Tuesday, May 16. 2023
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in Business Lessons, Coaching, Controller / CFO, Entrepreneur, Life Lessons, Strategy - Trends
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19:15
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Business Longevity: Navigating Success and Failure for Sustainable GrowthIt is often uncomfortable to talk about business failure. However, business failure is only half of a picture. The other half is business success. They are the “Yin and Yang” of doing business. Pro football teams review their prior week games to determine what worked and what didn’t. Plays that worked are repeated or enhanced, and plays that didn’t work are discarded or tweaked. The Bureau of Labor and Statistics tracks the number of business starts and the number of businesses that are still in existence by year – in essence, the “success rate.” Between the 1st and 2nd year approximately 20% of businesses disappear. Around year five approximately 50% of businesses have disappeared. Our focus should be on all tools and methods that help increase the success (and reduce the disappearance “failure rate.”) Note - not all businesses disappear for failure: some are sold, some are successfully closed down, etc. In this article, success and failure are captured in the phrase “Business Longevity.” This can be illustrated with three types of people: the first is a planned, deliberate individual that is extraordinarily health-conscious and measures many aspects of their life. A second individual is a happy-go-lucky person who lets life evolve. Their motto is “Que sera, sera” (whatever will be, will be.) The third person overindulges in many aspects of their life. They do not control their eating habits or their drinking habits, and as a consequence, they are overweight, out of shape and in generally poor health. If we evaluate these three on their lifespan, which person has the highest chance of dying first? Some people have even begun to use health longevity specialists. These are physicians who focus on helping people extend the quantity and quality of their life. This analogy can be compared to the business world. There are three types of businesses that fit the same profile. The first is a planful organization. They create plans, they execute the plans, and they measure the resulting success (or failure) of the plan. The second type of business goes from activity to activity depending on where the opportunity is most significant. They may also believe that generating sales will solve all the problems of the organization. The third type of organization is not planful and does not follow any discipline in regards to finances, employees, etc. Which of these three businesses is most likely to experience financial difficulties and potentially a shortened business existence? This leads us to the concept of business longevity. Business longevity is the practice of assessing where an organization is, determining where the organization would like to be, and then creating the action steps for the business to arrive at its the chosen destination. This may sound similar to business planning, and yet it is much more expansive. The assessment that an organization should go through would encompass areas such as evaluation of historical financial trends, industry analysis, competitor analysis, environmental scanning using tools such as PESTLE and planning tools such as strengths, weaknesses, opportunities, and threats. It should also include a robust evaluation of future innovations and changes in society as a component of the SWOT analysis. One of my favorite tools is the Altman Z-score. Traditionally this is a tool used to depict the likelihood of bankruptcy, however, the author uses this as an overall measure of the health of an organization similar to the way that a doctor uses a blood pressure analysis. Also, consider expanding the length of time financial information is reviewed. Current financial practices of comparing this year's results with prior years are too shortsighted. If you looked at any two successive years for Sears, the story of their failure does not “pop out.” If you review ten years of their financial information, it is plain to see how the company was declining. At a minimum, a company should understand their key financial metrics including the z-score and selected ratios (such as the current ratio) for a minimum of 10 years or the length the business has been in existence. Who is Jim Lindell Jim Lindell is President of Thorsten Consulting Group, providing strategic and financial consulting, professional speaking, training and executive coaching. He is a Vistage Chair and responsible for two CEO groups in the Milwaukee area. He is an Award-winning Speaker and Best-Selling Author. Contact him at 262-392-3166 or [email protected]. Email: [email protected] LinkedIn: https://www.linkedin.com/in/jimlindell/ Twitter: https://twitter.com/thorlessons Tuesday, May 2. 2023
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19:20
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How to Be More Resilient in BusinessOver the last several years, business owners have struggled with a lack of employees, Covid, a virtual workforce, recession, a political divide, supply chain problems, inflation and war. What does it take to run a successful business amidst those disruptions? It’s tough enough to generate profits in a typical business environment, and it gets much more challenging in the abnormal business environment that we have right now. How can you cope? Business owners and employees must be resilient, deal with stress, and persevere no matter how long the tough times last. Let’s consider what you can do to push through stress, disappointment and setbacks on your road to success. Thinking about your mindset and resilience is essential to succeed in the long run. Resilience refers to the ability of a person or group to bounce back from hardship. Being resilient is crucial to success because you can adapt quickly when faced with change. How do you develop resilience, and what are the most important traits for being resilient? 1. Develop flexibility. Try to be open-minded about new things and business approaches and explore different viewpoints on life issues with people who think differently than you. Flexibility builds creativity, confidence and self-esteem, which will help us persevere in difficult times. 2. Change your perspective. Practice changing how you view difficult times. For example, instead of focusing on the negative consequences of a challenging situation, ask yourself what lessons you can learn from this experience. 3. Consider how there may be some good aspects, even though they may not always be easy to see. Changing your perspective can help you put any difficult time into perspective. You’ll still need to deal with the issue at hand, but it won’t feel like such a burden if you’re looking at the positive side of things. More Tips for Bouncing Back Here are other ways you can be more resilient in difficult times. • Practice mindfulness or meditation for 10 minutes each day. • Increase your exercise by walking outside for 20 minutes daily. This will increase oxygen flow to your brain and reduce stress. • Monitor your thoughts without judging or allowing them to distract you from the task. • Over-aggressive goals could be counterproductive. Start small and then increase in scope and complexity. • Identify what’s causing you pain, and find ways to release it. Let go of any expectations of perfectionism. They will only lead to frustration and negative feelings about yourself and make it hard to get things done on time. • Recognize when you’re feeling negative emotions, and don’t let them take over your life completely. Remind yourself that everyone feels like this sometimes. But the feelings pass with time if you give yourself the space for reflection and the support you need. • Spend time with friends who make you laugh! Recover Quickly from Setbacks There will be setbacks for your company, staff, family and you. Develop a strategy for bouncing back through difficult times. Here are four techniques: 1. Find meaning in the setback by asking yourself what was accomplished or learned. What did you do well? 2. Create an action plan to prevent similar setbacks from happening again. You might also want to change your work to be more prepared the next time a similar problem occurs. 3. Get involved now with your support system that includes family, friends and church groups. 4. Take a step back. Breathe and relax. Many of the problems are not that significant. Remember the saying “you’re making a mountain out of a molehill.” Business people must be able to deal with whatever life throws at them—demanding bosses, tough negotiations or intense workloads—while maintaining high productivity levels. Remember to focus on what’s essential: your family, friends and values. When they read your eulogy, no one will mention your bank account, the square footage of your house or the revenue from your business. Mahatma Gandhi believed that if you couldn’t change the circumstances, you could change your attitude. He persevered through many adversities by being resilient. You can too. Who is Jim Lindell Jim Lindell is President of Thorsten Consulting Group, providing strategic and financial consulting, professional speaking, training and executive coaching. He is a Vistage Chair and responsible for two CEO groups in the Milwaukee area. He is an Award-winning Speaker and Best-Selling Author. Contact him at 262-392-3166 or [email protected]. Email: [email protected] LinkedIn: https://www.linkedin.com/in/jimlindell/ Twitter: https://twitter.com/thorlessons
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Jim LindellJim Lindell is a National Speaker, Author, and Vistage Chair. He is motivated by helping others improve their lives and businesses.
He is President of Thorsten Consulting Group, Inc. Order Jim's book - "Controller as Business Manager". controller as business manager - jim lindell - thorsten consulting group QuicksearchArchivesCategoriesSyndicate This BlogBlog AdministrationNetworked Blogs |