Business Banking E-Newsletter - January 2013

How to Change the Financial Future of Your Business

The start of the New Year is a great time to get you and your company pointed in the right direction financially. Making small improvements at the beginning of the year is a lot easier than trying to play catch-up later on. Just as you would embark on an exercise program to lose weight, there are simple steps you can take that will lead to your business being financially healthy.

Here are my seven tips for improving your financial life in 2013.

1. Review 2012 thoroughly. What worked and what didn't? The most expensive lesson is the one you have to learn a second time. What was the most important lesson you learned in 2012 that helped you move forward? You will want to build on the successful aspects of your business where you saw the best return.

2. Track the right stats. You can't control what you don't track. Decide what the three most important statistics are for your company and set goals for each of those. Follow each on a monthly basis so you can make small adjustments throughout the year. You'll be amazed at your overall results when you focus on the right stats.

3. Establish a cash flow plan. Too often, business owners think they don't need a budget because they can keep track of company expenses without one. A cash flow plan is critical for a company's future. You need to plan for the slow times of the year and put aside a contingency reserve. A line of credit may need to be established as a backup until reserves can be built up.

4. Trim the fat. Don't be afraid to shop for the best price on everything -- insurance, office supplies, telecommunications and any other business expense. There is no incentive for your current suppliers to offer you a discount. However, there is a huge incentive for a competing supplier to give you a better deal.

5. Consider expansion. This may be a good year to pursue expansion plans you put off during the economic downturn. The economy continues to slowly recover and the cost of borrowing is low. Companies with good cash flow and a clean balance sheet may be able to qualify for expansion loans with low interest rates. Interest rates are eventually going to increase; this will be a good year to lock in borrowing costs while the cost of capital is very low.

6. Study your competitors. What companies are doing better than you in your own field? Pay attention to what your competitors are doing and learn from their successes and their mistakes. Review those that are no longer in business to determine what caused those companies to fail. It's easy to get tied up in your own business and not think about others in your industry. However, there are many lessons you can learn from competitors that just might help you avoid a big mistake.

7. Make sure your team is on board. Do your employees understand your goals for the company? Give them the opportunity to review your business plan and offer feedback. Let your employees know you welcome their input and get them involved in goal setting when appropriate. This might be easier to do with a smaller company. Larger companies should engage department heads and let them communicate the company goals to their departments.

Don't just make a vague resolution to cut costs and increase sales. Put your goals in writing and share them with your team. You also want to be clear about the role each employee will have in meeting business goals. Let 2013 be the year you make lasting changes to improve your business and your financial life.


How to Train Your Brain to Stay Focused

As an entrepreneur, you have a lot on your plate. Staying focused can be tough with a constant stream of employees, clients, emails, and phone calls demanding your attention. Amid the noise, understanding your brain’s limitations and working around them can improve your focus and increase your productivity.

Our brains are finely attuned to distraction, so today's digital environment makes it especially hard to focus. "Distractions signal that something has changed," says David Rock, co-founder of the NeuroLeadership Institute and author of Your Brain at Work (HarperCollins, 2009). "A distraction is an alert that says, 'Orient your attention here now; this could be dangerous.'" The brain's reaction is automatic and virtually unstoppable.

While multitasking is an important skill, it also has a downside. "It reduces our intelligence, literally dropping our IQ," Rock says. "We make mistakes, miss subtle cues, fly off the handle when we shouldn't, or spell things wrong." 

To make matters worse, distraction feels great. "Your brain's reward circuit lights up when you multitask,” Rock says, meaning that you get an emotional high when you're doing a lot at once. 

Ultimately, the goal is not constant focus, but a short period of distraction-free time every day. "Twenty minutes a day of deep focus could be transformative," Rock says. 

Try these three tips to help you become more focused and productive:

1. Do creative work first. Typically, we do mindless work first and build up to the toughest tasks. That drains your energy and lowers your focus. "An hour into doing your work, you've got a lot less capacity than (at the beginning)," Rock says. "Every decision we make tires the brain."

In order to focus effectively, reverse the order. Check off the tasks that require creativity or concentration first thing in the morning, and then move on to easier work, like deleting emails or scheduling meetings, later in the day.

2. Allocate your time deliberately. By studying thousands of people, Rock found that we are truly focused for an average of only six hours per week. "You want to be really diligent with what you put into those hours," he says.

Most people focus best in the morning or late at night, and Rock's studies show that 90 percent of people do their best thinking outside the office. Notice where and when you focus best, then allocate your toughest tasks for those moments.

3. Train your mind like a muscle. When multitasking is the norm, your brain quickly adapts. You lose the ability to focus as distraction becomes a habit. "We've trained our brains to be unfocused," Rock says.

Practice concentration by turning off all distractions and committing your attention to a single task. Start small, maybe five minutes per day, and work up to larger chunks of time. If you find your mind wandering, just return to the task at hand. "It’s just like getting fit," Rock says. "You have to build the muscle to be focused."


Forget Your To-Do List: The 3 Lists Every Entrepreneur Needs

Resolve to be better organized in 2013? You're in good company. A recent study published in the Journal of Clinical Psychology found that getting organized is the second most popular New Year's resolution. 

But productivity expert Laura Stack says a giant to-do list is counterproductive for busy entrepreneurs. "Combining everything is very distracting and makes it difficult to determine what to work on next," says Stack, author of What to Do When There's Too Much to Do (Berrett-Koehler, 2012) "You must separate what you need to do today with what you don't need to do today."

To best organize your time, she suggests that small-business owners compile three lists.

1. The HIT List
Start each day with a limited daily to-do list. Stack calls it your HIT list, since it contains High Impact Tasks (HITs) that keep your workflow humming.

"If used properly, your HIT list can be one of your most powerful productivity tools," she says. "A HIT list literally guides your day's work, so be realistic. If yours contains more than 10 items, you're stretching it."

A HIT list might look like this:
• Send agreement to XYZ client
• Work on PowerPoint deck
• Finalize monthly earnings report
• Write article for company newsletter

“If something keeps rolling forward, you probably need to move the start date further into the future, as it's not really a priority.” says Stack.

2. The Master List
The master list is a running list of everything you need or want to do at some point.

"This is what some people have been using as a daily to-do list," says Stack. "While items on the HIT list rank important in the short term, you can't allow them to overwhelm long-term projects and tasks needed to achieve true workplace success."

Stack says whenever something important comes in that lacks urgency or has no set deadline, add it to the master list.

A master list might look like this:
• Hire a new assistant
• Research new CRM software
• Buy new printer
• Create QR code for business card

To make sure the master list doesn’t turn into a “dead file for forgotten tasks,” Stack suggests reviewing it weekly, adding start dates based on importance. If an item is large, break it down into steps and schedule those tasks on the HIT list when you're ready to move forward.

3. The Not-To-Do List
Finally, Stack suggests creating a not-to-do list with tasks you need to avoid because they waste time.

"You might think the key to productivity is getting more done each day," says Stack. "You don't need a calendar full of unnecessary tasks to be productive and accomplish more."

A not-to-do list might look like this:
• Don't do low-profit work when you can delegate it instead
• Don't deal with work issues during personal time
• Don't fall prey to perfectionism
• Don't micromanage

There is one item Stack suggests everyone put on their not-to-do list: don't monitor email all day. "Emails never show up in priority order, and you shouldn't read them as they come in the inbox. Unless your job requires it, don’t check your email more than a few times a day."


How to Take Your Business to the Next Level in 2013

Holiday leftovers aren't even cold before conversation typically turns to resolutions for the new year. A December 2012 TD Ameritrade survey found that half of Americans want to improve their health and 32 percent hope to strengthen their finances in 2013.

Companies also will be taking steps to achieve greater prosperity this year. To make your own resolutions about growing your business, consider these 10 steps as part of a successful 2013 action plan.

Move forward even in uncertain times. Over the next 12 months, companies will need to deal with health-care reform, changing regulations and still volatile economic times, but they can't let those uncertainties paralyze them, says Jeffrey Fox, a business author and consultant in Chester, Conn. Even in the worst economic times, some businesses thrive, says Mark Stevens, founder of MSCO, a marketing advisory firm in Rye Brook, N.Y. He advises companies to aggressively investigate potential new markets, invest in marketing, and test new ways of promoting themselves to bring in new customers and revenue.

Tap your employees. Your employees are a tremendous resource for new ideas, says Ken Blanchard, co-author of best-selling classic The One Minute Manager (William Morrow, 1982) and founder of the Ken Blanchard leadership training companies based in Escondido, Calif. For example, he notes that a Southwest Airlines employee proposed the idea that led to Business Select, which allows passengers to pay extra for such perks as priority boarding. "That one idea has made the business millions of dollars," Blanchard says.

Reconnect with your purpose. When you started your business, you had a vision for what you wanted to create. Find ways to rekindle that fire in your belly, Blanchard says. Whether it's sales, finance or product development, spend more time working in the areas of your business that excite you, he suggests. "If you don't love what you're doing, you're never going to work hard enough to be one of the best."

Diversify your income opportunities. Look for ways you can sell more to your customers and prospects. If you sell products, you can add complementary items, bundle offerings or add service packages. Service providers can often add products to boost the bottom line. For example, when Blanchard and his wife Marjorie started their company in 1980, they conducted business seminars. Soon, they realized their income was limited by just offering seminars. After they branched into selling such products as books and diagnostic tools, their business grew to more than 300 employees.

Adopt value pricing. Fox doesn't believe that all products and services have to compete on price. Retailers may sell similar brands, but you can add value based on location, customer service, convenience, cleanliness and other factors that are important to customers. Manufacturers can differentiate based on innovative new products, quality, on-time delivery record and exceptional salespeople. "Even salt has been differentiated—sea salt, kosher salt, salt that comes in shakers," Fox says.

Hire rainmakers. One of your best investments is an employee who can bring in new business, keep customers happy, and sell based on factors other than price, Fox says. When you're interviewing potential rainmakers, look for people who are engaged, politely persistent and well prepared for the interview. Fox says these coveted employees are able to speak specifically about past successes, whether a significant personal accomplishment or the amount of business they landed for their latest employer.

Set aggressive growth goals. Since he launched MSCO in 1995, Stevens has worked at doubling his business every 18 months. He advises setting a goal that makes you slightly uncomfortable and then determining what it's going to take to get there. Analyze how you landed your best customers, the length of your sales cycle and the ratio of prospects to customers to get a better understanding of what's working in your sales and marketing efforts, he says. Then, focus on the most effective methods.

Measure every marketing activity. If you can't measure it, don't spend money on it, Stevens says. It's often easiest to track online marketing, but other types of promotions can be measured as well, such as special offerings with a unique response telephone number, coded coupons or response cards, unique landing pages, and free white paper or information downloads. "When you combine tools in this way, you can track marketing effectiveness that some people say are unmeasurable, like outdoor advertising and public relations," Stevens says.

Pay attention to the experience. Consider what it's like for customers to do business with your company. How is their experience with the receptionist or sales team? Is the store or office environment pleasant? Do orders arrive on time? Is the customer service team responsive? Even small glitches or a perceived slight can cost you a customer, Fox says. "I know a bookstore owner who has signs all over 'No shoes, no shirt, no service. No cell phones. No food.' No one wants to be scolded like that."

Try doing what you tend to avoid. For years, Stevens thought radio advertising would be a poor medium for promoting his marketing firm. Finally in 2008, an employee persuaded him to spend $10,000 on radio ads. The return on the investment has proven so strong that this year, the company spent roughly $1.25 million on radio. Whether it's an assumption about a new market, marketing technique or management technique, Stevens advises you to challenge your belief that a new approach won't work.