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Travel and Expense Policy – part one February 12, 2011

Posted by solutionsbconsultants in Business Improvement, Increase Profitability, Procurement, Travel Policy.
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I have had quite a few requests for a travel and expense policy. Before I go into the philosophy and nuts and bolts, let me make a few comments.

First, most companies have severely curtailed travel, both for internal group meetings as well as attendance at training, seminars, and supplier visits. I am actually glad that a good number of these trips have been curtailed. With communication mechanisms like Apple iChat, Skype, Webex, Go-to-Meeting and other low-cost, highly effective tools, the goals and accomplishments of an in-person trip can be achieved without an unnecessary hit on the pocketbook. Why send three people to the same training? Send one and have him/her train the others – or film the training and put it into your training library for future hires.

Let’s look at a hypothetical scenario: A few years ago a IT executive wanted to send two of his personnel to make a presentation at an overseas conference. I challenged the $10,000 cost of the trip (which probably cost more than $15,000 if you count the loss of two IT resources for 10 days) for three reasons. 1) If you are invited to present, the body sponsoring the presentation should have covered the cost; 2) the virtual communication technology available at the time could have easily have achieved the goal; 3) the economy was showing signs of decline and it would send a negative message to the rest of the company (besides being fiscally irresponsible). I was told that this presentation was not only prestigious for the company but it would also serve as a reward for the employees. Actually, the company did issue a press release, however, both employees left the company before the year was out. There was no measurable ROI or any direct benefits to the company. Anyway, I lost the argument but would still make the same plea today.

Enough pontificating, let us talk about what you want to accomplish with a good travel and expense policy.

First, create some goals and objectives for your policy:

1) To fairly compensate the traveler and provide for his/her safety and comfort away from home
2) To ensure company resources are managed responsibly, ethically and legally and minimize costs when possible
3) To ensure consistency in travel administration, yet provide reasonable flexibility
4) When in doubt, use common sense.
5) Apply the same rules to everyone regardless of position.
6) The traveler should neither lose nor gain financially as a result of business travel

Think about these and let me know if I left anything out – I will follow up shortly with more on this in Part II.

Yours in Supply Chain,

Steve

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

If you have a topic of interest you would like me to discuss in our blog, “in-person”, or see a typo, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

The Savings Corner – Part I – Cleaning up Janitorial Spend April 5, 2010

Posted by solutionsbconsultants in Accountability, Increase Profitability, Procurement, Savings Corner.
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I have received more than a three dozen requests from executives who want to know how to drive instant or (near instant) savings for their company’s bottom line. 40% have come from CFO’s, and the rest from President’s and CEO’s. The Savings Corner will detail lowest prevailing pricing for a variety of commodities. And not just for Fortune 1000 businesses but for businesses from 10 to 100 employees.

Let’s start with an easy one, janitorial. First, don’t fall into a trap by signing up with a pure janitorial company. They have no way for them to take a small 10-15% profit without going out of business. Sure, they will razzle dazzle you with their “cleaning systems” that mount on the wall and their claims that their products will clean 40% more than the household equivalent. Besides, most of the cleaning systems that I have experienced over the years have a proprietary mount that will only allow that company’s product to be used with it – locking you into an overpriced solution. Best practices disallow proprietary solutions unless there is a huge (and I mean HUGE) benefit for your company – Let it be said now that any company that fails to use a universal dispensing system should be hustled away from the negotiating table.

Many of your other suppliers have drifted into the janitorial supplies arena because of the enormous profit potential. A good example of this is your Office Supplies vendor. Oftentimes, you can leverage the office supply store by requiring them to sell janitorial products at 10% over cost – or you take the entire block of business elsewhere.

And now for a secret. The single best place for janitorial supplies is not Walmart or Sams or Costco – it is your local dollar store – Dollar Tree, Dollar General, Dollar Store, etc. – Where else can you pick up 21oz of Comet for a buck – which is half the price of Amazon or Staples. And they have a wide breadth of cleaners, mopping agents and the like The key to buying these supplies is to have your procurement specialist do it once a month, write a number on each product (with a Sharpie) and have your cleaning staff perform a daily inventory. Don’t forget to invest five dollars for a hasp and padlock.

Incidentally, requiring a daily or regular inventory (not only for cleaning supplies) deters shrinkage – thieves usually take advantage of a place that is operationally sloppy – if they know you are watching, they will choose an easier target.

Annual savings for a small company averages more than $1500 annually including the monthly staff time for picking up the cleaning supplies. For larger companies, it makes sense to look at outsourcing the janitorial function – one company that I audited had the in-house staff emptying office trash cans three times a day just so they could appear busy. I favor limited outsourcing, making the employees responsible for keeping their desk, kitchen and common areas clean and using the janitorial service for dusting, mopping and zone cleaning.

Steve Gordon specializes in procurement and logistics cost saving initiatives – call him today at 865.356.3575

Steve

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

Solutions is happy to complete a complimentary audit of your firm’s expeditures. Just call or write to get started.

If you want to know how to save money on a particular commodity, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

The Power (or lack thereof) of Purchasing Departments April 2, 2010

Posted by solutionsbconsultants in Accountability, Improving Personnel Performance, Increase Profitability, Procurement.
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Recently, I read an interesting post by Mark Hunter on PowerHomeBiz which paints procurement departments as a weak link which can be easily marginalized. Since Mark trains thousands of salespeople on how to increase their productivity, it is important to not only understand his perception of procurement but the work that must be done in the future by your procurement department in order to successfully fulfill its mission and fiduciary obligation to your company.

While his entire article can be found on his website, http://www.powerhomebiz.com, I will pull a few excerpts and comment below:

“One of the most difficult parts of a salesperson’s job is dealing with purchasing departments. Whether you are a new salesperson or a seasoned veteran, you likely will agree that dealing with a purchasing department can create a tremendous amount of stress for a salesperson. Unless you are truly unprepared, there’s no reason for anyone to fear dealing with a purchasing department.”

“A purchasing department is nothing more than a group of individuals assembled for the sole purpose of trying to save money for their company…..”

* Rarely does the purchasing department have huge amounts of power in a company. This means they’re not at the top of the food-chain. As a result, they can’t afford to upset those above them….

“Purchasing agents love to bluff people….”

“(purchasing knows) how expensive switching to a new supplier can be.”

If you are involved in a purchasing role or responsible for a departmental, business unit or division’s bottom line, this type of “trash” talk should really get your attention. The article reduces your procurement process into a ‘price only’ play and actually encourages salespeople to do an end around the purchasing department. Further, it creates an adversarial atmosphere between suppliers and purchasing which we know is totally counterproductive.
After all, a company is only as strong as its weakest supplier.

Before I go further into the role of purchasing, I want to point out that Mark is correct in his analysis that there are companies which do not adhere to best practices of management and the type of activity he describes has become their de facto behavior. And this “bad” behavior is not confined to small and medium firms. Some of the most respected larger companies which have installed the latest and greatest versions of Oracle, SAP, Ariba and other platforms have failed to embraced a culture which properly blends the business operations knowledge of a department manager with the third party detachment of an independent purchasing authority.

What do I mean by this statement. Good purchasing requires adherence to best practices, leveraging core competencies and sourcing solutions so the outcome is a positive return on investment for the company. And it may be said that any given department of a company has needs that are unique to that department and those needs can best be solved by subject matter experts who work within that department. That’s right – the answer to a business problem oftentimes lies within the department and not in purchasing. So why do we even need an separate purchasing department? You might think that (purchasing) is probably going to get in the way like some type of government red tape. And this would be true if purchasing is only allowed to become involved only at the very end of a transaction, after the problem was allegedly solved and a supplier was selected. Purchasing would only have price to dicker about and perhaps delivery or payment terms to negotiate as their only function and you can only toy around with these variables so much until you get an inferior product or put the supplier out of business.

Purchasing exists because there needs to be structure within a company that ties company mission statements, goals and budgets to the needs of each department in a way that gives value to the company and its investors. After all, it would be unheard of for a department head to hire a manager without going through human resources. Or a salesperson to offer a new product feature set without the blessing of marketing, manufacturing and operations. In a similar manner, purchasing leverages the best practices of buying goods and services by creating a organized medium for bringing new suppliers into the company, setting delivery, quality, terms, supplier expectations and hundreds of other variables which would be impossible for each individual department to pull this off in a standardized way.

And remember that most department member(s) are constrained by the amount of time they have to invest on trying to figure out how to solve purchasing and logistics problem and oftentimes have to cut corners in their supplier sourcing, bidding and negotiations. Many choose to rely on suppliers they have used at previous companies, friends or a quick internet search. So they either propagate a previous bad decision, put themselves in an awkward situation or blindly accept Google’s paid search results.

So take the points that Mark made and my comments as your marching orders. The procurement function today is more important than ever – don’t let anyone marginalize it.

Opportunities in Marketing Procurement March 26, 2010

Posted by solutionsbconsultants in 1, Business Improvement, Increase Profitability, Marketing, Procurement.
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Thanks to Robert R. of New York City for his question, “Steve, I am a CFO of a medical supply manufacturer. Our marketing spend has spiraled out of control. What suggestions can you provide to help put this cost center in check?”

Great question, Robert. Marketing spend oftentimes represents a large portion of a company’s indirect spend. Without specific targets or a look at your detailed spend, I am going to provide a generalized list of items that you can focus on.

1) Rank marketing spend by dollars.
2) Focus on top 20% of spend.
3) Use agencies and outside creative ONLY for idea generation and development of concepts whenever possible. Never use them to outsource printing, video production, web-design, etc. unless you want to pay a large 25% or more premium. (Note – even though agency commission might be 10% they will always use the high cost provider (since they make a percentage of the final price).
4) Create an in-house agency to take advantage of agency discounts.
5) Resource top 20% of spend – print, video, web-design, seo/sem, etc. And source out to 7-10 supplies instead of the industry standard of 3 potential supplies. The advantages of engaging multiple suppliers in the quotation phase are based on statistics – you cannot locate innovative, competitive, and quality-oriented suppliers with a small sampling.
6) Require that all completed digital files are supplied to the marketing department including original files, fonts, images, etc. This way your in-house graphics/video person can repurpose graphics and video at no additional charge to your organization. (When I use the words “original files” I mean the original source files (such as a flash .fla file or layered photoshop file) instead of the completed file (flash video .flv or .swf or merged photoshop file). The reason for this is that you can only edit the source file. My experience is that you must require this to be done when you place the original purchase order.
7) Marketing has a tendency to go with who they know and oftentimes they have a personal relationship with many of these suppliers. Sometimes this can be useful but once a supplier knows there is no competition you can guess what happens – price creep (and it never creeps down).
8) In the web-space be careful of trying to reinvent the wheel. Chances are that someone has created that special widget or function that is needed. There are great sources for inexpensive quality code, Search Engine Marketing and Optimization, and other web services. Make sure to be careful when creating the scope of services document so nothing is left to chance and make sure to involve multiple suppliers. Even if you are in a major metropolitan area, you will need to conduct a national search. Research can help you target your sourcing.
9) Take the time to understand and document your company’s marketing strategy. Early involvement by Finance and Procurement can eliminate any rush procurements which is used as a tactic to avoid best practices.
10) Never allow marketing to unilaterally select suppliers and negotiate with suppliers. This is true with all departments, not just marketing so don’t think I am picking on marketing folks in particular.
11) Consolidate suppliers whenever possible to leverage spend.
12) Create a preferred supplier list of suppliers who provide quality service at approved pricing.
13) If you shoot video, this category has huge potential for savings. The economy and technology have produced a wide variety of talented individuals and equipment who can take your (or your agencies) concept to successful completion. Even if you are in a small market, a few phone calls can lead you to a wide variety of suppliers. Hint: Stay away from suppliers who use hardware based Avid suites or non-digital solutions Currently the best bang for the buck are editors who use Apple’s Final Cut Pro Studio.
14) Limit long-term contracts for marketing services – that means not signing any agency contract – business is tight and competitive so you as a buyer are not compelled to limit your options.
15) Develop strategic partnerships with suppliers – concentrate on value-add services, payments terms and other benefits that they can provide.

Yours in Supply Chain,

Steve

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

Solutions is happy to complete a complimentary audit of your firm’s expeditures. Just call or write to get started.

If you have a topic of interest you would like me to discuss in our blog, “in-person”, or if you find a typographical error, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

The Death of the Conventional Advertising Agency March 2, 2010

Posted by solutionsbconsultants in Accountability, Business Improvement, Increase Profitability, Marketing, Procurement.
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Twenty years ago, while I was running a printing plant, I was told that printing on paper would be a thing of the past. Today, printing isn’t dead but successful printers have had to find their niche, take advantage of the new business fostered by e-commerce and work smart to find their competitive advantage.

I will go out on a limb and predict the end of an era – the Conventional Advertising Agency. I define the conventional agency as one that has makes its real profit on services beyond that of an innovative think-tank that takes the most mundane of products and turns them into consumer must-haves. Times have changed and no longer are agencies needed to send unneeded people to garner billable hours on photo-shoots, commercials, printing, web-site designs and other outsourced projects. The sophistication of the modern marketing director understands that a good photographer is a good photographer without regard of who hires him or her.

The idea of charging fifteen, twenty percent or more on outsourced projects is a procurement nightmare. With a cost-plus methodology, no agency is interested in competitive billing. In fact, when you are making a commission, the higher the check the better. I have audited agency billings that would make you cry and even laugh – but it’s not so funny when it is your money. The abuse in some cases is nothing short of gouging the company. And some of the agency contracts are specifically designed to remove the choice of purchasing control from your firm.

Their will always be a place for idea men and women. People who can create compelling campaigns to bring top-of-mind awareness and develop strong brands. But they should take a hint that today’s modern cost-aware companies are going to look unfavorably on those ad firms who do not first and foremost, employ a fiduciary responsibility to their clients.

Yours in Supply Chain,

Steve

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

We will do a sample complimentary audit of your advertising agency expeditures. Just call or write to get started.

If you have a topic of interest you would like me to discuss in our blog, “in-person”, or see a typo, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

Travel and Expense Policy – part two February 25, 2010

Posted by solutionsbconsultants in Accountability, Increase Profitability, Travel Policy.
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With the goals and objectives mentioned in Part I, let’s begin.

Common Sense: If it can be accomplished via video conference, then don’t fly. For example, many IT courses are available via e-learning instead of a flight. Spouses and other non-employee travel with a company employee should not be allowed due to abuse and liability.

Budgets: Travel should be budgeted in advance. I recommend $400 domestic airfare, $1500 international airfare, $100 domestic/$200 international per hotel day, $100 for taxi and $50-$75 per day for meals with a maximum of a 15% tip. One employee may pay for additional employees of the company if it is more convenient.
Here’s a hint: Use the Radisson and Holiday Inn instead of the Hilton or the Hyatt. With that being said, there will be some variance for not booking 14 days in advance and for execs who insist on flying business or first class.

Hotel Amenities: No hotel amenities will be reimbursed so don’t use the honor snack bar. The exception would be internet service for those travelers that do not have a wireless internet card, dry cleaning for stays exceeding five days and one ten-minute phone call per evening if the traveler does not have a company issued or reimbursed cell phone. Room service is discouraged unless there is a good business purpose.

Approval: There should be a hierarchial system in place for travel approval but it should only be for exceptions as follows:
1) Not booking more than 14 days in advance
2) Out of budget request
3) Flying business class or greater
4) Person booking is not a supervisor, manager, director etc.
5) Not specifying a specific business purpose – there should always be some type of ROI for the company when someone travels
6) Not using a preferred vendor

Reimbursements: All travel expenses should be submitted for reimbursement within ten (10) days of return. The IRS limit is 120 days but what we have found is the longer someone waits, the greater chance of loss of receipts. Original receipts are required for all reimbursement and this means the detailed receipt (not the receipt that only shows the total). For example, a receipt must have the date of purchase, the vendor name, an itemized list and unit price of the purchased items and the total amount.
This eliminates liquor, multiple entrees and other non-deductibles from being reimbursed. For convenience, I would issue frequent travelers – four or more trips per year an American Express card. Amex has great electronic record keeping and if you migrate to a full-blown travel and expense package, you can easily integrate their data. Finally, approval of reimbursement should NOT be done by a supervisor or department head. Better to let accounting or procurement sign off – they are less likely to let unauthorized purchases slip through the cracks as they are more objective in their review. Infrequent travelers may require corporate booking of their transportation and hotel. We designated a person in procurement and accounting to take care of these folks who might undergo a hardship if they had to use their own funds to prepay.

Conferences: There is no reason to really stay in the conference hotel if more reasonable accommodations are a couple of miles away. The organized traveler should be able to plan his/her day in advance to avoid any inconvenience.

Saturday stay over: If savings for a Saturday stay over (when not required) are greater than the hotel and meal allowance for an extra day, the traveler may choose to stay over on Saturday.

Cancellations: Must be reported to accounting or procurement and the ticket put in the company “bank” for future travel. Cancellations should require the approval of a division vice-president or greater to dissuade abuse.

Rental Cars: Rental cars are approved on a trip by trip basis. For instance, a conference usually would not require a rental car. But a trip to meet with suppliers and factory tours may require a rental car. Rentals should be non-luxury, economy or mid-size cars from an approved supplier.

Domestic Travel: Travel under 250 miles should be accomplished by vehicle as the costs in time traveling to the airport, delays in airport travel, taxis and other factors make this type of travel cost more cost effective. Air travelers should be responsible for packing their bag appropriately within weight and girth limits. Additional bags for stays less than five days are the responsibility of the traveler. Non-stop travel is preferred, however, if a connecting flight within four hours is available and the difference is $200 or more than a non-stop, the traveler would be required to take one connecting flight. All flights under five hours in duration much be flown “coach”.

Think about these tips and let me know if I left anything out – I will follow up shortly with more on this in Part III.

Yours in Supply Chain,

Steve

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

If you have a topic of interest you would like me to discuss in our blog, “in-person”, or see a typo, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

How to Manage the Barrage of New Suppliers Knocking at Your Door January 1, 2010

Posted by solutionsbconsultants in Improving Personnel Performance, Increase Profitability, Procurement.
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I receive hundreds of solicitations “to buy” every week. Some are directed to me, others are forwarded to me by clients. The amount of time required to answer phone, cell and email solicitations is significant. Fortunately, the solution to this barrage requires little in the way of resources and time. I implemented this idea in several engagements and in each case it was monumental in payback. Try this method and save hundreds of staff hours each year.

Every Tuesday, we institute “Open Vendor Day”. Actually, we put aside one or two hours depending on response and had a procurement staff member (we rotate between everyone in the department) conduct five minute meetings with potential suppliers. The format was simple and was given out to the suppliers in advance so that they would not be caught off guard. This technique was conducted on an “in-person” or “conference call” basis depending on the supplier’s location.

Here is what we ask:

1) What products/services do you sell?
2) What is your company’s competitive advantage (i.e. what can you do that others can’t or won’t)?
3) How is this going to benefit my company – what’s in it for me? (i.e. streamline process, cost savings or avoidance, value add, etc.)
4) We expect a proof-of-concept or a “try before we buy” before we will do business with any new supplier and we prefer a transparent relationship – do you have the resources and willingness to do this.
5) Provide us a price list of services and recommendations from other satisfied clients.

Yes, there are a lot of other great procurement/purchasing questions, but we really wanted to keep the meetings short and productive. This is why we sent the questions out before the meeting along with the assigned call-in time. While we could have sent the questions via e-mail, I have found that personal communication is important to gauge the knowledge, sincerity, and culture of the supplier, and it is key for relationship building which, as you know, is the cornerstone of all successful supplier relationships.

Call-in times were actually scheduled 10 minutes apart to allow for time overages and note-taking.

Suppliers that survived this gauntlet would then be invited back for a more in-depth discussion with the appropriate category buyer. It should also be noted that suppliers love this idea. Oftentimes, new suppliers have no way to reach a decision-maker in your company. On more than one occasion, we were able to speak to suppliers who had been previously blocked and whose services we desperately needed – a true win-win.

Remember what the Aberdeen Group says……….

“For a typical enterprise, it takes an increase
of $5 in sales to equal the impact of
a $1 reduction in procurement costs.”

If you have a topic of interest you would like me to discuss in our blog, “in-person”, or see a typo, just send me a comment or email me directly. I would like to hear from you!

Respectfully,

Steve Gordon
Senior Consultant
Solutions Business Consultants
http://www.costavoidance.org
__________________________________
”Bringing Service, Value, and Efficiency to the Supply Chain”

steve@costavoidance.org
(865) 356-3575
Skype: stevegordskype
Blog: https://innovativeconsultant.wordpress.com/
Linkedin: http://www.linkedin.com/in/stevegordonthecostsavingsguy

All Business is Selling December 28, 2009

Posted by solutionsbconsultants in 1.
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We are fortunate to have a guest blogging this week. Business writer Laura Bell shares her wisdom. You can find Laura at her website, http://www.bellbusinessreport.com
or read her book, “101 Things You Didn’t Learn in Harvard
Business School,” on Amazon: http://tiny.cc/Ir4OC

All business is selling

I ran across a trade group recently who acted as if they wanted me to write for their publication. When I submitted info on successful ad campaigns, they weren’t interested. (That was to be the article topic.) In their eyes it didn’t apply to their clients. You see, their clients were financial planners. As such, they were service oriented, not product sellers.

The woman who wrote me back said that they had been debating the idea of whether or not their clients actually sold among their board members for years. This is another example that there are those in the corporate world collecting pay checks that haven’t got one iota of sense when it comes to business. Such ignorance finally takes its toll.

I have been interviewing top business leaders and writing my own business prose since 1979. In 1984, I did a lengthy profile on the first woman Dean Witter ever recruited for the sole purpose of being a stock broker. She told me that the first two years she had to work like the devil to build her name and reputation. After that, it was a virtual piece of cake because they all came to her. (Keep in mind that more people were pushing to invest back in that time. Nothing is that easy today.) Her adage was simple. “Sell yourself and then they will buy anything from you.”

If you run your own business, you are always going to be selling. It hasn’t got an anything to do with whether or not you are selling service contracts, investment plans, or the newest widget on the block. You are selling.

You are selling from the first day you decide you are going to launch a business. If you can’t convince someone else you have a valid idea, then you are going nowhere. You then have to either write a business plan or hire someone do it. You have to either convince a partner this is the new bonanza or you have to hire employees. Then there is the money to get the thing going, probably the hardest sell yet.

Some people are natural born sales people. The rest of us have to be pushed, myself included. To make it even harder, we try to convince ourselves we are just offering a service. Well, so is the guy down the street who has already paid his bucks to launch a great ad campaign. He paid someone to do the job he didn’t want to do.

I betcha if you could ask the ‘big guys’ they would probably admit they were tired of selling. I remember hearing Donald Trump on a talk show discussing his hard times. He was millions in debt. His task was to call the bankers he had dealt with in the past and convince them if given the chance, he would pay back his debts. He had to ‘sell’ them on the idea that he could do it. Without his faith in himself and taking that approach, that would probably been the end of Trump

I am sure that one thing Bill Gates and Steven Jobs have one thing in common, their dislike of presenting new products at conventions and exhibits. Gates is famous for showing products that fail to work properly when demoed. We know he’s Gates, but he still human and I can bet he can’t stand that part of his life.

No one ever said selling was fun. Of course, there are those few who seem to get their kicks from it. Think used car salesmen and high powered realtors. Other than that, it is a job that we are stuck with if we run our own business. If this idea sends tremors to the pit of your stomach, there are two options. You either find a partner who is brilliant at it or stay an employee. Yes, really. There is no way to sugarcoat it. That is simply a fact of business life.

If you are determined to have your own shop, but feel you lack these skills, then take a couple of classes. Spend the time to get this skill or as already said, stay at the starting gate. If you have children coming up, you might want to have in your envisioned business one day, let them spend times selling Girl Scout Cookies or get involved in a Junior Achievement program. The skills learned here will last a lifetime.

Engaging Your People! September 27, 2009

Posted by solutionsbconsultants in Accountability, Business Improvement, Improving Personnel Performance, Increase Profitability.
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A common theme has cropped up in several of my recent engagements. A perceived (and actual) communication gap between direct reports and their supervisor.

Here are some actual quotes, “I think John is here only to draw a paycheck”; “My boss has no idea about what is going on in the business and doesn’t have a clue as to what I do. . .”; “I wonder if my company really has a game plan.”

These issues didn’t happen overnight but they can be solved in a relatively short period of time. Here are a few tips. . .

1) Manage by walking around – If you live in an office with a door, make sure you spend no more than 20% behind closed doors and the remainder (outside of meetings) with your direct reports and internal/external customers. Ask what is going on and how you can help facilitate their mission.

2) Communicate clearly what the company (and your department’s) mission statement is.

3) Have regular (agendized) formal meetings with your staff as well as brainstorming and social (lunch or outside the office) sessions. Make sure you are getting and giving feedback so people don’t think they are working in a vacuum.

4) Compliment and recognize those that are doing a great job.

5) Collect and post KPI’s for your department.

6) Use the phone or in-person approach instead of relying on email or memos.

Today, every department is running lean so it is easy to disengage from your staff. Take the time to put the “human” back into Human Capital by engaging your staff!

Steve
costavoidance.org

Solutions Business Consultants are specialists in cutting costs and expenses without sacrificing employees™. We take an enlightened look at a company’s spend and create innovative cost savings methodologies which bring money to your bottom line!

How you can make your company more profitable! [Part 1] June 18, 2009

Posted by solutionsbconsultants in Business Improvement, Increase Profitability.
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Everyone wants to reduce costs and expenses. Here are some self-help steps that you can do yourself (for free!) – perfect in these tough economic times.

In a recent Linked-in poll, we asked companies, “What is the best example of wasteful spending at your company?”
Two-thirds of the Linked-In respondents answered, “the wrong person in charge”.
If you think of who buys goods and services or approves expenses at your company, how can you tell if they are doing a great job?

The best way is to ask questions….
1) Are they frugal?
2) Do they bid out goods and services?
3) Do they partner with suppliers?
4) Are they on the lookout for new suppliers and new ways to accomplish processes?
5) Do they negotiate with suppliers?
6) Are they strong enough to say no to bad purchasing ideas?

If they are not taking advantage of some or all of these protocols, you have just identified several ways to help your business get on the right track.

We have interviewed department heads who are in charge of ordering. Most tell us they are “too busy” to shop around. Oftentimes, there is an administrative assistant in charge of procurement who lacks the ability to properly specify what is needed and does not posses the ability properly evaluate suppliers and their offerings.

We have also found wasteful spending occuring by employee(s) who are funneling business to a supplier that oftentimes takes them golfing, or treats them at restaurants or clubs.

This is not an exhaustive list and most businesses would be shocked to hear many of the stories that I have encountered.

Most bad purchasing methodologies can be traced to poor or no training and oftentimes, senior executives forget that spend management is a science, has to be learned and has a specific rule set that one should follow to make sure that your company is being taken care of in the best way possible.

The Second most popular item in our Linked-in survey was insufficient internal controls. Spending company money should not be easy and should have a multi-level approval process that ties in with the company budget for that particular spend. Additionally, there needs to be a responsible party who reports to the CFO, COO or CEO. This person must be accountable for the smart and efficient spend of company funds. This person should have the ability and authority to discuss and question all company spend, make sure there is adherence to budgets and oversee requests for budget overruns.

Finally, there needs to be a strong audit committee. Lack of internal controls have led to abuses that occurred not only at Enron but also at companies of all sizes – oftentimes causing catastrophic damage to the company.

I hope these “self-help” ideas have been useful. And if you have a particular situation that you would like to discuss, I would be glad to take your phone call or answer your email.

Steve
costavoidance.org
 

 

Solutions Business Consultants are specialists in cutting costs and expenses without sacrificing employees™. We take an enlightened look at a company’s spend and create innovative cost savings methodologies which bring money to your bottom line!