Small Business Center

Sometimes business leaders need a rally cry to get themselves in gear.  For his call to arms, George Coultier choose to twist the old football axiom (“winning isn’t everything, it’s the only thing”) for his book, Profits Aren’t Everything,They Are The Only Thing.

Coultier, founder of American Management Services, used his 30-year career of turning around financially troubled businesses to assemble “rules” for hot to prevent your business from falling into financial and operational collapse. He wrote the book as an “attitude adjustment” for business owners.  He espouses “the need to run over anyone or anything that gets in the way of your company’s paramount need for profits.”  I bought a copy to understand this  adjustment better.

Great Discipline Leads to Results

Profits sets a clear tone that unrelenting discipline and execution is a key to profits.  Coultier’s perspective shines when applied to addressing tough questions and to operations judged by measurement.  For example, Coultier is a pay-for-performance advocate, emphasizing it on sales teams specifically, but also for all employees to achieve profitability.  He denounces sweat equity, insists on a plan on which the business lives or die, and contends owners must get closer to the sales process. He also suggests no great leader abdicates on financials:

“No one should know your financials better than you.  Your balance sheet is something that is in your control.”

Owners must apply “fingertip controls” to know the status of the business at all times and to subsequently delegate without haphazard follow up.  Profits emphasizes  answer-ability — from owners getting involved with sales teams to understanding inventory — and asserts all the while a connection between micromanaging decisions and financial security.

In the process, Coultier makes an ironclad argument that businesses must organize its processes to share linchpin decision-influencing information.  He suggests owners receive daily vital business information called  “flash points,” operational red-flags for profit and loss.  Establishing dashboards and creating a culture around monitoring the pulse of operations has been advocated among business intelligence professionals, but Profits makes it less technical and more down to earth.

Non-Stop Profit Motive Sometimes Needs a Pause

The book’s tone, however, is concerning.  There’s a myopic emphasis on making an attitude change.  The material is not enhanced with commentary from outside research, as is the case in some business books advocating change such as Dan and Chip Heath’s Switch.

For example, he makes the controversial suggestion that business owners are “not in business to pay vendors.”  He  considers slow payment as a valid strategy to increase cash flow:

“Instead of stressing over writing checks to your vendors, you should view them as your best source of financing.”

Profit Rule 10 – each maxim is a numbered chapter – goes on to suggest ranking the order of how you pay vendors according to the vendor’s impact on your company’s product or service (Rank A being the most disruptive to the business if payments are missed, Rank C being the least).   However,  slow payment is not an ongoing strategy.  It is a cash flow “black swan” that can obscure cash management problems best addressed through revised arrangements.  Many small businesses are not in a position to continually pay slow.  Some suppliers eliminate troublesome B2B customers — your company may be the one they eliminate.

Personal Issues Not Aside

The maxims on personal matters can lead some business owners to think “I don’t agree.”  For example, Coultier recommends that owners place their businesses first, even on weekends:

“The commitment it takes to reach that level of profitability in your business does not stop at 5 o’clock on Friday …. Weekends are for work.”

While Coultier is not saying remove church from one’s personal schedule , he is saying to evaluate one’s personal time outside of the clock to ensure attention to business growth (Chapter 13 is on eliminating golf, trade shows, and retreats).  But most business owners already know that their firms consume all their time (see Anita Campbell’s comments on The 4 Hour Work Week for comments on shortened worktime).  And there are instances of well-run businesses that maintain policies to keep a day sabbath, like Chick-Fil-A, the Southern chicken fastfood chain which closes its offices and restaurants on Sundays and B & H Photo, a renowned New York City photography and video retailer, that closes on Saturdays.

Some of the most controversial statements are about family. The book espouses that the best business “has one family member in it” and that one should “love your business more than your family”.   An aside:  In recent video presentations since the book’s publication, Coultier has modified his statement to “love your business as much as your family”.   The vision is for business owners to evaluate family dynamics carefully and make uncompromising personal decisions for the business. Coultier states:

“If you are not focused – if family, friends, community and church fill up your busy weekly schedule – you are probably failing to deliver real profits for your company.”

With Coultier called the “ultimate contrarian” on the cover, Profits understandably was written with an unorthodox state, bankruptcy, in mind.  In paying vendors late, for example, Coultier states that it “isn’t what Harvard Business School teaches you. You won’t find a how-to guide that advises you to use and abuse your vendors as much as you can, albeit legally and politely.”

But the material displays a need for supporting research to address business states outside of financial or behavioral extremes. A number of the “maxims” in the book do not have enough support to translate into solutions that business owners should use.

Furthermore, zero-sum commitment avoids the concept of managing risk, and it’s mismanagement of risk that can be the culprit for dire financial straights.  While the rules may aid business owners who don’t understand risk, the Profits maxims oversimplify to the point where one can overlook other causes of problems.

How to Benefit from Reading “Profits”

As a business owner, you will benefit most from Profits as “food-for-thought” for your own management and operational style.  But you should not believe the rules as a comprehensive solution for business problems.  The suggestions address extreme financial duress.  However, you should enhance your reading with other books on the lifestyle and culture of running an organization.

There are plenty of other books, like Ram Charan’s What The CEO Wants You To Know, that can offer guidance with less alarm and more researched processes.  Profits is a tough road, rightfully so for bankruptcy conditions.  But the beauty of maps is the ability to see other roads that may permit you to see more on your journey.

Late last year I quoted a statistic that said that 80 percent of small businesses were one-man [cough. Or woman] shops and that 50 percent of SMB owners worked from their home. With that in mind, it’s easy to see why so many small business owners and entrepreneurs have taken to the Web to chat and commiserate with others “like them”. But the Web can be intimidating. If you are a small business owner looking to connect with other entrepreneurs, where should you go looking?  Where can you hang with fellow SMB owners online?

Here are a few suggestions.

Entrepreneur-Themed Communities

It seems fitting that as the Web continues to spur Internet entrepreneurs, it’s also spurred communities targeted toward helping them. Web communities like StartupNation, Young Entrepreneur, Brazen Careerist, and EntrepreneurConnect give solo entrepreneurs a place to talk about common problems, share resources and help one another out when possible. These communities often have associated knowledge hubs where people can tap into expert articles, download eBooks, create networking events, and have real discussions. And, of course, they also offer the ability to establish friendships, both professional and personal.

Related to these communities are social voting communities where small business owners can submit and promote their content. Doing so helps others find information that may help them and they can also use it to brand themselves in a particular area. BizSugar.com [disclosure: This site is owned by Anita Campbell] is one example of a site allows SMB owners to promote themselves and others through their content. There’s even an associated BizSugar Twitter account they can connect with.

Question & Answer Sites

Question and Answer communities are another place that entrepreneurs can gather to make connections and get answers to questions. There are tons of great communities that specialize in this, including LinkedIn Answers, Business Answers and the just-launched QuickSprout Answers (really excited for this one). All provide great avenues for entrepreneurs to explore when looking to bounce ideas off one another or make new connections.

Twitter Lists

I know, Twitter is the answer to everything these days, right? Obviously, Twitter’s a great networking tool, but thanks to Twitter Lists, it’s also a great way for entrepreneurs and small business owners to find one another. Listorious is a really useful site that lets you search for people and Twitter Lists based on keywords.

For example, you can search for Twitter Lists titled [entrepreneurs], lists titled [small business] or whatever keyword you’re interested in. You can also perform the same searches to target actual Twitter users instead of Twitter Lists. For example, you can find users who identify as being [New York florists], [Florida wedding planners] or [your town + keyword].  People “like you” are out there, you just have to search for them.

[Twellow and Twitter Grader will also allow you to find people in your immediate area with common interests.]

Entrepreneur Podcasts

Okay, so this may not help you actually “meet” other people, but it can help you learn what other people are doing and about the faces that you could possible reach out to. Podcasts like Ducttape Marketing, Mixergy, Six Pixels, This Week In Startups and Untitled Startup conduct interviews with entrepreneurs that you can learn from and seek out.

Entrepreneur-Focused Blogs

Reading blogs geared toward the entrepreneur lifestyle helps SMB owners to feel more connected to the work force. I know I sometimes have a difficult time working day after day in my home and never seeing another person. Reading blogs puts you back in the mix, reminds you that others are going through the same struggles, and it lets you become part of a community where you can exchange ideas with others.

For me, blogs have been my preferred way to form relationships with other people. Both in publishing content myself and in commenting on the stuff other people put out. Blogs like VentureHacks, Toilet Paper Entrepreneur, Bootstrap Business, Jonathan Fields, Penelope Trunk, and, of course, our own SmallBizTrends give entrepreneurs satellite communities that they can feel a part of.

Online Coworking/IM Groups

Once you start to make some connections, organize online chats where people can connect on a deeper level. I know lots of SMB owners who keep IM and Skype groups open all day so that they can chat with people when things come up, ask questions or just use it as a virtual office cooler. It’s a little bit of coworking activity without having to leave your house. [However, I suppose you could move your IM Group to a real coffee house, if local and so inspired.] Sometimes having someone right there that you can shoot a question to is both handy and comforting.

Just because you work at home or have limited coworkers in your small business, doesn’t mean you should live your life void of social contact and confidants. Use the Web as your ultimate networking ground. After all, I’m pretty sure that’s why it was invented, right?

As the health-care debate rages on in Washington, I thought it would be a good time to take a quick look at how things are shaping up. Both house of Congress have passed bills. President Obama has invited Congressional leaders from both parties to a meeting on February25th to discuss the issue and attempt to iron out their differences. (The meeting is supposed to be televised.)

The Wall Street Journal reports that the Senate bill did get some support from big corporations and business groups. However, the House bill, which places more stringent requirements on employers to offer their employees health insurance, has met resistance from businesses both large and small.

What’s bugging business about the current bills? Big businesses don’t like a provision of the Senate bill that would tax a government subsidy on drug benefits for retirees; the accounting adjustments it would require could mean that many companies’ earnings would drop steeply in 2010. Big companies are also concerned about new taxes and fees in both the Senate and House bills.

What about small businesses? Some small-business groups, such as the U.S. Chamber of Commerce, contend that health-care reform will increase small business owners’ costs, making it harder for them to hire and retain employees. However, most taxes in the Senate bill are targeted at health-insurance companies, drug companies and other big corporations in the health-care system—not at small companies.

White House spokesman Robert Gibbs has said future negotiations to come up with a final bill must focus on how to control costs. The Senate bill has no public option (government-run health care), but the House bill does. Making sure insurance alternatives aren’t too expensive will be crucial if the House is to give up on the idea of a public option.

Here are the key elements of the Senate bill that specifically affect small businesses:

• Creates health-insurance exchanges where individuals and small employers could buy coverage.
• Requires employers with more than 50 employees to provide coverage or pay a fine of up to $750 per employee.
• Expands tax credits to help small businesses with up to 25 employees (and an average wage of $50,000 or less) buy coverage.
• Requires insurers to cover all comers, including people with pre-existing medical conditions.

SInce there’s so much rhetoric flying back and forth, a good place to keep up-to-date with changing proposals is the Kaiser Family Foundation Web site, which has detailed and frequently updated information about both the House and Senate plans.