Choosing the Form of Business Organization

Basic Business Cents

One of the first questions facing an entrepreneur is what type of organizational structure is best for the start-up company. This is a key decision that could have serious consequences later; one that many entrepreneurs are ill equipped to make. A free publication by the Small Business Assistance Office of the Minnesota Department of Employment and Economic Development (DEED), titled A Guide to Starting a Business in Minnesota, devotes 60 pages to this subject. This 357-page book covering a variety of start-up considerations can be obtained without charge by contacting:

Telephone: (800) 310-8323,

Fax: (651) 296-5287, or

Email: deed.mnsbao@state.mn.us

A simple comparison of the four basic business structures can be viewed by comparing pros and cons of each. Note, this is the author’s opinion drawn from research and experience and does not constitute a legal position. Legal advice must come from an attorney admitted to the bar in Minnesota and is a necessity for anyone considering starting a new business.

 

PROS

CONS

Sole Proprietorship Simple

Owned and controlled by one individual

Profits are taxed at the individual’s rate

 

Individual is responsible for all debts and obligations of the business

Individual bears the legal responsibility for the business

Partnership

   General Partnership

 

 

 

 

 

Limited Partnership

 

All partners share equally in the right, and responsibility, to manage the business

Partners are taxed on their respective share of the profits at the individual’s rate.

The limited partnership must have one General Partner and at least one Limited Partner.

The limited partners share in the liability only up to the amount of their investment in the business.

 

Each partner is responsible for all the debts and obligations of the business

Partnerships lead to disagreements causing serious disruptions to the business

The General Partner has the right and responsibility to control the partnership but is responsible for the debts and obligations of the business.

Limited partners do not have the power to act or bind the business.

Limited Liability Partnership (LLP) The personal assets of the partners are shielded against liabilities incurred by business in tort and contract situations.

Profits are taxed on the individual’s respective share of the business at the individual’s rate.

Care should be taken that the correct initials must be displayed as a part of the name of the organization.

An LLP is a fairly new form of entity and not well understood by everyone.

Limited Liability Company Liability for business debts and obligations generally rests with the entity rather than with individual owners.

It is not subject to many of the restrictions that apply to an S Corp.

Must obtain both Federal and State Tax ID numbers.
Corporation

 

 

 

S Corp

 

 

 

 

C Corp

A corporation is a separate legal entity, which in most cases shields insulates shareholders from claims against the corporation.

An S Corp is taxed much as the same way as a partnership. Profits/losses flow through to the shareholders in proportion to their holdings.

Best liability protection for the shareholders.

 

 

 

 

 

 

The S Corp must meet the statutory requirements like no more than 100 shareholders, no alien shareholders, only one class of stock.

Dividends and salaries are taxed at the individual’s rates plus the entity has already been taxed at the corporate rate.

 

An individual or partnership that conducts business in Minnesota under a name that is different from the full, true name of each business owner must register the name of the business with the Secretary of State.  An assumed name will not be accepted if it is the same as the name as another entity on file. Business owners may call the information line of the Secretary of State (651) 296-2803 go to the web site at www.sos.state.mn.us to determine if the name is available.

All businesses will encounter certain organizational costs. Both legal and accounting professional help is strongly advised.

Source: A Guide to Starting a Business in Minnesota

Thirty-Second Edition, January 2014

Minnesota Department of Employment and Economic Development

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Lagging, Keeping, or Leading

Basic Business Cents

A System for Enterprise Excellence

Competition today comes not just from the competitor across town, across state, or even across the country. With the improvement and innovation in transportation and communications, we are faced with competitive forces from all over the world. Many organizations have built on this global reach and even outsourced some manufacturing and service functions. In truth, to remain competitive, many of our organization’s key processes must be refined, improved, innovated, and streamlined to remove redundancy, waste, rework, and unnecessary steps as well as add value. Since the national average of productivity improvement is 4.5% per year, we must exceed this pace if we are to become leaders in our field. As Dr. W. Edwards Deming said, “If we want to be ahead, we have to get ahead.”

To do this, we need the brainpower, commitment, and skills of every employee. This cannot be accomplished by fiat, threat, or extrinsic motivation. It must come from within each individual who has an understanding of what it takes to succeed. To ensure this positive commitment, however, there needs to be effective performance improvement processes and a management improvement system, which integrates these improvement processes to remove barriers, prevents the damaging effects of organizational silos, destroys ineffective bureaucracies, and releases the innovative potential of each individual.

Most of us have looked at our operations and have decided there is a significant gap between where we are and where we want to be. The question is what to do?

In determining an improvement system, we need to do the following:

  • Create Real Results:  Improve the bottom line on the income statement.  Simply using a method that cuts expenses is good but does not go far enough.  What is needed is a system that also increases revenue – the top line. For non-profits, the management improvement system must significantly improve the operations of the organization as judged by the users, employees, and the owners.

 

  • Ensure Commitment:  Increase morale and ensure awareness, understanding, and/or commitment of everyone. The system must engage all employees in a quest to obtain a vision that is accepted to all and provide the methods to achieve it.  It must foster a sense of accomplishment and pride of work.

 

  • Is Action Based:  Provide solutions in response to real needs, not to a pre-ordained solution. The resulting system must effectively integrate all of the process improvement initiatives.

 

  • Create a Culture of Excellence:  Recognize the need to address the human side of action, not just the technical issues. It has to make sense not only to top management, but also to all employees. Clearly, people function best in an atmosphere of mutual trust and respect without fear of making a mistake.

 

  • Is Easy to Enter and Embrace:  Must allow different organizations that are at different stages of maturity in their improvement journey to use the management improvement systems to achieve similar results.

 

A proven comprehensive improvement system is named ADAMS for the acronym, Assess, Discover, Act, Manage, and Sustain.

 

Phase 1. Assess–Before we can take the first step in improving our organizations, we need to truly assess the current situation. We need to know where we are before we can decide how to get where we want to go.

 

Phase 2. Discover—With a clear vision of our current performance, the next phase of ADAMS allows us to gain a more comprehensive understanding of the underlying problems and issues preventing our organization from closing the performance gap.

 

Phase 3. Act—Assessment and discovery are fine, but what counts in the final analysis are resulting actions. If we do nothing with our information, we have failed.

 

Phase 4. Manage—Once we have determined our assessment, direction, and deployed our improvement initiatives, the most important function is to successfully manage all of these activities. This is an iterative process where we often return to review our assessments and verify our approach and progress.

 

Phase 5. Sustain—Finally, the major challenge we must face in completing these deployments is the real possibility of the trailing-off of performance improvement. We can be successful with assessment, discovery, action, and management, yet still run the real risk of seeing initial success but long-term failure.  If we want to be world-class leaders, we must master the phase of sustainability.

 

All organizations have gaps in where we are today to where we want to be tomorrow. The ADAMS system provides a disciplined method for closing that gap.

 

The next column will address details of how to deploy ADAMS in your organization.

 

 

 

 

 

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Nuggets of Knowledge

Basic Business Cents

Advanced Strategic Improvements Practices

2014 Conference

Dr. Charles Liedtke, owner of Strategic Improvement Systems, hosts the Advanced Strategic Improvement Practices Conference each year in the Twin Cities where representatives from selected organizations present their performance improvement initiatives, results obtained, and lessons learned. It is a great day of sharing and learning from each other. Presenters at the conference this year were from Hennepin County, MN Office of Continuous Improvement, MN Department of Human Services, Mayo Clinic Health Systems, IBM, Buckman Associates, Hormel Foods, Cargill, Strategic Improvement Systems, Toro, Process Management, and Seagate.

This year was the best yet as the activities appeared to be more complete, well rounded, and focused on the leadership and people aspects as well as process improvement.

Some of the nuggets of knowledge that resonated with me are:

  • Tap the power of hidden influencers. In every organization there are untitled leaders at all levels, who demonstrate that they can get things done beyond what their title on the organization chart might indicate. Enlist the aid of these hidden leaders to further the improvement activity.
  • Leaders may provide direction, but do they provide leadership? Are they modeling the way? Do they recognize that they have work processes that they perform and do they work to improve those processes? Perhaps we are not doing enough to help senior leadership become effective change agents. Training and coaching are important for both formal and informal leaders. They need to become role models by improving their own processes. Leaders lead!
  • Government entities do not share knowledge improvement lessons learned internally as well as industry. Promotional opportunities are fewer and individuals sometimes hoard knowledge learned to increase their chances of advancement. Unfortunately, this is true in industry as well.  Improvement lessons learned must be shared openly and applied across the organization.
  • Provide education and coaching for all employees to understanding and obtain commitment for performance improvement and innovation.
  • Improvement ideas can come from anywhere; sometimes the best ideas come from the front-line staff. Everyone in the organization has a brain and do not overlook any resources.
  • The following quote from Roger Milliken was shared, “Operational Excellence secures the Present.  Innovation Excellence secures the Future.”   The world is changing so fast that we must continue to innovate products and processes.
  • One organization gave the Baldrige Explorer Survey to 200 employees and discovered that there was very little understanding of what their work systems were. As a result, the feedback on strategic improvement had marginal utility.
  • Create current Value Stream Maps for Engineering (and other departments) first and then create future Value Stream Maps for review for all employees. Once these maps are developed, they will generate ideas for improvement and innovation. As the ideas are generated and maps redrawn, more ideas will emerge.
  • Make sure improvement changes are sustained and do not slip back to the old way of doing things. Building a sustainable enterprise needs to be integrated with the Strategic Planning Process as an explicit strategic intent. Business needs to completely incorporate sustainability action in the way of doing business; it needs to permeate every decision and every part of the operation.

This sharing of knowledge learned in the various strategic improvement practices added useful knowledge to all the attendees. The presentations get better each year and this year was no exception. It was a privilege to attend and learn.

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Strategy Execution

Basic Business Cents

Football coaches are fond of explaining a loss by assuring reporters that they had a sound game plan but the players just didn’t execute. In my opinion, that is just a cop out by insecure coaches as they have the responsibility to prepare the players. Tragically, that is also often the case in business.

Strategy Execution is an interesting term, but does that mean to implement it or kill it?  Unfortunately in many organizations strategy faces a slow death by neglect. It is just as necessary to develop and follow up on an execution plan, as it is to develop the strategic plan. Words without action are useless.

But, development and execution are not the only elements of good strategy management; communication and revision are also key elements to address.

Typically organizations look at their strategy as either brilliant or mediocre and their execution as brilliant or mediocre. The aim of the organization is usually developed by the top executive, followed by the top management team, who develops the strategy to reach that aim. This strategy is then handed down to employees to execute. In this way, each group can blame the other if desired results are not obtained.

We must remember that each employee has a brain and it is an asset that should not be overlooked by management. In addition, employees are closer to the work and usually closer to the customers.

Upon development of the strategy, it must be communicated to all employees in such manner that they fully understand and embrace it. In the past, strategy was often considered company confidential and many employees were considered to not have a need to know; they were just considered as arms and legs to do what they were told.

To obtain that level of understanding and enthusiastic buy in, in-depth discussion needs to be held with management willing to listen with an open mind to feedback. Ideally, all employees would be involved in the development of the strategy but that is not always possible. All people need to understand that communication is comprised of two parts, sending and receiving, so time must shared equally between presenting and listening. Reasons for the strategy, assumptions made, rationale, marketplace trends, available technology, etc., should be discussed and understood. It is always a good idea to document the assumptions because often we cannot remember at a later date why we made certain decisions.

Following the communication sessions, the strategy implementation can commence. The strategy is cascaded downward through the organization with each level defining the action required of them to meet the overall strategy. Leaders should be identified for each strategy and progress monitored at monthly meetings. Management should visit all work areas and discuss what problems are being encountered with the implementation of the new strategy. With full understanding of the strategy, the employees should feel empowered, not constrained. If not, management needs to investigate the obstacles and remove them. At this time, management needs to be flexible and if real problems are encountered, be willing to review and adjust the strategy. Mutual trust and respect must be obtained, up, down, and across the organization, so that employees are enabled and empowered to change if needed. A good strategic plan is a living document and grows with implementation and changes in the market. It should be dynamic, growing, and exciting.

Good strategy management does not just consist of development and execution, either of which can be brilliant or mediocre, but four elements-development, communication, execution, and revision. It then become “our plan” and is in a constant state of continual improvement, always keeping the aim in mind.

 

 

 

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Strategy Execution

Basic Business Cents

Football coaches are fond of explaining a loss by assuring reporters that they had a sound game plan but the players just didn’t execute. In my opinion, that is just a cop out by insecure coaches as they have the responsibility to prepare the players. Tragically, that is also often the case in business.

Strategy Execution is an interesting term, but does that mean to implement it or kill it?  Unfortunately in many organizations strategy faces a slow death by neglect. It is just as necessary to develop and follow up on an execution plan, as it is to develop the strategic plan. Words without action are useless.

But, development and execution are not the only elements of good strategy management; communication and revision are also key elements to address.

Typically organizations look at their strategy as either brilliant or mediocre and their execution as brilliant or mediocre. The aim of the organization is usually developed by the top executive, followed by the top management team, who develops the strategy to reach that aim. This strategy is then handed down to employees to execute. In this way, each group can blame the other if desired results are not obtained.

We must remember that each employee has a brain and it is an asset that should not be overlooked by management. In addition, employees are closer to the work and usually closer to the customers.

Upon development of the strategy, it must be communicated to all employees in such manner that they fully understand and embrace it. In the past, strategy was often considered company confidential and many employees were considered to not have a need to know; they were just considered as arms and legs to do what they were told.

To obtain that level of understanding and enthusiastic buy in, in-depth discussion needs to be held with management willing to listen with an open mind to feedback. Ideally, all employees would be involved in the development of the strategy but that is not always possible. All people need to understand that communication is comprised of two parts, sending and receiving, so time must shared equally between presenting and listening. Reasons for the strategy, assumptions made, rationale, marketplace trends, available technology, etc., should be discussed and understood. It is always a good idea to document the assumptions because often we cannot remember at a later date why we made certain decisions.

Following the communication sessions, the strategy implementation can commence. The strategy is cascaded downward through the organization with each level defining the action required of them to meet the overall strategy. Leaders should be identified for each strategy and progress monitored at monthly meetings. Management should visit all work areas and discuss what problems are being encountered with the implementation of the new strategy. With full understanding of the strategy, the employees should feel empowered, not constrained. If not, management needs to investigate the obstacles and remove them. At this time, management needs to be flexible and if real problems are encountered, be willing to review and adjust the strategy. Mutual trust and respect must be obtained, up, down, and across the organization, so that employees are enabled and empowered to change if needed. A good strategic plan is a living document and grows with implementation and changes in the market. It should be dynamic, growing, and exciting.

Good strategy management does not just consist of development and execution, either of which can be brilliant or mediocre, but four elements-development, communication, execution, and revision. It then become “our plan” and is in a constant state of continual improvement, always keeping the aim in mind.

 

 

 

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Written Communication

Basic Business Cents

“I cannot forecast to you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma; but perhaps there is a key. That key is Russian national interest.” Winston Churchill in a radio broadcast in 1939

No, this not a political article but the quotation is useful to point another puzzle wrapped in an enigma that we are faced with today. Communicating through writing is essential in the modern world and is becoming ever more so as we participate in the information age. Yet, the current generation is thought to have terrible writing skills and use of proper grammar. We are living in an era where we have a flood of information but a drought of knowledge. We need to overcome this puzzle wrapped in a riddle if we want to be successful.

Written communication is more permanent and raises accountability. It is a lasting document that can be used for reference, guidance, and holds the author accountable for the truth of the document. Therefore, care must be put into the content. Fortunately, time can be taken to proof read, think about what is said, how others may interpret or misinterpret, and whether it clearly conveys the intention of the author. This is not always the case with oral communications.

Written communications need to be complete, concise, clear, and courteous. The document should contain the facts needed to support the aim of the communication but only those pertinent. It should rarely be more than one page long or it is in danger of being put aside until the reader finds time. Most people are very busy today and that time to read long treatises rarely is found. At the same time, do not fall victim of saving time by using acronyms. They mean something to the author but often not the reader. I sometimes jokingly say, “I would like to stamp out all acronyms ASAP” to prove a point. I need to follow my own advice; ASAP stands for As Soon As Possible.

It helps to clarify intent if you use active verbs to be more action oriented, and clearer about what you want to accomplish. Improper grammar can cause the reader to focus on mistakes and miss the point of the message.

Always remember to be courteous; don’t burn bridges that will haunt you later. Remember written documents are permanent. You are more likely to receive support and cooperation if you show respect and trust.

Emails have become a common means of communication and most of the common sense rules above are applicable in this medium as well. We tend to become lazy, hurried, and less formal with emails, but they are still are permanent documents in which we need to take care.

The first, and maybe most important, thing to remember about emails is to choose the subject line carefully. It may determine whether the reader opens the email. Clearly define the topic, relevant times and places, and key words. Personalize the subject line if possible.

Use only one topic per email and keep it short and to the point. Bullet points and formatting are helpful in adding clarity and conciseness.  Other rules above apply. If action is required, list desired results and times involved.

If replying to emails, direct your response to only those who have a need to see it; don’t hit reply to all if not required, so you are not cluttering up their inboxes.

In this age of smart phone messages, tablet computers, and other electronic help, writing skill is more important than ever to business success. If only I had paid more attention and studied grammar harder in school.

 

 

 

 

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Reinventing Your Organization

Basic Business Cents

Are you in the business of manufacturing buggies or people movers? Most industry-changing innovations come from without the industry. Why? Because companies are so focused on their competition that they lose focus on the needs of their customers.

You can never win a race by following the leader, yet we do it all the time in business. We spend too much time studying the competition; trying to anticipate their next move. We should be aware of competition and their trends, but we need to spend more time studying the customers, desired customers, and their trends. There is no substitute to holding dialog with your key customers. They may not know their real needs in the future but you will not know that until you talk to them.

Many organizations today find themselves in a mature or declining industry that does not bode well for the future. It may be that the more important aspect of the business is that the leadership is mature and not providing fresh direction.

Imitation of your competition may be the sincerest form of flattery but it will not get you ahead. “If you want to get ahead, you have to get ahead” said W. Edwards Deming. You need to challenge conventional wisdom of how to run your business. You need to develop a creative plan for the future.

As with any plan, top management needs to share an articulated aim of the organization around five years forward. This is easier said than done as it requires stepping out of your comfort zone and think outside your usual framework. By asking difficult questions of yourself and agonizing over the proper answers, you can stretch your imagination and develop an inspiring, compelling, and memorable aim for all employees to strive toward. Some examples are:

  1. What business are you in?
    1. What business should you be in?
    2. How are you differentiated from your competition?
    3. Which customers do you desire to serve in 5 years?
      1. What will be their wants and needs?
      2. By what means will you reach them? On-line sales or promotion? Electronic word-of-mouth? Some method not yet available or thought of?
      3. What will be the required delivery method and in what time?
      4. What do you have to create to satisfy those needs?
        1. Is the technology required in view or does it have to be invented?
        2. In what areas do you need to build your skill base to be successful?
        3. How can you be financially successful meeting those customer needs?
          1. Do you have a financial projection for the next year by month including cash flow?
          2. Do you have sufficient cash capital to carry out your plans?
          3. What are your expectations for profitably for the next five years?
          4. In what way can you define your market so that you can dominate?
          5. What changes are required in hiring, compensating, communicating, and treatment of employees?
          6. Are you having fun?

Once the aim is shared and enthusiastically accepted by all employees, then a strategy can be developed to reach that aim in the 5-year time frame. Involve all employees as each of them possess a good brain and can contribute good tactics and strategy. They are closest to the work and probably closest to customers. By participating in the development of the strategy, all employees are more likely to execute the strategy. They will help management keep everyone’s attention focused on reaching the aim in the planned timeframe and achieving success.

All work is a series of processes that need to be constantly improved and innovated. Business strategy is no exception. The first organization to act on a new idea usually reaps the benefit. All we want is an unfair advantage and we can get that with creative planning.

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Successful Public Speaking

Basic Business Cents

So you have been asked to give a talk; are you excited or apprehensive? It doesn’t make any difference if you prepare and rehearse properly, you will become comfortable with your ability to effectively get your message across. It doesn’t matter if your talk is 5 minutes to your church group, 20 minutes to Rotary or Lions, or an hour key-note address to a large crowd, the home-work is the same.

Harvey Mackay, author of Outswimming the Sharks, said, “The best way to sound like you know what you are talking about is to know what you are talking about.” It is important to research and study your subject so that you can develop a focused message that will be a valuable take-away for the audience. But it may be more important to research and study your anticipated audience. Ask yourself what are they interested in and what are their expectations. Relate your message in terms of benefits to the audience. They are not there to hear how smart or how eloquent you are, they are there to hopefully hear something that might be useful to them.

A secret weapon in speaking is to create a mind map that can be visualized. Start by dividing your talk into three main points you wish the audience to remember. Place them in three circles on a sheet of paper and add additional points radiating from the appropriate circle. If you try to put your talk into a standard outline form, you force your brain to think serially and it just doesn’t work well that way. Thoughts come randomly and they can be placed on the proper circle as they come to mind. Keep audience interest by adding stories or anecdotes to emphasis points throughout the talk.

Having done this in your preparation, you will be surprised at how you remember this map in the delivery of the talk. You will find that you may not need notes, or at least only this one page. When finished with this map, you have the body of your message detailed and only now it is time to develop the introduction and conclusion. A professional speaker once told me that the audience will only remember three things after your talk; the introduction, the conclusion, and the stories. This is rather disheartening after you have studied your subject so hard but there is probably more truth to it that you might like. This only emphasizes that your stories must be relevant and properly enforcing key points of your message.  Stories and anecdotes keep the audience interest and, properly used, reinforce key points of your message.

The introduction should be a “grabber” to get the audience attention. The conclusion should be a memorable one-line summary of your key points that leaves the audience on a high note.

Next comes rehearsal- practice, practice, practice. When you think you are ready, ask a friend to listen to you or tape yourself so you can listen and learn. Practicing out loud is important. When you become satisfied and comfortable with your talk, you are ready for the delivery.

First of all, remember to teach and not preach; the audience will appreciate you more and you will be more effective. Pay attention to your appearance and personality. The audience will feed off of what they see of you. If you look like you are having fun, they will have fun. If you appear dismayed, they will be also. Put a smile on your face; be confident, and enthusiastic. Be animated, energetic, gesture, and be alive. Maintain eye contact and talk to the audience, not at them. Be engaged with the audience, ask for questions if you like, or use other means to get them involved. Any talk worth listening to, is worth learning by the speaker, so don’t ever read your talk. If you use slides, remember no more than three lines per slide and no more than three words per line. Use slides to emphasize points, not as an outline to follow.

The talk may be over but not your effort. Write a hand-written not to the person responsible for your speaking opportunity. Take time to criticize your performance and list what you can do to improve next time. Obtain email addresses of attendees to expand your network. If questions were raised and you are not satisfied with your answers, follow up with a short email containing further thoughts.

You prepared well by studying your audience and subject, you developed a mind map and rehearsed so you did not need notes, and you were comfortable in your delivery. You are now an effective and successful public speaker.

 

Basic Business Cents

Successful Public Speaking

So you have been asked to give a talk; are you excited or apprehensive? It doesn’t make any difference if you prepare and rehearse properly, you will become comfortable with your ability to effectively get your message across. It doesn’t matter if your talk is 5 minutes to your church group, 20 minutes to Rotary or Lions, or an hour key-note address to a large crowd, the home-work is the same.

Harvey Mackay, author of Outswimming the Sharks, said, “The best way to sound like you know what you are talking about is to know what you are talking about.” It is important to research and study your subject so that you can develop a focused message that will be a valuable take-away for the audience. But it may be more important to research and study your anticipated audience. Ask yourself what are they interested in and what are their expectations. Relate your message in terms of benefits to the audience. They are not there to hear how smart or how eloquent you are, they are there to hopefully hear something that might be useful to them.

A secret weapon in speaking is to create a mind map that can be visualized. Start by dividing your talk into three main points you wish the audience to remember. Place them in three circles on a sheet of paper and add additional points radiating from the appropriate circle. If you try to put your talk into a standard outline form, you force your brain to think serially and it just doesn’t work well that way. Thoughts come randomly and they can be placed on the proper circle as they come to mind. Keep audience interest by adding stories or anecdotes to emphasis points throughout the talk.

Having done this in your preparation, you will be surprised at how you remember this map in the delivery of the talk. You will find that you may not need notes, or at least only this one page. When finished with this map, you have the body of your message detailed and only now it is time to develop the introduction and conclusion. A professional speaker once told me that the audience will only remember three things after your talk; the introduction, the conclusion, and the stories. This is rather disheartening after you have studied your subject so hard but there is probably more truth to it that you might like. This only emphasizes that your stories must be relevant and properly enforcing key points of your message.  Stories and anecdotes keep the audience interest and, properly used, reinforce key points of your message.

The introduction should be a “grabber” to get the audience attention. The conclusion should be a memorable one-line summary of your key points that leaves the audience on a high note.

Next comes rehearsal- practice, practice, practice. When you think you are ready, ask a friend to listen to you or tape yourself so you can listen and learn. Practicing out loud is important. When you become satisfied and comfortable with your talk, you are ready for the delivery.

First of all, remember to teach and not preach; the audience will appreciate you more and you will be more effective. Pay attention to your appearance and personality. The audience will feed off of what they see of you. If you look like you are having fun, they will have fun. If you appear dismayed, they will be also. Put a smile on your face; be confident, and enthusiastic. Be animated, energetic, gesture, and be alive. Maintain eye contact and talk to the audience, not at them. Be engaged with the audience, ask for questions if you like, or use other means to get them involved. Any talk worth listening to, is worth learning by the speaker, so don’t ever read your talk. If you use slides, remember no more than three lines per slide and no more than three words per line. Use slides to emphasize points, not as an outline to follow.

The talk may be over but not your effort. Write a hand-written not to the person responsible for your speaking opportunity. Take time to criticize your performance and list what you can do to improve next time. Obtain email addresses of attendees to expand your network. If questions were raised and you are not satisfied with your answers, follow up with a short email containing further thoughts.

You prepared well by studying your audience and subject, you developed a mind map and rehearsed so you did not need notes, and you were comfortable in your delivery. You are now an effective and successful public speaker.

 

 

 

 

 

 

 

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Improving the Health of Your Business

Basic Business Cents

Everyone would like to find the magic recipe to improve his or her business. I have a secret; it doesn’t exist unless you consider thought and subsequent action a secret.  Deming said people hope for instant pudding. Kano said improvement is a hot and sweaty job.

Maybe it is not so hard if we break it down to the three major business areas, marketing, production, and finance, and then work on those areas.

All work is composed of a series of processes. There is a tremendous breakthrough when people understand their processes and then seek to flow chart, improve, replace, and/or innovate better processes.

This certainly applies to marketing, which includes sales, promotion, advertising, networking, and planning. What works and what doesn’t work? Improve continually those processes that work and stop or cut back on those that don’t work to bring desired results. You probably would be better off replacing some marketing processes as the field of marketing is changing rapidly with electronic media rapidly bringing new marketing opportunities. Be critical of your marketing actions; if you are doing something solely because that is the way it has always been, you can be assured that it is wrong.

Production is a broad term; I use the context meaning of performing the transaction of the business, the changing of input into output. It can be the assembly of a product, the performance of a service, or the movement of merchandize in retailing. Start by identifying the major processes of the business and then chart all the action steps in each process. Once you see it in black and white, you will inevitably find ways to streamline and simplify the process. You will be looking for ways to remove complexity, improve quality, and improve throughput, or simply put—better, faster, and cheaper.

Finance is typically thought of as the reporting of the results of marketing and production, but it has a bigger role. This means its processes can also be improved. Certainly it means the reporting of the revenue and expenses with the resulting net profit and cash flow. It should also detail a pro forma projection of these four elements for the next year as a minimum by month. Without this prediction of the future, it is like driving your car by looking in the rear view window. With this financial forecast, management can see the effect of their decisions by the impact on the future projection, thereby making it the most valuable management tool at their disposal.

This brings us to leadership. Leaders need to set the example by charting, improving, replacing, and innovating steps in their work processes. Leaders are the role models; people will follow their actions, not their words.

Maybe there is a magic recipe after all; it simply involves time, thought, and effort.

 

 

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Improve Your Decision-Making Process

Basic Business Cents

I have a friend who used to become so stressed when faced with a decision at work that he became physically ill. His doctor finally advised him to resign from his position and he retired early. That is an unusual case and most of us are much luckier when faced with decisions.

You make many decisions every day. Some are easy, some are challenging, and some are difficult. Some are of little consequence, and some are very important. Some of you find making decisions easy and some find it very stressful. No matter the conditions, higher quality, more timely, and easier decisions can be made with a standard process that you follow on a regular basis. Acronyms are sometimes useful in aiding our memory of the steps of a process, such as the CADET Decision-Making Process.

C. Classify the Type of Decision. Some decisions must be made instantly because time demands an immediate decision. In this case, you must rely on your experience, intuition, and training and make the best decision that you can. When you have more time, you can categorize your decision into one of three types. If it is of little consequence, you can again use your experience, intuition, and training and make the decision and go on to more important work. If it is more important or challenging, then walk through the CADET Process in your mind and make the decision.  It is useful to make a chart of the pros and cons of the decision, either on a flip chart or white board if in a group, or simply on a plain sheet of paper if by yourself. If the decision is critically important, then research the problem necessitating the decision and analyze the data collected on the consequences of various decisions.

A. Identify and evaluate Alternative Solutions. You might go to the people directly involved with or affected by the decision and brainstorm all possible alternatives. Two to ten heads are usually better than one.  More than ten begins to diminish the effectiveness of the time used and quality of input. Collect data on the problem requiring the decision. Good data always simplifies decision-making. Again, talk to the people involved and evaluate alternatives and their consequences. It is possible to do research on what others have done, both inside and outside your organization, when faced with a similar decision.

D. Make the Decision. After you are satisfied that you have sufficient data and input from the people involved, don’t procrastinate. You are probably being paid to make such decisions and not for waffling. Waffles get eaten. Remember the maxim attributed to Theodore Roosevelt, “In any moment of decision the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

E. Execute the decision. It is wise to communicate the reasons for the decision to the people involved and to management. Remember, don’t just tell them, discuss it with them to make sure they understand and agree.

T. Test the impact of the decision. If possible, implement on a test sample and support your theory used in making the decision. If the results are positive, roll it out across the organization. If not, reenter your decision-making process armed with what you have learned. Whether or not you implement on a test case first, monitor the results to ensure you are achieving what you desire.

Learn all you can from your experience with the CADET process to improve your decision-making ability for the future. As with any process, regular use will improve your comfort and ability to get results, improve your skills, and increase your usefulness to your organization.

 

 

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