[VIDEO] Stop Chasing Revenues and Start Measuring These KPIs Instead

I was recently interviewed by ASBN, an online "television network" serving the small business community, about how driving profitable growth is dependent on driving the underlying KPIs that will enable that, including average order sizes, conversion rates and cross-sell rates.  This includes setting your commission plan based on gross profit instead of revenue, to ensure your sales team isn't simply "giving it away", and so they become educated on the highest margin products to be selling.  As you will learn, all revenues are not created equal.  I thought this video turned out great, and I wanted to share it with all of you. I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

[VIDEO] Strategies to Transform Workplace Culture

I was recently interviewed by ASBN, an online "television network" serving the small business community, about how to build a great company culture.  This video will help you learn that it all starts with hiring smart people and getting out of their way.  As you will learn, recruiting, onboarding, team building and management all play critical roles.  And you cannot manage what you are not measuring, so be sure to get the right KPIs in place.  I thought this video turned out great, and I wanted to share it with all of you. I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.

Business Lessons from The Coach Who Built a Dynasty in Two Years

I have been a lifelong University of Michigan basketball fan.  When I was a student there, they had won the national championship in 1989, where I had a front row seat as a member of the basketball band to see Rumeal Robinson hit his game winning free throws to beat Seton Hall. But since then, it had been 37 years without a national title, and the passionate UM fan base was aching for another championship.  UM had gotten close a couple times, in 1992 and 1993 with the Fab Five, and again in 2013 and 2018 with John Beilein’s gutsy teams, but we just couldn’t summit the mountain.  That was until Dusty May was hired in 2024, after UM’s worst season in their history, finishing with a dismal 8-24 record.  His two-year turnaround to a 37-3 national champion will go down as one of coaching’s greatest accomplishments. Here are a few of his leadership lessons that you can apply to your businesses.

Read the rest of this post in Entrepreneur, which I guest authored this week.

For future posts, please follow me on Twitter at: @georgedeeb.

Lesson #381: Stick to Your Plan--Short-Term Sacrifices Have Long-Term Consequences

When you are an entrepreneur, you want nothing more than to see “your baby” grow up into a successful business, especially with all the headwinds that are sure to come your way.  That often means that those same entrepreneurs are willing to make sacrifices, veering off on tangents away from their stated business plan.  I am not talking about business pivots in a new direction, that would ultimately require an update to the business plan.  I am talking about keeping the same business plan, but making exceptions to the stated goals, just to make some progress with the business.  That is when you can get into a lot of trouble.  This post will help you learn how to avoid getting trapped in those rabbit holes.

A Case Study

I recently met an entrepreneur building a restaurant chain.  She had opened four locations in North Carolina.  The first location was a home run, built exactly to plan and was generating a lot of revenues and cash flow.  That encouraged her to start rolling out new locations.  But she was having a hard time finding locations with the same rental costs or prime locations as the first location.  So, she started making sacrifices, to keep the business growing.  And that is when she started to get into a lot of trouble.

The second location did not have an optimal floor plan.  In fact, it was a two-story location, with half the seating on the first floor and the other half of seating on the second floor.  Instead of having a wide open fun environment, the space was too chopped up, and had a completely different vibe.  As you can imagine, people did not like the experience and did not return, creating the stress of having to make a profit on her long term lease with limited revenues to work with.

The third location was put in a suburban location, as opposed to the city center.  But the target demographic was young people in their twenties, and the suburban location appealed more to families.  Even though the rent was half of the price of the downtown location, it just wasn’t attracting the right audience, and was struggling to make a profit.

The fourth location was opened in Raleigh, after the first three locations were opened in Charlotte.  She was excited to be expanding her business into new markets.  But Raleigh isn’t like Charlotte in terms of population density downtown. And even though the location felt pretty similar to her first location in Charlotte, it only had about half of the revenues, with the same costs.  And to make matters worse, the entrepreneur didn’t have any marketing economics of scale with a single location in the market, and she was now forced to drive 2.5 hours between the two cities trying to figure out how to improve the Raleigh location’s results.  Her enthusiasm for growth had suddenly turned to frustration and desperation.

When I asked the entrepreneur how she ended up in this position, I got a very interesting response—she said she was following the advice of her investors who wanted her to test a second market and her friends who wanted her to open up new locations near where they lived.  She said her “gut” was telling her these locations were not right, but she opened them anyway, racing to grow.  Now she is stuck with three long term leases choking her cash flow like a noose around her neck.

The Key Learnings

Set a Clear Plan/Do Your Homework First.  The entrepreneur had never created a clear site location strategy.  That was like a home builder trying to build a house without a blueprint.  She should have laid out clear “rules of engagement” before opening any new location.  That could have included a certain population size within three miles, a certain demographic target nearby, a maximum of 2,500 square feet on a single floor, located on a busy intersection, with a minimum number of locations per market, etc.  So, when she went to go find new locations, it had to check all of these boxes to give it the best odds of success. 

Stick to the Plan. Desire for growth should never trump common business sense, in terms of her site locations.  The sacrifices she made, in the spirit of growth, ultimately ended up creating terrible financial strains for her business.  In this case study, she made sacrifices in floor plan, location and market, and each time it ended up costing her.  Now instead of spending her time celebrating her successes and profitable growth, she is spending all of her time cleaning up her old messes made, which wears on a person psychologically and puts the financials in a negative light, making it difficult to attract new capital needed open up the next locations.  It is perfectly fine to say “no” and wait for the perfect opportunity to present itself; don’t just jump on the first thing you see for growth’s sake.

I am not saying you should never make sacrifices; sometimes you have no choice (e.g., think about how different store layouts are in Manhattan due to the lack of space, compared to those chains’ other locations in other cities). But you can’t always be making sacrifices, or you are going to end up in the same mess as this entrepreneur. 

Always Listen to Your Gut.  As a CEO, you are the person with your hands on the “steering wheel”.  Only you can make the business turn one direction or another.  Don’t let the desires of others lead you in a direction you would never have driven on your own.  By not listening to her “gut”, that was like handing the steering wheel to the person in the passenger seat and letting them drive the business right off a cliff.

Closing Thoughts

Your actions as a CEO have consequences.  Don’t be in such a race to grow, that you throw out your proven playbook and common sense in the process.  For if you repeatedly stray too far from “ground zero” in your business plan, don’t be surprised when it results in growing losses, an inability to attract additional growth capital and a material increase in your general anxiety level.  Growing is hard enough as it is; don’t self-inflict any wounds that makes it any harder than it needs to be.

For future posts, please follow me on Twitter at: @georgedeeb.

    

Lesson #380: What Happens To Your Business If You Die? Legacy Planning is Critical.

I was recently engaged by the estate of a founder to assist in finding a new owner for their business after the founder died.  There were a lot of valuable business lessons that came out of this process that I wanted to share with you.  Not for your estate survivors after you die, but instead for you before you die, so you don’t repeat the same mistakes of this other entrepreneur that failed to properly lay out a clear legacy plan in the event of his death, leaving the survivors scrambling looking for answers in the wake of his death.

The Business and Situation

The business here was a solo-owner charitable foundation that runs a big annual event, an event that was run by the founder for decades.  The founder died with no clear plan for what do with his business in the event of his death, especially with nobody in his family wanting to pick up the reins.  But everyone associated with the event wanted the event to survive for years to come, especially to honor the legacy of the founder.  The problem was we couldn’t get into the head of the founder to ask him who he would have liked to take over for him.  Instead, we had to come up with candidates on our own.  And that left a big void for us to fill.

Step One:  Search for Breadcrumbs Left by the Founder to Help Guide Us

The founder had considered putting a transition plan in place in the past, and we were fortunate to find a few files in his office that referenced those specific partners.  He even went so far as having detailed merger discussions with two of them, the notes and draft agreement left behind in the files.  But how do we interpret that?  Yes, they are good candidates because the founder thought they were good candidates in the past?  Or, no, they are not good candidates because they never got to the finish line for some unknown reason?  We decided to pursue them, to see if there was any interest in rekindling those old discussions.

Step Two:  Speak to the Staff and Current Board of the Business For Their Thoughts

The surviving staff had been associated with this business for years and did offer up several specific suggestions of potential companies to reach out to, to take over the event.  But the staff were more execution-level in their approach and thinking, and I was looking for more of a strategic-level list of companies where the missions of the two businesses were perfectly in alignment with each other, to increase the odds of long-term survival of the event.

The board was also helpful, in that they presented themselves as a candidate to take over the event, given their decades of history there.  But that presented a couple problems.  Their recommendation was biased for their own personal interests, and it is one thing to be a board advisor, and another thing to be the actual event operator, and they didn’t really have those needed operational, marketing and fundraising skills.  There was also the issue of the event having struggled for the last couple years to grow its audience back to historical heights, and the fear of handing the event off to the same team that oversaw such historical declines.

Worth adding, I was curious why only some of the board members reached out to me to express their views, and I hadn’t heard from the others.  So, I called a few of them to seek their input, figuring they did not have a “horse in the race” and would give me a candid opinion.  Those were very telling conversations; the board members were not in alignment with each other, with one half of the board not really desiring the other half of the board to take over, to keep their going forward involvement.  I wasn’t expecting that, but it certainly helped directionally find a partner that would be embraced by most all.  And in this case, it wouldn’t be the fractured existing board. 

Step Three:  Figure Out Your Exact Needs and Outreach to New Partners That Fill Those Needs

We came up with a scorecard of everything we wanted to find in a new partner. Things like strategic fit, financial resources, event production experience, event marketing experience, reputation, interest in preserving the legacy of the founder, personality fit, vision, etc.  Strategic fit was the most important and we came up with a short list of organizations that served this same target market and reached out to each of them, interviewing each of the interested parties for the criteria above, and ultimately selecting a winner that “checked all the boxes” to move forward with the transition.

Step Four:  Prepare for a Lot of Bruised Feelings

In this project, we had five interested parties, but only one could win.  And one of those parties, the current board, felt they were “entitled” to win this event given their decades of history with it.  But it was clear for many reasons they lacked the needed skills to be successful in not only running the historical event, but growing it into something bigger and better than it had ever been in the past, to truly honor the founder’s legacy.  When many of these board members learned they did not win this process, the decided to entirely disengage with the event.  Which is really sad.  As that meant it really wasn’t about the event, or the cause, or the founder’s legacy that was important to them; it was simply their personal ambitions which was driving them.  That confirmed we made the right decision.

The other issue to navigate through was all the various surviving family members had differing opinions of how the process should be run and who should ultimately win the event.  And there was no way to make everyone happy, which bruised a lot of feelings that their opinions were not being listened to.  But without the founder making his intentions clear, and “lots of cooks in the kitchen” in the wake of his death, the project was ripe to leave people feeling discontent.

Step Five:  Hug All Legacy Partners and Make Them Still Feel Loved to Embrace the New Partner

In addition to making room for all the old board members to stay engaged in leadership roles with the new event owner, there were lots of event sponsors, vendors and other partners that needed to be communicated with and embraced to keep them involved in the future.  In this case, the event was so tied to the founder, that there was a risk of many of the historical partners not continuing their involvement going forward.  But with the right communication strategy, vision and outreach plan, we were successful in getting most historical partners to continue their involvement with the new ownership.  But in the absence of the founder giving clear direction here, to ensure his legacy desires were communicated to all ahead of the time of his death, I think we did a good job of filling that void.

The Moral of the Story

The survivors of the founder should have never been in this situation in the first place, having to “guess” what the founder would have preferred to happen to his business in the event of his death.  It is very important you document your desired transition plan for your business somewhere.  It would have been so much easier for the survivors to simply shut down the business and move on with the rest of their lives.  But in honor of the founder’s legacy, they put in the work to make a smooth transition happen. Hopefully, the founder is happy with the selected outcome, but I guess we will never know for sure.  Don’t put your own survivors in this same situation when you die.

For future posts, follow me on Twitter at: @georgedeeb.

[VIDEO] Don't Chase Short-Term Revenues at Expense of Long-Term Success

I was recently interviewed by ASBN, an online "television network" serving the small business community, about potential pitfalls entrepreneurs fall into when chasing short-term revenues.  This video will help you learn which types of revenues/clients to avoid so it doesn't negatively impact your business.  As you will learn, all revenues are not the same shade of green.  I thought this video turned out great, and I wanted to share it with all of you. I hope you like it!!

The embedded video player didn't give me the option to change the size of this video.  But, if you want to see a bigger version, simply click the expand size button in the player above.

Thanks again to Jim Fitzpatrick and the ASBN team for having me on the show.  I look forward to our next interview together.

For future posts, please follow me on Twitter at: @georgedeeb.