The Three Elements Of Sunk Costs You Need To Review For Better Business Decisions.

We’ve all done it, invested so deeply into something that we didn’t walk away even when all the signs were there. Instead, we dwelled on everything we sank into that business, job, relationship, home, health, finances, etc. and kept on truckin’ as if everything was fine. The problem with sunk costs is that once we’ve accepted them in one aspect of our life, they can easily slip into others. And the really annoying part is that when we’re finally able to view those situations in hindsight, we almost always wish we’d taken action sooner.
Sunk costs can often be divided into 3 general categories:

Time:  We’ve sunk an enormous amount of our time into something—time we’re never going to get back.

Energy:  It’s very hard to walk away from people, things, and situations we’ve sunk our honest and sincere energy and effort into.

Money:  Too many people cross over financial boundaries by sinking money that should have never been used as capital into their ventures.

The reality is that anytime we invest our time, energy, and/or money into one or more aspects of our life, failure is a risk. If you find yourself in a situation where you’ve been investing your time, energy, and/or money, but there aren’t any signs of your investment paying off in the near future, maybe it’s time to take a serious look at why you’re still plugging away at it.
You have proof it’s going to get better. If this is the case, it’s time to sit down and make sure you’re not trying to avoid reality. Believing in what you’re doing is important, but you still need to do a reality check every now and again to make sure you’re focusing your efforts and resources appropriately. Dale Carnegie has a few good thoughts about this:

·       What is the worst that can possibly happen?

·       Prepare to accept the worst.

·       Try to improve on the worst.

Planning for the worst may sound negative, but it’s a reminder that having a cut-off point, or an exit strategy, is always a good idea. Knowing how and when to get out can definitely reduce the stress of getting in.
Hoping things are going to get better.  Hope can be a funny emotion. We use it to stay positive, but it’s also evidence of doubts or fears, or that we’re struggling with clarity. If hope is keeping you from acknowledging the extent of your sunk costs, find someone you respect and have a conversation. Having an objective set of eyes on the situation can definitely be eye opening.
We’d rather fail than be found out. Sometimes we don’t walk away when we should because we don’t want our failures to be exposed. Here’s the thing: Everybody fails, and that means you’re going to fail sometimes too. Suck it up. Give yourself an appropriate amount of time to feel like crap, and then get over it. When you do, there will come a morning when you’ll wake up feeling refreshed and ready to move on.

Here’s the best tip of all for avoiding sunk costs. Before you enter into a sale, investment, job, or some other business arrangement, think hard about what you’re about to invest in. Put some time and effort into examining the true ramifications of your decision. Do your due diligence. It’s your best friend because every business situation comes with some degree of risk. The better job you do up front of proactively identifying and addressing those risks, the less likely you are to find yourself sinking under their weight.

Alan Luoma: I am a Sales Coach with extensive experience in industrial sales, sales management, new

product development, sales and product training. I work with a great national sustainable packaging company and their exceptional distributors to increase sales. My success has been and is in utilizing the Pareto 80/20 principal in business and life. I have become an expert in seeking out and eliminating behaviors that prevent business people from being successful. I am a member of The National Speakers Association and New England Speakers Association. You can view my profile on LinkedIn, or contact me at Luoma@snet.net 

How To Take Charge of Your Accounts and Increase Your Quality of Earnings

Quick! Print out a list of all of your accounts. Do it right now.
Did you print it? Probably not. After all, you know your list. You know your clients too, and besides, how could I say or ask anything that would be relevant to your specific list?
The reality is that after all my years in sales and as a sales coach, I don’t need to see your list to know that there is untapped information and potential there. It might be that no one ever showed you how to mine your list. Or, it might be a case of having forgotten how a few simple questions can keep you inspired to reach another level. Either way, there’s a tremendous amount of value in analyzing your list.
As you know, I’m a firm believer in the application of Pareto’s 80/20 principle. That means that if you have a list of 80 clients, 16 of them are in the 20%, providing you with 80% of your revenue. The other 64 clients aren’t.
With your top accounts, what do they have in common with each other? Is it their industry, location, or the way the company is structured? Are they all within a specific aspect of the industry that you have more expertise in? Why do you think they do business with you rather than your competitors?
When it comes to mining your top 16, think about the way their business is built and how they structured themselves. Then brainstorm/research for other businesses, companies, and organizations that mirror their setup. This will provide you with a list of more potential top 20% performers.
Make sure your top accounts really are profitable. There are times when the revenue they provide looks good until you dive into how much time, effort and work it’s costing you to consider them as one of your top 20%.
Don’t forget about your other 64 clients. Take a long look at each one of them to determine their long-term prognosis as being a good match for you and your list. Are there any with the potential of moving up and into your top 20%? If there are, consider how much time it would take to get them there. Are you willing to make the effort? If you aren’t, it doesn’t mean you should get rid of them as a client. It just means you can block the time you spend on their account off your calendar well into the future.
With the lower performing clients, maybe it’s time to consider another alternative for them—like inside sales. Could you hand them over to a new sales rep in your company? Obviously you can keep them, but you will be blocking off your valuable time to work on their accounts well into the future too. On the other hand, if you come up with a way to professionally and ethically let them go, you’ll have more time to pursue new accounts.
There’s always a balance to be struck in sales. We want to believe that our client list is structured with the necessary combination of clients who will help us reach both our sales and monetary goals. But business is always on the move—always changing.

When was the last time you went through your client list to make sure everyone on it is still performing in a way that supports their goals as well as yours?


Alan Luoma: I am a Sales Coach with extensive experience in industrial sales, sales management, new

product development, sales and product training. I work part time with a great national sustainable packaging company and their exceptional distributors to increase sales. My success has been and is in utilizing the Pareto 80/20 principal in business and life. I have become an expert in seeking out and eliminating behaviors that prevent business people from being successful. I am a member of The National Speakers Association and New England Speakers Association. You can view my profile on LinkedIn, or contact me at Luoma@snet.net 

Shiny Object Syndrome (SOS)

When you are a business owner, it's important to stay current with trends and be open to new opportunities.  It's also important to not be distracted by a new idea, product or offer.  Knowing when to let a new idea take off and when to stay on course with your original vision is critical.  

How do you decide?

CASE STUDY

Aiden started his company based on a great product that he was sure people would buy.  He had a plan to engage 200 distributors who would each promote his product and he would be wildly successful.  Wonderful ideal!

The catch was that he had the “Shiny Object Syndrome”: he was easily distracted by and lured into projects that looked exciting, and were not part of the company mission/vision.  These caused him to shift his focus every few months (sometimes weeks) and off he would go!

It is hard to resist an exciting new venture that might make us successful.   In Aiden’s case his original vision languished from lack of attention.  3 years later, he is finally turning his company around and starting to make good money.  He has a small sign on his computer monitor: WIMM?  (Will it Make Money?) And another handy acronym: WIGMB?  (Will It Grow My Business?)

"First Things First" as Stephen Covey said.  Keep the purpose the purpose.

Enough of the quips and acronyms!  Small, medium or large companies must keep focused on what they’re trying to accomplish.

WIMM?  Keep this in mind as a way of prioritizing your Goals, Strategies and Actions. When you have a clear vision and mission, ensure that your focus for you and your people follows the path to the realization of your vision.

Do you ever grab for a Shiny Object?

Check out my Leadership Coaching Program on my website. or email me for a free Leadership Strategy Session. ann@leadyourteams.com There are many layers to this simple concept.  

6 Common Communication Mistakes You May Be Making

Miscommunication can make or break our world.  Bad communication leads to broken relationships:  with the people you work with, your clients or customers, your family, your at-large community.




6 Common Communication Mistakes that you might be making:

1.  Not using "we" language.
Newsflash.  Relationships are not a competition.  Or at least they shouldn't be.  When you start to think in terms of "me" and "you", it's time to reframe the conversation and think of yourselves as a team.  Work to solve a problem, not to be victorious.

2. Not giving eye contact.
When people are not looking at us when we talk, how does that make you feel?  Not good, right?  So try living by the golden rule and give other people the same courtesy that you want to be given.

3. Interrupting.
What does it say to someone when you interrupt them?  It says, "What I have to say is more important than what you have to say."  This can be a result of excitement or a desire for power.  Either way, it still says.  "I'm more important than you."

4. Making assumptions before you hear the whole message.
You have probably had the thought, "Oh I don't even have to hear the rest of this - I already know what they're going to say!" Well, maybe you do .... maybe you don't.  Don't do that.  We don't like when people make assumptions about what we are saying, do don't do that to other people either.

5. Not asking probing questions of other people.
Saying things like, "Tell me more about that" or "So how did that make you feel?" lets the other person know that you care about them enough to ask for more information.  That's called a probing question. Ask people to elaborate.  It makes them feel good and shows that you're interested.

6. Needing to "win" an argument.
I repeat.....Relationships are not a competition.  Admitting that you're wrong is not a sign of weakness.  It is a sign of maturity.  No one is right all of the time.  Don't think you have to "win."  Acknowledging your mistakes will not give away your power.  It shows that you are the better person because you can be honest.

Being a good communicator takes effort.  It's like being a good athlete - you have to practice if you want to be good at your craft!

Are the communicator you need to be?

Ann Meacham is president of Leadership Dynamics.  She works with business leaders to help them see issues that need to be addressed and ensure that the focus is on the big picture.

Sign up for a Free Leadership Strategy Session on her website.  Email a comment to ann@leadyourteams.com  

Are Your Blind Spots Holding You Back?

By Ann Meacham 

It’s important to know that your mind plays “dirty” tricks on you.  That is, your perception of reality is never reality itself.  Rather it is your mind’s version or internal representation of reality. 

This causes blind spots – beliefs you have that cause you to be unaware of factors and situations that are causing your business success strategies to fail.

Example: “The economy is keeping me from getting more customers.” 

Blind spot #1: Frequently the reality is that are not getting customers because your marketing and sales efforts are not well organized or focused.

Blind spot #2:  You get bogged down because you feel you’re working so hard and aren’t seeing the results.  What you’re not seeing is the possibility that focus combined with hard work will bring results in any economic climate.

Blind spot #3: Allowing yourself to be distracted by projects that are not aligned with your marketing and sales will block the results you so desire.

It’s complicated. Developing strategies and plans is a healthy practice. However, if your strategies include significant blind spots, they are doomed from the outset.

Remember, your mind creates these blind spots by filtering incoming information and thoughts.  As a result, this filtering process distorts, deletes and generalizes your sense of reality. It feels like you know the truth.  Often it is not real.

•   Where are you missing critical external cues that your strategies need to be adjusted?   
•    Where are you over-estimating your abilities?  
•    To what extent are you attached to your own strategies as being correct that you cannot perceive better ways of reaching your destination?

The first step to get past blind spots is to be aware of every thought, assumption, belief (disguised as fact) and point of view with which you currently identify.  Challenge it. Especially when you believe you are right.

Find out how to clear your blind spots and create greater success for yourself.

I am president of Leadership Dynamics.  I work with business owners and executives to clear their blind spots so they can identify the issues that need to be addressed and focus on making their business succeed.  Contact me at ann@leadyourteams.com  or sign up for a Free Leadership Strategy Session on our website or call 860-788-3504.

 

     www.leadyourteams.com 

Over 7.2 million people miss out Christmas presents!

In the last quarter of 2014, the North-pole International Centre for Excellence (NICE) boasted that Santa was a five nines organisation and the world could relax knowing that everybody would get the right present on time..

Process Guru Siobhan Sherman (a six Sigma Black Belt) ran the numbers and came up with shocking finding: running a five nines organisation wasn't good enough for global impact and accuracy. Based on current estimates, 7.2 million people missed out on Christmas! (Subsequent Intercontinental Statistical Testing [SIST], has shown this to be the case).

Earlier this year, North-pole spokesperson "Alf on the shelf" said that the core principle behind Santa Clause’s  excellent supply chain delivery organisation was the checklist. Alf boasted, not only do we use checklists, we check them twice! 

Nevertheless, 7.2 million people woke up on Boxing Day wondering whether or not they've been naughty or nice. So far, no comment from Alf on the shelf on how the North Pole organisation intended to correct this problem and ensure it does not happen again.

The harsh lessons we have learnt from this Christmas season can be summed up in one word, CHECKLIST!

If you want your organisation to compete with a world class supply chain like Santa's and make a positive impact on the world, you have to ask yourself, do you have a checklist? Do you use your checklist? Do you check it twice? Anything less will leave unhappy customers

checklists ensure that things get done in an organized and consistent way. They are the key to overcoming "task saturation", where the flow of incoming data and tasks is so overwhelming that one becomes paralyzed and unable to take action.  Checklists can be used as an audit tool to see if you are utilizing best practices in your current and future plans.

As shocked as we all are about the 7.2 million mistakes uncovered after last Christmas, this tragedy could have been much worse had Santa and his elves not used checklists.

Are you smart enough to use checklists? 

Maybe the first place you could use them is on your New Year's resolutions :-) .

Happy New Year from Tony Sherman, the Implementation Rabbi, at Impact Teams. My your checklists bring you prosperity throughout 2015.

“Getting lots of sales is my #1 priority.”

Well . . . yes, after you have created a structure for fulfilling the orders and managing the business.  

Of course you need money to make money. Sales would provide that.  Please consider. . . it is very difficult to start a new business without enough resources to make it run.  Plan to invest or borrow enough so that you have a way to handle production and delivery.

CASE STUDY 

Sylvia* is a chemist who is a miracle worker when it comes to creating formulas for wonderful skincare and massage products.  She had a small work space and equipment with limited capacity in which to produce her product.  And she did! 

Then she found clients who loved her products and wanted more. All of a sudden Sylvia could not deliver the products in a timely fashion and maintain the quality.  She was working night and day, was exhausted, and confused about how to make things better.

It took some time being coached for her finally to open to the answer.  Get organized.  Make a plan. Get help.  She now has two part-time people who help with sales, follow-up and manufacturing.  A larger facility, bigger equipment and an employee allow her to produce enough product for a whole month.

What a difference it has made in her business!  She can now better access her creative talents to develop special Holiday packages and new skin care products.  NOW she is prepared to sell, sell, sell and her revenues are about to triple!

Ann Meacham, president of Leadership Dynamics, positions CEOs and business

leaders to strategically grow their company and tilt the competitive odds in their favor.

Contact her for a Free Leadership Strategy Session.  www.leadyourteams.com