The importance of effective communication for managers and business owners can’t be overemphasized. Clear and effective communication from management increases efficiency, satisfies customers and improves quality 
throughout the organization.
Let’s define what we mean by “effective” from both the employee & management perspective. Our interest here is in how information, ideas and caring flow from management to employee and also how employee concerns are transmitted from employee to manager. Remember communication must be a two-way street to truly be effective.
As owners and managers we must communicate the company vision and objectives to each employee, along with our expectations for their particular position and role in reaching our vision. In the E-Myth management model, we do this through the strategic objective, organizational strategy and position contracts. For important agreements, getting it down in writing is often the difference between effective communication and communication that misses the mark between the person delivering the message and the receiver. Don’t shy away from the written word. The E-Myth system of management along with effective delegation and regulation, relies on written interchanges to make certain that both parties understand what is being communicated.
Effective communication is most easily achieved in an organization that has a clear structure and systematic ways to communicate. Again, let me re-emphasize, don’t be afraid of implementing written systems when they provide the most effective method of making certain both the sender and receiver acknowledge the same message or agreement. Nothing puts the team, or a manager and employee, on the same page as a written statement.
Consistent communication between an employee and their manager is fundamental to establishing an open, trusting culture. Company meetings, department meetings, and one-on-one employee development meetings all serve this end. While “management-by-walking-around” has its place and advantages, there really is no better way to ensure effective communication than scheduling regular meetings between managers and individual employees. This regular meeting is a commitment management makes to always address any issue that arises and it gives the employee the opportunity to ask questions, express concerns or seek mentoring and support.
Communication one can rely on with regularity along with a commitment to transparency is the kind of communication that builds trust between manager and employee. Transparent communication is open, honest and objective and allows for disagreement. Being a good manager requires that you balance the individual employee’s concerns and requirements with the overall needs of the business, and sometimes means making tough decisions. Transparency when the seas are rough is even more important than when there is clear sailing.
Effective communication has two phases; the transmission phase and the feedback phase. The transmission is the sending of a message, either verbally or written, phone, in person, e-mail or letter; and the second is the feedback phase or the acknowledgment that the original message was received and understood, or a restatement of the original message to make sure that it was correctly interpreted, or a request for more information. Getting this acknowledgment back is an important part of communication since we can’t consider it effective unless we know it’s been received and understood.
Individual perceptions play a large part in the understanding of our communications. Body language plays an important role in getting our point across. Our body language may either be congruent or incongruent with the verbal message; something we want to be aware of during our face-to-face interchanges.
When asked to define communication, most of us say talking, writing or body language. But listening is equally important; especially when confronting difficult issues. Recognizing the importance of listening and making it a part of your culture improves communication considerably. Everyone can learn the art of active listening. The key to listening effectively is relaxed attention. Listen with your whole body, maintain eye contact and give verbal and non-verbal cues that you’re right with the speaker. Do your best not to interrupt.
If half of the equation in communication is active listening, the other half is expressing what you think, feel, or want in a true and non-defensive way. Be clear about what you want and what you are willing to give. Use “I statements.”
Employee surveys consistently demonstrate that ineffective communication results in poor employee morale which causes increased turnover and absenteeism, dissatisfied customers from poor customer service, higher product defect rates, lack of focus on business objectives, and stifled innovation.
Employees will put in that extra effort to create a high performance environment when they are kept informed openly and honestly on all aspects of their job and the business and they feel that they are being listened to with empathy.
A culture that places an emphasis on effective communication instills its value in each employee and provides tools and training to elevate everyone’s abilities. Fostering two-way communication gives employees adequate opportunity to ask questions, discuss and express their own ideas. Feedback loops, sharing best practices and having an open channel for ideas, innovations and suggestion for improvement ensure that employees and managers work together to achieve success. Effective communication is like cash in the bank and it helps grow your business like compound interest.
The Managerial Perspective
Accountability: Defining Work Relationships that Work
The Best Employee Retention System
What communication challenges have you faced in your business? How have you overcome them? Post a comment and tell us about it.
A good coach will make his players see what they can be rather than what they are.
Ara Parseghian, Notre Dame Football Coach
In many ways, business coaching is at the heart of what we do at E-Myth Worldwide. But the question often arises as to why a business owner would need a coaching relationship and how to make the most of it. It is important to realize that coaching works best for people who are successful at what they do and are ready to go to the next level in their business. And, much like a sports coach, a business coach works with you to develop the skills and abilities that are already within you.
Coaching involves a number of different qualities that are not always employed with consulting. For example, in sports, a coach will help you understand not only how to do something, but why it is important or necessary. A coach will guide you, provide feedback and insight, while holding you accountable to the goals and objectives you have agreed to accomplish. A coach will facilitate your progress and work alongside you to help you achieve your vision.
Consultants, on the other hand, typically engage in an analysis of a particular problem, issue, or project while providing recommendations and suggested courses of action. While their role is usually advisory in nature, they will often perform specific work for a client. Their focus is generally on what needs to be done and not the why and how of the processes involved. Although some may disagree, it can be said generally that a consultant offers a fish, while a coach helps teach one to fish for themselves.
There are also significant and instrumental roles to be played by family, friends, and mentors in the life of a small business owner. Motivational materials, books, and seminars are useful as well. But as critical as these individuals and resources may be in the success of the business owner, none of them can fill the role that a coach can have in helping that business owner achieve his or her vision.
Here’s a real-life tale of one our clients: Rick's dad was a plumber, and Rick grew up working in his dad's business. Then one day Rick decided that, since he's a plumber and has lived in and observed the plumbing business all of his life, it was only reasonable that he establish a business of his own. And so he did.
Rick is a terrific plumber, but he found that while he could clear clogged pipes and repair broken toilets, he did not know very much about such things as how to hire and manage employees, use an income statement or financial balance sheet, or even develop marketing strategies to attract new customers. His dad had some good advice to give, and Rick’s wife tried to help with the books, but as his business grew he began to find himself working more and more hours and yet never getting a handle on the “business” of running the business!
A day came when he realized that, just as he invested his time and energy in learning his trade, he also needed to learn how to run a business. He knew that he needed to develop skills and acquire new skills to be an effective business owner, but he was reluctant to seek help. Fortunately, Rick had a friend—the owner of a successful hardware store—who offered some insightful advice and directed him to E-Myth Worldwide.
Armed with a clear vision of where he wanted to go with his business, and assured that he could indeed develop the skills he needed to successfully lead and build his business, Rick soon found that his business coach became an essential guide for navigating the path to business success and achieving his objectives. Along the way he also discovered that his relationship with his coach enabled him to see himself in ways he hadn’t before, and to find his proper role as a business leader and entrepreneur. Rick the plumber with a plumbing business became Rick the business owner who also happened to be a terrific plumber!
What Rick and others like him have discovered through the coaching relationship is the need for what we call “dual-vision” and the value of a coach’s objective viewpoint and feedback. This dual-vision involves the art of keeping focused on the present and the needs of today, while always keeping the goal lying ahead clearly in view. The overriding value of the business coach is his or her ability to provide the critical objectivity to the business owner. This objectivity is supported with feedback and input to assist in that business owner’s progress.
Another aspect of the coach/business owner relationship that cannot be overlooked is the accountability that is provided. There is tremendous value in sharing one’s goals and objectives with another and then striving to accomplish them. In a very real way it becomes a partnership wherein the business owner is accountable to himself and his coach to fulfill his obligations, and the coach is accountable for facilitating the business owner’s experience along the way.
No one person has all the answers to the challenges faced in life or in business. But everyone can benefit from the insights, knowledge, and perspective of another. This is especially true for business owners who want to move beyond the place they find themselves today. Having a vision for your business is essential and getting the help you need to achieve that vision is priceless. Or, in the words of Tom Landry:
Setting a goal is not the main thing. It is deciding how you will go about achieving it.
How has you and your business benefited from having a business coach? What is it about having a coach that is valuable for you?
Learn to lead your business in a way that supports your life objectives and create a business that works for you without your constant involvement in the daily operations. We can show you how. Business owners, contact us today for a complimentary business consultation to learn more.
Flickr photo credit: Markfive
Great leadership requires the ability to control what is in your power to control, to give people clarity, direction, and a sense of security, to chart a course and set goals your employees believe are attainable. As we begin a new year, it is your job as the business leader to set and communicate expectations for the year ahead. From strategic initiatives to marketing campaigns, from new positions to new product lines, your company is waiting for you to clearly set the goals for the new year.
It also falls on your shoulders right now to make sure that your financial house is in order, that you understand thoroughly where you are today, how you got there, and have a plan moving forward.
We’re all eagerly anticipating good things from the year ahead. But hoping is one thing, preparing is another. Here are three financial objectives you really need to have in order to start the first quarter off right:
A budget is developed from past trends and future predictions, and is a forecast of your income statement. It emphasizes profit and the path you intend to take to generate that profit. In addition to planning how you will operate in the near future, your budget is also a control device. It helps assure that proper measurement and evaluation procedures are established throughout the company. It provides a plan so that everyone knows where the business is going and what you expect by way of performance. It also gives you a way to measure that performance.
Need help developing a budget? The E-Myth Online program has extensive information, worksheets and examples that will help you with budgeting and much more.
Determine Your Financial Goals - A big part of your budgeting process revolves around the financial goals you’ve set for the year ahead. Where do you want and need your business to be at the end of the year?
The main purpose of creating a budget is to plan the monetary results you're going to achieve during the coming year, and then ensure that you realize those results. Rather than wait until the end of the year to see what happened, track your progress monthly and make adjustments as the year progresses. This dramatically increases the likelihood that you will, indeed, accomplish what you've set out to do.
If you haven’t already, it’s time to set annual goals (either revenue/profit or both). You can then break these goals into a series of twelve monthly goals for short-term strategy and monitoring. Remember that these are first-pass goals that will be refined as you grow your business.
Some business owners are leery of sharing financial information with their employees while others believe in total transparency. Ultimately, how much you share is a personal decision. It’s up to you to decide what you’re comfortable with. At the very least, we recommend you share enough information so that your employees understand the overall financial health of the business.
One way to do this is to make sure that everyone in your business is aware of the financial implications of their respective positions. People who have no financial information can’t be held accountable for managing financial performance. They have to know the financial dynamics of the positions they hold before they can make positive changes. This can be a tricky topic, and we have an entire process in our Mastery Impact! coaching program dedicated to bringing financial awareness and accountability to employees at all levels of your organization. The bottom line is that the more that managers and workers become aware of their impact beyond their own positions, the greater their appreciation of their roles within the business and the greater their positive impact can be.
How your business does in Quarter 1 sets the tempo for the entire year. Make sure that you set the right tempo for the year ahead with clear direction, a realistic budget and the support of your team. Here's to your success!
Have you set your financial goals and budget for Q1 and beyond? Post a comment below and tell us about your challenges and triumphs.
Practicing Financial Leadership
Company Culture: A Game Worth Playing
Your Cash Management System
Need help controlling the cash flow in your business? At our Six Steps to Maximize Cash Flow virtual seminar, an E-Myth Business Coach will help you identify and maximize the cash in your business. We’ll offer tips you’ve probably never even considered…
Allocating time for developing systems is a difficult task for busy business owners. If you’re familiar with our blog, or any of the E-Myth books, you understand the value of developing systems. But adding more work to your already extremely busy schedule can leave you feeling overwhelmed and frustrated. Even with a regular chunk of time allocated to systems development and improvement, it can be difficult for even the most savvy business owners to create and develop systems.
There’s a variety of ways you can approach systematization, and different businesses require different systems. Some systems are common to all businesses, although even these have variations on a common theme. For example, an income statement is an information system common to all businesses, but there are countless ways to prepare and present even this most common of information systems.
Our first recommendation is to get an E-Myth Business Coach. Our coaches are uniquely qualified to help you implement the systems essential to business success. You may also want to attend the Creating Your Business System virtual seminar which will help you begin the process of creating a systems-dependent, business. But here are a few tips to get you started right now.
Believe it or not, your systems development starts with a system. You need a system for developing systems in your business. While that may sound a bit trite, this is where so many people get tripped up. The reason you want systems in the first place is to produce order, structure and predictability. You want to approach your systems development in the same way… with a Systems Strategy.
A Systems Strategy will save you valuable time and reduce the frustration and stress of system development. In our coaching programs, we use E-Myth’s proprietary Seven Centers of Management Attention™ model as the basis for developing your Systems Strategy. This model demonstrates the integrative nature of any business. It contains the three essential business disciplines, Money, Management, and Marketing, and the three essential business processes, Client Fulfillment, Lead Generation, Lead Conversion, and finally Leadership at the center of the model.
If you use the Seven Centers of Management Attention model to guide your systems identification and development efforts, you’ll have a holistic or “360-degree” view of your business. It gives you the ability to consider the business as a whole, and then you can break it down to look at the major divisions of business activity. The Marketing Center is your marketing system; the Money Center is your financial system; and so on. Each of the Seven Centers may break into smaller component systems, which may break into still smaller systems, just like the root system of the tree.
The benefit of using the Seven Centers model is that it allows you to approach systems development with structure. You can look at this model and visually identify where you need to focus your attention to begin developing your systems and best practices. You might take a look at this and recognize that the area of Lead Conversion is where your business needs the most attention right now. Then you can create a plan that will guide your systems development efforts in that area. Viola! You have your first system and it’s in an area that really matters.
Start with the “big picture” of your business as a whole, and work your way through systems, subsystems, and sub-subsystems until you decide that further systemization is an exercise in the trivial.
If nothing’s jumping out at you, try examining each Center, and then ask: “What systems do I need for Money?” or “What systems do I need for Lead Conversion?” In this way, you will uncover the systems that will support each Center and ultimately, the systems that will lead to increased efficiencies and greater results.
One question we hear a lot is: how much is too much? Just think about it practically: you will certainly need a system for recruiting and hiring employees, for example, but you almost certainly will not need a system for sorting paper clips by size and color.
And remember, creating systems in your business is a team effort. As the business owner, it is your responsibility to lead systems development in your business. This means you set the stage for development, define the strategy for systems development and then involve your staff. Many times they are the ones working the systems on a day-to-day basis. Do not get caught up in all of the systems work. Involve your most important key players.
How have you implemented systems in your business? Have you used the Seven Centers of Management Attention model to become a systems-dependent business? What does your business look like now that it is systematized? Post a comment and tell us about it, we love to hear your stories.
You misplaced your credit card bill and sent in payment a few days late. It happens to the best of us, right? Maybe so … but as an entrepreneur, you can’t afford even a single late payment.
Your credit file is a complete history of your credit activity. Not paying your bills on time can ruin your credit file. A single delinquency can be held against you for years and be used to constrict the extension of existing credit or deny new credit – which can make or break your ability to finance the launch, operation or growth of your company.
There are two things you should do to protect yourself from this critical mistake. The first, obviously, is to ensure that you pay your bills promptly. Second, keep your personal credit separate from your corporate credit. That way, problems with your personal credit history will have no bearing on your corporate credit. But if you do not take all the necessary steps to separate your corporate and personal credit, problems with your personal credit file could directly affect your ability to build your corporate credit and your business.
If you need help incorporating or building good business credit, click here for a complimentary business credit consultation and to obtain our free e-Book, "Unlimited Business Financing – Without a Personal Guarantee” – a step-by-step process for building a business credit asset.
This week's podcast is about a topic that is top-of-mind for a lot of business owners right now: funding. What kind of business funding is available to small business, how you go about getting it, and what's different about securing funding now during these challenging economic times.
E-Myth Seminar Leader and Keynote Speaker Karin Iwata interviews Paul Bozzo, of 10X Consulting Group which specializes in helping companies who are seeking private equity or debt financing.
Whether it’s for start up capital, expansion needs, or working capital, chances are good that if you’re a business owner (or plan to be one) you have looked for financing.
This podcast will help you better understand the financing options available to you and give you some of the smart strategies you can use right now.
Podcast: Finding Funding for your Business
Sometimes we get into ruts. We get used to doing business “our way” and we close ourselves off to the possibility that there might be another way. Maybe even… a better way. We repeat the same patterns and produce the same results and our business coasts along but never grows or evolves.
Take for example, a contractor client of ours who attended one of our Leadership Intensive Seminars. He’d been in the business for more than 15 years and he’d never – not once – left the business behind. On the few vacations he had taken in that time, he’d always called to check in. He even cut a trip short once because he felt he couldn’t leave a situation to somebody else on his staff to handle. He was extremely proud of the company he’d built and he felt he was the only person who could run it.
Then somebody gave him The E-Myth Revisited on CD and he listened to it in his truck while driving to and from jobs. And then suddenly it dawned on him. After 15 years, he realized that he’d hit a wall. That the business wasn’t growing. That his revenues were flat. That the business was running...but not efficiently. He told us about the moment this realization struck him. He pulled over and banged his hands on the wheel of his truck. It was his “ah-ha” moment.
“Ah-ha” moments happen at different times for different people. But inspiration usually strikes at some point. Something happens to make you think that maybe there is a better way. Perhaps you have a truly rewarding experience with a client, or an employee goes above and beyond in a way that makes you rethink how things are being done. Maybe you attend a lecture or read a book. Like our contractor client, you may have felt that way when you read our book, The E-Myth Revisited. A lot of people read it, identify with it, and enjoy a few minutes of enthusiastic determination. And then life gets in the way. Monday comes around and the day-to-day work of running your business begins to make it feel like Groundhog Day.
But let’s face it; Groundhog Day is no place to live. Stay in a rut too long and you could begin to lose interest in your work, feel defeated, and when that happens to a business owner the impact can be devastating. So what’s a business owner to do?
Here are three things you can do right now to break out of that “doing it, doing it, doing it” cycle. Three things to get you back in touch with the entrepreneur who started your business in the first place.
As a leader of your business, it’s important to recognize the needs you have to uphold the level of passion, integrity, motivation and drive you have for your business. Especially during this time of year, take a time out to Delegate, Rejuvenate, and Create the business which means something to you and your team. Giving yourself the gift of time to be in the entrepreneurial head space is one of the greatest gifts you can give yourself – and your business.
After all, aren’t you ready for a new year?
The pressure in a seasonal business requires that you succeed in a short period, then plan and cope through the down times. In the first part of this article, we talked about some of the strategies you can employ behind a seasonal business. This week we're offering some tactical tips to help you plan for the ebbs and flows.
To help maximize your skills, time and resources, follow this list of tactics:
Though most small businesses are affected by seasonal changes, a seasonal business depends on them. Being profitable in the face of uneven cash flow, unpredictable sales, and high employee turnover requires a great deal of planning and ingenuity. With the right planning and execution you can alleviate the pressure and find fresh ways to view the opportunities as they present themselves.
One clear advantage to a seasonal business is that when operations stop or slow down you have a perfect quiet period to regroup and refocus. What better time to work on it, instead of in it, when there isn’t much in it going on at all.
The real key to making your seasonal business a success is the creation of good controls along with engaging in strategic thinking that may unlock new ideas that capitalize on your assets and create new markets for the slow times of the year.
Many small businesses experience the bulk of their annual sales during a short season or cycle. For many retailers it’s the holidays. For fitness centers, January new years’ resolutions typically bump up new business only to dissipate in the summer months. Some businesses do amazingly well when the weather gets warmer, while others depend upon the cold and the snow. The wedding season, tourist season, tax time… these are all examples of the endless variations that shape a seasonal business. For many business owners, it’s critical that you catch the right wave at the right time.
While all businesses realize sales cycles, truly seasonal businesses fall into two primary categories: those that can shut down during the off-season and those in which the owners must find other ways to maintain cash flow during the remainder of the year. In both cases, the challenges are similar and must be addressed in order to keep your business flourishing throughout its ebbs and flows.
Budgeting and cash planning are critical for any seasonal business. Vigilance and a clear strategy in this area can alleviate many of the potential problems and create a path to solvency and success, even if you never attempt any of the strategies to grow your business beyond its seasonal barriers.
Can you dedicate the entire year to your business, paying the business expenses along with your personal ones? If so, use the off-season to perform necessary maintenance and repairs, take on new projects or work on your marketing systems. If you have the luxury to perform strategic business development while little or no tactical work is occurring; you have an advantage that most businesses don’t. Create a plan now for making best use of this down time.
An essential part of your strategic development should be exploring ways to even out revenue and keep cash flowing during the off-season. Can the sales side of the business take place during the off-season for operations? Can off-season registration generate income prior to opening operations? If you consider the possibilities creatively, you may come up with successful methods of spreading your cash flow throughout the year.
Some seasonal business owners can afford to take off large amounts of time, while others need to scramble and find alternative plans to get through the off-season. If this is your situation, see if you can find compatible substitutes for your product or service. Landscapers hanging holiday decorations, snow removal operators doing landscape work, a Christmas store extending its open months by taking on other holidays are all examples. By carefully examining the possibilities, you may discover a similar low-cost strategy that brings in cash during your primary off-season. Another strategy is transforming your seasonal business into a year-round enterprise. Patio.com, for example, took on pool, ping pong and foosball tables, as well as bar, barstools and bar tables and chairs in order to get out of their summer season niche.
While running a seasonal business has its challenges, as we all know, behind every challenge is an opportunity. By asking key questions and looking at your business strategically, you can create new opportunities and develop your business in extraordinary ways that lead to previously unexplored avenues of growth and profit.
Consider the following:
Next week we'll continue this discussion with some tactics you can put into action to take advantage of this opportunity to grow your business.
What else have you discovered that has helped you succeed in your seasonal business? How do you take advantage of slow times to work on your business?
The ubiquitous business slogan, or tagline, is familiar to everyone. From Nike’s “Just Do It.” to the classic “got milk?” of the California Milk Processor Board, we all carry these phrases around in our heads along with commercial jingles and corporate logos. But the USP, when the concept was originally developed back in the 1940s, was specifically intended to communicate a distinct and unique proposition to the consumer, a proposition so compelling that it can draw customers to your brand.
From the E-Myth perspective, the USP accomplishes this by communicating what it is about your business service or product that brings emotional gratification to the customers in your target market. The genius of the famous tagline, “got milk?” is that it speaks directly to the fact that consumers intensely disliked finding that they were out of milk. By leveraging that emotional reality, the ad agency launched a highly successful series of print and TV ads that impacted millions of consumers over the years.
But over the decades the usage and understanding of the USP has morphed somewhat. Purists in the marketing world lament that what passes for Unique Selling Propositions are often little more than clever or innocuous slogans.
Consider a Unique Selling Proposition for Bob’s Backyard Barbeques such as this: “We Build Barbeques.” Aside from stating the obvious, the phrase says nothing that stirs the emotions or speaks to any need for gratification. And it certainly isn’t communicating anything unique in its proposition. On the other hand, Bob might come up with a USP that reads: “We Build Backyard Escapes” or “Exotic Vacations At Home.” The imagery and emotional appeal is vastly different and the power of the USP has been harnessed more effectively.
The foundation for your USP must come from a real understanding of your customer. In our Mastery Impact! coaching programs we work through the Marketing process with our clients to make sure that before a USP is developed, there's a solid understanding of the target market. Here are a couple of ways we suggest you develop that understanding..
The last step here is to be as objective as possible in determining what features of your business stand out as something that sets you apart from the pack. What can you highlight that will move prospective customers to patronize your business? And how can you position everything you do in your business to embody that USP?
So what should an effective USP look like? There are several schools of thought on this topic and much has changed since the concept of the Unique Selling Proposition was first developed back in the 1940s. However, most successful USPs share some common characteristics.
The real power of your USP comes from its connection to the unconscious mind. Once you have dedicated some careful thought to understanding the collective minds of your target market, you can then concentrate that understanding into how you need to position your business. The way to craft a powerful USP is to make sure it ties into the most emotionally stimulating elements of your customers’ experience with your business. So how do you capture this in a short phrase that touches on emotional gratification promised by your product or service? By following these seven guidelines:
Don’t feel that you have to be “married” to your initial efforts. Businesses often develop new USPs as they grow and evolve. And the more you learn about your customers and what constitutes your promise of emotional gratification, the clearer your understanding of what an effective Unique Selling Proposition will be. Ultimately, the real acid test is to ask yourself, “What emotion am I selling?”
What's your USP? Got one you're proud of? Post a comment and share it with the E-Myth Community.
Subscribe via RSS
E-Myth Your Business Podcast
Ask E-Myth
Follow E-Myth on Twitter
(last 10 days)
Subscribe to the E-Myth ViewPoint Newsletter
