From Greg's Head

Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the PKF Texas - Entrepreneur's Playbook® page of the PKF Texas website. 

Recently the business conversation has shifted. While process improvement is imperative and waste reductions should be a routine part of your business activity, you can only cut costs so much.  The top line of your business eventually must carry the next wave of improvement.

New business will be harder to come by over the next few years. Now is the time to decide what type of customers you want going forward. Not all business is good business. Think about your best customers.

This is an opportunity for you and your management team to develop a list of critical factors characterizing a good customer for your organization.

Client selection criteria is important, and will guide your sales team to ask the right questions to make sure future prospects are “good customers.” With that information, you can contact referral sources to help identify and approach prospective “good customers.”

Identify from your existing client base your “A”, “B”, “C” and “D” customers. What can you do to move the “B” and “C” customers to “A” customers? Do you have too many “D” companies in your client mix? Can you move your unprofitable “D” customers to your competitors?

Have this discussion at your annual workshop. Your sales and business development teams should be familiar with what makes a good, profitable customer.

As we start to find our way out of the recession abyss, think about ways to build your business with the right kind of customers. Hopefully, you will begin to “guard the front door” and build a solid business based on an “A” client portfolio.
 

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"You can’t build a reputation on what you are going to do."
Henry Ford

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 As you know PKF Texas actively supports Houston and its business community in a variety of capacities. One way we show our support is through the sponsorship of area award programs. Two such programs are currently accepting nominations: the Best CFOs of the Year and 40 Under 40, both a part of the three day Celebrate!Enterprise event presented by the Houston Business Journal.

PKF Texas has been a proud sponsor of the Best CFOs of the Year award program since 2007 and the 40 Under 40 since its inception in 2009.

The criteria to nominate an individual for Best CFO or 40 Under 40 is in the extended entry below.

To nominate your own CFO or a friend of your firm, please see the criteria in the extended entry, then

·         Fill out the nomination form on the Houston Business Journal website

To nominate an individual for the 40 Under 40, please see the criteria in the extended entry, then

·         Fill out the nomination form on the Houston Business Journal website

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the PKF Texas - Entrepreneur's Playbook® page of the PKF Texas website. 

As organizations work through their 2010 budgets and we see the economy teetering back and forth on the edge of pulling out the recession or falling back into it, one of things on the minds of most CEOs is: “How can they improve the profitability of their organization?”  One of the answers is to get better information from your accounting system.

At a customer site we started doing some analysis of their sales revenues and customers.  The controller was our sponsor, and was looking to use the power of their new dashboard reporting tool we implemented at their headquarters to tell them more about their business.  One of the items they were challenged with was knowing whether or not, a customer was profitable. 

Our dashboard reporting tool indicated that they were showing some profitability on 40% of its small customers and approximately 75% on its larger customers.  Having never had this information before, the controller went down the hall and visited with the VP of Sales and a plan was developed to redesign sales processes.

With our help, we redesigned the process to focus on value and cut waste.  More time was spent in directing the smaller customers to web based support/ordering and large customers with more commodity based sales also to web based support/ordering.  Reducing back office support on these areas allowed the organization to cut costs by 35% on the smaller customers and 7% on the large ones. Larger customer profitability increased by 20% and smaller customer profitability increased by 100%.

If you are not getting this information from your accounting system, you should contact us.  With Dynamics NAV and our dashboard tools, we can help bring that type of information to the forefront.
 

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Starting this week, I'm going to be posting a quote of the week.  I've been doing this for my team for a while now, and would like my readers have the benefit as well.

This week's quote is:

“Always bear in mind that your own resolution to succeed is more important than any other.”
Abraham Lincoln

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Over the past few weeks, you may have noticed something brewing on our website.  To enhance your visitor experience, we have launched the newly reimagined PKFTexas.com.

From the book of our best practice tips, to local, state and federal tax updates, the new mobile ready site houses valuable resources for our clients, prospects and friends of our firm. The key business tools you have indicated are important are now more prominently spotlighted alongside new pages and features.  Selected highlights include:

PKFTexas.com is Mobile Ready.  All 235 pages of our site can be accessed anytime from anywhere at m.PKFTexas.com. 

Meet our Firm Leadership.  Watch each Director Preview video to get to know our Directors on a more personal level, or connect with them on LinkedIn.

Subscribe to Valuable Communications.

From the Leading Edge Magazine electronic Nxtbook® to the Route to Profits newsletter and connecting to events in the marketplace, you don't want to miss receiving any of our valuable communications

Connect to the Marketplace. The Community Connections section connects you to key events and organizations in Houston like the FastTech 50, BusinessMakers Radio Show and the Greater Houston Partnership.

Share our Site.  The pages of our site can now be shared with your friends and business colleagues over the social web. 

Stop by the International Desk. The one-stop page to connect your business to our global resources.  We do business where you do.

So take some time to browse through our site while you have your morning coffee.  We would love to hear your feedback.

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the PKF Texas - Entrepreneur's Playbook® page of the PKF Texas website. 

As we start the New Year, we find at many of our clients and businesses that January is usually a time of employee annual reviews and performance feedback.  One of the items noted by employees at high achieving organizations is the environment in which they work.  Highly successful companies achieve very high scores in the feedback assessment processes by their employees.  Which raises the question: “Where would my organization rank on such an assessment?”

To the following question: “What type of workplace fosters the creation of exceptional sustainable value?”  Some of the answers gathered by Marcus Buckingham in his book, First Break All the Rules, include the following subset from over 1,000,000 surveys:

• Do I know what is expected of me at work?
• Do I have the materials and equipment I need to do my work right?
• In the last seven days, have I received recognition or praise for doing good work?
• Does my supervisor or someone at work, seem to care about me as a person?
• In the last six months has someone at work talked to me about my progress?

In the book Conscious Business I learned that feedback is actually a mutual learning opportunity.  In providing feedback I try to:

• Recognize that the intent behind feedback is learning and development (vs. criticism)
• I provide broad context, both positive areas and areas that I am concerned about
• I try and focus on effectiveness gaps and not personal traits
• Be timely and convey both positive and constructive feedback

In receiving feedback, I try and remember the following:

• Be learner, do I love the truth more than I love my face?
• The person giving my feedback is supporting my development.
• I take responsibility for the feedback, and my role in the gap of my performance
• I use effective inquiry to understand, not defend myself

If your environment is creating exceptional sustainable value in the area of Giving Feedback, you will be surpassing your competition in this challenging market place.
 

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Last week’s Consumer Electronics Show  in Las Vegas hosted the debut of several cool gadgets. Much like the concept cars at the Detroit Auto Show, they won’t all make it to the mass market, but the fact the technology is there, is pretty cool.

Microsoft kicked off the Show with an announcement of the launch of several touch screen devices that will help drive their Window 7 product. Most notably, they’re using the technology for several of their tablet PC concepts.

LG announced a new flat screen television that is less than 7 millimeters thick! I wouldn’t mind having one of those in my house!

What did you hear about that you would love to get your hands on?

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Over the Christmas holiday, I had some time to catch up on my reading. One article on Inc.com caught my eye, “Is Your Small Business Cyber-Secure?”

Apparently, the National Cyber Security Alliance, together with Symantec, surveyed 1,500 small businesses and found that only 28% had a formal internet security policy. Only 28%?!

Give the amount of applications we rely on that transmit data over the internet, that statistic is disturbing. Cloud computing is increasingly becoming a more cost effective way to do business, so it behooves small businesses to ramp up their cyber security. Spending the money now to take the proper precautions can prevent a more costly security breach down the line. 

What is your company doing to protect its data? How often does your IT team reevaluate the security measures you have in place?

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the PKF Texas - Entrepreneur's Playbook® page of the PKF Texas website. 

One of the items I find at the heart of many communication breakdowns includes conversation around commitments and the ability to honor, or not meet these obligations.  If your organization is having trouble with commitments, try this exercise.

Before giving a commitment to someone do this quick self assessment before offering a response.
How do I assess the integrity of my commitment?  I recommend a quick review of your sincerity.

With sincerity you should:
• Only make promises you intend to keep
• Believe you understand the commitment
• Believe you have the resources and skills to keep it
• Will apply your energy to the task at hand
• Do substantial planning to mitigate risk

You should honor your promises unconditionally.  When you see the commitment is at risk you should:
• Alert the creditor immediately
• Apologize and offer an explanation
• Inquire about potential damages
• Negotiate strategies to minimize damages
• Recommit

Remember honoring your commitments doesn’t necessarily mean fulfilling them.  Commitments are always first broken ethically (integrity) before being broken effectively.  The breaking point occurs when the committed person realizes the promise is at risk and decides to keep quiet about it.

In his book Conscious Business, Fred Kofman writes, “You behavior always express your values in action.  Your integrity hinges on whether your values in action agree with your essential values.  When they do you feel pride.  When they don’t you feel guilt.”

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Note: Running Fridays in FromGregsHead.com, is a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the PKF Texas - Entrepreneur's Playbook® page of the PKF Texas website.

Software as a Service or SAAS as it’s commonly referred to is here to stay.   The question is whether many software and infrastructure providers can properly take advantage of such a strategy for their businesses.

Recent studies have indicated that SAAS made up about 1% of the $18 billion IT management software market during 2008 and projections are increasing to 10% by 2013, by which time many SAAS brands will be well established.  The most successful SAAS product offering known to date is salesforce.com, which experts are predicting will top $1 billion in revenue in the near future.

And recently these same studies indicated that many Small and Medium Businesses (SMBs) are also becoming more aware of, and accepting of these environments.

Here at PKF Texas we have recently joined the SAAS world through a combination of our ERP application Dynamics NAV and our SAAS business partner SAAS Plaza.  We can now offer our customers and prospects a choice between owning their own application and infrastructure, or, providing an alternative SAAS solution.  We will have more on the topic of SAAS and NAV in the future, but if you are interested in such a solution for your business, contact us.

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