Jim McCarthy, CERTIFIED FINANCIAL PLANNER™ with Directional Wealth Management, LLC, provides comprehensive financial planning and wealth management services to individuals and business owners. Jim works with his clients to provide a tailored financial game plan encompassing both personal and professional goals. Whether its using the business to provide the client and their family with benefits, retirement planning, disability and life insurance coverage, and/or a mix of all of the above, Jim stresses that understanding a client’s long term goals, risk tolerance, and ultimately, the value of their business, are all equally important in achieving the financial freedom we all seek one day upon retirement. Read more
What’s your company’s WHY? Why should you care and what are the benefits?
According to Beth Perl Berman, a WHY/Compellications™ Coach with BPB Solutions, finding your WHY is a powerful process for defining and developing compelling communications within corporate organizations. Knowing Your WHY impacts bottom line results in the areas of significantly increased productivity, wallet share, and profitability.
We’ve distilled the many benefits of knowing your WHY into 7 key areas of opportunity. Read more
We’re excited to launch a new blog series, “In the Trenches with Entrepreneurs.” Our first blog of the series features Evelyn Cucchiara, The Toy Tamer and serial mompreneur, who chatted with our Senior Manager, Jessica Timmerman, about her journey to building a business that is both rewarding and profitable.
Entrepreneurs start businesses for a variety of reasons – a great idea, market demand, special skillset/talent – the reasons are endless. Growing numbers of women business owners are finding smart ways to balance motherhood and entrepreneurship. For some of these “mompreneurs” the motivation is to contribute to the family’s duel income. For others, it’s to stay active in their careers while spending time with their children. For many, it’s both. Evelyn Cucchiara, The Toy Tamer and serial entrepreneur, has done just that in her journey through business ownership. Read below to learn about her evolution as a business owner and the next steps of translating her weekly paycheck into continued company profitability.
JT: When did you make the switch from employee to entrepreneur?
E: I’ve always had to work. Things changed after we had our first son. Fortunately my in-laws were able to watch him for the first two years as my husband and I commuted into Manhattan, but after some time, it was no longer ideal. When we finally decided to put our son in daycare and found one we liked, the waiting list was over 9 months long – that didn’t work for us either. We had to come up with an answer and that answer was starting an in-home daycare.
I remember quitting my job and saying that the success of this daycare was not an option. It HAD to work. If you are going to start a business, you need to jump in with both feet and commit to making your business work.
JT: And you did just that – you made the business work?
E: The daycare was a huge commitment – 7 in the morning until 6 at night, five days a week. By the time we had two children and a third on the way, my husband and I knew I needed to curtail my hours. So that was that – I closed the daycare in June of that year, had my son in July, and then started a new business (Art Adventures) in September. Rather than a full day daycare, I now offered a once a week art class for children as young as 2 and up to age 7.
JT: So you kept with the same market and demographic. Did this help in spreading market awareness and capturing a captive client base quicker than someone starting out a business for the first time?
E: Yes. My “market” has always been families, and more specifically, women with young children. Moms would pick up their kids at my house and ask me how I kept things so neat and organized. I knew there was knowledge there to share. This then evolved into my next venture.
JT: So I’m seeing a trend here. You assess your market, their needs, and then provide a solution based on that knowledge.
E: Working with this demographic, I noticed a trend – mothers were always running around like crazy people trying to find a solution to this every day juggling act and ultimately needed more time in the day. So I worked with some clients to teach them how to be better time managers; however, I quickly realized that although they needed what I was offering, they weren’t open to accepting it. I took a step back and through this analysis bloomed the idea for The Toy Tamer. I already had a system – I had to be organized when running a daycare – how to store the toys and put them away, while learning – so now it was sharing it with others. I moved from trying to train people to organize things themselves (the DIY people) to working for the WTC (write the check) people.
JT: The value of a business has many moving parts contributing to its success. While you’ve been able to identify a need, establish a client base, and build systems and processes in order to streamline your business, the next step to consider is understanding what the value of this business you have built is. What are some of the preconceived notions you’ve had as a solopreneur about the valuation of your business?
E: I would be willing to bet that the majority of small business owners have absolutely no idea what their business is worth. Even speaking on my own behalf, I always thought my businesses would have no value to an outsider. Each business was just me, I’m the secret sauce, and there’s nothing past that to monetize. This all changed recently. My experience and methods are what can translate to value to a potential buyer. For example, I am in the process of creating lesson plans to market to other entrepreneurs looking to start up their own business. I’ve also written a book that has become an Amazon best seller. There are tangential services and products that support the services The Toy Tamer offers. I now have seen that there is more value to my business than just the paycheck it produces. Understanding more about how to build value in my business has been a real game changer.
JT: Too often we see business owners consider closing up shop without exploring the possibility of selling their business, ultimately losing out on a major liquidity event they have been working towards for many years.
E: I was almost to the point where I feel that if I wanted to exit my business, I would have closed down and not monetized on the business that I built. And I did do that with my art studio for two years when my husband and I went into the real estate business, not even realizing that the Company’s captive client base, brand, services, and repeat revenue streams would have made it an attractive opportunity to another small business owner.
It takes a while to build a network and market awareness. Especially in these types of businesses where they are generational and you touch a family, their relatives, and later the next generation with their children. This in and of itself has value.
JT: Where do you think knowing exactly what your company is worth pays off as a business owner even if they are in the very beginning stages of entrepreneurship?
E: Working with a valuation analyst and determining that your start up business has value would be a great confidence booster. It would make you feel legitimate and that your efforts are working towards something. Everyone feels like they’re faking it until they make it! Well, a valuation would prove that there’s nothing fake about your business.
JT: Nicely said! And we do find that many business owners do not consider going through the process of having a valuation performed because they themselves doubt the market value their businesses have created. But think of it in another way – do people not look at their bank balances in fear that there is nothing in the account – of course not (at least we hope). In the same way that a small business owner monitors, manages, and hopefully grows their savings or brokerage accounts, a business – which is primarily their largest asset, should be closely monitored and evaluated.
Thank you to Evelyn for sharing her story and participating in our In the Trenches with Entrepreneurs series. The entrepreneur community is an elite team of risk takers, hard workers, and driven individuals who do what many only dream of. But when it comes to profiting off of those efforts, business valuation cannot be left up to chance. There are many proactive steps that can be taken in order to achieve continued growth and profitability, but this goal is only accomplished through employing the appropriate advisory team and affording yourself with the knowledge of the value of your business beyond the weekly salary you draw.
About Evelyn Cucchiara
Evelyn Cucchiara has been an entrepreneur for over 22 years – balancing the demands of work and life and finding happiness along the way. She currently owns two businesses focused on children and the messes they create: Art Adventures Art Studio, offering art classes for children starting as young as age 2, and The Toy Tamer, creating neat, clean playrooms while teaching kids the organizing skills they‘ll need for future success. In addition, she helps everyone save their sanity by sending out short (3 sentence!) Sanity Saving Suggestions every Sunday night – get them here.
She can be reached at evelyn@TheToyTamer.com or visit her websites:
Beth Perl Berman, a WHY/Compellications™ Coach, specializes in the art of defining and developing the compelling communications (see where the word comes from?) within corporate organizations. And WHY is this important (yes, we had to take that and run with it!)?
Read on for Jessica Timmerman’s interview with Beth below to gain an interesting perspective on the importance of cultivating a strong culture and how this translates to business valuation.
JT: So Beth, help define your specialty for our readers.
BB: I am a WHY/Compellications™ Coach focused on fortifying leaders individually and organizations as a whole from the inside out via compelling, WHY-based communications. Key elements that I analyze include:
- Creating awareness, and alignment with leaders’ visions and each person’s contribution to it —
- Empowering team communications – so that leaders and team members “get” each other and become aligned, and engaged with their purpose
- Defining company branding – who they are, what they do, and why should we even care?
- Determining authenticity of a company’s message
- Overcoming infobeasity – in order to not only be heard above the noise, but to create a deeper connection
By understanding their “WHY” – which is their unique individual gift, that which makes them tick, how they’re hard wired – they can better understand how to articulate a company vision from the inside out, how individuals on teams can be validated for what they bring to the vision of the company, how to cultivate strong and effective leaders, and how to deepen communication – internally with their teams, and externally with their ideal clients, investors and stakeholders. Ultimately, these elements foster compelling messaging to the company’s customer base, creating brand intrigue and ultimately, loyalty.
JT: And what is this “beast” you speak of when you mention the term Infobeasity?
BB: Infobeasity is the shift towards shrinking attention spans due to accelerated communications. The biggest culprits, social media players like Twitter, Facebook, Instagram, Pinterest, etc. So we now need to now strive to connect on a different level with the public because there is just so much clutter out there.
JT: How does WHY Work analysis translate to improved earnings?
BB: Businesses are about making money but highly successful businesses have shown time and again to always be hardwired to a greater purpose. The WHY Work includes an analysis followed by a series of workshops with team leaders to define corporate goals and help management communicate better with each other. We then define the ideal client and determine the best way to reach them. Ultimately, we are emotional beings. When we appeal to a deeper emotional connection, on the level where individuals actually make decisions, it becomes a cyclical feeding of effective communications that creates bottom line results.
JT: What are some non-traditional ways the business owners can facilitate organic growth and profitability without reinventing the wheel?
BB: Business owners need to look to build from the inside out. They need to create a culture that encourages passion, alignment, and engagement. Another critical assessment should be analyzing each employee’s driving factors and their individual contributions to the company. Knowing how your people are motivated enables you to put people in the right seats. Align their passion, goals, and skills to that of the company’s and recognize them accordingly.
Fostering and cultivating strong employee morale and loyalty are often overlooked as key performance drivers. According to a Gallup poll, employers in the top 25% in terms of employee engagement have a 21% higher productivity and in turn, a 22% higher profitability than the average business. There is a 33% employee turnover rate in the US whereby 9 out of 10 people are fired because of their attitude. This can easily be reversed through having an engaged community and culture. When WHY people do what they do is aligned with WHAT they do and HOW they do it, they have passion… passionate employees who are not just in it for the paycheck but believe in your cause.
Additionally, it cannot be stressed enough – powerful internal and external communications are at the root of your successes. Clearly articulate company vision with all employees, vendors, customers, competitors… with the world. When your vision is clearly defined, and you provide the language to communicate it, others can also spread that message to the masses.
The next element is to remain current with communication trends. While fighting infobeasity, you need to also work with it in order to stay relevant and captivate the audience out there. Use social media as a way to stay on the pulse of the industry and your organization. Survey employees, customers, stakeholders on a regular basis to remain relevant, keep those that matter happy, spread company awareness, and facilitate new ideas.
JT: How does Compellications™ development relate to brand loyalty?
BB: You can have the best SEO and spend a ton of money on Pay Per Click advertising to get your business at the top of Google searches, but when someone gets to your site, they need to connect with you and your message. If not, it’s just a commodities game – a price war. People are willing to pay a premium to work with people they like, or purchase a product that makes them feel good regardless of pricing.
JT: When business owners are in growth mode, they all too often forget that exit planning is best done proactively and when your business is booming. What do you do to educate clients about the importance of exit planning?
BB: Business owners need to plan very early for exit. It is by fortifying your business from the inside out through communications, through proper procedures, through product development, that drives valuation well in advance to starting to think about exit.
When you have alignment with your customers and your brand via WHY-based communication, this creates brand alignment. Brand alignment brings a 20% increase in wallet share which means 20% more from your existing clients and customers (as per Gallup). It is much more cost effective to develop business within existing clients who’ve already bought in at some level than to go out and forge new relationships. If you build alignment and build business with existing clients that continue to rave about you and just by inertia continue to bring in other people, that is a huge formula for business success but all of that has to start early.
JT: Where do you see company’s failing to maximize value?
BB: There are a lot of areas in which businesses fall short but the good news is they are fairly easy fixes once you develop open and clear communication channels. Primary culprits include:
- Not cultivating new business with the current client base.
- Not recognizing people or putting them in the right seats.
- Planning too late in the game. The earlier they seek ways to fortify their business, the better off they are.
- Not cultivating passion/engagement within organization at all touch points. In order to be effective, you have to live it and connect on a deeper level. You also need to demonstrate it upon every client interaction – from sales to service to billing!
- Having an inauthentic or inconsistent messaging.
- Ignoring the intangibles – these are what separate the company from its competition.
- Addressing all audiences and educating them on your corporate messaging. This includes customers, clients, employees, followers, fans, influencers, bloggers, etc.
JT: To sum it all up, if you could offer only one piece of advice that a business owner should do TODAY, what would it be?
BB: Ask yourself, is what you are putting out there – to your people, to your audiences – compelling? Strive to achieve the Apple culture where people want your new products just because they are associated with you name! And in the end, never underestimate the power of understanding what makes you, your people, and your entire organization tick.
Chris Lipper from The Alternative Board (TAB), is in the business of business owner development – both professionally and personally. Above all else, Chris holds accountability and measuring key metrics as the secret sauce to a business owner’s ability to achieve personal success and a work/life balance. Read below for Chris’ take on these two critical and often overlooked responsibilities:
J: What is the premise of TAB and what is its primary goal for business owners?
C: TAB’s primary objective is to help business owner’s grow. That can mean many things – to help them grow personally, to help them have their business grow – through the use of peer boards of other business owners. Each owner has the opportunity to present a challenge, have questions asked, and get feedback from other owners.
There is an aspect of accountability. They are there to be held accountable to do something about a particular challenge. These challenges don’t have to all be work related so some natural ones might be receivable collections time or profit or sales, but it could also be work life balance related – how many of your kid’s ball games do you want to go to this year or how many times a week do you want to have dinner with your spouse? At each board meeting they will report on their KPI’s (Key Performance Indicators).
J: How important are measuring KPIs with members?
C: Numbers don’t lie. It’s the bottom line. I like when people manage by KPIs. I always say it’s important if an employee knows if they have a good day or a bad day and it can’t be based off of a notion.
It’s the same thing for an owner. You need to know if you’re hitting your numbers and KPI’s, and you can’t base everything off of your last good or bad phone call. There are certain things that need to happen in the day or in the week to build towards whatever that goal is.
J: Gathering data and starting the process of analyzing performance can be intimidating at first. How do you encourage members to get on board with what may appear to be another “To-do” to add to their extensive list of responsibilities?
C: Initially it’s a little daunting and some owners can have their head in the sand, but soon they learn to embrace their dashboards and numbers and KPI’s and maybe even look forward to it. It depends on how it’s presented and if it’s presented in a way that’s very positive and an opportunity, instead of nagging and negative.
J: Where should an owner first look to calculate some of the most important metrics?
C: There are thousands to pick from but I recommend honing in on three to four – two business related and maybe two not – but it could easily be six to eight. As for where to look, it depends on the business. They may already have the data but not know what they’re looking for.
For instance we may look at quotes vs. orders. What we would establish then is not everyone is worthy of a quote. I like to see about 60% success rate. If their batting average is 1 out of 20, maybe we shouldn’t be quoting 20. Or another scenario, if they’re 20 out of 20 maybe they need to raise prices. Taking it a step further, maybe sales training is necessary, or sometimes the solution is that we’ve got the right person in the wrong seat. We have a wonderful employee but they’re just not hitting their numbers so maybe they need to be in marketing instead of sales.
J: Sometimes seeing statistics on paper can be discouraging. How do you retrain your thinking to view the positive?
C: Say for example we have a company that knows February and October are awful months. All they hammer on is how bad these Februaries and Octobers are as opposed to viewing it as “what an opportunity – this is how I can grow my business”. So a lot of times the numbers, what they’re telling us and who’s telling us, it’s how they’re presented. If it’s presented with a bat it doesn’t feel good. If it’s presented in an uplifting manor then it’s exciting.
J: What are best practices in setting a plan for reaching defined and measurable goals as well as making sure to stay on track with your plan?
C: In November, TAB members present what they think they want to track in the following year. In December, they put numbers to it. In January, we’re hitting the ground running.
Our plans are set and ready to go. Owners know their KPI’s and hopefully there is a team in place and that team knows their KPI’s. Then after the first quarter, we can take a look and readjust if need be. There will be a feeling if things are in place and working or if they are not. Then it’s just fine tuning.
Ultimately, business owners can’t be in the results business without a plan for driving results. You can’t just say, “I want $1m of new business.” We can’t totally predict results, but what we can do is monitor the behaviors.
Personally, I like behavioral goals and figuring out kill ratios. So if we know it takes 10 calls to get a sale and each sale is $100,000 and we want a million dollars then we know we need to make 100 calls. You now have something to work with, but it starts with knowing your numbers and having a way to track them.
We’d like to thank Chris for his time and insightful guidance on best management practices. For more information on The Alternative Board, please check out, www.tabnj.com.
About Chris Lipper
Chris Lipper is a knowledgeable, creative professional who has worked with a range of businesses from large institutions to entrepreneurial startups. He has excelled in marketing, sales, operations, and management. Chris has experience in creating brand identity and corporate image, and he has developed advertising, direct mail collateral, web sites, and trade show booths. Chris’ marketing experience expands across the globe. He has helped conceptualize, develop, market, and sell products domestically and internationally in different markets including consumer, business-to-business, and institutions.
Chris has also achieved great results in sales, operations, and management.With his multifaceted background, Chris was able to start at zero and develop multi-million dollar revenue streams in a business-to-business sales environment. In addition to his other achievements, Chris is also an inventor and has patented and sold many products, which has helped him understand licensing issues. He has licensed and trained the sales teams of two publicly traded companies to sell his patented products.
As our next interview in our Exit Strategy series, we chatted with Erik Fromm, advisor with CSG Capital Partners of Janney Montgomery Scott LLC. As a financial advisor he’s a critical member in the Exit Planning team. We’re excited to have Erik share some of his insights on the exit planning process. The CSG Capital Partners team works with corporate clients advising on their retirement plans and with individuals for general wealth planning purposes, including investment management, retirement planning, business exit strategy, and estate planning/legacy issues. Erik concentrates his efforts on retirement income planning.