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Choosing ERP/WMS Software for Your Company

Dan Kaplan of SMC Data Systems is a member of XPX New York
Dan Kaplan
SMC Data Systems
3 months ago

The Red Sea disruption forcing ships to go around Africa creates a new Supply Chain reality. It can lead to late deliveries of inventory resulting in disruptions affecting business globally. One of the noticeable issues is the Reuters report, “Tesla, Volvo Car in Europe Pause Output of Certain Car’s models.” Besides the production disruptions, late inventory arrival can result in order cancellations, often creating excess inventory which affects the warehouse. Besides the additional labor cost, it often results in using a 3rd party warehouse or purchasing/leasing additional warehouse space. These disruptions can lower profit margins and cause cash flow issues. Today’s reality of business disruptions makes companies realize that their outdated ERP Software, should be replaced with new integrated ERP/WMS Software that has a Warehouse Management module enabling companies to avoid business disruptions by having the features below: • Inventory availability after it was allocated for production or future orders. • Real-time Analytic information reflecting sales activity, what products should be ordered, and when. • From which vendor to purchase based on analytic information of promised delivery dates. • Customers’ buying patterns of products ordered. If the customer’s current purchases are less than in the past, the reason for this should be investigated. • If the accounts receivable overdue payment days have increased, the customer’s financial stability should be evaluated. Selecting New Software Before the software selection search starts, a committee should be established. Its members should be key people from each department and a requirements list should be developed. • The end users can provide important information that will be needed when the demos are conducted and they will have emotional investment once the software implementation starts. • The developed requirements list should be addressed at each demo. • All the demos should be a “workshop style” rather than a “slide show” with “bells and whistles.” • Not having the “workshop style” demo often results in purchasing the wrong software that does not meet the business’s unique requirements. • Having to change the business model to meet the software requirements will result in business disruption and the end users having a large learning curve. • Software functions that are beyond the users’ ability to learn will result in long implementation, and the project might be eliminated. • Before the decision to purchase the software is made, a visit to the software provider’s client in the same industry should be arranged. • Three people should be met at the vendor’s client site: the CEO, CFO, and IT manager. • The main question the above people should be asked: “How good is the software house hotline support?” • This is a crucial factor that should be considered. Not having good hotline support will result in severe business disruptions when an issue occurs and immediate support is not provided. Issues Arising from Multiple Software Often companies that have legacy software choose rather than replace it with new integrated ERP/WMS Software that has Warehouse Management they choose to buy it from Warehouses Software Vendor and have it integrated with the legacy software. Doing it will result in the issues listed below. • Stand-alone warehouse software can result in integration issues resulting in inaccurate inventory. • Having multiple software platforms creates issues when it’s upgraded. • Excess user efforts accessing multiple software results in business disruptions. • Often when one of the vendors has a software upgrade it might result in integration issues. • When having to contact multiple hotlines, vendors often don’t take responsibility resulting in business disruption. Case Study: Multiple Software • Large Food Manufacturers/Distributors decided not to upgrade their legacy software and purchased four software platforms from different vendors hoping it would enable them to meet their business requirements. • It resulted in the users having to access multiple software platforms resulting in excess efforts retrieving the needed information. • When one of the software platforms was upgraded sometimes it affected the main software platform or the other platform resulting in business disruptions. • When connecting the software hotlines each vendor claimed it was the other software vendor that caused the issues. • After a few incidents the management team decided to purchase new single database software that will have all the software modules needed supported by one vendor. • Before starting the software, a search committee was established having key end users for each department and a requirements list was generated. • The list was presented to each software vendor who gave the demo and made sure that besides addressing the business requirements the end users could master it without a large learning curve. Benefits of Single Data Base ERP/WMS Software • The end users without having to access four different software platforms instantly find the information needed. • The customers were able to place orders on smartphones and have a web portal where they could view various needed information. • Inventory in the warehouse is picked by using Voice Pick which has multiple language capabilities addressing today’s labor reality and RF Guns. • Streamlining the operation resulted in lowering operating costs and improved customer satisfaction. Overseeing Software Implementation Manufacturers and Distributors, who had outdated software, experienced production, and inventory control issues. It resulted in shipment delays leading to products being returned, excess inventory in the warehouse, and penalties affecting the accounting department which had to issue credits and adjustments, often missing the vendor’s early payment discount date. When the shelves were consolidated to receive new inventory, products sometimes were misplaced and were not found until the physical inventory took place. This resulted in excess inventory becoming obsolete. To resolve these kinds of issues, new ERP/WMS Software was purchased from the company we represent. The computer manager designated to oversee the software implementation was related to the president. Unhappy with the decision, feeling that the 20-year-old software he developed met the company’s requirements, he decided that purchasing the new ERP/WMS Software was the wrong decision and became an obstacle to implementing the software. His behavior resulted in implementation delays. The users, seeing his attitude, lost interest in the project and did not practice what they were taught. The president, with whom I had a long-term working relationship, asked me to meet him for lunch and expressed his concerns about the ERP/WMS Software going live on the targeted date. I asked the president to assign a different person to oversee the project. To prevent a family rift resulting from this action, I suggested the person be called the computer manager’s “assistant.” Extensive individual training should be given to the manager to enable him to get over the fear of learning the new software. After the training ended, the manager got comfortable with the new ERP/WMS Software, assumed the project’s responsibilities and the end users practiced what they were taught every day. Case Study: Benefits of the New Software Twelve months after the company went live with the new ERP/WMS Software, the president invited me for lunch again and told me: “I would like to thank you for helping resolve the issue I had with my relative. It prevented a family rift. The new integrated ERP/WMS Software streamlined the production and enabled my company to ship the products the same day, The company operating costs were lowered and the inventory accuracy is 99.6%.” Key Person Overseeing Implementation The large Distributor who bought the ERP/WMS Software from the company we represent had a computer manager who was eager to learn the new software functions. As soon as the project started, he addressed the users’ concerns about learning the new software and made sure they practiced daily. It resulted in going live on the estimated date and budget. The end users, before having the new ERP/WMS Software, had to access multiple software platforms to retrieve needed information. They were happy being able to retrieve information instantly without having to access multiple screens. this resulted in decreasing their workload and improved customer service. Implementing Software without Parallel Run • Before the Software implementation is conducted, the business requirements study should be conducted and a test environment should be established. • The legacy software data should be downloaded to the test environment daily and verified for accuracy. • Data verification will eliminate the need to run parallel software. • The end users should be trained in a test environment that has the information they are familiar with. • Software vendor key personnel should be assigned to each department i.e. accounting, warehouse, and purchasing. Going Live with New Software • Company-wide tests should be conducted in which the end users create errors in the “test environment” and then be able to correct their mistakes. • If the users cannot correct their mistakes, the going live date should be postponed and additional training should be given. • After going live with the new ERP/WMS Software, the training and technical staff should remain on-site to assist with any issues that might arise. ERP/WMS Software Case Study Attending the event at a major accounting firm I met the large Food Manufacturer/Distributor CEO who was the keynote speaker describing his experience of going live with the new ERP/WMS Software he bought from the software company we represent. “I had a sleepless night before we went live with our new ERP/WMS Software concerned about shipping the daily 800 orders to our customers who depend on us. I was relieved that we didn’t have any issues because the ERP/WMS Software House training and technical team were at our location. If any of the users had an issue, it was immediately resolved. The training and technical team stayed at our location until they were convinced that our users were proficient. I was also pleased that our ERP/WMS Software house Hot Line support personnel are all technical. When my users call, they get an immediate response, and any issues they experience are immediately being resolved.” About SMC & Dani Kaplan: Since 1980, Dani Kaplan has worked with Manufacturers, Distributors, and Food companies as a trusted advisor helping them lower their operating costs, streamline their operations, and control the inventory. Dani can be reached at Dani.kaplan@smcdata.com  

Apr 22, 2024
New York
Business Value Growth

Will AI and Machine Learning “Empower” Buyers to the Point That They No Longer Need Salespeople?

Susan Powers of Sandler Training by PEAK Sales Performance is a member of XPX Hartford
Susan G Powers
Sandler
8 months ago

  The 2023 Sales Dilemma Susan Powers, Peak Sales/Sandler   Salespeople have never had a greater advantage and opportunity than they do today. They can secure even greater advantages and opportunities with each passing day. That’s because artificial intelligence, machine learning, and technology continue to make advancements that help salespeople develop closer and stronger relationships with their clients and prospects. Yet a lot of salespeople and sales leaders don’t see it that way. They see their main dilemma as one of getting, not just more leads, but more qualified leads. Fortunately, the sales-enabling and marketing-enabled technologies now driven by AI are making this goal much easier to attain– at least, for organizations that grasp the power of these technologies and leverage them. But for many salespeople, there remains an underlying, and far more serious, dilemma, one of attitude. They are stuck in the 21st-century version of a very old problem, one that has been known for decades as the Scarcity Mindset. They fear that artificial intelligence, machine learning, and technology will replace them. These salespeople worry that buyers will no longer need them around to make an intelligent buying decision. They fear there will not be enough to go around. The reality we face is simultaneously more encouraging and more challenging than that. AI will not replace salespeople… but AI-empowered salespeople will replace those salespeople who choose not to embrace the future of selling. Selling is still about choosing abundance over scarcity, and it is still about trust and honest communication– the two most important ingredients in any relationship. Today’s sellers need to remember that when their organization’s marketing technologies deliver those sought-after high-quality leads, their job is to initiate trust, build trust, maintain trust, and further trust. And the best way of doing this is to lean into, not away from, the revolutionary sales-enabling technologies that have been made available to us. To initiate trust, show up fully prepared for the first call or meeting, leveraging AI to know as much about the prospect, their industry, and their competition as possible. To build trust, use what was discovered in the first call or meeting and continue researching the solutions that will best meet the needs of the prospect– even if it means that you are recommending a competitor or other solution that is not your own. This approach goes a long way indeed in building trust. Once we have received a qualified lead, initiated trust in the first call, and built trust through honest adult-to-adult truth-based communication to create a relationship that wins the business, we must also maintain trust. All too often, this responsibility gets left out of the equation. We lose track of the relationship once the deal “closes.” So: Stop thinking in terms of closing! There will inevitably be delivery or other customer service issues; there will probably also be price increases at some point; there be unexpected shifts in the buyer’s world that neither side can predict right now. These and other events will require a strong relationship if they are to be handled properly and if the relationship is to grow over time. As sellers, we need to stay more informed than our competition, and if you think AI isn’t part of that, you’re not reading the horizon well. We need to get out in front of the challenge that shows up in our buyer’s world, whatever form it takes, and we need to share relevant information with our buyers and their stakeholders. That means delivering difficult information when necessary, and in a way that strengthens, rather than weakens, the relationship. Humans will always have an advantage over computers in this regard. When clients know that they can count on us to deliver honest but difficult news, they know that they can also trust us to take care of their needs as a customer. Furthering trust means that as sellers, we are leaning into AI and other information technology as much as possible, so we can make sure we see trends and shifts in the business and/or industry we serve before they impact our clients. When we can proactively bring information and insights to our clients that could help bring about advanced solutions, or help them to mitigate risks that connect to potential changes in their industry, this furthers the trust between the buyer and the salesperson. I began this article with the dilemma that most sellers care about: filling their funnel with qualified sales leads they can pursue. However, the real dilemma today’s sellers face has to do with a decision: embracing either the Scarcity Mindset or the Abundance Mindset. In 2024, embracing the Abundance Mindset means embracing artificial intelligence, machine learning, and sales enabling technologies with everything we’ve got. Gone are the days of Chief Revenue Officers or Chief Sales Officers accepting the excuse that part (or all!) of their sales force can’t even open an email or use a laptop. If you choose not to adapt to the world in which you now live and work, you will be left behind. That’s not scare talk. That’s reality. Here, then, is a wake-up call for today’s seller, regardless of tenure, age, or perceived influence within the company: We must all get on board the train and become AI-empowered sellers. If we don’t find our seat on this train, we will be replaced by salespeople who are leveraging all that AI, machine learning, and sales-enabling technologies have to offer. If you doubt this, compare the recent commission checks of those who are embracing the AI revolution with those who are not. I predict that you will instantly see the difference! Sales leaders: Are you certain you and your sellers are on board the train that’s heading toward the future of selling? Or do you feel like you or your team may have been left behind at the station? If you’d like to know more about how to make the shift, and/or how to get buy-in and adoption from your team on the ideas I have shared here, I would love to hear your story.

Nov 10, 2023
Hartford
Business Value Growth

Top B2B Marketing Myths

Yvonne Levine of YGL Enterprises, Inc is a member of XPX Charlotte
Yvonne G Levine
YGL Enterprises, Inc
1 year ago

B2B businesses, particularly professional services, are some of the most skeptical and risk-averse companies when it comes to embracing marketing. I should know because I service this client base. However, once I explain how marketing can elevate awareness and increase ROI, most B2B companies will adopt today’s proven digital marketing tactics. In today’s blog, we explore some common myths and provide insights into the power of B2B marketing. Common Marketing Myths Debunked Myth #1: My website is the only marketing initiative my business needs. First, having a website is a critical piece of any marketing plan, but it’s not enough. Many business owners believe having a website is enough to generate leads and grow their business. Unfortunately, this is a myth. While a website is important, it’s far from the only marketing investment you need. In today’s digital landscape, there are numerous marketing tactics that you can use to grow your business. From email marketing and content creation to social media marketing and search engine optimization, there are many approaches that you can use to increase your visibility and reach potential customers. Additionally, it’s important to remember that having a website is not a one-time investment. You must constantly update and optimize your site for the best results and develop a comprehensive marketing strategy incorporating multiple tactics. This will ensure you can reach your target audience and build a strong brand presence. Myth #2: B2Bs don’t need a marketing strategy. When it comes to marketing, B2B companies need to take a strategic approach to ensure their efforts are successful. Without a plan in place, there is a risk of wasting time and money on tactics that are not effective. On the other hand, a well-crafted

Apr 12, 2023
Charlotte
Business Value Growth

Appointment Setting for B2B Sales Teams

Mike Lindert of Sales Xceleration is a member of XPX Chicago
Mike Lindert
Sales Xceleration
1 year ago

Does your B2B Sales Team need help generating leads? There are many different types of B2B Sales teams. Direct Sales, Field Sales, Territory Sales, Indirect Sales, Channel Sales, Solution Sales, National Accounts, Global Accounts, etc. Most sales organizations create segments based on a few distinguishing client characteristics that delineate customer types so that sales teams can be organized, trained, and managed to pursue a particular market segment based on a similar set of customer attributes. One thing B2B sales team types have in common is that they all sell Business-to-Business or, depending on the organization’s size, Enterprise-to-Enterprise (E2E). They engage corporate customers directly and are skilled at working through a complex sales process rather than a B2C sales team focused on selling to an individual consumer. B2B Salespeople Not all B2B salespeople are created equal. Some are naturally gifted at generating leads (i.e., “rock turners”) but need help advancing or closing deals, while others are naturally-gifted “closers” but need help generating leads. Some salespeople prefer to manage customer accounts (i.e., “farmers”) rather than turn rocks or close deals. These different types of sales personnel tendencies are quite common. In an ideal world, you’d have a balanced team of hunters, farmers, and closers that align precisely with your business needs. Today’s sales organizations are multi-dimensional, multi-location, and multi-generational, with many different characteristics – including varying levels of industry experience, educational backgrounds, training, personalities, priorities, etc. As such, it’s often challenging to align and balance a sales team’s skills and preferences with organizational needs. Suppose you’re running a B2B sales organization consisting primarily of experienced salespeople. They have proven to be excellent closers but do poorly in developing new customer opportunities (i.e., lead-gen or “turning rocks”). In this case, hiring a third-party appointment-setting organization may make sense to help your closers become more efficient by generating, qualifying, and developing actionable leads. This approach is a variation of the traditional “Fronter-Closer” sales model. Rather than trying to recruit, hire, train, and develop this lead-gen capability in-house (or worse yet, attempt to retrain your “closers” to be “hunters”), you could hire an external firm specializing in Appointment Setting to generate and qualify leads for your closers. As most SMB businesses have learned, it’s often quicker and more efficient to “Hire than Build” this capability in-house. I’ve used this approach in the past with great success. Before you decide to implement this approach, I wanted to share with you a few tips and some of the lessons I learned along the way: Vendor Selection Experience. Make sure the vendor you’re considering has B2B appointment-setting experience rather than B2C experience. Don’t worry about the vendor having specific industry experience. Experienced B2B appointment-setting vendors will adapt to your B2B campaign’s needs. Low Employee Turnover. Look for low turnover on the attack teams. High turnover is a red flag as it takes valuable time to replace a productive appointment setter. Training. Make sure you understand how your team will be established and managed. Ask the vendor to explain their processes for recruiting, onboarding, training, ramp-up, handling violations, retraining, reassignment, etc. Price. Many different pricing models are available, depending on the program’s goals. The cheapest solution is not always the best fit for your needs. Vendor Capabilities & Structure Management Team. Know who you’re dealing with and ask for references. Organizational Structure. Learn how the vendor is structured and how to escalate a client issue if necessary. Resources. Where are their resources located? How long does it take to launch? Lead Lists. Clarify who provides the lead lists. How much do they cost? Scripts. Clarify who provides the call scripts and the process for making changes. Sales Process. Understand how they nurture each prospect and the cadence between customer interactions. Request a flow chart of the typical sequence of events, including phone calls, emails, follow-up calls, voicemails, newsletters, blogs, whitepapers, etc. Call Recordings. Who audits calls for compliance? Where are recordings kept? QA Reporting. Ask for sample QA reports, exception logs, templates, etc. Vendor Relationship Relationship Type. Understand the difference between contracted, outsourced, and offshored. Partnership Approach. Both parties must be willing to invest in developing a solid working relationship that can create and continually improve the reporting, processes, and tools needed to be successful. Often this takes at least one year, so be prepared to invest and don’t expect instant results. Get to know the Appointment Setters. Know the names and experience levels of each member of the group of experts developing qualified leads for your team. Part of the Team. Treat them as members of your sales organization. If possible, include them in sales contests, campaigns, etc. Appointment Setters: Special Requests “The Producer.” Request a minimum of one experienced sales “producer” to be assigned to your appointment-setting team. Ideally, you want an entire group of top-producing “A-Players” assigned to your account, but that’s nearly impossible with most vendors because the industry has notoriously high turnover, low pay, difficult working conditions, etc. Start with one producer, and as that one becomes successful on your account, producers on other teams will want to transfer to your team. Notification of Team Changes. Insist that the sales team leader notify the client of any personnel turnover or changes to the assigned appointment-setting team. Surprise Visit. Fly to the vendor’s location unannounced 2-3 months post-launch. Just show up to see how they are doing. Bring swag. Introduce yourself and get to know the team calling on your behalf. Have lunch delivered, or take them out for dinner. Ask how things are going and what they need from you, and then deliver on their requests. Sometimes they may require changes to the script, a second case study, updated product brochures, or a new email template they can quickly send to highlight your key differentiators. Whatever it is, follow up asap to get them what they need, and keep the door open for more feedback. B2B Appointment Setting Program – Leverage Your Investment Most sales leaders understand that the direct sales model is one of the best ways to close B2B business because customer-facing meetings are usually very effective if done correctly. Unfortunately, these face-to-face meetings also consume time, money, and resources. Layering the cost of a B2B Appointment Setting program on top of the existing cost of a B2B Sales team can add up quickly. One way to lower your average investment per Appointment is to leverage each confirmed customer appointment into 2-3 additional leads. How do you do that? Start by launching the B2B Appointment Setting program as an opt-in for your Sales Team. Explain the program’s intent, duration, distribution mode (round-robin, zip code, etc.), notification mechanics (email, Calendar invitations, etc.), and the sales rep’s participation requirements, which are simple: The lead associated with the Appointment must be entered in CRM and kept updated. Before or after the Appointment, the sales rep must make a minimum of two cold calls to neighboring businesses in an attempt to gain an additional meeting or two. Both companies are entered into the CRM referencing the initial client meeting. If both of these requirements are not met, the Sales Rep can be dropped from participating in the Appointment Setting program, and all future leads will be redistributed to other sales reps. This approach has multiple benefits: It acts as a lead multiplier. It leverages limited resources. It expands the sales pipeline. Every dispatched sales meeting is converted into additional lead gen activity for your B2B Sales Team, which lowers your average cost per meeting while expanding your sales pipeline. Uses neighborly familiarity as a door opener – “Hi, I was just talking with your neighbor about “X,” and since I’m in the neighborhood, I thought I’d introduce myself and ask to talk to your VP of Operations about this popular program.” Potential Sales Contest. It can be used as the basis of a sales contest that improves activity levels while driving results. It can be a fun source of friendly competition around most appointments, causing even more activity. This month, I’ve posted three valuable resources on

Dec 15, 2022
Chicago
Practice Tips

The Impact on Strategy In the midst of Uncertainty

Ricardo (Dick) Albu of Albu Consulting LLC is a member of XPX Fairfield County
Ricardo (Dick) Albu
Albu Consulting LLC
1 year ago

Uncertainty…Has inflation peaked? Are we in a recession? Will the federal reserve increase rates?  Will supply chain challenges be resolved?  We have written often about the challenges business leaders face and the impact of uncertainty on strategy management.  Two of our most recent articles on the subject were

Sep 16, 2022
Fairfield County
Business Value Growth

Strategic Thinking in Turbulent Times

Ricardo (Dick) Albu of Albu Consulting LLC is a member of XPX Fairfield County
Ricardo (Dick) Albu
Albu Consulting LLC
2 years ago

Here we go again…supply chain challenges continue to cause shortages driving costs up; tightening labor markets are pushing wages higher; global energy prices are at new highs due to geopolitical disputes; and these external factors threaten to push the economy toward a recession. We are in another challenging business cycle that demands changes to how your business will succeed now and into the future. The most resilient companies large and small are already taking steps to manage this new level of economic volatility.  The bad news is that companies tend to refocus on the short-term and put long-term strategies on hold.  As discussed in previous AlbuonStrategy publications,

May 20, 2022
Fairfield County
Business Value Growth

Song of the Day

Maria Forbes of FIREPOWER Business Catalyst, LLC. is a member of XPX Atlanta
Maria C Forbes
FIREPOWER Business Catalyst, LLC.
2 years ago

How a successful women-owned company gets its teams into positive gear every day. On multiple occasions, I have experienced something noteworthy, something different and real, a true and authentic sense of purpose about this owner and her partner. Their method of forming relationships has created business strength that withstands economic, social, and business shifts with amazing resilience. As I experience our association from my usual lens, how people are powering organizations, Chrissy’s unique personal blend of characteristics becomes increasingly more intriguing as a people-powered company. A conversation that starts differently. Today we intended to discuss a client project, but the start of the conversation opened the door further into their unique business model. As Chrissy shared what seemed to be her personal viewpoints on business relationships, she unintentionally described deeper layers of her approach to team success. Not fully aware that her vast experience, natural talents, and her God-given purpose have formed a superior people foundation, she was revealing to me the real drivers of her core business values. I caught the wave, like being hit by an ocean surge, and found myself further intrigued by this dynamic leader. Conversations start with who we are as leaders, with a purpose to help others do their best work. A strong code of conduct is a catalyst for business growth Owners and leaders overlook the importance of cohesive business culture. As a part of the business growth continuum, we uncover and highlight a business culture as a driver to organizational success. Your code of conduct resonates from internal relationships within the company eco-system, outward to client relationships, vendor relationships, and professional associations, all with great influence on expanding the business networks. Intentional People Engagement There is a natural and intentional mission to grow people, no matter their background. Chrissy and her team look beyond education and experience. They observe the potential to lead and then develop leadership. Instead of a right-of-passage from subject matter expertise or years of experience, this is a different measure of success, it is a measure of potential. The partners advise their people, that learning to lead will require bravery, and to make mistakes as they experience opportunities to grow. The “we’re in this together” approach to growth keeps their people invested in the business. Song of the day It was with the true passion that Chrissy shared her anticipation about the morning’s team meeting. In the midst of working on an office relocation, opening a new business territory, and a call to jury duty, she finds excitement in the one thing she can schedule this week, a team meeting. The meetings start with a song, something from Chrissy’s mind, as “a way to connect to the teams”, and she suggests, “a way to lift them up.” Why does this stand out to the teams? Because it is real, authentic, not a prescribed method, or someone else’s idea to copy, and therefore it works to bring the team together. Today, as we were on the call, a senior member of Chrissy’s team requested a specific song for the meeting, which was like music to her ears! Consider what is authentic. Are their shared interests, or sharable interests, among your leadership team that encourage participation, and belonging, and may cultivate community? When these interests are set into the right framework, they can be a means of engaging your people, a true driver to cultural success. If you like this post click executiveassistant@firepowerteams.com.

Apr 21, 2022
Atlanta
Business Value Growth

How Businesses Can Deal with Inflation

Gershon Morgulis of Imperial Advisory - Fractional CFOs and Advisors is a member of XPX Long Island
Gershon Morgulis
Imperial Advisory - Fractional CFOs and Advisors
2 years ago

With the supply chain and labor shortages caused by the pandemic, the blockage of the Suez Canal (remember that?), and the ongoing war between Russia and Ukraine, prices have gone through the roof. And while the Fed may claim some of it is transitory, many of us know exactly what it is: Inflation! But what exactly is inflation, what does it mean for a business, and what can a business owner do about it? In this article, we’ll define inflation and discuss some strategies for dealing with its ramifications. What is inflation? Inflation is an increase in prices not tied to an increase in quality. Inflation is when food prices go up for no reason at all; if package quantity went up to the same degree as food prices, then the price increases would not be an example of inflation But when we get away from simple things like food, it gets a bit murkier. If a car price goes up because the car is rare, is that inflation? How about putting out better but more expensive models…is that inflation? If cars are hard to come by because of a chip shortage, is that inflation? How about when the price of a commodity goes up because the price of fuel went up? Is that truly inflation? Or is it what the Fed would describe as transitory – something that will reverse itself when the price of oil comes back down? (Incidentally, the question of when the price of oil will come down is up for debate.) Our firm recently held a webinar with an energy analyst who opined that energy prices might stay high for some time (fact check and include link)) But, beyond defining inflation, the real question is – what does this mean for my business? How do I react and keep my business, reputation, and pricing power? Tips for Dealing with Inflation I recently had a conversation with a food service provider. He was facing a dilemma; commodity prices like flower, oil, and onions were up 80-150%. Labor was up significantly too. How can he keep selling food at a price people can handle while continuing to make a profit? Here is some of what I shared (and other things I did not share that may be interesting to a broader audience). Not all products are created equal. The cost for components of one product went up modestly while the cost of ingredients of the other went up much more significantly. Understand your margin by product and you can know where you need to raise and where you can absorb slightly tighter margins. Create efficiencies. If labor costs are up, what can you do to reduce the amount of labor inputs? Maybe hire robots for a piece of the process. Maybe buy certain items ready made from a larger vendor who can get economies of scale. If certain onions are up more than mushrooms, start offering mushroom salad as a standard and charge an extra fee for onion salad. Be thoughtful about inventory. Having extra inventory will cost you more money and you ultimately have to chare the customer more to cover your carrying costs. On the other hand, with prices increasing weekly, you may save significant money by buying things today rather than next month. Loss leaders are an option. Certain products might be unprofitable when viewed individually; however, if they enable you to sell other more profitable products, you might profit on a customer interaction even if you do not profit on each individual component. Consider buying in bulk. If you get a slight discount today and lock in your prices for the next few months, you are probably ahead of the game. Unless of course prices start rapidly falling, in which case you have price stability but are behind the 8-ball. Keep a long-term view while making sure you stay liquid and solvent. If you believe that commodity prices will come down (I do, but unfortunately, I do not know when), realize that there could be an opportunity to build or solidify those long-term relationships today and make the profit tomorrow. Keep an eye on the competition but know your numbers. Know where your business’s “line in the sand” is located. If you go past there, you will end up regretting it. Don’t let your competition entice you to chase unprofitable volume. You may not “make it up in volume…” Compete on things other than price. Provide a better dining experience, off hours delivery, customization, or something else your customers value that doesn’t cost you too much to provide. You will raise prices, but they’ll keep coming back for other reasons. Don’t just focus on margins. If you used to produce product for $5 and sell it for $10 but now it costs you $10 to produce, you can sell it for $15 and while you’ll have a much tighter percent margin (33% vs 50%), you’ll still be making the same number of dollars in profit ($5). Your competition may continue to mark it up 100% (so if the cost is $10, they’ll charge $20). Consider a loyalty program. If you do have to raise prices, consider instituting a loyalty program to “give something back.” While “points” are often left unused, you still build loyalty and if customers do come back for the freebies, you are giving my favorite type of discount – the one you only give when they come back. Monitor closely. If you do choose to operate on tighter margins, be very careful of waste and spillage. With tighter margins, every lost “unit” eats up a bigger piece of your profits. It’s been an interesting decade so far, these 2020s. When we are all grandparents, the kids are not going to believe this, but until then, keep paying attention to what is going on and make sure you are thoughtful about the scenarios in which you find yourself. Be intentional about your business (and life too!) and make sure to have good facts so you can make the right strategic decisions to help you weather this storm. — Gershon Morgulis is the founder and managing partner of Imperial Advisory CFOs. Imperial’s 8-CFO team provides owners and other executives of growing businesses with part-time CFOs and other consulting services which enables businesses to make better and more confident business decisions.

Apr 12, 2022
Long Island
Business Value Growth

How a Fractional VP of Sales can increase valuations: The sales team shouldn’t be operating “independently” of a Strategy

John Spencer of Clear Direction Sales Development is a member of XPX Austin
John Spencer
Clear Direction Sales Development
2 years ago

In this video, I discuss the impact of developing a strategy for the sales team with the Fractional VP of Sales. “Independence” shouldn’t mean doing your own thing for your self-satisfaction. Get started on your sales action plan today by taking my quick 10 question assessment link here: #salesstrategy #StopRandomActsofSales #rankcustomers

Apr 5, 2022
Austin
Business Value Growth

How a Fractional VP of Sales can increase the valuation of a business

John Spencer of Clear Direction Sales Development is a member of XPX Austin
John Spencer
Clear Direction Sales Development
2 years ago

In this video, I summarize why a Fractional VP Of Sales is often the best choice for a business in transition. Businesses from $3M-$75m often encounter a “Gap” they have to address before they can leap to the “next level”. This will require professionalizing the sales team by removing or elevating the current leadership from the sales function. An experienced Fractional or Outsourced Sales leader is often the next best step to support this transition. #salesleadership #immediatebenchstrength

Apr 2, 2022
Austin
Business Value Growth

Assessing the Advisor-Client Relationship: Consider the Client’s Past Experiences

Larry Gard of Hamilton-Chase Consulting is a member of XPX Chicago
Larry Gard
Done With Work Retirement Coaching and Consulting
2 years ago

Second article in a series . . . If you work as a business advisor, you know that engagements can be unpredictable. Whether helping the owner take advantage of a changing marketplace, or optimizing the business to prepare it for sale, these initiatives typically involve significant planning, coordination, and effort from both advisors and their clients.  Despite the best of intentions, these large-scale projects don’t always proceed smoothly. There are many things that can affect the advisor-client relationship and make it harder for clients to accomplish the tasks associated with the project.  This article is the second in a series highlighting matters that should be considered by advisors and clients before they agree to work together. “What’s past is prologue” – William Shakespeare While every engagement is different, a client’s experience with a complex project (or lack thereof) ought to be grist for the mill before beginning a new advisory relationship.  Without the insights gained from learning about the client’s past, the client and advisor may be starting from square one.  By taking the time to explore the client’s experience, both parties can identify potential obstacles to success and make a more informed judgement as to whether they are well-suited to work together. Consider the story of Jacob, the owner of a medical practice that specialized in providing home infusion treatments.  Twelve years ago, Jacob hired a firm to reduce coding errors, automate insurance filing, and streamline patient billing. The process stalled as Jacob became preoccupied with every detail of the project, right down to the font used on patient statements.  What was to be a nine-month project took almost twice that long to complete.  Now at age 60, Jacob wants to sell the practice and retire.  He hired an exit-planning advisor to orchestrate and manage the process.  The advisor began by recommending an expert to conduct a business valuation.  Things quickly bogged down as Jacob questioned the results and the methodology.  He insisted that another valuation be conducted at the advisor’s expense.  Had the advisor inquired about Jacob’s prior experience and had a better understanding of him, he or she might have explained the valuation process in advance and obtained Jacob’s explicit approval beforehand. A client may have no prior experience working with an advisor on a complex project.  In such cases, the advisor might direct the conversation as follows: “You say you’ve not worked with an advisor on a complex project like this before.  Since we don’t have that background historical information, perhaps you can think about what it has been like working with the professionals who routinely assist you, such as your attorney or accountant.  How does your work style, your communication preference, etc. mesh with theirs?  Are there certain things that lead to productive interactions with those advisors?  With your permission, it would be useful for me to speak to them so that I can get a deeper understanding of your business history and learn more about how they helped you.  Who may I contact?” Some clients have had a truly bad prior experience.  Engagements get terminated before they are finished, advisory relationships end on bad terms, and aggrieved clients may consider legal action.  Not all clients will immediately mention these matters and the prudent advisor should inquire, “Have you been fully satisfied with the process and outcome of previous projects?” If the client wasn’t satisfied, the advisor might pursue the following line of inquiry: “I can’t imagine that was pleasant, but I also hope we can avoid a repeat.  Let’s talk about what was dissatisfying and exchange ideas about how to make sure things go smoothly here.” “How do you feel about the communication between you and that advisor?”    “Were there misunderstandings or misperceptions?”   “What was your degree of alignment regarding how the project would unfold?”  “What prevented the two of you from resolving your dissatisfaction?” “What’s the most important thing we can do differently to ensure a solid working relationship?” As clients respond to these questions, advisors should pay close attention to the client’s observations and insights about the prior advisory relationship.  Are there lessons that can be applied moving forward?  Does the client acknowledge, for example, that communication wasn’t timely or that responsibilities weren’t specified?  If no clear considerations emerge the advisor might suggest an incremental approach rather than contracting for an entire project.  This would give both parties the opportunity to grow comfortable with one another. This is the second in a series titled “Assessing the Advisor-Client Relationship”.  Each week, I will explore a new element affecting the advisor-client relationship in some detail.  These articles will help you understand potential opportunities and obstacles when working on long-term strategic engagements.  The next article will explore the client’s attitude toward change. Please feel free to reach out for more information or assistance proactively assessing the potential advisory relationship.

Feb 7, 2022
Chicago
Practice Tips

Taking On a New Business Advisory Client? Assess the Potential Working Relationship Up Front

Larry Gard of Hamilton-Chase Consulting is a member of XPX Chicago
Larry Gard
Done With Work Retirement Coaching and Consulting
2 years ago

If you work as a business advisor, you know that engagements can be unpredictable.  Whether helping the owner take advantage of a changing marketplace, or optimizing the business to prepare it for sale, these initiatives typically involve significant planning, coordination, and effort from both advisors and their clients.  Despite the best of intentions, these large-scale projects don’t always proceed smoothly. There are many things that can affect the advisor-client relationship and make it harder for clients to accomplish the tasks associated with the project.  This article is the first in a series that will highlight matters that should be considered by advisors and their clients before they agree to work together. Why take the time to examine the potential working relationship?  Both parties have a shared interest in the project going smoothly.  Clients invest a considerable amount of time, energy, and money, and they expect (or at least hope) that the process will be relatively effortless and pain free.  As an advisor your client’s success is paramount, and satisfied clients can be a good referral source. Yet too often advisors proceed full speed ahead with a prospective client, eager to assist, only to wish they had taken more time to explore issues that affect compatibility.  They come to realize they are a poor fit for their client, they encounter stylistic differences that impede progress, or they discover that the client is uncomfortable with the process.  In some instances, things move forward even though in retrospect it’s clear that the project should have been deferred, either until the client found a better advisor match, refined their goals, or completed some pre-work. The other rationale for taking time up front is that clients may have multiple strengths that ought to be identified and capitalized on.  For example, a client may be particularly innovative and thus quite comfortable with a state-of-the-art solution.  They may embrace change and expect that the advisor will propose initiatives that are truly transformative. Initiating the Discussion Some advisors may feel unsure about how to explore the potential working relationship.  Here is one way to introduce the topic with your client: “We both have a shared interest in this project going smoothly.  I appreciate that it represents an investment of time, energy, and money on your part, and it may require new approaches and changes to your business.  It’s also important to me that we’re successful in meeting your goals.”  “Of course, it makes little sense of us to proceed if we’re not mutually comfortable, and I certainly don’t want you to go down this path if we determine there are significant obstacles to our success.” “Every client comes to us with different characteristics that contribute to our progress together.  If there are things that might affect our working relationship, we should talk about them in advance.  For example, if you’re the sort of person who might benefit from assistance tracking key deadlines it would be helpful for me to know that up front.  By learning more about your work style ahead of time, I’ll be better able to adapt to it and optimize my efforts to assist you.”  At this point the advisor can then raise various topics for discussion.  This can include questions about the client’s prior advisory experiences, attitude toward change, persistence in the face of obstacles, and so forth. This is the first in a series titled “Assessing the Advisor-Client Relationship”.  Each week, I will explore a new element affecting the advisor-client relationship in some detail.  These articles will help you understand potential opportunities and obstacles when working on long-term strategic engagements.  The next article will address the client’s experience with past projects. Please feel free to reach out for more information or assistance proactively assessing the potential advisory relationship.

Jan 31, 2022
Chicago
Practice Tips

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A Dozen Questions to Begin the Exit Planning Discussion

Larry Gard of Hamilton-Chase Consulting is a member of XPX Chicago
Larry Gard
Done With Work Retirement Coaching and Consulting
13 hours ago

As an advisor, your role is to help clients prepare to exit their business, yet many people resist thinking about the future because it involves so many unknowns, decisions, and choices.  And emotions typically complicate matters further, sometimes derailing the process altogether.  Here are some questions that can help you establish rapport with your clients, learn more about their concerns, and move the conversation forward. How are you feeling about your work/profession/business these days? Which aspects of work are you still enjoying, and which are you ready to leave behind? Do you envision retiring from work at some point, or are you contemplating an encore career? What part of planning for your future feels most challenging? How do you imagine your life in retirement will be different from how it is now? What process are you using to figure out what you’ll do next after you retire? What would you like to see happen with your business long term? What options have you considered for the transfer of your business? What steps have you taken to make your business more attractive to a potential buyer? What are your concerns about transitioning your firm to new ownership? What would be your ideal scenario for transitioning out of your company? What topic(s) have we touched on today that we should put on our agenda to revisit? So, what happens after you pose a few of these questions and your clients open up about emotional matters?  Remember, the most helpful thing you can do is to listen attentively.  You’ve created a valuable opportunity for them to talk about things they may not share with other advisors.   Here are some tips for managing the conversation when clients raise emotionally loaded topics: Don’t try to “fix things” by immediately offering suggestions. Doing so sends the message that you’re uncomfortable hearing their concern.  You can offer suggestions but do so later. Don’t say anything that conveys the message that their feeling or concern is unwarranted. “There’s really no need to feel that way” or “I’m sure it will be just fine” may sound reassuring to you but could be experienced as dismissive by your client. Don’t immediately offer a logical counterpoint to your client’s emotion. Remember, feelings don’t have to make sense; they’re “as is”.  Put another way, if feelings made sense, they would be thoughts. People report concerns and characterize their feelings differently from one another, so it’s in your best interest to seek amplification and clarification by inquiring as follows . . . “I want to make sure that I understand exactly what you mean by ___.  Can you tell me more?” “People sometimes mean slightly different things when they talk about ___.  What does ___ mean for you?” “Before I suggest anything, I’d like to learn more about it from your perspective.” It’s possible that during early conversations your client may hint at mixed feelings about exiting their business.  That’s perfectly normal, but you need to bring it out into the open.  You want to foster an atmosphere such that your client keeps you apprised about where they’re at.  If they keep their ambivalence to themselves, it has greater potential to blindside you and complicate the sale.  You can say: “In my experience, it’s normal to have some mixed emotions about selling.  Those thoughts may not always be top of mind, but when they do pop up let’s be sure to talk about them.  Believe it or not, they can help inform our process and alert us to aspects of the sale that are important to you.” You may also find that your client is overly risk averse.  If so, consider saying the following: “Our work together won’t be comprehensive if we only plan for what could go wrong.  That’s just half the equation.  It’s fine to be conservative and err on the side of caution, but to be truly realistic we should also consider a range of possibilities both good and bad.”   Author’s Note:  The concepts in this article are derived from Robert Leahy’s book, Overcoming Resistance in Cognitive Therapy.  New York:  Guilford

Jul 26, 2024
Chicago
Practice Tips

Southern States Fight Back Against Union Wins in South

Robert Brody of Brody and Associates, LLC is a member of XPX Tri-State
Robert G. Brody
Brody and Associates, LLC
1 day ago

For five decades, the southern United States has been an attractive location for automakers to open plants thanks to generous tax breaks and cheaper, non-union labor. However, after decades of failing to unionize automakers in the South, the United Auto Workers dealt a serious blow to that model by winning a landslide union victory at Volkswagen. In an effort to fight back, three southern states have gotten creative: they passed laws barring companies from receiving state grants, loans and tax incentives if the company voluntarily recognizes a union or voluntarily provides unions with employee information. The laws also allow the government to claw back incentive payments after they were made. While these laws are very similar, each law has unique nuances. If you are in an impacted state, you should seek local counsel. In 2023, Tennessee was the first state to pass such a law. This year, Georgia and Alabama followed suit. So why this push? In 2023, the American Legislative Exchange Council (“ALEC”), a nonprofit organization of conservative state legislators and private sector representatives who draft and share model legislation for distribution among state governments, adopted Tennessee’s law as model legislation. In fact, the primary sponsor of Tennessee’s bill was recognized as an ALEC Policy Champion in March 2023. ALEC’s push comes as voluntary recognition of unions gains popularity as an alternative to fighting unions. We recently saw this with the high-profile Ben & Jerry’s voluntary recognition. Will this Southern strategy work to push back against growing union successes? Time will tell. Brody and Associates regularly advises its clients on all labor management issues, including union-related matters, and provides union-free training.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.  

Jul 25, 2024
Tri-State
Business Value Growth

My Interview with Jerry West on Management

John Dini of The Exit Planning Coach is a member of XPX San Antonio
John F Dini
The Exit Planning Coach
2 weeks ago

I once had the thrill of interviewing Jerry West on management. He was “The Logo” for the NBA, although back then they didn’t advertise him as such. Only the Laker followers knew for sure. In 1989 the “Showtime” Lakers were coming off back-to-back championships.  Pat Riley was a year away from his first of three Coach of the Year awards. 

Jul 9, 2024
San Antonio
Owner Life & Legacy

Can You Offer too Many Product Versions to Your Customers?

Steven Lustig of Lustig Global Consulting is a member of XPX Atlanta
Steven Lustig
Lustig Global Consulting
2 weeks ago

Can you Offer Too Many SKUs to Your Customers? The short answer is YES! A SKU, or Stock Keeping Unit, defines each different product version that you sell and keep inventory of.  There may be different SKUs of the same overall item based on size, color, capacity (think computer or cellphone memory), features, and many other parameters.  For build to forecast businesses, that number of variations can quickly explode and become difficult to manage. Your customers are busy and want ordering simplified. Of course, they may need (or want) more than one variation of a product. That is reasonable and a common aspect of business – one size does not fit all! But there is a point where too offering too many SKUs is not value added either for your customer or your business.  In his April 30, 2013 article “Successful Retailers Learn That Fewer Choices Trigger More Sales” in Forbes, Carmine Gallo discusses his experience and a study about “choice overload” by other authors. He writes about a retailer that “has discovered that giving a customer more than three choices at one time actually overwhelms customers and makes them frustrated…when the customer is faced with too many choices at once, it leaves the customer confused and less likely to buy from any of the choices!” Choice overload is well-documented in consumer studies but can apply in B2B as well. While customer satisfaction is important, another key concern is the often-hidden costs associated with a business offering and managing a large number of SKUs for a given product type. These costs include holding inventory, S&OP (Sales and Operations Planning) team time, small production runs, and scrapping inventory. Holding inventory takes up space, which may come with a cost or utilize racks that could be used for other products. Scheduled inventory counts take up employee time and may result in blackout periods when the warehouse is not shipping product.  The more SKUs there are, including extra SKUS, the greater the potential impact. The Sales team’s forecasting and the Operations team’s purchasing reviews that are part of the S&OP process can occupy more of their valuable time if they need to consider these times. If small orders or forecasts require a new production run, this could be costly and create excess inventory. Whether from this new production or past builds, eventually it will make sense to write off and scrap old inventory, another cost impact to the company. How do you know which SKUs to focus on if you wish to look at reducing your total number of SKUs? Start by examining SKUs that have: Low historic sales over a period of time Small variations between SKUs that customers do not value Older technology or model when newer option SKUs are available This requires a true partnership between Sales and Operations. It starts with educating both teams on the costs involved – neither group may be aware of the money and time impact to the company. Periodic (such as quarterly) reviews of SKUs that meet the above descriptions should become a fixed part of the calendar. A review of the data and other available for sale options should result in the identification of SKUs which may not be needed. At that point, it is helpful to have a customer friendly EOL (End of Life) Notice process by which you inform customers of last time buy requirements for this SKU and alternates available. It is usually best to provide some time for the last time buy in the interest of customer satisfaction, although that may not always be necessary. At a company that designed and sold electronics, a robust SKU rationalization process was implemented to help address these issues. A representative from the Operations team analyzed SKUs that met a version of the above criteria and suggested candidates for the EOL process. Next, a member of the Sales team reviewed them and, where appropriate, issued product change or EOL notices to customers, providing them time for last time buy orders when needed. These steps helped reduce the work involved in maintaining these SKUs while not leading to any customer complaints. A final note – sometimes it makes sense to continue offering low selling SKUs – to support customers buying other items (hopefully in larger quantities). It may be worthwhile to encourage them to keep coming back to you for all of their product needs and this may be a way to accomplish that. But it helps to understand that this is truly the case and not assume that this customer would not be equally happy with another, more popular, SKU.   Steven Lustig is founder and CEO of Lustig Global Consulting and an experienced Supply Chain Executive.  He is a recognized thought leader in supply chain and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.

Jul 9, 2024
Atlanta
Business Value Growth

Owners are a Minority

John Dini of The Exit Planning Coach is a member of XPX San Antonio
John F Dini
The Exit Planning Coach
3 weeks ago

When it comes to careers, business owners are a minority of the population. In conversations this week, I mentioned the statistics several times, and each owner I was discussing it with was surprised that they had so few peers. According to the Small Business Administration (SBA), there are over 33,000,000 businesses in the US. Let’s discount those with zero employees. Many are shell companies or real estate holding entities. Also, those with fewer than 5 employees, true “Mom and Pop” businesses, are hard to distinguish from a job. The North American Industry Classification System (NAICS) Association, lists businesses with 5 to 99 employees at about 3,300,000, and 123,000 have 100 to 500 employees (the SBA’s largest “small business” classification.) Overall, that means about 1% of the country are private employers. Owners are a small minority, a very small minority, of the population. Even if we only count working adults (161,000,000) business owners represent only a little more than 2% of that population. So What? Where am I going with this, and how does it relate to our recent discussions of purpose in business exit planning? It’s an important issue to consider when discussing an owner’s identity after transition. Whether or not individual owners know the statistics of their “rare species” status in society, they instinctively understand that they are different. They are identified with their owner status in every aspect of their business and personal life. At a social event, when asked “What do you do?” they will often respond “I own a business.” It’s an immediate differentiator from describing a job. “I am a carpenter.” or “I work in systems engineering,” describes a function. “I am a business owner” describes a life role. When asked for further information, the owner frequently replies in the Imperial first person plural. “We build multi-family housing,” is never mistaken for a personal role in the company. No one takes that answer to mean that the speaker swings a hammer all day. Owners are a Minority We process much of our information subconsciously. If a man enters a business gathering, for example, and the others in the room are 75% female, he will know instinctively, without consciously counting, that this business meeting or organization is different from others he attends. Similarly, business owners accept their minority status without thinking about it. They expect that the vast majority of the people they meet socially, who attend their church, or who have kids that play sports with theirs, work for someone else. There are places where owners congregate, but otherwise, they don’t expect to meet many other owners in the normal course of daily activity. This can be an issue after they exit the business. You see, telling people “I’m retired” has no distinction. Roughly 98% of the other people who say that never built an organization. They didn’t take the same risks. Others didn’t deal with the same broad variety of issues and challenges. Most didn’t have to personally live with the impact of every daily decision they made, or watch others suffer the consequences of their bad calls. That is why so many former owners suffer from a lack of identity after they leave. Subconsciously, they expect to stand out from the other 98%. “I’m retired” carries no such distinction.       This article was originally published by John F. Dini, CBEC, CExP, CEPA on

Jul 1, 2024
San Antonio
Owner Life & Legacy
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