Business Optimization

The crux of our economy is based on people that put their lives and fortunes into building their small business. They don’t often understand business principles, but they have a passion and talents that often result in somewhat profitable enterprises. Wouldn’t it be nice if when these people reached out for help with business principles – someone with principles was there to help. Wouldn’t it be nice if the buzzards weren’t the first ones there with their hands out?

There are the large unscrupulous consulting companies, that the government is beginning to crack down on, that paint a “sky is falling” picture to get an unknowing business owner to pay them $20,000-$50,000/week to fix a $1,000/month problem. Then these large companies take weeks/months to implement their standard cookie cutter 1960’s approach and call it custom. Then there are the new $75/month membership consulting companies that will answer your questions for a monthly fee. They write blustery meaningless answers that often lead the small business in the wrong direction.

When you get “wrong way” advice when you are traveling, you have signs along the way that let you know you are going the wrong way and need to seek additional guidance. Your biggest expense is lost time/gas. In the small business world, most business people don’t know there IS a problem until their pocket runs out. They don’t know enough to have seen the signs the first time. They don’t get too many chances to get it right before the door is closed permanently.

Whether you paid $75/month or $580/hour for those instructions, you’d hope that they were golden – often your survival depends on it. But today, you are lucky if the result is a positive at all. Often the consultants today aren’t consultants at all – they are usually has-beens that act as puppets for a home office to sell additional services. Often while the client is paying for high-priced consulting, the consultants are busy doing as they are told:

1. Identifying cash and assets that can be claimed upon the default that is sure to happen.
2. Searching for new areas that can be presented to extend the project.
3. Dealing with invoice and payment issues to ensure they get paid weekly/daily.
4. Ensuring a proper legal trail has been laid to eliminate any future legal argument the client might have.

Unfortunately, although these activities comprise a great deal of the time billed, none of those activities benefit the hard working entrepreneur. They often don’t even have the MBA or other credentials touted in the sales presentations – hence their reluctance to share the credentials with you.

The $75/month solution would be ideal for the smaller businesses if it were valid. Unfortunately, the advice delivered from these to-date have been wrong, counter to profitability, and based on non-reliable sources. Basically these services have delivered little more than a human Google interface.

Small business is the crux of our employment and innovation. Whether you evaluate it from the country’s perspective, or the hard working entrepreneurs: How much better off would we all be if the first responders for these companies were delivering quality solutions. That is why at businessoptimization.biz we are offering free second opinions on business consulting issues. Having been there, we know the game. We’ll let you know whether we think the “sky is falling” or if there are some simple steps to fix the problems. Then you can make the choice as it should be made – calmly and with the facts.

Imagine you’ve almost arrived at the beach for a long anticipated day doing what you love.  Just before you can see the water, you hear screams, splashing, and people yelling.  As you get closer, you see someone thrashing in the water and your heart starts to race wondering what action you should take.  Then you hear a voice and see there is a lifeguard on shore with a rope and he’s yelling instructions to the victim.  He says – don’t panic – do just what I tell you and grab this rope as I throw it – and your heart starts to settle a bit.  Then, as the lifeguard throws the rope you notice that there is an anchor where the float should be.  You watch as a innocent little child grabs the rope and is pulled beneath the water.  That is how I felt watching people fighting to save their company being sucked in by “consultants”, who knowingly took these people’s last dimes under the guise of “saving” them.  A company that was coming up short of making the $2,000/month rent talked into $20,000/week consulting.

How can this happen – how can an intelligent business owner fall for this?  The business owner started the business with skills of their craft – plumbing, HVAC, sales, whatever.  They managed to find enough right business answers to make a profit – and they are proud.  They begin to drive nicer cars and live in nicer homes.  But they don’t know they haven’t built the skills to navigate a storm.  They don’t know about optimization, modeling, six-sigma, regression analysis, break-even, risk analysis, or how to tell which cash flow is more profitable.  And then it comes; a new law, a new competitor, a recession.  They find themselves spending more than they are bringing in – month after month.  They squeeze, they hope, they cry, their gut aches, they can’t sleep, but they don’t have the skills to pull themselves out.  Their only hope is they won’t run out of money/credit before it all ends. 

Then, like the lifeguard, those consultants, that are supposed to save them, toss them the anchor.  They take a desperate owner and make them feel worse for not having seen it coming.  Why didn’t they turn the ship much earlier? How could they do this to their friends and family? They suggest there is only one way out. They suggest the owner is incapable without the “experts” help.  How else could you get someone to spend $20,000/week because they were missing monthly expenses by $1,000/month?  They don’t suggest that there isn’t enough money to solve the problem.  They don’t even put people in place with the skills to solve the problem  – they just get started – started billing.  And if the business owner doesn’t let go in time, the business owner is pulled under.

What does this mean to you?  It is no skin off your nose, right?  They took a risk – they lost – oh well.  Over 600,000 small businesses fail in the average year. Small business is responsible for 90% of our innovation and 50% of our jobs.  Are we going to relegate them to “niche” industries?   Are you ready to tell your kids and your grandkids that this is no longer a world where they can turn their love of pets, shoes, sports into a main line business like it was for you and your parents.   What does that do to employment?  What does it do to innovation?  What does it do to your kids and grandkids?  

And then there is the impact on your community.  A dollar spent at your child’s pet shop, would then be spent at the luxury car dealership, who would then use it to build his dream house, and on and on.  That same dollar becomes 5, 10, or 15 dollars as it circulates through our local economy.  Instead, we wad it up and send it air express to Bentonville Arkansas – or some other megastore home city.     If we give up on small business – that same dollar becomes less than a dollar to our community.  So, do you still think it is no skin off your nose? 

What needs to be done?   Well, we’ve seen similar circumstances before.   I remember when I was a kid – you didn’t go to the doctor for physicals, for tests. Often, you didn’t even go when you were sick.  You didn’t get your teeth cleaned to prevent cavities – you enjoyed the drilling when things went bad.  We don’t do that today, why?  Because someone came up with the idea that removed the huge financial decision from the medical one – called insurance.  

That is what small business needs.  They need to be able to get marketing advice, financial advice, legal advice, etc. without having to make a big financial decision.  Expertise needs to be made available in a form that is both affordable and usable to the small business owner.  It needs to start before the storm – so they build a business that is less vulnerable - so small storms pass unnoticed.   And when the typhoon arrives, it should be there to help then too.  They need everyday access to lawyers, and industry experts – like the big companies have.  

Small business needs help, but it has to be positive help, and it has to be affordable.  Small business, your kids, and our communities need small business to have this kind of innovation.

Business consulting has long been out of reach for the small businesses.  Most small businesses don’t know what they don’t know until it is too late.  Then, like a drowning victim, they reach for consultant’s help.  The anchor that is thrown to them is a $300-$1,000/hour consultant that most certainly will empty their pocket before the solution is found.  They are scared into the logic that says paying $6,000-12,000+ per day is a good path to fixing not being able to pay the $2,000/month rent.  They do it with words like imminent, bankruptcy, insolvent, etc.  There has to be a better way.

In order for small business to be successful, it needs daily access to a wide variety of skills that are, by their nature, not present in a small business.  They need to know that finding profitability doesn’t mean they’ve found the margins to weather the storms that will come, or even pay proper returns on their labor and capital.  It doesn’t mean they know how to change direction to meet the storms challenges.   Today’s business must sharpen their pencil do a degree of precision never before required in business.  That is why the small businessman struggles today like never before.

Most small businesses are good at their trade, but they aren’t trained in finance, statistical analysis, law, marketing, advertising, HR, etc.  These skills provide big business the growth opportunities and safety nets required to thrive.  But as was stated in the opening paragraph - at $300 - $1,000/hour they can’t reap the rewards fast enough to pay for those skills.  Therefore growth and safety elude most small business, leaving many to faulter and fail.

In the last decade’s wave of the mega-store and mega-business, the number of small businesses that believed with great passion that ”their larger competitor couldn’t service the client as well” quickly fell very silent as one by one they folded.  They didn’t know what the big guys knew about business, profitability, and the vulnerability of the small business.  If only the small business could get a glimpse of what their business might look like today if 3 years ago they put experts in HR, IT, Legal, Finance, Accounting, Operations, etc. to work for them. 

Whether they see it or not, finally, they now at least have that option.  There are now new tools and delivery methods that bring those very skills to the small business market.  Today, a business owner can gain DAILY access those game changing financial, legal, marketing, sales, advertising, and other skills - for about the price of a “value meal”/day.  Find out more at www.businessoptimization.biz