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Recruiting Customers and Suppliers to Help with Your Continuous Improvement Efforts

Steven Lustig of Lustig Global Consulting is a member of XPX Atlanta
Steven Lustig
Lustig Global Consulting
6 months ago

I wrote earlier about the value a closed loop employee suggestion program can provide. These do provide significant benefits, but there is no need to limit continuous improvement suggestions to those inside the company. Customer and supplier surveys can provide great insights into such opportunities while also enabling the company to collaborate better with key partners. However, like employee initiatives, if they are not managed well, they can leave you worse off than if you never asked your suppliers and customers for their help. Designing the survey is important – this is not the time to ask leading questions or pressure the recipients to provide high numerical scores because somebody’s annual performance review or bonus depends on it. If you want to obtain honest answers, understand what the customer or supplier values, and receive useful responses on what is working well and what is not, objective survey questions are needed. It is great to ask about their level of satisfaction with relationship-specific functions. For a customer survey, this could include asking about responsiveness, on-time delivery, quality, etc. For suppliers, this may involve questions about purchase order and other documentation accuracy, on-time payment and more. You may also wish to ask some higher-level questions, such as: What is one thing that we are doing that we should keep doing the same way? What is one thing that we are doing that we should improve? What is one thing that we are not doing that we should do? What is one thing that we are doing that we should not do at all? The quickest way to turn this into a negative experience is to ask customers (especially) and suppliers to spend time completing these surveys and then nothing is done with the results. They will have an expectation that their time and opinions are being valued. Failure to respond will create frustration – I have seen this firsthand. Similar to the best practice for employee suggestion programs, before you send out surveys to customers or suppliers, it is critical to commit the resources to: reading, evaluating, and consolidating the responses developing and executing improvement initiatives based on those comments promptly responding to the survey respondents on what actions are being taken based on their survey participation   Depending on the actual responses, it may be necessary to also diplomatically explain why certain requests are not being acted on – we can easily imagine a customer utilizing the survey answers to ask for unrealistic price decreases or other concessions. Surveys can be periodic (quarterly or annual) independent events or incorporated into Quarterly Business Reviews or other meetings. Some suppliers may be unfamiliar or uncomfortable with customers requesting their honest feedback. Their past experience with other customers (and even with your own company) may be limited to customers telling them what to do better and never asking for their insights. They may be afraid that if they provide honest continuous improvement feedback it will not be well-received and may even be held against them. It may take assurances and several iterations before they trust the process. It is essential that your company receive these suggestions as they would acknowledge ideas from the customer, demonstrate that they appreciate them, and act on them as appropriate. Once that level of trust is established, suppliers can be key partners in improving how you enable them to support you. I have had to work with suppliers to help them get comfortable with what to them was a novel request so don’t accept the response that everything your company is doing is great. I recall one occasion when I was responsible for combining the best New Product Introduction processes between two different divisions of the same firm. Aside from taking the time to understand each group’s steps, I found it valuable to ask the shared external manufacturing partner for their input on which of those differing steps best assist their ability to support our needs. Of course, showing where their advice was used to implement new standard processes or explaining why certain suggestions were not utilized was important to this closed-loop process. Your key customers and suppliers can be some of your strongest allies in your quest for continuous improvement. A robust closed-loop survey process can be an effective tool in this effort while simultaneously creating a stronger, more collaborative relationship with those external partners most critical to your company’s success. 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, manufacturing, and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.  

Continuous Improvement and Employee Engagement Through Employee Suggestion Programs

Steven Lustig of Lustig Global Consulting is a member of XPX Atlanta
Steven Lustig
Lustig Global Consulting
6 months ago

During my first visit to one factory, I quickly noticed on a wall in the lobby a collection of cards with employee suggestions – normally a good sign of a facility’s commitment to continuous improvement and employee engagement. A closer look revealed the opposite – improvement ideas that were months and even quarters old without any response or follow up. While creating that program was a good idea, the lack of follow through likely discourages employees from contributing further suggestions. Unfortunately, that company is not alone. This all-too-common practice is highlighted in the article “Companies Often Solicit Employee Feedback but Seldom Act on It” (in the May-June 2024 issue of Harvard Business Review) which discusses a 2023 Gartner white paper “Employee Engagement: Close the Action Gap to Drive Business Outcomes” by Jen Priem. Employees want to help. In fact, “40% of survey respondents said they would rather have difficult processes fixed than receive more career development opportunities”. That interest is not always matched by a company’s efforts. Aside from the missed opportunities in quality, cost, efficiency, and safety improvements, this also negatively impacts employee engagement: “only 34% said they thought their companies would act on feedback they provide” so why would they take the time and effort to participate? Setting up an effective employee suggestion program is more than placing a box for suggestions or creating an internal software tool. To be successful, the company needs to dedicate management effort and commit to a timely, closed-loop initiative. A cross-functional management level team should be established to review the qualifying ideas. This does not need to be top management but should be leaders high enough such that they can approve and implement many ideas themselves and have ready access to higher level managers to discuss larger improvement suggestions.  A coordinator, perhaps someone from the quality department or in an administrative role, can be designated to facilitate the program – helping create the methods for employee suggestions, collecting the inputs, and maybe conducting a first level sort of ideas (the entire review team does not need to spend time on the suggestion to paint the bathroom a different color!) This team should meet frequently (perhaps monthly) to evaluate and prioritize the employee suggestions that were submitted since the last meeting. Plans to implement or investigate the most valuable ideas should be developed. Someone on the team should be designated as a sponsor of each such idea to obtain updates and ensure progress even if the responsibility for investigation or execution is handed over to a functional area leader. Often, a team of employees from the impacted area(s) will be created – this helps make use of their more detailed knowledge and improves buy-in to the solution. Whenever possible, the employee who suggested the improvement should be included on this implementation team. There are different ways to celebrate the improvement ideas that were selected for implementation – monetary and non-monetary awards, inclusion in the employee’s performance review, public recognition, plant competitions, etc. The choice will depend on the company’s and location’s culture. Communication is key to a successful employee suggestion program. Leadership should consistently share its enthusiasm for the improvement idea program and what type of ideas are desired (not that bathroom color suggestion!). Leaders can also show their support by attending events associated with this program. Regardless of whether a valid improvement suggestion was approved for further action or not, it is important that a member of the team (for example, the facilitator) always provides prompt feedback to the employee on the decision and why that was the determination. This closed loop aspect is essential if the firm wants to continue receiving, and benefit from, employee ideas. Are there other sources for great ideas beyond your employees? Stay tuned….   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.

Contribution Margin: Why Profit Planning Matters for Manufacturers

David P DeMuth
CFO Consulting Partners LLC
1 year ago

By Jeffrey Appleman Manufacturers are focused on sales—not cost or profit. If they were keen on net income, manufacturers would know one key data point: contribution margin. Once you know it, the possibilities are endless for growth, sustainability and efficiency. In effect, a contribution margin is the percentage of revenue that remains after you pay for your variable costs, which include the materials and labor to make your products. If the remaining revenue covers your fixed costs—the top item tends to be salaries—then you have a profit. For manufacturers, a contribution margin should be in the neighborhood of 30%-40% so everyone gets paid including the business owners. Contribution margin helps a manufacturer figure out its breakeven point. Let’s say your fixed costs equal $1.2 million a year and your variable unit cost per unit is $10, while the sales price unit is $15. Because you know the variable cost, you can determine the contribution margin, which is the remaining $5 from the average sales price. So how many units would you have to sell to break even this year? Divide the fixed costs by the contribution margin ($1.2/$5) and you will need to sell 240,000 units. So, why don’t more manufacturers know their contribution margin? It’s because they don’t make time for profit planning, which is a financial plan for your business. The process aligns operations with financial objectives by projecting revenue and expenses. It views profit as a crown jewel, not as a byproduct, making everything else revolve around it through transparency. At first, the light may seem blinding. Here are several critical items that manufacturers will be able to see more clearly: Manufacturing Insight: We Need To Raise Prices Most manufacturers are not eager to test price elasticity with their stable of products, but your company could be living on borrowed time. Invest the time to find your true costs. Don’t take shortcuts with estimates unless it’s necessary. When I consulted with a manufacturer that made printed boxes, we broke down every operation in the process. For example, when making a printed carton, you need employees in many areas to make the final product. Every station in the process is a profit center that needs to be covered in the final sales price. So, every printed box started with a paper-sheeting operation, then the printing, the die-cut operation, the waste-product operation, the cellophane operation, the gluing operation and shipping. That’s six operations, each with one to three employees. If you don’t take the time to add it up, there’s a good chance your pricing will be too low. And then, you will pay the price. Manufacturing Insight: We Have Too Many Loss-Leaders If a squeaky wheel gets the grease, then manufacturers will undoubtedly end up with stains on their financial statements. Over time, manufacturers have a tendency to listen to the wrong people when it comes to their lineup of products. A contribution margin is a formula that brings one of the Laws of Business to life: 80% of outputs come from 20% of inputs. This general truth, which has withstood the test of time across any industry, is called the Pareto Principle. Does 80% of the company’s turnover come from 20% of the product line? Put another way: Is 80% of your product sitting there in the warehouse, typing up resources for an inordinate amount of time. Instead of listening to random customers about suspect marketplace needs, the C-suite at manufacturing facilities need to listen to the data, which should come from profit planning at the beginning of every year. Manufacturing Insight: We Pay Too Much Whether it’s your customer or your suppliers, most manufacturers are probably paying too much. Now that the company has a contribution margin and a 12-month profit plan, you actually know how much you can afford from both stakeholders. If you don’t make a reduction, something else will have to be reduced. Creating terms for your customer is the best way to reduce the cost of accounts receivable. If they have 45 days to pay, you will need to enforce it if the obligation is not met. Most manufacturers don’t have the discipline and persistence to protect the bottom line. In the end, 90 days can be too costly. Your suppliers are another area to scrutinize. Do you know the quickest way a manufacturer can get a discount from one of their suppliers? They can ask. (In the real word, this often works.) (This story originally appeared in

Short-List KPIs: Why Manufacturers Need More Than Historic Data

David P DeMuth
CFO Consulting Partners LLC
1 year ago

By Chris Delaney When it comes to managing their business, manufacturers need much more than historical financials to project their future revenue, profitability and liquidity. Historic numbers simply capture what has happened in the past—but traditionally do a poor job predicting where a company will be in the near (3-6 months) or distant future (1-2 years). To make matters worse, most smaller manufacturers simply rely on financial statements as their historical data to help make decisions, but this is only the first level of information that they need to understand. Historical numbers will tell you if you grew, but they will not tell you why. Key questions are: Where is the growth and why? Is it sustainable? Which customers? Which divisions? How profitable was the growth and does it represent a new opportunity for investment? If your company is in growth mode, forget historic numbers and focus on the key KPIs that are going to be predictive of future growth and profitability. KPIs are easier to project and do a better job at forecasting future financials than historical data alone. Is there a new customer onboarding or is a recession coming? Are customers going to leave shortly? New mergers on the horizon? A handful of KPIs will create a more accurate forecast for manufacturers, which is invaluable. Here’s a good place to start: Sales Pipeline KPIs Most manufacturers have a sales pipeline, which is the life blood of the company, but they tend to do a poor job in predicting future revenue. Typically, that is because it’s not systematic nor consistent, and because it’s done in an ad hoc manner. “Garbage in, Garbage out” is what I typically see. Without reliable reports on future revenue, moving forward will be a challenge. Bottom line, manufacturers tend to not break down the sales data in ways that are meaningful. Start with the next 12 months and start framing it in two different ways. What is my core business (existing customers and existing SKUs in the marketplace)? Where are they and how can they be forecasted? I traditionally look at the core business in three ways: 1) what do you know (for example, future purchase orders that might be on hand, 2) what do you think (sales forecast provided by a customer) and 3) what are you guessing (no purchase orders or forecasts provided, but looking at historical data on how this customer typically behaves). On top of that, what is the new sales pipeline? What do we expect to “hit” and when? If one utilizes this simple technique from a “bottoms up” perspective, overlaying “core business” and future growth, forecast will be more reliable than what any historical data would predict. Revenue forecasts, by nature, will never be perfect. But performing forecasts utilizing the above technique and in a consistent manner will always be more predictive than historical data alone. And further, and perhaps more importantly, it will also allow management teams to better predict future performance by allowing an analysis of “what we thought back then and why” and comparing it to actual results. The easiest example of this is the new sales pipeline. Last year, you had a $10 million dollar sales pipeline and you predicted 50% of that would translate into incremental revenue over the next 12 months. Well, what happened? Did that pipeline translate into $3 million, $5 million or $8 million of actual revenue and how do you use that information to forecast the business over the next 12 months when the current sales pipeline is $15 million? Overhead KPIs When it comes to gross margins, manufacturers struggle with the real cost of delivering something out of the business. We used to call it “unit economics,” matching revenue to expenses per widget. Manufacturers understand direct costs and margins, but they have trouble quantifying semi-fixed costs, which are items that feature both fixed components—set expenses—and variable components that are based on activity like utilities, maintenance, R&D and labor to name a few. Overhead costs that are not part of direct labor or materials can be tricky to assess. They tend to show up on the income statement in different places. Your KPIs will break out the valuable parts that will serve as the basis of managerial accounting and forecasting. For example, a customer may require a special batching process to make the product. If the management team doesn’t understand the semi-fixed costs, the magnitude of increasing quantities and capturing indirect costs can create a situation where the true profitability of a project is not fully understood and could create problems in the future. In such a situation, the economics around a 30,000-unit order (after allocating for indirect costs) may still lead to attractive margins, but a 5,000-unit order may and will create an inability to scale into the future. Working Capital KPIs From a number’s perspective, working capital is current assets divided by current liabilities. More importantly, this number, which should range from 1.2 to 2, tells your management team and investors if you can sustain day-to-day operations in the short term. Your KPIs should include inventory levels, accounts receivable and accounts payable. Improving working capital could look like standardizing payments terms and providing incentives to speed up cash collections. Outsourcing operations, selling assets or leasing assets could improve your cashflow and generate a more favorable tax treatment moving forward. While paying vendors in a timely fashion may seem counter-intuitive, it could allow you to negotiate better terms in the future based on your strong relationships. This set of KPIs is about liquidity—the more, the better—for all your stakeholders. Utilization KPIs If you can’t measure something, then you can’t manage it. For manufacturers, the utilization rate deserves plenty of attention. It has been stated that 80% is the goal for utilization, but a recent survey shows that reality is a different story. More manufacturers believe their company’s utilization rate hovers around 50%, which takes into account setups, breakdowns, as well as staff breaks. Unfortunately,

Preparing for a Future Exit: Supply Chain and Manufacturing Savings

Steven Lustig of Lustig Global Consulting is a member of XPX Atlanta
Steven Lustig
Lustig Global Consulting
1 year ago

Increasing revenue when preparing for a future sale (or pretty much anytime!) is great but an equivalent savings in operational costs, such as supply chain and manufacturing, can provide an even greater increase in company sales price since valuations are often based on multiples of EBITDA. A $1M increase in sales may improve EBITDA by several hundred thousand dollars while a $1M decrease in supply chain and manufacturing costs usually improves EBITDA by almost that full amount. There are a number of ways to tackle optimizing these costs.  A first step is to look at the current manufacturing and supply chain strategies and how they align with the company’s overall strategy.  Are these areas part of the core competencies that are essential to maintain in-house? Are there other possible operational strategies that are worth considering? With that guidance, companies can then look at their options.  Are they buying the right things from the right suppliers (and the right number of suppliers) at the right time (think inventory levels) at the right prices and on the right terms? Do they have the right mix of what they fabricate, assemble, test, package, and distribute themselves vs. through suppliers? Are the in-house process optimized for best cost, inventory, and quality? Assessing these areas provides great potential for increasing the company’s values.  For more information please go to

7 Tips for Working with a Fractional CFO to Grow Your Business Value

Michael Stier of FocusCFO is a member of XPX Charlotte
Michael Stier
FocusCFO
1 year ago

As a small business owner, you face many challenges when running your own company. Financial management is one of the most critical aspects of any business, but hiring a full-time CFO can be a costly and unrealistic expense for many small businesses. This is where Fractional CFOs, like those provided by FocusCFO, come in. What is a Fractional CFO? A Fractional CFO is an industry-experienced professional who provides part-time financial management services to a company. They can help small business owners make informed decisions, manage cash flow, and improve financial performance. To maximize the value of this valuable resource, it’s important to use your fractional CFO wisely. Here are some tips to help you get the most out of your partnership. How to Maximize the Value of Your Fractional CFO [Read the full blog post here….

5 Accounting ‘Turnarounds’: How Manufacturing Fends Off Credit Squeeze

David P DeMuth
CFO Consulting Partners LLC
2 years ago

By David DeMuth Manufacturers can’t afford to wait any longer. For two years, CFOs and controllers have managed supply-chain disruptions and labor shortages, as well as surging prices. Typically, these developments could require most manufacturers to raise prices to survive. In Q4 of 2022, there is a looming recession. The generally accepted definition of a recession—two consecutive quarters with a declining gross national product—actually happened this summer. Yet, the National Bureau of Economic Research, which is the official scorekeeper, hasn’t made the proclamation. Normally, a recession means no consumer price hikes and less access to capital. Unfortunately, you can’t spell capitalism—or keep a factory running—without capital. So, carpe diem. If manufacturers are feeling the pain today, the next six months are going to leave a mark. To mitigate the pending credit squeeze, here are five things manufacturers need to do today: Plan Ahead Before It’s Too Late Most manufacturers that have been in operations for less than 10 years have never experienced a recession. For smaller companies making less than $100 million annually, that often times means month-to-month finances. No planning. No forecasting. A recession will expose that deficiency. A better planning process would allow manufacturers to estimate revenue and mitigate future obstacles before they hit. Financial planning and analysis (FP&A), which takes a quantitative and qualitative approach of every aspect of operations, is mission critical for every economic climate, especially a recession. Don’t be the CFO who says, “I should have zigged when I zagged,” in 2023. Access Working Capital Before You Need It Generally speaking, you should borrow money when you don’t need it. Before a recession really lands its wallop, manufacturers should increase their lines of credit because they may need it when the market gets tougher during the next six months. A liquidity assessment is one of the top reasons a manufacturer would need to perform proper planning and forecasting. Ultra-thin profit margins require the need to raise or borrow capital for investment before you really need it to maintain continuous operations. And, if the economy doesn’t turn as projected, then you’ll have more dry powder on hand. If you wait too long amid a looming recession, however, you will put your company in a situation where you really need capital at a time when banks are feeling the stress. In the best-case scenario, procrastination will cost you in the form of higher interest fees for the same amount of capital. In fact, you may have to go the nontraditional route and use asset-based banking. For an even higher rate, they will lend you capital based on your balance sheet, including items such as working capital, accounts receivables and inventory. You have between now and the end of 2022 to sure up your liquidity needs. Then, get back to planning three to five years out, using the last two years as a benchmark. Stretch Price Elasticity As we move into a recession, manufacturers need to follow the money—no matter where it takes them—and evaluate the need in an attempt to conserve capital. Management should look at line items that can be eliminated or reduced. Maybe you should negotiate a better deal with your suppliers. Perhaps you hire temporary workers instead of fulltime employees. On the revenue side, you should consider increasing the price on high value-added products. If you are not keeping up with inflation, it will catch up with you in the long term. Begin the process by finding appropriate benchmarks. What are your competitors doing in this market? Every industry has benchmarks. While it may be more difficult to evaluate with privately held companies, you can take advantage of industry associations. They often provide networking opportunities, ranging from manufacturers to suppliers. Associations also provide member surveys that can be quite valuable. Reviewing the financials of publicly traded companies is another option. Yes, they may be larger than your company, but they face the same issues. Closely Track Costs, Margins Smaller manufacturers, especially ones that have never endured a recession, tend to be deficient on cost accounting, which focuses on a business’s costs. This type of accounting, which is mission critical for manufacturers with diverse products lines that scale, helps operations 1) determine pricing and profit margins, 2) identify cost efficiencies and 3) improve accountability and decision-making. For example, cost accounting takes into consideration fixed and variable costs. If a manufacturer’s operations team in only considering the cost of materials to make a widget—and leaving out the associated labor and overhead—that’s going to be a problem. It’s very difficult to make a profit when you sell something with an unknown cost. To underscore the importance of tracking product margins, the Pareto Principle, known as the 80/20 rule, states that 80% of consequences (outputs) come from 20% of causes (inputs). From a manufacturer’s perspective, 20% of the products earns 80% of the company’s revenue, which makes it more important to know what every product in the SKU really costs. Turn Data Into Dollars Manufacturers can’t afford to fly blind, waiting six weeks for the Finance Department to close the books. That’s too long to sit on your hands before you know how you did last month. You must implement a system that turns information into knowledge so management can make better, timely decisions about operations. Create a new process that enables you to close in eight to 10 days, which allows management to receive a report during the third week of the month. Then, assign responsibilities so every team members understands what is expected. More importantly, set up a review process that will allow you to find efficiencies and make adjustments to help you endure 2023. (This story originally appeared in

Do You Know What Metrics You Should Be Tracking?

Bill McDermott of The Profitability Coach is a member of XPX Atlanta
Bill McDermott
The Profitability Coach
2 years ago

Coming up on mid-year, you might be reflecting on the first half and are either looking to course correct or finish strong. What are you going to start doing, stop doing, and keep doing? One of the ways to determine this is to look at the key metrics of your business and see if you’re on the right track for success or what changes need to be made to get back on track. The key metrics that you’re using to make changes can become key performance indicators (KPIs) that you and your team want to track regularly. Here are three things you must know about KPIs. Read more:

Interpreting the Language of Accounting

Bill McDermott of The Profitability Coach is a member of XPX Atlanta
Bill McDermott
The Profitability Coach
2 years ago

For my wife’s and my 25th wedding anniversary, our family went to France. Paris, Provence, Chamonix and on the way back to Paris to catch our flight home, we went to the cathedral in Reims. The one with the Chagall stained glass and where Joan of Arc was to be crowned by King Charles in 1429 after her victory in Orleans in the 100 Years War. On the drive back to Paris, I was a little uncertain about directions so I pulled into a gas station to ask. By the way, none of us spoke French. But, in the best French I could muster I said, “Parlez-vous anglaise?”. The owner’s reply was to spit at the floor and give me a look that sent me quickly on my way. How dare I come to his country and not speak his language. Just like trying to speak the language in a foreign country, if you’re trying to run a business but you don’t speak the language, how do you know you’re headed in the right direction? Read more:

Accounting is the Language of Business

Bill McDermott of The Profitability Coach is a member of XPX Atlanta
Bill McDermott
The Profitability Coach
2 years ago

“Accounting is the language of business, and you must learn it like a language…To be successful at business, you have to understand the underlying financial values of the business.”  –Warren Buffett Time after time in my banking career I met with thousands of business owners who were looking for loans. Frequently, it became apparent that they had command of their sales and operations, but financial management was their “Achilles heel”. They didn’t speak the language of business. Many didn’t take accounting in school and there is no on-the-job training when you’re the owner. This was my primary motivation for starting The Profitability Coach. I wanted to make business owners better financial managers. Every business owner has a big dream for their business and wants to make it happen. But they often don’t know which levers to pull to improve their profitability or cash flow. They simply don’t speak the language of business or understand the underlying financial values of the business. Read more:

Supply Chains and Labor Shortages

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

Supply chains and labor shortages are the chief topics among the 40 or so business owners I currently work with. Their anecdotes are widespread and widely varied. I wanted to know why, so I did some research on behalf of you, my business-owner readers. Supply Chains A broken foot was diagnosed at an urgent care center. “You are lucky,” said the nurse as she handed over a pair of crutches. “This is our last pair, and all five of our medical supply houses are sold out.” A technology supplier is simultaneously dealing with the largest order backlog and lowest percentage of order delivery in the company’s history. As much as I can see reasons why the supply chains will eventually correct through market forces, my look at the numbers in the labor market convinces me of the opposite. The Feds haven’t published any statistics on how much supplemental unemployment was paid in 2020, but those programs have expired. Employers who are complaining that “The government is paying people not to work,” are barking up the wrong tree. I don’t think that is the problem. Quite frankly, one “problem” is the Internet. Advances in telecommunications have enabled a lot of people to choose alternative approaches to earning a living. ETSY grew from 2.6 million sellers to 7.5 million sellers in the last 18 months. Those 5 million additional sellers may not be online full-time, but it is a component of their income strategy. Amazon has lots of programs for home-based businesses. You can even set up a store selling other products that are already listed elsewhere on Amazon. I presume you would send your friends to such a store to support you. I see it is an updated equivalent of Amway, except that Amazon lets you control your entire operation, from marketing to financial statements, on your cell phone. Then there are the gig jobs. According to 

What does your childhood and your business dreams have in common?

Dominick Wallace of Wallace Capital Funding is a member of XPX Atlanta
Dominick Wallace
Wallace Capital Funding
2 years ago

For two Wallace Capital Funding LLC clients, a Pretend Play Center was their business dream. What is a Pretend Play Center? I had the same question. Remember running around with a large white coat on, who were you? A doctor or chemist? Or maybe you put on a red hat and said “weee, wooo, weee, wooo” like a siren. Who were you? A fire chief. It’s a place where a kid can dream to be anything they set their mind to. A doctor, a chef and everything in between. The clients wanted to make a difference in the lives of local youth while also operating a profitable business during their retirement. And this dream became a reality thanks to the Business Funding Analysis. So, you might be asking yourself — What is a Business Funding Analysis? The analysis is a tool that Wallace Capital Funding LLC uses to pre-qualify business owners for traditional as well as non-traditional funding for businesses including real estate financing. Say you are a home inspector. You do a thorough job of looking at every fine detail of a home to make sure it is up to code. The plumbing system ran well. The electrical wiring was working. The air conditioning unit functioned great. You breathe a sigh of relief for an easy day of work as you head to the front door. Just as you are ready to approve the house, you hear a light scratch in the wall. And what originally sounded like a quiet tap suddenly grew louder. A small crack begins to form and a hoard of baby mice spills out onto the foyer. No matter how much a small business thinks they are qualified, sometimes it is not as simple. You never know what is “behind the walls” unless you open them or what lenders are looking for in their applicants. So, what does a Business Fund Analysis do? The Business Funding Analysis makes sure you get the funding you want and deserve. It uses the same process as banks go through to qualify for a business loan but also includes alternative financing. The analysis predicts the likelihood of you getting financed before submitting any official documentation to lenders. Prior to the Business Funding Analysis, all documentation would go straight to lenders. However, it was not guaranteed that you would be approved. Now, the analysis ensures you will get approved in a hassle-free process. Interviewing clients prior to having the Business Funding Analysis was a challenge because you never knew whether a person would qualify. Using the same process as the lender is the best way to guarantee approval and avoid any heartache or embarrassment. Established in 2002, the Business Funding Analysis is continuously developing and improving to get you the loan of their dream just like the Pretend Play Center. Talk to one of Wallace’s Capital Funding LLC today to get the process started and get the loan you and your business deserves. Join WCF’s mailing list, which can be found on our

USI Insurance – Data Driven Benefits and Risk Consulting

Adam Brier of CBIZ is a member of XPX Long Island
Adam Brier
CBIZ
2 years ago

USI is one of the largest insurance brokerage and consulting firms in the world, delivering property and casualty, employee benefits, personal risk, program and retirement solutions to large risk management clients, middle market companies, smaller firms and individuals. Headquartered in Valhalla, New York, USI connects together over 8,000 industry leading professionals across approximately 200 offices to serve clients’ local, national and international needs. USI has become a premier insurance brokerage and consulting firm by leveraging the 

Where’s the Cash?

Bill McDermott of The Profitability Coach is a member of XPX Atlanta
Bill McDermott
The Profitability Coach
3 years ago

Worry about cash flow is one of the top issues that keeps business owners up at night. Cash flow is like oxygen to a business and without it, the business won’t survive. Several years back, I had a client ask me, “If I’ve made $500,000 in profit, why isn’t it in the bank account?” A very good question I’m sure many of us have wondered. While profits are great, they don’t cover payroll, other operating expenses, bank loan payments, and owner’s distributions. Cash does. So doesn’t it make sense to track where your cash is in the same way you track where your profit is?

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Exit Strategy – Harvest or Grow?

John Dini of The Exit Planning Coach is a member of XPX San Antonio
John F Dini
The Exit Planning Coach
4 days ago

  In every internal transfer, whether to family or employees, the owner/seller has to make the harvest or grow decision. We’ll presume that your business has already reached a point where its value meets or exceeds your financial objectives as the owner. If growth is required in order for you to afford your next act, then that decision is less strategic than it is driven by your lifestyle requirements. If the company has already reached a substantial level of success, however, you may still be tempted to maximize cash flow until your departure. Deliberately reducing your cash flow by starting a process of equity transfer may not sound very appealing. The obvious question is “Why would I sacrifice my personal income in order to finance their acquisition of my company?” Why not harvest? The answer to that question revolves around the strength of your desire to control the process. Although staged internal transfers of equity almost inevitably require that the owners surrender some personal income at the outset, there is considerable psychological value in dictating the timing, method, and eventual proceeds of your exit. When compared to the listing and sale process of presenting the company to third-party buyers, an internal transfer allows the maximum of owner control. There is no exposing the finances of the company to strangers. It doesn’t require negotiating, sometimes against professional negotiators, or against low-bid opening offers. Since internal buyers are already familiar with the organization, it can circumvent the often excruciating process of due diligence. IAs a seller, you can look at your up-front funding of initial equity purchases as a sort of insurance policy. No lender will fund 100% of an employee purchase, and family purchases are rarely financeable. Transferring equity to the buyers, whether it is fully paid for or via a subordinated note, allows them to finance the balance of the purchase. The “insurance” factor is usually understood. In return for sacrificing some cash flow now, an owner can leave on a chosen departure date with 70% or more of the proceeds in hand. The longer you wait, the higher the probability that you will have to owner-finance the entire transaction. Why not grow? There are also a few arguments against a growth strategy. The chief one among these is time. If you are pressed for time due to the influence of one of the 

What is an Exit Plan?

John Dini of The Exit Planning Coach is a member of XPX San Antonio
John F Dini
The Exit Planning Coach
1 week ago

“What is an Exit Plan” is an article I wrote ten years ago. It was just brought to my attention and I realized I never posted it to Awake for some reason. Here, with some updating, we celebrate its 10th anniversary. Exit planning is the buzzword for those who consult to Baby Boomer business owners. Business brokers, wealth managers and other professionals are adding “exit planning” to their marketing messages. It’s a logical reaction when over 5,000,000 Baby Boomers (about 3,000,000 in 2024) are preparing to leave their businesses. Not surprisingly, when a business broker creates an “exit plan,” it usually involves listing the business for sale to a third party. An attorney’s planning focuses on the legal documents that allow the transition of the assets of a company to new ownership. An accountant or financial planner will look closely at tax and inheritance issues, and an insurance broker offers products that reduce the risk of interruption or disaster. All these are important to the successful implementation of a plan, but each professional focuses on his or her specific skill set. If your shoulder hurts, you could go to an orthopedic surgeon, a neurologist, a general internist, a chiropractor, or a physical therapist. Each will have a treatment approach for a painful shoulder. Each will be different, based on his or her specialty. Each will reduce the pain at least somewhat, although some of them may or may not address the underlying cause. Similarly, there are many professionals who claim competence in exit planning. Each has a different area of expertise, and what they term exit planning tends to focus on those areas. A comprehensive exit strategy encompasses legal, tax, and risk management issues, but it also examines the operational issues of the company whose value is the underlying driver for everything else. Why do an Exit Plan? Before drafting the first document or embarking on a plan to spend the money from a sale, the business must first realize the proceeds of a transaction. That means it must find a buyer who will pay for it. That buyer could be a third party, but it might also be an employee, an employee group, or family members. Any third party considering the purchase of a business will do extensive due diligence. Their willingness to pay a premium for a company will depend on its track record of revenue growth, the stability of its margins, and how well-established its systems and customers are. If the company is larger than about twenty employees, they will look for supervisory and management talent who will stay after the sale. Regardless of size, a business that is highly dependent on the owner for revenue or making all key decisions will be deeply discounted or even impossible to sell. An exit plan should look at these factors and help to make the adjustments needed to realize full value. Selling to employees or family is often an attractive option because it allows the ownerto choose a retirement date, and price is less of an issue than financing terms. Unless you are willing to accept a promissory note for most of the price and feel secure that your successors can maintain payments over a long period, a plan for this kind of exit should begin at least three, and preferably five to eight years before the planned transfer date. What is an Exit Planner? An exit plan needs legal, tax, risk and wealth management expertise to be successful, but it also requires a practical examination of the operational strengths of your business. Selecting one professional to manage the efforts of everyone, and to help keep you on track, is a wise investment. In America, the average small business owner has nearly 75% of his or her net worth in the company (still true in 2024). The single biggest financial transaction of your life deserves special attention. ==================== This article was originally published by John F. Dini, CBEC, CExP, CEPA on

NLRB General Counsel Campaigns Against Non-Competes

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

Jennifer Abruzzo, the National Labor Relations Board’s (NLRB) General Counsel, is continuing her campaign against non-compete agreements. She just issued a memo announcing her office will seek more remedies for employees who are required to sign non-compete agreements. This follows previous statements in which she said non-compete agreements, which affect about 20% of US workers (30 million people), are unlawful. She has expanded her argument to include “stay-or- pay” provisions, stating they restrict workers’ job opportunities which (somehow) discourages unionizing. Non-Compete Agreements The NLRB is currently considering the legality of non-compete agreements under the National Labor Relations Act (NLRA) in a case involving an Indiana HVAC company. In a 2023 memo, Abruzzo explained why overbroad non-compete agreements are unlawful. She explained they hinder an employee’s ability to exercise their rights under Section 7 of the NLRA, which protects employees’ rights to take collective action including unionization. Abruzzo’s agenda has faced setbacks. In April 2024, the Federal Trade Commission (FTC) largely noncompete agreements, with some exceptions, however the ban was subsequently

A Time To Remember You Have A Seat At The Table

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

As small business owners and leaders, we’re no strangers to the daily grind of comparison and competition. It’s easy to look at the success of others and wonder if we measure up. But this Thanksgiving, we’re taking a page out of Heather Holleman’s novel1, “Seated with Christ: Living Freely in a Culture of Comparison,” and the transformative words of Ephesians 2:6: “God raised us up with Christ and seated us with Him in the heavenly places in Christ Jesus.” In the hustle to prove our worth and carve out a place in the market, realizing that your seat at the table is already secured is revolutionary. This isn’t about your turnover, your team size, or the number of followers on social media. It’s about recognizing the value you bring to the table just by being you, backed by the firepower of your determination, creativity, and the unique vision only you possess for your business. The Overlooked Seats Comparison is the thief of joy in business, and it’s also the thief of innovation and growth. The environment of inauthentic seats fuels comparison, the moment you and your team stop eyeing the lane beside you is the moment you turbocharge your path forward. Your business isn’t like anyone else’s—for a reason. The individual strengths and talents within your team are your biggest asset, waiting to be unleashed. Recognize and harness the power of these unique capabilities to drive people-powered change. A Secure Seat on The Team Your team—the one you’ve built, trained, and grown—holds untapped potential. Just as we are seated with Christ in a place of honor and security, so too should our team members feel valued and vital to our mission. This Thanksgiving, let’s take a moment to express genuine gratitude for the diverse skill set each member brings to the table. When people feel valued, they’re more engaged, productive, and innovative. And that’s how a small business not only survives but thrives. The Power of People-Powered Change FIREPOWER Teams is founded on the belief that the power of a small business lies in its people. “Fuel your people power” isn’t just a motto; it’s a mission statement and a call to action. Reflect on how you can empower each team member to contribute their best this holiday season, fully aware that their seat at the table is as non-negotiable as yours. Thanksgiving is a time of gratitude, reflection, and community. As business owners, it’s a prime opportunity to reassess what we’re thankful for and how we express that gratitude through our actions and leadership. Let’s enter this season with a renewed commitment to value ourselves, our team, and all our unique contributions. Let’s reject the ceaseless comparison and instead focus on fostering an environment where everyone feels seated at the table—secure, valued, and ready to make a difference. The entrepreneurship journey is rarely easy, but with a team that genuinely feels like their efforts matter, there’s untold strength to be garnered. Your business, team, and vision have a secured seat at the table. Let’s give thanks for that incredible opportunity and the journey ahead. Conclusion Remember, the most sustainable growth comes from within. Thanksgiving is a time to rekindle our appreciation for the value we each bring to the table, reminding us that when we work together, there’s nothing we can’t achieve.

Exiting a “Time and Place” Business

John Dini of The Exit Planning Coach is a member of XPX San Antonio
John F Dini
The Exit Planning Coach
1 month ago

“The purpose of middlemen in the marketplace is to provide time and place utility.” I remember the light bulb going on in Economics 101 when my professor said that.  Suddenly, I understood the concept of added value. Someone had to get the product to the customer. “After all,” the professor continued, “The footwear manufacturer in Massachusetts can’t sell a pair of shoes directly to someone in California. They can’t manufacture and handle thousands of customers. It would be a nightmare, and completely unprofitable.” The fact that Massachusetts was still known for shoe manufacturing gives you some idea of how long ago this took place. So long ago, in fact, that Zappos wasn’t even a word yet. The independent shoe retailer gave way to the department stores. In turn their shoe business was decimated by the specialty chain retailers. In fact, most shoe departments in Macy’s and others are actually chain operations within the store. Shoe sales moved into sporting goods stores and discounters. While the industry shifted multiple times, they all still provided time and place utility. Then came the Internet. Now the manufacturer can sell directly to consumers. In fact, they can eliminate several layers of middlemen, along with the mark-ups. Lately my area has been swamped with billboards saying “Mattress Dealers are Greedy. TN.com.” TN.com turns out to be My friends at Digital Pro has survived (and thrives) by their differentiation and service. The large, bright showroom is full of computers where they can show customers the effect of adjusting color balance or editing. They can print your lifetime memories on almost anything, from a key chain to a large metal panel. They can still give you prints made with permanent liquid ink, not the water soluble powder used by most printers. In addition, they can do all of this online because they’ve invested in the technology necessary to keep up with the “convenience-based” competitors. As the cost of digital printers fell, professional photographers invested in their own machines. Digital Pro Lab has replaced their business with consumers who want to discuss their special moments, choose how to preserve them, and hold the results in their hands before they pay. In an industry where the number of time and place based outlets has fallen by over 90% in the last decade, Digital Pro Lab has beaten the big boys with product differentiation and service. When the time comes for planning an exit, they will have options.       This article was originally published by John F. Dini, CBEC, CExP, CEPA on

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