Manage Your Cash

Manage Your Cash

Managing your business’ cash is not something you should think about every once in a while. You must manage it every single day because cash fuels your business. It’s your business’ lifeblood. On a daily basis you should check how much money your business took in, how much it spent, and the status of your receivables. If you don’t do all of these things, you risk being blindsided by a cash shortfall, which could cripple your business.

If you don’t have the time to manage your business’ cash day to day, give that responsibility to someone who has the skills to do it and who you can trust to do it well.

Many new businesses do not pay enough attention to cash management because they are overly focused on generating sales.

There are several aspects to effective cash management. For example:

  • Use credit applications to figure out to whom you will extend credit and how much credit you will extend. Ask each of your customers to complete a credit application and then evaluate the information on each application using a credit scoring process.
  • Make timely billing a priority. The quicker you bill, the faster you will get paid and the less likely that you will have a problem with cash. Although a lot of businesses invoice once a week, I recommend that you invoice every day.
  • Understand how your customers handle their accounts payable and what you must do to ensure that they pay you as quickly as possible.
  • Monitor your accounts receivables on a daily basis and do not let bad debt accumulate. Even one past due account can have a big impact on your business’ financial health.
  • Use an electronic accounting system. If you don’t have one, get one!
  • Manage your credit relationships with your carriers as aggressively as you manage your shipper relationships.
Fixing Performance Problems

Fixing Performance Problems

A client reached out to me about performance issues within his team and I want to share it with you.

He owns a freight brokerage business that employs 10 brokers. Overall, he has a good team and his business is growing, so they are on the right track. However, he has some employees who have spotty performance when it comes to sales and customer service. He feels these people could be successful so he wants to help them get their performance up rather than letting them go.

Does this sound familiar to you? Maybe you have experienced a similar situation with your team.

This is a very frustrating problem for managers. Since the performance is spotty, it implies that sometimes they get the desired results and other times they fall short. Since you are having some success, we can assume that your employees will be successful if they follow your process and make the appropriate effort.

At TranStrategy Partners, we recommend using the following 4 step approach to helping your employees meet your performance standards:
Set Expectations. Create clear expectations for what you expect in terms of results. Also, communicate the processes for getting those results. When you set expectations, it is important that your employee understands exactly what you mean. If possible, have them articulate the direction in their own words (active listening). Sometimes, things that seem simple and direct in our heads are far less clear to the listener – this is especially true if you are an expert and they are a newbie.

Job Specific Training. A properly developed training program is a great way to communicate the goal and the processes needed to reach the goal. Ideally, your training should improve your employee’s attitude, skills and knowledge. Developing the right attitude about the goal and the approach is key. The right mental attitude will motivate your employee to gain the skills and knowledge necessary to succeed. Skills training will allow your employee to learn the specific skills needed for the job, like phone skills, customer service skills, TMS skills etc. Knowledge training refers to broader learning and practical understanding of a topic like supply chain, truck sizes, or industry best practices.

Inspection. After you have communicated your expectations and provided training, the next step is inspection. People do not always do what you expect, but they usually do what you inspect. Follow up with your under-performing broker to ensure they are doing exactly what you asked them to do. After a while, they will realize you are inspecting their work, which will compel them to follow the process. Inspect their work until their performance improves then reduce to periodic inspections to prevent backsliding into old habits.

Recognition and Reviews. The last step in the process is recognition and reviews. Schedule a review with your underperforming broker and discuss their performance. If they are back on track, encourage their progress and if they are still failing, determine the cause and take action. If you see your employee following the process and getting results, give them a little casual praise like “good job” or “attaboy.” Be careful with praise and recognition – it should always align to performance. Too much or too little can send the wrong message.

Everyone knows your tactics, but not your strategy!

Everyone knows your tactics, but not your strategy!

“Everyone knows my tactics, but no one knows my strategy,” attributed to Sun Tzu in The Art of War*

This got me thinking how many business leaders in the third-party logistics industry (myself included) spend too much time focused on the business tactics of our competition.

Then we try to copy those tactics in our own company, hoping against all evidence otherwise, that they’ll make us wildly successful.

We try to create high pressure/high volume sales teams where we’ve never had them because that seemed to work for (insert competitor’s name here).

We want to have the most intensive website, with videos, flashing graphics and all, because (insert competitor’s name here) has one and they’ve grown more than 50% each year for the last three years.

We want to copy the most sophisticated incentive based compensation system used by (insert competitor’s name here) in the hopes that it’ll make star performers out of our average employees.

But copying tactics used by the competition will not make your business successful. Your business will be successful when you have a clear mission, a well thought-out strategy, and then using the tactics that support your strategy and, most especially, have meaning for your customers.

Your Mission is a statement of purpose, what you are in business to accomplish. Your reason to exist at all.

Your Strategy is about the long term direction of the company. It’s about the resources you’ll have, the markets you’ll serve, your competitive advantage, and the expectations of your customers.

Your Tactics are how you do what you do. In the longer term it is how your processes and technology are deployed. On a daily basis it’s about everything from how you open the office in the morning and answer the phones to how you qualify carriers and collect your money. Every one of your tactics should make it easier for your customers to do business with you, and if they don’t you must change them as soon as possible.

Whether you’re starting a new business or your existing business needs a change, start with a clear Mission. Take the time to create, and stick with, a well-reasoned Strategy, and then create your own identity in the marketplace with the Tactics that flow from this process.

* The more accepted translation of this quotation is “All men can see the tactics whereby I conquer, but what none can see is the strategy out of which victory is evolved.” Sun Tzu, The Art of War.

You can raise your business game today. Your Mission and Strategy are unique to your company, but the specific tactics you use are pretty common.

Thankfulness: Crossing Bridges

Thankfulness: Crossing Bridges

As we approach the end of the year and our celebration of Thanksgiving, I wanted to express appreciation to all of our clients, to our colleagues, to our friends and to our industry – an industry that embraces the challenges of growth, of change, of technology, of talent acquisition and of diversity to create a pathway to success.

This past week, I had the privilege to attend the Women In Trucking (WIT) Accelerate! Conference in Frisco, TX. With over 800 attendees (60% increase from 2017), there was an energy and a spark(le) to the conference. Over the last 11 years, the mission of WIT has been to encourage the employment of women in our industry, to promote their accomplishments and to limit any obstacles faced. The sense of empowerment and forward movement was palpable throughout the conference.

Networking

From the steady rhythm of the speed networking session to the reception events to the integrated expo, attendees had the opportunity to reconnect with colleagues and make new connections. Every conversation served to strengthen a relationship and build the foundation for great work in the future.

Unlike other conferences that celebrate only the few, Accelerate! is a celebration of all – drivers, directors, recruiters, salespeople and owners alike. There is a true sense of community and that community is driven by collaboration.

Education and Development

The core of the conference is about development – from sessions and breakout topics (for individual knowledge gain) to affiliate member tools and services (for business development). Growth and advancement are key points to a fulfilling life and career.

For us, at TranStrategy, we were excited to celebrate the first graduates of the WIT Professional Development Certification (PDC) at the conference. Designed with and for the association, the PDC is a 30-course curriculum across Leadership, Success and Personal Brand development. Delivered online and on demand, the program helps the learner to build skills, to look from a more strategic viewpoint at their business and career and to foster growth and empowerment for themselves. The benefits are received by both the individual and organization.

Congratulations, again to Bonnie Supan, Erin Turcotte, Susan Collins and Ellen Voie.

Looking Ahead

I had a colleague ask where I was this past week and when I told him that I was at the WIT conference, he stated that we should have a Men in Trucking conference. Shaking my head, I just had to say, “for a hundred years, that has been called the ‘Trucking Industry’.” The point is inclusivity, not exclusivity.

As we understand and encourage the power of diversity, across race and gender, the industry becomes stronger more adaptable to the changes on the horizon.

It is a privilege and an honor to be a part of the movement and the vision of Ellen Voie and WIT.
Thank you.

Are You a Business Owner or a Glorified Sales Manager?

Are You a Business Owner or a Glorified Sales Manager?

If you are the owner of the business, you focus on:

  • Articulating the vision and developing the right culture
  • Creating a strategy and leading the execution
  • Connecting with customers / prospects and creating a great service offering
  • Hiring great people and developing them into leaders
  • Implementing processes and systems that will maximize productivity for the finance, operations and sales and marketing groups.
  • P&L

If you are the sales manager, you spend most of your time on sales. Since most sales managers are judged solely on sales and margin growth, they better keep focused on sales. Finance and operations will take care of themselves.

A good sales manager is focused on:

  • Connecting with customers and prospects
  • Hiring, training and retaining the very best sales talent (even if they work in the operations or finance group)
  • Developing a great sales process and messaging for the sales team
  • Sales numbers

A Focus on Only Sales Can Slow Growth

As strange as it sounds, focusing solely on sales can limit the growth of your company. In my experience, new sales begin to hurt a company if they haven’t adequately developed their operations, finance and marketing groups.

As an executive coach and business strategist, I help companies accelerate their growth. I work with companies that are at a cross road, where the founder is struggling to get their company to the next level. These companies typically have been around for 10 years and have revenues of $10-15 million.

Often, the owner and his team have an almost obsessive desire to grow their sales, yet they find themselves stuck enough that they hire an outside firm to help.

Building a Foundation for Growth

To help my clients grow, I first assess their current state. I have learned that many, if not most companies have very weak organizational structures because they are so biased toward sales growth.

Typically, the owner behaves more like a sales manager than as a business owner. Since, most startups fail due to lack of sales, the sales bias is justified when the company is new.

Lack of sales kills start-ups, but lack of organization and structure prevents sales growth for small and medium size businesses. To get to the next level, the owner and executive team must change their focus.

Build It and They Will Come

When I help new clients develop an organization and structure, many are initially impatient. They want to discuss sales strategies and nothing else. They are like the top heavy weight lifter at the gym who only works on his upper body – he can’t see that his huge upper body looks silly attached to stick legs.

To get a structure in place, I meet with the leadership team and we agree to the groups, typically sales & marketing, operations and finance. Next, we determine what each group will be accountable for. I always ask the team to agree on just 5 specific responsibilities for each group.

Next, we discuss who should head up each group. This step is always interesting. We are picking the person who should have this job going forward, not who has the job currently. Companies and leadership teams evolve and sometimes the guy who sits in the chair isn’t a good fit anymore – maybe they were never were. This step empowers the leadership team to get everybody in the rights seats and playing to their individual strengths.

So Does It Work?

Developing a solid organizational structure with specific responsibilities sounds boring, but it works every time. I get great feedback from my clients on this exercise. Typical comments include:

  • “Our company feels focused”
  • “The new structure improves cooperation, communication and accountability”
  • “Now that I only wear one hat, I feel energized”
  • “We are much more productive”
  • “This is the foundation we needed to grow”
A Case for Service

A Case for Service

How do you give back? How do you serve those around you? Not just your customers (in providing solutions to their needs), but the folks with whom you interact each and every day. As a leader, your role is not just to direct and make known your expectations, but to provide inspiration, guidance, humility and encouragement to those you lead. As that network expands, there are new ways to serve outside of your organization and for the benefit of many.

Industry Associations

Both Not for Profit and For Profit industry associations are designed to provide a strong network of leaders and knowledge to benefit the overall membership. Balance what you take from the membership and give more than just the annual check and conference registration. These associations are hungry for your expertise and your experience in navigating the landscape of our industry. Others can benefit from your stories, your context and your analysis.

Local/Regional Education

Local colleges, university and trade schools can greatly benefit from your knowledge and expertise. Whether through full course development, seminars, panels or as a guest lecturer, you can support the learning of others. Many schools have courses on operational excellence and supply chain management, but few provide knowledge of the brokerage industry and its impact within the larger supply chain network environment.

This connection to schools can help to shorten the learning curve of our industry and can position your company as a both a supporting entity of educational growth and as an employer of choice upon graduation for many potential new hires.

Community Efforts

Donating time, dollars and other resources to various community needs serves to strengthen the people affected and the community as a whole. Raising hope and building bridges (where both are, unfortunately, absent) can create long lasting encouragement for the individuals helped. While the motivation for volunteering shouldn’t be about how it serves your interests, the potential benefits for you and your company are powerful in building the brand beyond commercial identity, but to become a more holistic entity that has deeper context and empathy.

Mentoring

Mentoring can be focused internally in support of your current team new associates, or it can be focused towards groups outside the company or even the industry. As you look through your own development path, you can identify those people who helped you achieve your success. Providing similar supportive guidance to others can raise the level of conversation, ensure more thoughtful decision making and allow for more personal and professional growth.

You, through your success, have been given a gift. You are given the power to change lives and promote positive values and ideals.

Today is a day where you can utilize the right given to you and make your voice heard in the way our local, state and national political actions are undertaken. Please go out and vote today.