Not a money person? You’re not alone. Many small business owners are not money people. And there is nothing wrong with being a great idea person or adept at business development. However, thinking that just paying attention to your “cash in, cash out” is the only information you need means you are missing a great deal more information.

In previous posts about living business plans here , here and here, I’ve written about the importance of having a living document and designing it so you use it on a quarterly basis. It’s great to have well written goals that keep you in action and being clear about what you want to accomplish is crucial. But, at the end of the day, how do you know if what you’re doing is working? How do you know if you’re making money? It’s all in the financial reports.

The 3 most important reports

1. The Balance Sheet is like a snapshot of your small to mid-sized business (SME) for a given moment in time. It details the company’s assets, liabilities and net worth.

Now, before you let your eyes glaze over and shut off your brain, let’s take a closer look. It is highly recommended that you read more about   these definitions at AllBusiness.com (highly recommended site) as this post is using just the basic definitions for brevity.

Asset: an economic resource that is expected to provide benefits to a business. A few examples of this include real estate, cash, inventory, machinery or a patent. There are also sub-categories that may be important to understand if you are planning to speak with investors or a banker. In your living business plan, it is important to know what your business owns that carries a tangible or intangible value.

Liability: a debt or financial obligation. A few examples  of this are money owed to vendors, estimated tax payments or loan payments. For those of you who offer a money-back guarantee or warranty, this may also be a liability.

Net Worth: total assets less your total liabilities. This is also sometimes referred to as retained earnings. Imagine it like a simple math problem Assets – Liabilities = Net Worth

If you aren’t using accounting software or have an accountant creating this document for you, you can find a good template here to get you started. Seeing it all lined up in categories and numbers can help you see the overall picture of what your small business is doing right now.

2. The Profit and Loss Statement is another sort of picture of the health of your SME. Simply put, it lists how much revenue (money coming in) is being generated and your expenses (money going out) during a set period of time. This can be done monthly, quarterly, biannually or yearly. Other terms that mean the same thing are income statement or operating statement. This report cuts to the chase. Are you making a profit or posting loss after loss? If you find your business is consistently losing money, it may be time to revisit other parts of your business plan or consider an exit strategy (closing the business, selling it or hiring someone with better skills to run it).

3. The Cash Flow Statement reports revenue and income as well as expenses derived from selling services or products, investing in long term measures for the growth of the company and borrowing and/or selling common stock. This report really highlights the solvency of your business by showing how easily financial obligations can be met.

You can be a “money person” some of the time

You may not become totally enamoured with all kinds of financial reports but you can discover how useful they are as tools. There are moments that you will discover good or bad news. I remember one time in the early days of my business when I was sure things were going south. I was pleasantly surprised to discover that the cash flow was healthy and trending upward. There is plenty to lose sleep over. Knowing what is going on financially will help you sleep better and make proactive decisions.

*Want to learn more about living business plans? Join me for a 2-hour interactive Business Planning Workshop on Monday, October 17, 2011 from 6:00pm to 8:00pm at the Lowell Small Business Assistance Center, 88 Middle Street, Room 202, Lowell

Participants will:

• Revisit their vision, core values, and core purpose to make sure they are on track
• Learn simple methods to analyze and measure how their business is progressing so you can make course corrections before it’s too late
• Fine tune their current goals and map out steps so they stay focused on what their customers really want and stop wasting time

During the workshop, there will be written exercises using information from case studies and the participants’ own businesses. At the end of the workshop, participants will leave with a written version of their living business plan. To learn more about the Lowell Small Business Assistance Center, you visit their website or call (978) 322-8400.

Recent #kaizenblog chats got me thinking about how easy it is to go along with the fast pace of business. This fast pace seems to evoke a sense that we are machines placed in our workplaces to keep things functional. There are more and more words in our vocabulary that speak to machines and technology. We get amped up about new initiatives and ideas. How do you unplug? People tell me they just don’t have the bandwidth to take on new projects. We can dial-in people for meetings and be undertooled when we lack skills or resources. But what happens to work-life balance if we allow ourselves to be seen as machines?

Are we trying to be machines?

In a recent post on Small Business Trends, Susan Payton reported that the number of small business owners planning to take a vacation was a little under 50%. These are the ones who are planning to go on vacation. These leaves about 54% who are not taking time away from their business. While it isn’t clear that these business owners are truly going to work every day from now until the beginning of September, it is clear that a great  many feel apprehensive about leaving their businesses.

Does this 54% expect that they can act like machines and sustain their performance with no ill effects? Machines are designed to work nonstop. They don’t lose problem-solving skills to fatigue and anxiety. They also don’t feel resentful when other machines are shut off until needed again. People do suffer consequences when fatigued and do feel resentful when they perceive they are stuck. But we still expect ourselves to perform like robots in a perfect, predictable and uninterrupted way.

Do robots have a work-life balance?

There is always talk about work-life balance. Is it supposed to be 50/50, 60/ 40 or some other split? Is it supposed to favor the off time or the work time? One of my favorite ways to explaining work-life balance is a simple exercise.

Try this for a  moment…Stand on one foot for 1 minute and notice the adjustments your body makes as you stand there. Now, if you were a robot, you would have been programmed to stand perfectly balanced throughout the exercise. And how often is preventive maintenance performed on a robot or machine? Yes, even machines get downtime.

So what gives?

Well, you do for starters. Research has demonstrated that chronic stress is a great trigger for serious health problems such as cardiovascular disease and depression as well as links to cancer. Sounds pretty nasty, right? You may have good reasons for eliminating your vacation this summer. There may be good economic reasons why you can’t get away for an extended period of time. Just this week, one of my clients was expressing worry that taking even a week off could cause a major project deadline to be missed. Sure, these are real issues but…

The challenge is identifying how you are getting sucked into trying to be a machine and not a person.

Rather than getting all worked up that your work-life balance is out of whack, ask yourself about the words you use. Do they include references to machines? Are you feeling pressured to stay on the job because something might happen? Some people find out to their dismay that no one missed them while they took a long weekend. Sounds backwards, right? However, when you start believing that you must be present continuously for your business, you are allowing yourself to become robotic. The work gets done but that’s all. Innovation is hard to create with a tired mind. It’s easier to get aggravated or despondent. How does this serve your business or you?

Do you need to be always on?

Even in the darkest moments, it is important to give yourself some human time. What would happen if you decided to end every Friday at 3pm, no matter what? Imagine the experience of shutting your smartphone off for your lunchtime. Work-life balance isn’t easy and, frankly, it can change depending on where you are in your business cycle. It’s certainly tempting to give you suggestions on how to adapt your work-life balance so it is healthier. But that would be wrong. it’ s more important for you to take the time and ask yourself some questions. Such as, if you, the business owner, work like a machine, what message are you sending to your peers and your staff? Is this really what you want to say?

What is  your definition of work-life balance?

How does using words that evoke machinery or technology affect how we think about ourselves at work?

Productivity seems to be a hot topic lately. And yes, I’m adding to it too. But…why is it so stinking hard to stay productive?!

Productivity depends on habits, attitudes and reinforcement.

Habits

Sounds so easy, doesn’t it? But then, we work on new habits fairly often. How many of us are working on a new exercise program? Getting up in the morning and getting out for a walk or a run? That’s a new habit, well, actually a few new habits. Actually, it’s kind of cool how we develop new habits!

Let’s take a  little jaunt into neuroscience first. Our brains have the capacity to build new networks all the time. A habit is simply a learned behavior. So, as you do the new thing, you learn the behavior. Now, as you repeat the behavior, you make the neural pathway stronger. The other cool part of this is that when you are doing the new behavior, you reduce the frequency of the old habit and weaken that neural pathway.

Tony Schwartz has a good point. Rituals are  a good way to make learning new habits easier. They  have the benefit of combining rules and behavior in a prescribed manner. By following the same routine on a regular basis, say you choose to set an alarm for 2o minutes for uninterrupted work. This is a ritual. What routine could you turn into a ritual that would support your productivity?

Attitudes

This is stating the obvious but how we think and feel does have a huge impact on our motivation. According to Deborah Rinner, one act of incivility can have harmful effects on productivity. It doesn’t even have to be about the actual task you’re trying to complete.

And it’s not just incivility. It can also be exposed to negativity. It’s a tough time to be leading and managing a small business. If you focus on the bad news or spend time with the Doom and Gloom crowd, it’s easier to start telling yourself stories of how tough it is. It can creep up when you’re tired or under additional stress. It’s easy to start using coping strategies such as defense mechanisms like “all or nothing thinking” or projection or many of the other common ones.

So, the negative stories you tell yourself or just the unpleasantness of someone acting rudely towards you affects your attitudes. It becomes a loop which takes you away from your productivity.

Reinforcement

Who cares if you get your work done? Seriously. Is it your customers? Your employees? Your peers?

Even the most internally driven person needs a little sugar. Some kind of recognition that you truly are talented and valuable. It can be lonely running your small buisness. Carrying the weight around without comrades is wearying. That’s why mastermind groups, mentors, coaches, friends, family and/or a trusted peer is essential to your productivity. When you’re with people who know what you’re experiencing, it reduces feelings of isolation, anxiety and frustration. These are the feelings that eat away at your energy that could be spent on your work.

It also helps when you can see that what you’re doing is creating results. I recently was advised to write down everything I had been doing with my marketing and the results. I was totally amazed at how much I had done in just a few weeks. What would you see? How might that reinforce your actions?

Alignment of habits, attitudes and reinforcement is key to your productivity.

So much can happen in a day, a week or a month to get us on or off track. You hold so much responsibility in leading, managing and implementing the mission and work of your small business. When you are fully aligned, your performance is improved.  Building a system that makes sense to you is an important way to create alignment.

What surprises you about productivity?

What do you believe a small business owner needs the most to be productive?

While I’ve been focusing on business plans recently, there are often things in the background that will determine how much faith you put into your own planning and any action actually taken. Confidence is one of these things.

Confidence is a remarkable attribute in any part of life. Merriam-Webster online dictionary lists one definition as “a feeling or consciousness of one’s powers or of one’s circumstances”. In business, it’s a huge piece of any effective business plan. When we can clearly see our our choices and actions are successful, they build on each other. There is an aphrodisiac effect when we feel confident. People want to be around us. They believe that we can deliver our products or services and they will work. Like that feeling of first being in love, our customers want to tell others how wonderful we are. So what could possibly get in the way?

Emotions have a major influence in how we approach the hard work of our businesses.

My friend, Caroline pointed me to a post recently about emotions. It was an interesting tie in of how our emotions are tied into our emotional intelligence. Our instincts and perceptions certainly work on a nonverbal level that is useful. How many times have  you noticed that when you didn’t listen to your instincts that you ended up in a negative situation? We know stuff that we don’t realize we know.

But confidence can be built or eroded by emotion. Consider this-your skill level doesn’t suddenly evaporate. You still have the same body of knowledge and the same talent to serve your customers well. However, if you’re seeing your revenues decreasing or you just can’t seem to land new customers, your confidence generally drops. On the other hand, the times you’ve landed that fabulous client or solved a difficult problem, it gave you such a boost. There are days when you feel as if you couldn’t find your way out of a paper bag or, conversely, you are beautiful and people love you.

It’s not just our reaction to our performance that can grow or erode our confidence.

Circumstances in our environment can be taxing on our confidence as well. For small business, access to credit or consumer spending or lack thereof can drain one energy and motivation. The Irish Independent reported that the Small Firms Association ((SFA) urged that measures be taken to restore confidence to Irish small and mid-sized companies. Access to adequate networking, advice or governmental policies make up the environment in which we operate our businesses.  They fertilize our thinking and present opportunities for our growth. The way our peers respond to circumstances does in some way affect us. We may choose to get caught up in the zeitgeist or not but it is still in the air.

Sometimes personal issues have an impact on our confidence. It doesn’t take much to notice that we siphon off energy to respond to personal situations. They can be positive or negative events (e.g. weddings, children leaving home, illness or death) but they still evoke an emotional response.

Perhaps wisdom is in our awarenss of how we allow our emotions to grow or erode our confidence.

We’re going to feel our emotions, no matter what. As I often say, it isn’t the emotions that are good or bad. It’s what we do with them. The level of influence you have over a situation can markedly affect how much confidence you feel. And we have choices about how we express ourselves. Our choices encourage that glow and attraction that an aphrodisiac provides.

While it’s tempting on my part to provide suggestions for creating confidence that works like a love charm, it will be much more interesting to hear what the #kaizenblog community has to say. Please join us as we’ll be discussing ”Confidence, Emotions and Business Growth” on the Twitter chat, #kaizenblog on Friday, May 13, 2011 at 12pm ET/5pm BST/9am PT 

How would you describe the levels of confidence in your offline peers?

Could confidence have a fragility to it? Why or why not?

What is the relationship between experience, confidence and emotional intelligence?

What is it about confident people that attracts you?

It’s been awhile since I’ve written about living business plans. (This post might be a good place to start if you’re not familiar with this type of business plan). While my mantra is “Make your business plan usable for you”, it’s not always clear how to design this plan so to fits you. I remember being interviewed by an interested small business owner who wanted to know if she had to use an outline form. The short answer was, and is, no. So what can you use instead?

There certain parts that are necessary so that this document actually reflects that you are running a business.

No matter how visual, linear or whatever ways you write out your business plan, you still have to include:

1. Executive Summary

2. Services and products offered

3. Marketing strategies

4. Desired client profile

5. Financials

6. Company goals and objectives

This is entirely about how you work.

Keep in mind that this is not the business plan you’re showing to the bank or investors. It exists so you can keep focused as you lead and manage your business. It’s way too easy to get sidetracked by the day to day work, exciting opportunities or negative events. There’s a host of stuff out there that can get you off your game.  Couple this with your thinking and learning styles and it makes sense to write or draw your business plan your way.  And, of course, any goals that you include will include specifics, measurements and deadlines 

So, what are my choices?

Style 1:  Outline form- This is probably the most traditional.  With an outline format, list each category and use bullet points to specify the details. 

Style 2:  Fish Diagram-This style reads left to right with each category branching out into the specific components.   The Executive Summary is the “head” of the fish and the other parts of your business plan make up the body of the fish.  This diagram creates a visual image of what you desire for your small business.  The lines coming off the “body” of the fish are the details that you want to remember and/or implement as actions steps.

 Style 3:  Bubble Chart- This method is well suited for people who like to take a creative and/or visual approach to goal setting.  Write your executive summary in the center bubble and in the radiating bubbles, write the other sections of your business plan.  Each radiating bubble contains important details or the goals you wish to execute. The bubble chart allows you to keep track of  each section while having fun with your strategic and operational planning. 

Try out the different styles suggested here to see what works best for you. 

Your business plan is supposed to be a guide and a reference. It’s a live document that you can review, writing comments in the margins, scratch out what you don’t want, add on new ideas and use continuously. Consider how you learn.  Do outlines make things sensible to you or do you prefer pictures?  Do you tend to think in a step-wise way or in “stream of consciousness”?  These important details will aid you in designing how you think about and plan the actions in your business plan.  The cliché, “Keep it simple” also applies here because simplicity will prevent or manage feelings of overwhelm or distractibility.  It makes no sense for your business plan to become forgotten in a desk drawer or a computer file that it never opened. It’s a tool to keep you focused and motivated as you lead and manage your small business to successful outcomes. Make your business plan a living business plan!

What style makes sense to you?

What suggestions do you have that would help other small business owners create a written business plan?

What are the givens in your business? Are there things about your business that seem so definite and unchangeable?

I’ve been reading Killing Giants:10 Strategies To Topple the Goliath In Your Industry. It’s a very engaging read by my friend, Stephen Denny and the strategies he describes in the book run the gamut from gutsy to deceptively easy. Some of you may be considering taking a run at the giant in your industry. Others of  you may be wondering if you could just increase your market share and work around the giant. However, to move to the next stage in the business cycle, it’s important to know your capabilities, your limitations and the truth.

One theme that jumped out at me in Denny’s book was his question about what is a given and if it is constantly true. So, for you, are the givens really true in your business? Now that we’re entering a new quarter of the year, it’s a good time to review your strategic plan. Basically, check to see if you and your business are progressing well.

You’ve heard the phrase, “given the givens”? We believe certain things are true. Somehow they are immutable. What if they are not true? Maybe the givens are only partly true? Critical thinking is an important skill here. Imagine what would happen if you asked yourself what is true about your business. For example, who are your real clients? Sometimes small business owners are aiming for one type of client but they are actually paid by another. I’ll use my own business as an example. I thought I worked with entrepreneurs with small businesses. I really work with established small business owners who are transitioning from one stage of growth to the next stage in the business cycle..

 Another given people cite during planning sessions is the economic environment. It could be regional, national or even global. Certainly with the recent recession, memories are long. However, what is true about the economy you participate in? Even in the darkest days, there are businesses and industries who thrive and the opposite can be true when things are bullish.

And while we’re considering the  larger economic question, there is also being clear on what revenue streams are givens. What  really makes money for your company? Sometimes we believe that something is our primary moneymaker. Until you actually stop and look at all of your numbers and ask the question, you could easily assume something is set in stone.

A given is simply that…something we believe is set in stone. Maybe there are things about your competitors that aren’t true. Maybe there is something about you that’s not true. But you won’t know until you ask.

What are some givens that you believe need to be challenged?

You know you don’t grow your small business alone but so many of us get caught up in questioning how to ask for help. Truth be told, I’m just as guilty as anyone else. In a conversation with a friend and colleague, he asked me why professional women have a hard time asking for help. After thinking about it, I came away wondering if it is less about gender and more about our perception of our own competence and ability to solve problems.

It seems like you’re walking on a tightrope. How much do you say? How do you say it? There is a perception that if you show a weakness, people will perceive you as incompetent or that your business is fly-by-night. So that presents a dilemma. How do you ask for help without appearing weak?

We don’t know everything and we are not good at everything. There, it’s been said. We’re not superhuman.

It’s time to take advantage of our network. Is it a treasure trove when you need help with something? Sometimes our network inspires us because we spend time with people we aspire to emulate. Sometimes our network provides us with support when we share common experiences. Our networks also provide us with resources we aren’t aware of or have forgotten.

We create communities rich in connection. When we connect with others, we want to know what they think about, feel about, struggle with and celebrate. Typically, this is a reciprocal relationship. Think about the last time you were meeting people at a networking event. Who smiled at you? With whom did you laugh? Who did you really want to schedule coffee with right away? Within your existing network, who makes you feel good? My friend, Kate is one of those people for me. I don’t have to say a word about my business and I walk away feeling like a million bucks.

What would happen if you asked that person for help? It could be you need a referral for a virtual assistant, a lead on new clients, to hire additional staff or ask for business. Sometimes you need a simple sounding board or a good laugh.

So, what would happen?

What do you think gets in the way of asking for help?

*For more information like this live, check out my no cost webinar, “Achieving the CEO Mindset For Small Business Success” Thursday, March 31st, 7 pm BST/2pm ET. For more information and to register, go to Programs

As I read today’s SmartBrief On Leadership, I came across the results of their weekly poll. The survey question was “How closely do you think you will follow your strategic plan this year?” The results were thought provoking.

According to the poll:

We’ll generally follow the plan but expect a few major deviations   76.15%

We’ll follow it to the letter    11.62%

We may do a few things on the plan but generally ignore it and do something else   9.54%

We don’t follow it at all   2.68%

Is this happening in your small business too?

At the end of last year and the beginning of this year, many small business owners started thinking about what they wanted their business to accomplish in 2011. So, if we, like most small business owners, got the bones of our strategic plan put together. The three questions most associated with the strategic planning process are

1. Where are we now?

2. Where are we going?

3. How are we going to get there?

So you sat down and probably reviewed your organization’s overall mission, values or principles and what you envisioned for the year.  You probably did parts or all of a SWOT analysis. After this, you noted what big goal you’d love to celebrate on December 31st. More than likely, you identified what makes your organization special or even the specific advantage in the marketplace. You probably finished off with setting goals that will make these great aspirations reality.

So, if you went to all of this trouble, why wouldn’t you follow your plan?

There are a variety of reasons why people don’t follow their plans. For some companies, the strategic planning process was an exercise in lip service. For others, they scare themselves with their aspirations and shy away from making these dreams into reality. Sometimes things  happen (natural disasters, personal crises, major market shifts, etc) that make the plan irrelevant.

The strangest number in the poll above is 11.62%. Why do so few business leaders actually follow their strategic plan? You have to wonder what is really happening in the planning process. On the face of it, it seems like a colossal waste of time to go through the whole process and then relegate the plan to a shelf somewhere.

What’s the deal?

Why do you think strategic plans are not followed?

*For more information like this live, check out my no cost webinar, “Achieving the CEO Mindset For Small Business Success” Thursday, March 31st, 7 pm BST/2pm ET. For more information and to register, go to Programs

When you were a kid and just going out the door, did your mom ask you “where are you going?” How did you answer? Did you say “nowhere” or “just up the street” or maybe even say the name of one of your friends? You had an idea of where you wanted to go when you walked out the door.

So what about your small business?

When you’ve been in business for a while, you know esssentially where you going. There is a purpose to your business, right? Have you asked yourself recently, “where are you going?”

All businesses evolve over time. Sometimes by choice, sometimes by circumstance.  The people running them learn more about customer’s needs and wants or technology enables something to exist that couldn’t exist before. Someone comes up with an innovative product or system. The recent recession and economic recovery has caused some businesses to go back to their roots while other businesses are reinventing themselves.

All evolution.

With so much change, it ‘s easy to lose your True North.

Your business vision is your True North. How did you want your business to affect the world? One client I coached is committed to making it easy to communicate electronically. Another client sees her wealth management business as a tool for reliable, no stress retirements. For your small business, your vision provides the framework for the types of actions you take, the people you hire and how you stay motivated. It comes from your value system. Your vision is just over the horizon waiting for you.

To review your vision, ask yourself these questions:

1. What are your top 3 values right now?

2. What is the most important thing you want your business to accomplish and why?

3. How aligned are your current business goals with your business vision?

So, where are you going?

*For more information like this live, check out my complementary teleclass, “How To Use the CEO Mindset For Small Business Success” Thursday March 31st, 7 pm GMT/3pm ET

It’s always interesting asking small business owners to imagine themselves with different titles and words. In a recent in-person presentation about the CEO Mindset, I asked what words or phrases mentioned came to mind in reference to “CEO”:

• Chief executive officer          
• Buck stops here          
• Boss                     
• Money                                          
• Big                                   
• Big desk
• Big company 
• Coordinator                                                 
• Most responsible       
• Overseer
• Headaches                             
• Me                                          
• Mentor                
• Out of touch                              
• Working too many hours                         
• Them                                      
• Creative Force                                                    
• Leader

 So, what would Twitter folk say? Granted I was asking my followers so it’s not entirely random. However, you never know who is on and if they see what’s in your stream.

Barney Austen: Leader, Driving Force

Derek Edmond: Leader & vision

Celtic Seas: Most important role in an organization with or without a board

Gnosis Arts: leader, chief stakeholder

What does it mean to act as if you are the CEO of your small business?   With all of the different models of how to be a CEO, it make sense that some small business owners feel ambivalent about embracing or rejecting the title as CEO. If you look at larger corporations, you can see everything from criminal to inspirational. However, leading a small business is much more intimate. It is as likely that you will use your technical expertise while you are monitoring the greater organizational needs in any given day.

How about you? What words do you associate with the title of CEO?

What would happen if you chose to consider yourself as CEO of your small business?

*For more information like this live, check out my complementary teleclass, “How To Use the CEO Mindset For Small Business Success” Tuesday March 1st, 7 pm ET/4pm PT