When to Hire a Chief Operating Officer and why

Posted May 31, 2012 by Michael Fanghella
Categories: sale personnel recruitment

Tags: , , ,

Company culture starts with a common set of values.  Because the role of a COO can vary from company to company, you’ll want to assess which departments of your organization the COO should oversee – be it all or just a few.  “The company’s core performance is impacted by a number of non-core items,”

Hiring a COO can free up a CEO to focus on major external initiatives and foster new opportunities rather than being occupied with keeping multiple departments productive.  In practice, I’ve found that hiring a COO makes sense for most entrepreneurs.  While I’m sympathetic to the arguments against hiring a COO, I do believe the role can be highly beneficial — and even necessary — in certain situations.

By hiring a COO, the CEO usually the founder in a start up or next wave company can concentrate on the aspects of the position that he/she really excels at and loves the most.  Before hiring a COO, ask yourself if you’ll be able to delegate business operations and put in place a monitoring system to ensure that operational standards meet your expectations.  For example, hiring a COO to handle operational problems, someone who can manage legal, someone who’s great at business development and revenue partnerships and someone who’s a technology leader who can actually scale the technology team or mange an ever growing sales force.

The COO should be an effective personnel hire for your small business.  Typically, these types of leaders are interested in working on operating and growing a sustainable organization while the CEO is more interested in driving innovation.  While innovation is extremely important (i.e. Apple’s ability to grow through innovation alone), Even Steve Jobs needed to have someone who is ensuring all the pieces of the organization are aligned with the company’s vision and priorities.  This is where a COO would be extremely valuable to an innovation focused leader. So Look at the experience of you hire and not at yourself in the mirror.  When you are in the grand forest of the business world you don’t really want the only sound you hear there to be an echo of your own voice.

In a world where good business practices and corporate governance are daily credos find one that has some dirt on his/her shoes because experience is more valuable than a alphabet soup monogram after their name. Check this article out at http://www.entrepreneur.com/article/73392

Funding Your Business in Today’s Ever Changing World

Posted April 11, 2012 by Michael Fanghella
Categories: Funding a Business

Tags: , , , , , , ,

If your business has easy access to business capital then you have a serious advantage over your competitor. The question is how to get it.  It can be from cash flow currently generated, it can be gotten as equity but more often or not it is collateralized and as such is a debt instrument of some sort that may cross over to equity but not just now.  This type of funding is secured to many different things be it a Small Business Loan (SBA), a peer to peer lender, a small business private financier, merchant financier, a leasing company often seen in leasehold financing and finally friends and family.  Why haven’t I mentioned Angels, VC’s etcetera.  Well if this is your first go around there’s a 99% chance they won’t even speak to you.  Your preparation has to be tight and your understanding of your business plan exacting in its current and future paths all shown on highly calculated spreadsheets that show proposed performance basis believable assumptions. First can you explain your business in thirty (30) seconds or less.  If not you are not yet prepared to go in front of a venture capital/Angel investor, small business lender, even your friends and family.  So attend to that immediately.  Think this way no one is going to fund you out of their inherent niceness to their fellow man.

Often your benefactor will want first loss security and this comes in the form of your equity or in business or directly to your product or of that of your personal assets.  You said you are a risk taker now “you” will be risking not your assets because you are the voluntary stakeholder in this event, but the assets of involuntary stakeholders like your family aren’t. So think before you sign or better yet think before you decide to quit your job, invest in an idea or consider a franchise etcetera.  Business especially small businesses have quirky financial needs.  It is not like you just turn on a faucet and business pours out profitably.  There are ramp ups, market share analysis, branding of your idea or company.

In the 70’s and 80’s there was a proliferation of funding by major investment banks of multiple business concepts basis a the available tax benefits they could provide the investor  from tax pass through to their limited partners. That all for the most part ended in 1986 with the Treasury Act.

Today if you are in an Enterprise Zone and they exist in 21 states and by example there are 42 such zones in California alone you can receive major tax credits for a number of things.  Now if you seek investors you may think of forming a sub s corp. for tax purposes in any number of forms such as Limited Liability Company, or a Sub Chapter S Corporation.  These are entities that are limited in the numbers of investors they can have (35) unless they (the investor) are qualified investors (means sophisticated investors and able to bare the loss of any investment made in your entity as provided to you in writing prior to investment) and they don’t get counted into the number of investor (35) as mentioned prior.  But before you run off to do this I highly recommend, no I really highly recommend you seek the advice of a legal counsel as to the particulars in your state and what the rules both intra state and interstate are because once you step outside the state you are operating in to get investors you are now under federal fund raising guidelines. So take the extra moment for precaution. But if you do this correctly and are located in these Enterprise Zones you can pass through many of these benefits such as new hires, equipment, etc. as tax credits to those investors and thus mitigate their financial exposure in you investment.  There may be limitations and that is why I say speak to competent legal counsel before going ahead.  Remember a tax credit is a dollar for dollar reduction of taxes to be paid so it will generate some attention.  Another tactic is if you have a company who will use your product and or service they may wish to invest in your future and take advantage of such benefits because companies are seen as sophisticated investors.  So you can see there are many choices other than the more known such as Angels or VC’s.

Be prepared to explain the amount of funding your business needs and provide supporting financial data on your past (if any and tax returns also) and projected financial activity in the form of income statements, budgets and cash flow statements, among other documents.  Explain how you plan on funding your business venture in the next section, which will cover financial management.  Anytime this can be done by an acceptable third party such as an independent CPA firm that helps build creditably.

Be prepared to deal with the following questions apart from your financials:

1. Target markets –  Who are you aiming for and what needs through either products or services are you trying to satisfy? 2. Drivers of choice – What is the thing that will get these clients/consumers to choose you over the competition? (see my article on Blue Ocean thinking) 3. Core Business – what are the products and services that you must sell (core business) and what should you say about them? 4. Channels – where do you have to be seen and be available so people will know about the brand and be able to buy it when they want it?

In essence you are being asked to know your business inside out. That’s not such a bad idea after all.

Where to go you ask?

There is the U.S. Small Business Administration (SBA) as an invaluable resource for entrepreneurs. It offers several loan programs through participating local banks. For example, the Guarantee Loan Program provides loans to small business owners who cannot secure financing through other sources. While there’s no limit to the amount you may borrow, the SBA can only guarantee up to certain amount. In addition, you must provide collateral, such as your home, to support the loan. Check with your local SBA office for more information about loan programs or visit their web site at www.sba.gov.

SCORE is also a great small business resource you should seek out for advice as to how to reach the many avenues discussed above and can be found in most cities just by looking it up on the internet. But if looking remember the 5 C’s of lending for small business loans are Character, Cash Flow, Collateral, Capitalization and Conditions. The 5 C’s are the underlying principals behind lending and if you are not able to meet them that’s when it gets sticky.  There are bad credit business loans, there are collateral based business loans, there is merchant financing basis your cash receivables, but all these are expensive and quite frankly all place your business in harms way if anything goes wrong.  Because you are a business you are not out in the market as a consumer and as such will be viewed and classified as a commercial entity and not subject to the consumer protections often afforded to those who seek credit personally. So think fast but act slowly when taking this leap and of all things “to thy own self be true” when assessing your chances, your credit and your business plan.

A healthy business credit profile will allow you to keep good open lines of credit with vendors, easily establish new accounts, and obtain more business funding for future expansions and business growth. Investors are more apt to deal with businesses that have a healthy business credit profile as it gives them an extra layer of security knowing that their finances are stable.   Just like with personal credit, your business credit profile will be supported by credit bureaus. Dun & Bradstreet is the main bureau that will be tracking and providing your business credit score. In some cases, your personal credit score can be tied to your business, so it’s important to discuss this matter with your Cash Flow Experts program mentor to determine the benefit or harm this may bring.

Register your company with the business credit bureaus.  These are Dunn and Bradstreet,   Experian Business, Business Credit and Equifax Business.  If you do not have the time to build your business credit score and you need funds right away, there are a few different small business loan programs that you can take advantage of.   These loan programs are going to have higher interest rates but offer cash very quickly into your business. Regardless of the type of financing you obtain for your small business, one constant remains true at all times—there will be interest.   So don’t live beyond your personal means.

For more information contact michael@santafeadvisoryservices.com  or call 619 550 1198 for a free consultation.

Procedural Guidelines in Marketing Business Strategy

Posted April 2, 2012 by Michael Fanghella
Categories: sale personnel recruitment, Uncategorized

Tags: , , , , ,

By Michael Fanghella

This is a topic where we could get lost pretty quickly as the sands shift almost daily and a new idea promotes a new strategy as quickly.  But rather than go there I am going to suggest we look at just taking the issue at hand simply.

You spend lots of money to hire and train if needed sales personnel.  But have you made clear to them what you desire as a result from them and have they done the same with you?  Or has it been a sales effort by you when you were impressed with the candidate in front of you.   Often we get caught up in what we want so much we forget to review what we need.

If you can’t explain to a new hire or a veteran who is anticipating coming on board for employ what your company does in 30 seconds or less, be able in that discussion, explain what the company’s desired results are and allow the candidate to speak freely to see how they can achieve them, how can you expect them to figure it out on their own.  Truly you need to answer the following issues internally before asking your newest employee to charge out there. I find it amazing how many hiring directors hire without making sure of the prospect that everyone is on the same page.  Little things like who does he/she speak to when there are questions, where else in the organization can answers be gotten.  What procedures for pursuing and accomplishing the results so mutually set out are and what means of sitting down to review them by and between both of you to see if results aren’t forth coming have they been followed on both your accounts.  Often I will see the hiring entity explain away the question because honestly they have never thought about it.  They are too worried about “do you have industry contacts or background”.  I have seen more great sales people fail because they went to the next level with a firm that was not connected to the procedure to ensure success concept by having it mapped out.  Without a good process the sales person will in all probability fail.

This may mean that if the employee is off course a few adjustments can have a beneficial effect because when in review either they or you are off the guidelines as to what was originally discussed.  But that those procedures were set out to allow this analysis and correction on a weekly basis.   How often do we hear where a salesperson gets a 30 day probation notice after 60 days being there?  Were any procedures reviewed, did the manager sit down and review as to whether or not he and the company were fulfilling the compact by and between both parties.  You waited 60 days before noticing?  What it really means is that you don’t have a procedural guideline for this sales person to follow.

I have built multiple sales teams successfully because of this basic concept. I have multiple sales efforts fail because of its absence.  Sales people like structure, they want and need feedback, want to understand how they fit in.  Most of the time we hire them and throw them into the that red ocean of competition without a thought or plan as to  how that one person will meet both you and their results by procedure.  It is like golf, you only have to miss the ball by a degree for it to land in the rough.

You see there is this leap of faith that says as an employee, “I will work and give you my best effort on the proposition that you will pay me for that time”.  But it goes much further than that.  It really goes to whether the employer really has their act together, has a strong vision and a result in mind that calls for procedures to be in place so that when hiring someone they can start working immediately on meeting the result driven thought process versus doing what we have all seen in the past spending time building a lead generation system on his/her own, spending as much time branding the company as being able to sell the products or services available and having a mutual respect process that keeps everyone on their game.  As too often the whole result driven paradigm at the moment is on the shoulders of the salesperson to meet expectations that while they may have bought in on they had no say so in the how to get there.

One of the worse things I heard from a marketing person that worked for us was I don’t now what do to make it better, can you tell me.  Well eventually I did it is what spurred my beliefs as you see them today.  I was not going to waste our training expenses just to go out and repeat the mistake.  In doing so this person latterly was transformed over night into being the most successful marketing assistant and from where her territory sales people wanted to get rid of her she was nominated for employee of the year.  It is not rocket science, but you do have to care as much as you say you do.

This concept I speak of and the one utilized with my employee is based upon the book I believe is one of the best guides ever printed and if you get the chance read it and get the CD to listen in your car on the way to work.  Stephen Covey of Franklin Covey has been at the forefront of this thinking for years and his book Principled Centered Leadership is to me at least its bible.

It is much more complicate than just this but….If you have been following this blog you know I started out preaching the need for vision and then a mission statement then once achieved the focus starts getting narrower.

So stop today before you go on Craigslist or LinkedIn to place that ad and ask yourself, “Am I hiring a person to do what?, and am I am hiring them because I know how we want it done?, and am I providing this person with the resources when they have questions to learn? and am I committed to this being a successful hire because we will have accountability sessions where we review the whole process including my effort and what we have promised.

If you do this, your interviews will be much more focused and your hires will understand why they are there and when the process is followed goals and results will not get away from you.  If you would like more information this and other thoughts about your hiring strategy call us at 619 550 1198 or email me at Michael@santafeadvisoryservices.com

The Call for Reputation Management

Posted March 27, 2012 by Michael Fanghella
Categories: Uncategorized

Tags: , ,

Reputation management is a necessity not only for larger corporations but for small businesses and individuals as well.  It is a relatively new industry that is driven by necessity.  It can be proactive or reactive and anyone can benefit or fail by its implementation or failure to do so also.  It will help you to move out of the first result pages those negative posts.  It will help you quickly respond to negative reviews and thank customers for the positive reviews.  Online is simply just another way people experience us — either directly or through word of mouth with their mouse.

The process will assure that potential customers will have a first excellent impression of your company.  It is the act of crushing negative remark(s) about your company, product, or service.  It can also serve as a way to fight back against otherwise unchecked defamation of character or product.  It is vital to businesses nowadays so do not rush a decision.  It is the first response to reputation damaging information.

This is a process of creating and monitoring multiple online profiles.  Part of the process also involves aggressively publishing useful positive information about yourself and/or your business.  You must create a strong internal process to gain these reviews from your customers. There are really two types of reputation management.  One is reactive and the other is proactive.  The reactive type involves creating new Web content  to suppress the negative blog articles or negative reviews that are hurting your  online reputation .

Proactive means generating positive reviews and that isn’t as easy as it looks, but reputation management by a professional can help you create a program that will help build positive reviews. This can be done by a simple plan who works daily on what your business needs to do to get what it wants so every day it promotes positive aspects, generates articles, writes in blogs, posts, videos and press releases.  Because of the viral nature of the web you do have to have a publicity agent who is watching out for you and your interests.

If you don’t have a program in place to promote positive mentions of your name or business, your reputation could suffer.  Like search engine optimization, this isn’t a one-time deal. In fact, Google typically penalizes Reputation Management companies who try and push too hard too quickly. For the best results, you need a slow drip of positive articles, mentions and press about your business. This is our specialty. Any serious reputation management company will manage this process for you. For more information go to this site  http://www.smallbusinesssem.com  or contact us by visiting us at www.santafeadvisoryservices.com, email us direct by clicking info@santafeadvisoryservices.com or  call us at  619 550 1198 This blog consists of exerpts taken from an article written by Mr.Fanghella and can be found at http://www.articlesbase.com/public-relations-articles/lies-agreed-upon-left-to-fester-the-call-for-reputation-management-5774559.html

Strategic Planning – If you can’t see the future how can you ask your clients or your employees to.

Posted March 21, 2012 by Michael Fanghella
Categories: Uncategorized

Strategic planning in today’s business world is an ongoing process.  The Next wave always looms over us.  It is a seemingly logical, linear, step-by-step process that focuses on analysis.  It is the essential first step to meeting your goals and sustaining the company.  It is a good thing an organization, company, or business can take and execute for success.  .

Strategic planning is a surprisingly simple process for the organization that clearly understands why it exists.  It is a process whereby management makes choices about overall direction.  It is a management tool.  It is a tool to formulate high level business strategy.  It is an essential function of senior management in any business firm.

Strategic planning helps you devise a guide to help you meet your business goals.  It can also help your managing team put new projects into motion to meet larger goals.  It is a team effort, one that draws on the particular skills and expertise of employees in the organization.  It is worth the effort because it helps you run your organization better.

Strategic planning is a multi-layered, multi-frequency process that must be engineered for efficiency. It is a dynamic process of continuously looking at your current situation and plotting your next move.  It is a continuous process that requires constant feedback about how the current strategies are working.  It is about being ready for the future.

Business is all about planning intelligent strategies and wisely implementing them.  Strategy is a tool for the company to find its competitive advantage and place within the environment.  It is widely disseminated throughout the organization and key employees understand the strategy and their role in its execution.  It is not dissimilar to the apparent strategy of competitors.  It is rooted in a realistic market assessment.

Strategy is sometimes called a road map which is the path chosen to plow towards the end vision.  It is formulated, selecting enterprises and activities that lead to accomplishment and fulfillment of goals and objectives.  It is the means or broad approach by which a program will achieve its Annual Objective. It can be considered a plan or map of this process. Where as Mission is defined by a vision

Strategy will produce this atmosphere for you.  It is planning how to get where you want to go.  It can then be defined as a method of achievement. Mission is a brief summary of the drive that focuses the organization to employ to achieve its vision. Vision will also provide an organization with its purpose, values, and operating principles.  It is an image or description of the organization we aspire to become in the future.  Vision is set by one’s values.

Vision is the destination, where you are going.  It is an organization’s long-term focus on what it would like to accomplish in a given time frame. Goals may be revised periodically, but should be directly related to the aspirations of the unit.  It are defined as broad, ideal conditions.  They are specific statements of continuing intended results.  Goals are generally written as verbal statements introduced by an infinitive such as to train, to develop or to win..

Where as goals are statements of the outcomes that the organization intends to achieve at some time in the future.  It can be set for the overall organization, units within the organization, and individuals within the operating units.  It will differ depending on the stated timeline, and of course your organization.

They may sometimes need to be revised during the period covered by the plan because of changing conditions.  It are identified when you create the strategic plan for your program.  Strategies are activities or groups of activities leading to the attainment of goals.  They are the approaches you are likely to adopt, to accomplish each goal.  They are the map that gets you to the vision.

Next, establish a few guideposts – your vision, mission, and values – to lay the foundation for your strategic plan. Your vision describes the benefit your organization provides – your end goal or final accomplishment. Typically, a vision is an object of your imagination and creativity and therefore may be unattainable. Your mission describes what your organization must do to achieve the vision. And your values establish clear boundaries of behavior for pursuing your vision. For example, some common values are  Quality, Respect, Client Satisfaction, and Financial Fulfillment . One could argue that these aren’t required for our continued success, but this is how we choose to operate as we pursue our vision.

For a detailed review of your company’s strategic plan or how to build one email me at michael@sanatafeadvisoryservices.com or call 619 550 1198

Business Plans – Don’t Start Without One

Posted March 20, 2012 by Michael Fanghella
Categories: Uncategorized

Tags: , , ,

Business plans are universally reviled among tech startups, both on the entrepreneur side and among investors. They are not all alike and neither are angel investors, venture capitalists and loans. They are also used when approaching potential lenders or investors that have an interest in a particular business venture. They are almost universally used to secure funding for business ventures. Business plans are used in some primary and secondary programs to teach economic principles.

Business plans can be extremely complex, but for most small businesses, this simplified business plan will be sufficient. They are key decision making tools. They are flexible and offers greater efficiency in the use of minutes by your business. They are not historical documents about a company’s past performance. Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community.

Business plans aren’t obsolete anymore than letters are. They are essential when starting a business. They are organized to address major concerns and interests of their intended audience. They are written for a variety of purposes and for different intended readers. Business plans are fresh for only 2 or 3 months.

Business plans are the preferred mode of communication between entrepreneurs and potential investors. They are prepared as an integral ingredient of procuring debt capital from potential investors, bankers and other lenders. They are dynamic and can be changed as per your business’s requirements.

Professional business plans are often some of the first things new small business owners consider. You need to know the direction you are going, where to focus, who your customers are or will be. A business development plan will put in writing your goals, budget and ideas. Of course, it may also be a prerequisite for a small business loan. But more important a revised business plan for an existing business is just as important so that you are prepared for the next wave of competition in your industry.

Santa Fe Advisory Services has over 25 years and multiple success stories and can start this process with you just by your contacting us at 619 550 1198, or michael@santafeadvisoryservices.com