will be.  Therefore, if possible, everyone who can have a significant impact on the achievement of the company’s Vision, Mission and Long-Term Goals should be part of the strategic planning process.

It is, nevertheless, well established that any working group begins to lose efficiency and effectiveness when it gets bigger than 17 participants.  Depending on the size and complexity of your company, an ideal strategic planning group size is 5-15.

How Long Should This Process Take?

Some professional facilitators recommend telescoping the entire process into a single weekend.  I think this is a mistake.  My recommendation is to conduct a series of three one-day meetings, spaced about one month apart.  After a couple of weeks, the facilitator should issue a preliminary report summarizing the results to date.  At that point, each individual will be able to review this report as a “reader” rather than as a “writer” – a key factor in objectivity – and be prepared to suggest changes, if appropriate, at the next meeting.

Selection of a Facilitator

Every strategic planning process needs a facilitator.  A highly effective facilitator must possess all of the following skill sets and personal qualities.

  • Highly knowledgeable about your business and industry
  • High self-esteem
  • Not easily intimidated by higher-ups in the organization or their opinions
  • Well organized
  • Excellent listener with first-class summary skills
  • Excellent at drawing out all participants, including the wallflowers
  • Articulate
  • Clear writer
  • Not the CEO

If you are the CEO, try to avoid revealing your position on various issues for as long as possible.  You will always have the power to pursue a particular course of action.  But, when you do, you want to be certain that you have had the benefit of the broadest set of opinions and options.

Key Elements of the Strategic Plan

The strategic planning process involves the following key elements:

  • Vision
  • Mission
  • Long-range Goals
  • Short-term Objectives
  • Task Assignments
  • Action Items
  • Follow-up to compare actual performance with plan

Vision

At least 3 Years in the Future

Often at End of Accounting Year (Calendar or Fiscal)

Any worthwhile strategic planning process must begin with the Vision for the company at some specific date in the future.  What will be the company’s identity?  When customers, suppliers or professionals hear the company’s name, what image do you want them to conjure up?  What overriding quality do you want front of mind?  In other words: Who is this company?  Here are a few examples of Vision statements that speak to this identity question.

  1. We make the defense of the U.S. homeland stronger and more flexible.
  2. We help our clients’ teams to function more cohesively and effectively.
  3. We improve the quality of health care in America.
  4. We make transit passengers safer.

When your employees fully understand (intellectually and viscerally) your company’s Vision, they will be able to see how the optimum performance of their individual jobs will contribute to the fulfillment of that Vision.  This connection is critical for long-term job satisfaction, high achievement and career track progress.

Mission (Same Date)

The Mission statement describes your company’s function in concrete terms.  Using the same examples, here is a group of Mission statements that address the question “What does this company do, and for whom?

  1. We train dogs to assist Customs inspectors to locate drugs and explosives.
  2. We deliver workshops to privately held companies on verbal and written communication, listening skills and teamwork.
  3. We make timely delivery of top-quality components to medical instrumentation OEMs.
  4. We manufacture shatter-proof glass for public transit vehicles.

Marrying the Vision and Mission statements is essential, because it helps to get across to your employees how truly important each of their jobs is in the grand scheme of things.  For example, these dog trainers are obviously in support of the drug and explosive interdiction business.  But, interdiction is a means, not an end.  The end is that we are all safer in this country.  In this example, you want your employee to make the connection that “If I do my job really well, I will be saving lives.

Long-Range Goals (Same Date)

The Long-Range Goals (LRGs) cover as wide a range as you and your group deem appropriate, including such categories as:

  • Sales
  • Gross Margins
  • Overhead structure
  • Pretax profit
  • Market share
  • Market niche(s)
  • Key new customers
  • Improved product quality
  • Improved delivery times
  • Customer satisfaction
  • Geographical outreach, including additional facilities
  • Breadth and depth of management company-wide
  • Technology
  • Technology management and infrastructure
  • Reducing employee turnover

These goals should be quite specific and measurable. For example, improved customer satisfaction could be measured by two distinctly different kinds of yardsticks.

  1. Reduction of customer turnover by 30% over three years.
  2. Improvement in customer survey numerical responses by 30% over the same period.

Both provide numerical measures, but surveys rely on subjective personal judgments.  Improved delivery times are much easier to measure than, say, product quality.  However, the latter can be measured by customer returns, customer complaints or other means.  This, of course, requires that you have a system to capture these data 100% of the time.  Whatever your system, ensure that your Long-Range Goals are inextricably linked to day-to-day performance.

Short-Term Objectives

To be Achieved Within 12 Months

The successful completion of your short-term objectives should provide some tangible improvement in company operations.  However, the primary strategic payoff will be a head start on achieving the Long-Range Goals.

If you are going to make a mistake, err on the low side of commitment, not the high side.  You can always add something later, but lack of achievement in one part of the strategic plan can cause problems elsewhere and, at the same time, create morale problems for the team.

Carrying on with the example of Improved Customer Satisfaction (and assuming that progress in each of the measured categories is linear) the Short-Term Objective for customer turnover and survey results could be 10% per year.  However, inertia may preclude linear progress.  As a result, 5%, 10% and 15% in years 1, 2 and 3 respectively may be more realistic. Try to ensure that your Short-Term Objectives are achievable, and give yourself and your team enough time to get the job done.

Task Assignments (Quarterly)

The achievement of quarterly task assignments will, by definition, achieve the Short-Term Objectives.  Each task assignment is the responsibility of one or two individuals, with a deadline and standard of performance.  For example, someone will have to design the system to collect data on customer turnover, including precisely what constitutes turnover.

Similarly, someone will have to design and implement the customer survey or find and supervise a source outside the company to perform one or both of these services.  Someone will also have to analyze the data and present it to management.  The best way to avoid front-loading this part of the process is to assign tasks only one quarter at a time.

Action Items

What Do We Do Tuesday?

Action Items fall out week by week or month by month from the Task Assignments.  Unlike Long-Term Goals and Short-Term Objectives, it is best to front-load the Action Items, because that is the best way to get the job done on time.

Monthly Follow-Up

Plan the work and work the plan.  Whether it’s an individual salesperson’s call plan for the next week or the company’s strategic plan for years to come, the principle is the same.  It doesn’t matter how great the plan is if implementation is poor, excessively late or both.  In this regard, follow-up to compare actual results with plan is invaluable.

There should be a two-hour morning follow-up session, no less often than monthly, that includes all members of the original planning team.  The purpose of each meeting is two-fold.

  1. Determine the status of all active projects in the strategic plan.
  2. If any project is in trouble, determine what can be done to right that particular ship.

The most critical factor is that the strategic planning group functions as a team, providing support for one another and directing help where and when necessary.  Good luck.


PhotoPopell This article has been contributed by Steven D. Popell. Steve has been a general management consultant since 1970. Steve is a Certified Management Consultant, business valuation expert, and inventor of ExiTrak®– a process designed to assist the privately-held company owner/manager to build an attractive strategic acquisition candidate

Manage that financial belt…or it will get you!

by Guy Ralfe on July 15, 2009

tightening-budgetsEntrepreneurial business ventures have the same business concerns as their conglomerate competitors – they all want to turn a profit. They want their revenues to be significantly larger than their costs.

Keeping it simple, to increase profit we have two approaches:
~ increase our revenues relative to the cost
~ reduce our costs relative to our revenues

During times of economic prosperity companies often deal with challenges associated with growth, in their operations, by sacrificing operational efficiency. Typical examples are acquiring equipment when we expand our orders rather than reworking the scheduling; hiring additional staff rather than reorganizing the process.

I will use an example to simulate a company going through a growth and contraction to highlight the effect:

A sample company produces 1000 widgets per month at $5/piece, produced by 2 machines costing $2,000/month each. Throughput is 500 units per machine.

Through economic prosperity, production increases to 2,000 widgets per month, however this production requires 5 machines because along the way as each successive machine is acquired, the sudden capacity relief resulted in a decline in efficiency. This efficiency is not regained as you approach each successive machine capacity limit. Throughput is now 400 per machine.

In a market contraction,  production reduces back to 1,000 widgets. This is half the peak value so the machines scale back at this new throughput rate of 400 units per machine (1000/400=2.5) This requires 2.5 machines which we obviously can’t have, so now we need 3 machines to produce our 1000 units per month.

If we look at these three scenarios from a profit margin point of view (below) the accumulated inefficiency during growth has a drastic effect on the profitability when operations have to be scaled down. This example used machines but the same concept applies to all resources.

chart numbers

Going back to the factors that influence profitability, this translates into value, which is what we are prepared to pay for items:

  • the value produced for customers through product offerings – this will preserve the revenue side of the equation through both expansion and contraction.
  • the value to the organization of resources (assets, employees, cash) – cost is the component that seems to creep out of hand quickest and can be difficult to reign in again once you have established a lower value to the organization. This usually shows up in falling utilization (% of productive time) and realization (% of potential revenue)

The market is cyclical and the challenges faced in prosperity are the same that will haunt you during contraction. So as your business grows, pay attention to which notch you keep the belt on!