Author name: Gary Furr

The Town of Sweet Pickles

| Business Leadership

    The Town of Sweet Pickles

Recently a good friend of mine was reflecting on her childhood and a favorite book series called Sweet Pickles, written by Jacquelyn Reinach. What a Mess  tells the story of Goof-Off-Goose who relaxed in her hammock while the entire town of Sweet Pickles was busy getting ready for the first snow.

Goose’s front yard was a mess, littered with empty ice cream containers, old newspapers, and all kinds of junk. Goose had promised Smarty Stork that she would clean up her yard the following day and went back to sleep while everyone else labored away. Goose had all kinds of excuses as to why she could not clean up her yard right away and kept promising she would get to it tomorrow.

During the night a heavy snow fell over the town of Sweet Pickles, covering the town and Goose’s yard. When Goose awoke and saw the snow hiding the mess underneath, she was very happy that the snow had eliminated the need to clean up her yard.

I run into many business owners who are in denial of the state of their businesses. They keep thinking that it will get better tomorrow, but tomorrow comes and everything remains the same. Those business owners are not much different than Goose, content to ignore her problems and the issues that await her. But snow always melts, and the problems remain until they are acknowledged and dealt with.

If you want to make lasting change in your business, hope won’t get the job done. You have to take action. The sooner you do, the sooner you can solve the problems causing you stress. If you want your business to change, youneed to change.

Unfortunately, sometimes business owners are so immersed in the day-to-day that they can’t clearly see what is going on in their business. This is where an expert in business can make a significant difference. An expert’s clarity and lack of emotional involvement can help you see and confront the issues buried beneath the blanket of snow—all the day-to-day issues and tasks.

If you want to make significant improvements in your business, give us a call, 503-312-3145. We are experts in business with over 40 years of C-level business experience.

garyfurr@garyfurrconsultng.com

www.garyfurrconsulting.com

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What Driverless Cars Have to Teach Us about Success

| Business Leadership

                        What Driverless Cars Have to Teach Us about Success

In 2011 two top engineers from Google traveled to Detroit hoping to create a partnership to carry their project called Chauffeur. They had developed a car that could drive itself on a variety of 100-mile trips on public roads, and they needed a partner. It turned out that none of the big car manufacturers in Detroit were interested in the concept.

According to the Wall Street Journal, the main reason the car companies were not interested in the new technology was that they mistakenly believed that their business was manufacturing and selling cars. “They failed to realize that they were really in the business of helping people get from one place to another.”*

Many small and mid-size businesses fall into a similarly limiting mindset, focusing on what they do or how they do it rather than the benefits and results for those they are doing it for. Most customers don’t care about what you do and how you do it; they care about the benefits and results they receive when they purchase your product or service.

Fast forward to today: Detroit is spending billions on self-driving technology, and we are constantly hearing about it in the news.

Don’t make the same mistake Detroit’s big automakers made. If you want ongoing success for your business, learn to stop talking about what you do and how you do it and focus on the benefits and results of what you do. What’s in it for your client or customer? How is your product or service going to add value and benefit them? That shift in mindset makes all the difference. It will allow your business to keep moving into the future.

If you want to drive revenue growth and achieve greater success, call or email us (503-312-3145; garyfurr@garyfurrconsulting.com). We are experts in business growth.

* Lawrence D. Burns, “Late to the Driverless Revolution,” Wall Street Journal, August 17, 2018.

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You Should Pay the Tax Man

| Business Growth

You Should Pay the Tax Man

It seems that more and more businesses are operating in tax-avoidance mode. I understand the desire to not pay The Tax Man more than your fair share, but in minimizing your tax burden, you may be creating bigger problem.

The Problem

As a business owner in tax-avoidance mode, you are likely trying to spend your money at the end of the year to avoid taxes. But this is a short-term strategy that will likely have a long-term negative impact on your business. Unless you are spending that money on assets that will generate additional revenue moving forward, then you should reconsider.

Here’s Why

When you’re thinking about avoiding taxes, you are not thinking about creating wealth. As business owners we should be more focused on maximizing after-tax revenue to build wealth rather than focusing on tax avoidance. I run into many business owners who have been in tax-avoidance mode, and when they need to borrow money from their bank or another lending source, they run into trouble. The problem is that bankers don’t lend from the P&L or income statement; they lend from the balance sheet. When the business owner presents their financials, the banker turns to the second page of their balance sheet and looks at retained earnings, or wealth (equity), in the business. That’s where the trouble starts: the tax-avoidant business owner has not built any wealth, which makes the banker reluctant to lend them any money.

Bankers like to apply a simple ratio to your business—the debt-to-equity ratio—and this is how they set limits on how much you can borrow. Typically, it’s a two-to-one ratio, meaning for every dollar of equity you have retained in your business, the bank will let you borrow two dollars. No equity or retained earnings, no borrowing. Quite simply, minimizing taxes reduces your borrowing power.

Selling Your Business

Another common pitfall related to tax avoidance occurs when it comes time to sell your business. Because you have been in tax avoidance, your business is not worth as much as it could be. Small businesses typically have a range of value at a 3–5 multiple of EBITDA—that is, earnings before interest, taxes, depreciation, and amortization. Mid-market companies tend to have a valuation of 5–7 times EBITDA. When business owners have been avoiding paying taxes, they have not maximized after-tax revenue, and therefore they have not built wealth (retained earnings), which impacts their business valuation. In other words, your business is not worth as much as it could be because you have been in tax avoidance rather than wealth creation. As my mentor and friend Phil Symchych likes to say; “maximizing earnings will maximize your wealth.” We should be focusing on wealth creation, not tax avoidance.

If you would like to earn more money, gain better control of your business financial situation, and maximize your wealth, give us a call at 503-312-3145. Or visit: http://garyfurr@garyfurrconsulting.com

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Put Your Calendar to Work

| Business Breakthroughs

Business Breakthrough #3: Put Your Calendar to Work

Never walk into your day with an empty calendar. Without priorities set ahead of time coupled with time set aside on the calendar, the day will simply take over. That’s exactly what you don’t want.

Every night before you leave the office, make a list of six things you need to accomplish the next day. When you come into the office the following morning, focus on #1 and nothing else. Once #1 is complete, move on to #2; keep working through the list until you get all six done.

The only way to accomplish your list of six is if you block off time on your calendar to be focused. Keep in mind that on average we feel the tug of distraction every three minutes and it takes considerable time to regain concentration.

If you feel like you don’t have enough time in your day, it means you don’t have clearly defined priorities. Without those priorities, at the end of each day you’ll feel like you were busy but accomplished nothing important or strategic.

Don’t allow the day to take over your calendar. A list of six is a powerful tool to take charge of your time and fight the common tendency toward distraction. With planning and focus you can put your time and your priorities to work and get the results you’re looking for.

To better understand the power of focus, read Gary Keller’s book; The One Thing or Darren Hardy’s; The Compound Effect.

garyfurr@garyfurrconsulting.com

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Put Out the Fire

| Business Breakthroughs

                   BUSINESS BREAKTHROUGH #2

                         Put Out the Fire

Every day in our businesses we are burning through cash—and we don’t even know where it’s going! I can hear you now: I bet you think you’re the exception. You know I haven’t looked at your numbers, so how dare I predict such waste? I dare because I have observed that constant distractions are impeding productivity—yours, your staff’s, and your employees’. This is costing your business some serious money.

A recent study found that the time wasted as a result of constant distractions is costing the U.S. economy $997 billion every year, and 89 percent of employees don’t complete their top three tasks each day due to distractions.

Employees are wasting 759 hours each year due to workplace distractions. That equals 19 weeks—almost 5 months every year! One study found that workers check their email on average 40 times a day, even when there has been no notification or email alert. These distractions are like kryptonite. They are killing your productivity, which has a direct effect on your profitability.

Studies show that every time we get distracted, it takes approximately 23 minutes to get refocused. To make matters worse, the average U.S. worker feels the pull of distraction every three minutes.

We can change this negative pattern if we are willing to take charge of our time. Perhaps it isn’t time management that is our biggest issue these days, but self-management. Simple tools make a powerful difference. Business Breakthrough #3 provides one to help you turn things around.

garyfurr@garyfurrconsulting.com

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Cash Flow

| Business Growth

 

            What Cash Flow Can Tell You

Inadequate cash flow is like Kryptonite was to Superman; without cash your business will suffer and eventually die.

Yet most business owners I meet are not tracking their cash flow. They look at their P&L and balance sheet, but they do not conduct a cash flow analysis of their business.

The Problem

Here’s the problem:The P&L and balance sheet are a look at what has already happened in the business, and there isn’t anything you can do to change that.Their usefulness is as comparison tools to measure how your business is performing compared to other months, quarters, or YTD. The past is important, but what about the future?

Revenue-Expenses=Profit

Too often business owners look at net income or profit and think they are making money. Your profit is simply the amount that your revenue exceeds your expenses; it is not cash but the theory of cash since your P&L does not take into account debt service. It does not matter how much profit you make if the amount of cash you receive is less than or equal to what you are spending. If you cut into your cash reserves long enough, you will eventually be broke.

Cash Flow

Cash flow is the net amount of money that is flowing in and out of your business, and a cash flow analysis focuses on the timing of when cash comes in and when it goes out. The cash flow projection is the only tool you have to look ahead, and the future is where we want to go. By understanding your cash flow and how it can positively or negatively impact your business, you can make more informed decisions about how to run your business.

If you want to know how to manage your cash flow and create a sustainably successful business, give us a call. We are experts in the business of managing your business: 503-312-3145.

garyfurr@garyfurrconsulting.com

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The Pareto Principle

| Business Breakthroughs

Business Breakthrough #1                                             

May 2018

The Pareto Principle

I frequently talk about the 80/20 rule, otherwise known as the Pareto principle, because it’s a powerful concept that illuminates the reality of our time and efforts. In short, the 80/20 rule tells us that 80 percent of consequences or effects come from 20 percent of the causes. The reason I talk about this so much is because I see this in operation all the time in my clients’ businesses.

From my outsider’s perspective, it’s clear that 20 percent of my clients’ investments of time, energy, and money generate the vast majority of their return. Unfortunately, most business owners don’t operate with this understanding. Instead they are caught up in the 80 percent of time and energy that generates little, failing to drill down to the efforts and investments that would be most effective in their business (and personal) lives.

For this reason, I always suggest creating a stop-doing list, a list of those things that are not the highest and best use of your time, energy, and money. No matter who you are, these are limited resources. As business owners, it’s our responsibility to find the best way to invest those resources.

If you want to radically leverage your time, energy, and money, determine what makes the 20 percent cut. To accomplish that, you have to learn to say no more often; it helps to remember that every time you say yes, you are saying no to something. Why not determine the things that you want to say yes to?

The key is to learn to say no to the trivial things and yes to the highly important things, the 20 percent of the 20 percent. Be more intensely focused on those things that will bring the greatest success in your life, professionally and personally. Be focused on the right stuff, the good stuff. Start saying no now. Warren Buffet said: “For every 100 great opportunities that are brought to me, I say no 99 times.”* Start that stop-doing list, and let me know how you are doing once you’ve put it into practice.

* Harvey Mackay “Super Secrets to Becoming a Super Achiever,” harveymackay.com, August 22, 2012.

garyfurr@garyfurrconsulting.com

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Learning the Language of Business

| Business Growth


Learning the Language of Business

 I was recently sitting at the chef’s counter of my favorite restaurant, the Hairy Lobster, watching the chef and sous chefs work their magic to produce what I consider the best food in Portland, I was thinking about mastery and the language required to achieve it. These chefs have learned the language of cooking—teaspoons,tablespoons, cups, pinches,temperature, seasoning, and much more—allowing them to produce amazing results. The language is such a part of them, it’s as if they’ve become native speakers.

It is the same with musicians. The ones that move us with their songs have learned the language of music—flats, sharps, chords, and keys. Their investment in learning the language produces the compositions we spend our time listening to.

As a business owner,you are responsible for learning the language of business:accounting. Understanding the P&L and balance sheet and how they are interconnected is critical to the success of your business. But these two tools both look backwards. Their informationis already dated by the time you get your reports. What has happened has already happened,and you can’t do much to change it.

Business owners need one more tool to produce great results—the cash flow projection. The cash flow projection is the only tool you have that looks ahead at what is coming in your business so you can forecast your cash needs.

Business owners often think that net income on the bottom line of their P&L is cash, but it is actually only the theory of cash since the P&L does not account for debt payments. This highlights the need for a cash flow projection, which takes your debt payments into account (which is a use of cash).

If you would like to learn the language of business and master the finances of your business as well as the business metrics that will create amazing results, give us a call. We can help. 503-312-3145.

garyfurr@garyfurrconsulting.com

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How Pruning Produces Results

| News

                       

How Pruning Produces Results

Recently I went home to southern California to visit my mother who is 89. It’s been a number of years since I’ve been home, and she was excited to show me her roses, which were blooming profusely. She explained how she prunes them back every year to ensure that she gets the best roses by reducing the number of buds that are formed. I was reminded of the similar process for fruit trees—that by pruning them annually to eliminate the water sprouts, nonfruit-producing growth, the trees will yield more fruit. Less is more in roses, fruit trees, and our businesses.

As business owners we need to constantly prune our commitments and eliminate the non-essential activities as well as those that produce little value. Such things distract us and prevent us from performing at our highest potential. In other words, we have to do less to produce more. When we say no to more things, we can say yes to the right things.

For some reason, perhaps our addiction to busyness, we can get caught up doing the trivial many rather than the vital few. Remember it is better to move three things a mile than a 100 things a few inches. Focus on the few things that will have the greatest impact or results on your business.

In my work with clients we will sometimes create a stop-doing list—a list of things that are not the highest and best use of time. It might be time for you to create your own stop-doing list. Take some time to consider the 20 percent of your activities that produce the greatest return on your investment of time. You may be like many business owners who are caught up in the 80 percent rather than the 20 percent that will grow the business and take it to another level. The 80 percent will dilute your effectiveness. Intense focus on the 20 percent is required to maximize results.

Stop minimizing your results by trying to do everything. If you need help learning how to focus your time, energy, and money to maximize your return on investment, call us at 503-312-3145. We are experts at improving bottom-line results.

garyfurr@garyfurrconsulting.com

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ARE YOU TRYING TO GROW A TREE IN A FLOWERPOT?

| News

Tree in a pot ARE YOU TRYING TO GROW A TREE IN A FLOWERPOT?

 

When I was Chief Operations Officer for the largest deciduous shade tree nursery in the U.S. Located on 4000 acres in Oregon, we also had 85 acres in container grown trees or trees in plastic pots. We would plant fully-grown trees from our fields into containers and finish them for up to one year before we sold them.

If we happened to not sell all of our trees at the end of one year, they would often become too large for the container. When a tree becomes too large for a container the growth slows way down and may even stop growing. It doesn’t matter how much fertilizer and water you put on the tree, the growth is limited by the size of the container. Left for too long, these trees would actually start to deteriorate.

The same principle applies to our businesses. When we start our business, we plant a seed in a flowerpot and our business starts to grow. We continue to work hard in our businesses and the business starts to get larger. The business continues to grow and as it does so, it becomes more complex.

The problem is we are trying to grow this larger business in the small flowerpot that we started out with. The systems and processes we started our business with are no longer adequate to sustain continual growth of our business. It doesn’t matter how hard we work, the business will not grow and could very well be stunted. Left unaddressed this business will start to deteriorate and could eventually die.

Just like we can’t grow a large tree in a small flowerpot, we can’t grow our businesses to the size we want with the same systems and processes that we started out with. We have to think differently. We have to grow our systems and processes so our business can grow. We can no longer fly by the seat of our pants. We have to think more strategically about the systems and processes that we use to run our businesses on a daily basis.

Stop trying to grow your large tree in a small flowerpot. Call us and we can help you to develop systems and processes to grow your business beyond your imagination. We have helped our clients grow their business from 30 to over 452%. We can help you as well.

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