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Business Building Foundation Guide: Employee Turnover

October 24th, 2010 steve No comments

Please Note: I originally published this article in 2006 and it is as relevant today as ever.
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The High Cost of Employee Turnover

Mike Ullman, the CEO of J.C. Penny since late 2004, estimates the company has saved over $400 million annually by implementing programs to reduce the turnover of valuable talent. Mike has further quantified this cost per employee leaving. Each one costs J.C. Penny about one third of that employee’s annual salary to replace.

If J.C. Penny only loses one third of the cost of an employee’s annual salary when they leave and need to be replaced, they are fortunate. I have seen huge costs associated with employee turnover including the cost of recruiting, training and relocation. There are also the less obvious costs of lost productivity, lost sales and a loss of control of assets.

J.C. Penny operates fairly large format stores supported by district and regional managers. In theory, if a person leaves there is a backup to cover the business while a replacement is found. The reality is that even in that situation productivity is compromised and customer service standards are at risk.

Consider a smaller format store with local or regional retail chain. Often the only backup is none or maybe the owner. I have seen many instances where a store cannot open because of inadequate staffing. When this happens too often, the customer base loses confidence and the profits decline to a point where a store may have to close. Look at the transportation industry where there continues to be an acute shortage of drivers. How many freight companies are losing revenue because they simply do not have enough drivers for their equipment?

In each of these examples, the cost of replacing an employee is far greater than 30% of the departing employee’s annual salary.

In one of the modules of my FREE course How To Increase Profits by 30% or More in 90 Days or Less, I cover key ways to minimize the turnover of valuable people. One is to make sure you do not retain and nurture mediocre performers. That is a major negative influence on talented staff. Another is to clearly define and communicate company performance goals in terms of how they relate to a person’s job and then answer the question “WIIFM” or What Is In It For Me?

Mike Ullman is right on point focusing on the company’s number 2 asset. Employees in retail and many other industries are key to developing a company’s number 1 asset which, of course, is it’s customers. If you know Mike, please compliment him on J.C. Penny’s vastly improved performance and please ask him to visit www.localretailmarketing.com which is a program that will definitely help him grow profits by customer.

Steve Pohlit

Business Consulting, Executive Coach
Turnaround/Crisis Management
Temporary CEO, CFO, Controller Services

Social Media Services
New Digital Media, Inc.

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727-587-7871

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About: Steve Pohlit CPA,MBA has been the CFO and COO of  major domestic and international companies.  Steve has extensive business ownership experience having purchased and started off line and on line businesses.  Steve offers his  business building experience to companies and entrepreneurs with business coaching and business consulting.  His  focus is on building business  profits and net asset value at above average rates.   All articles published by Steve unless specifically restricted may be freely published with this resource information.

Great Advice For Building Your Business: Learn From The Restaurant Industry

October 24th, 2010 steve No comments

Top 7 Steps For Strengthen Sales and Profit In The Restaurant Industry….Actually Applies To Most Businesses:

1. Know your customer!  People coming thought the door and buying should be acknowledged with an email or card and possibly more. How do you do this?  You need to have their contact information and specifically an email address and now ideally their cell phone number.

Here is an idea on how you do that: Buy them a drink or a dessert in exchange for their information.  Here is the key: when you identify a particularly important person, the owner comes to the table, welcomes them and offers to buy their dinner in exchange for the cell phone number so they can be alerted for a very special event. Now before you say this ticket could be $200 or more I ask you how worth it is to have the cell phone number for key text messages with VIP’s and I mean people whose net worth is in 8 figures. This is huge

2. Have a plan. Your financial plan should be an annual target that can then be detailed to a weekly plan.

3. Know your numbers. Traffic and sales by time of day. Track your trends. Use this information to market to your list. Invite them to slower times using incentives.

4. Use all proven marketing tools to help grow your business. These include direct mail to targeted zip codes and ads with a “hook” in publications your target customer reads and other venues like radio, participation at key charitable events, local/regional festivals that are for your target audience, on line promotions and more.

5. Have your on line credibility in place meaning a website and social media presence

6. Use a referral marketing system. Reward people for inviting their friends and colleagues.

7. Monitor the variances from plan in all areas of your business. Nothing is excluded: payroll, food costs, utilities….the gold is in the detailed analysis of the variances.

Now You Know…Success Is In The Details.  Failure is almost always a result of not consistently following the steps that have been proven to lead to success.

Steve Pohlit

Business Consulting, Executive Coach
Turnaround/Crisis Management
Temporary CEO, CFO, Controller Services
International Business Resources

Social Media Services
New Digital Media, Inc.

Twitter

Facebook

Linked in

MySpace

727-587-7871

Email

About: Steve Pohlit CPA,MBA has been the CFO and COO of  major domestic and international companies.  Steve has extensive business ownership experience having purchased and started off line and on line businesses.  Steve offers his  business building experience to companies and entrepreneurs with business coaching and business consulting.  His  focus is on building business  profits and net asset value at above average rates.   All articles published by Steve unless specifically restricted may be freely published with this resource information.

An Executive Summary Is An Essential Tool For Your Business: Follow This Guide

October 24th, 2010 steve No comments

Relationships are key to building your business regardless of your industry. An Executive Summary is an essential tool in developing relationships.

This details the elements of the most effective executive summaries and if you are on my email list ..see the registration form on the top right of this screen, I will soon be sending several examples to my list that should be very helpful.

You Need An Executive Summary for Your Business Even If You Never Hand It Out!

Having worked with hundreds of business owners and hundreds more of business executives and managers, across the board, very few are able to clearly state what business they are in and what they are looking for.  Every business owner and business leader is looking for something and nearly all are looking for more than one thing that will help take their business to the next level.  In many cases it is funds for growth and expansion. Often it is new sources of products and services. Nearly always leaders are always interested in meeting people who could be business partners, joint venture partners or valuable employees.

We can only get what we want when we have clearly defined what we want and clearly defined what is in it for the other party. I am currently coaching a number of people in the process of building their real estate investment business. An effective Executive Summary is right at the top of the list of what we work on at the start of the executive coaching process.  Candidly, it is this work that has helped me see the value of executive summaries properly prepared. I have used the techniques being taught to real estate investors and applied them to a rather large privately held construction company that is looking for equity capital to support much larger jobs.  The element of an effective executive summary apply to any industry and any job.

The “Must Have” Components of An Effective Executive Summary

1. A clear definition of your business with an emphasis on your unique selling proposition.
2. How your business clearly benefits your customers or in the case of real estate investment how your strategy benefits funding partners, sellers of real estate and buyers of real estate.
3. Examples of properties (or products/services) in support of what is in it for those you are developing relationships with. Innaclude proforma calculations of share of profits or other relevant calculations for your business.
4. Your picture and bio. Note if you are new to your business your bio should emphasize your network definitely never say you are new. Rather than disclosing just starting this venture, you could say you have been studying the markets and networking with experts so as to avoid the pitfalls that have been experienced by others in this industry.  Then indicate you have developed the going forward success strategy with several of the key success factors being: 1.____________ 2.____________.
5. Key contact information: Your name again, phone, email, website, blog, addresses for Facebook, Linkedin, Twitter

All of this can be done in two pages, not crammed and professionally presented.

What Is The Point If You Never Physically Hand Out Your Executive Summary?

First of all if when properly completed and if you are networking, there will be people who are interested in this document. If you are not networking your business is likely to struggle.  Remember the first point of this article which is success is directly proportionate to the quality of your relationships.

However, regardless of how frequently you physically deliver your executive summary, completing it will prepare you for more effective verbal presentations on what is your business, what you near term goals are and what is in it for those that help you.

Email me or call if you would like help with your executive summary.  My contact information follows:

Steve Pohlit

Business Consulting, Executive Coach
Turnaround/Crisis Management
Temporary CEO, CFO, Controller Services

Social Media Services
New Digital Media, Inc.

Twitter

Facebook

Linked in

MySpace

727-587-7871

Email

About: Steve Pohlit CPA,MBA has been the CFO and COO of  major domestic and international companies.  Steve has extensive business ownership experience having purchased and started off line and on line businesses.  Steve offers his  business building experience to companies and entrepreneurs with business coaching and business consulting.  His  focus is on building business  profits and net asset value at above average rates.   All articles published by Steve unless specifically restricted may be freely published with this resource

Nido Qubein: Why Immigrants Become Millionaires (Hint: Think Top 1% Mindset)

December 30th, 2009 steve 3 comments

I recently published an article titled The Top 1%

The idea for that article emerged from my discussions with JT Foxx about the strategic direction of his coaching and mentoring program. I learned JT was being mentored by Nido Qubein.  Watch this video with a pen and paper as Nido summarizes key attributes of a prosperity mindset.

Steve Pohlit

Business Consulting, Executive Coach
Turnaround/Crisis Management
Temporary CEO, CFO, Controller Services
International Business Resources

Social Media Services
New Digital Media, Inc.

Twitter

Facebook

Linked in

MySpace

727-587-7871

Email

About: Steve Pohlit is a CPA,MBA and has been the CFO of several major domestic and international companies.  Steve is a business owner and an expert business consultant focused on building profits and net asset value. He is very experienced with Internet marketing and social media marketing.  All articles published by Steve unless specifically restricted may be freely published with this resource information.

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