Include Every Team Member in Setting Goals

Common company wide goals – we don’t have them. We’re all self-interested in what we’re doing, and sometimes it’s hard to understand each other’s pictures. Not sure if we’re lacking the patience or the perspective we need. When we do make goals, they seem loose, they don’t get transferred to the entire team, and we don’t take them seriously. There are no consequences to not meeting our goals.

Thoughts of the Day: Even if you don’t have written goals, you do have goals, you just don’t know it yet. As owners it’s important that you take hold and decide what you stand for. There are always consequences for your actions or inactions. Remember that there is strength in numbers, learn to help each other get ahead.

Every day, people get up, go to work, get things done, and then go home. Intentionally planned out, or simply drifting along, most people manage each day to get moving and accomplish some things. Conscious and unconscious activities are the outgrowth of conscious or unconscious goals – to get moving, to earn some money, to be in contact with other people, to get something done.

Thinking through long and short term goals, actions and consequences allows one to act pre-emptively to achieve what’s desired. Written goals, backed up by a list of action steps needed to achieve those goals, tends to increase the likelihood of the goals coming to be. Working consciously through goals and actions can also increase the chance that undesired consequences can be anticipated, and avoided or minimized.

Human behavior starts with thinking selfishly, what’s good for me. For some people it evolves to, “How can I accomplish what I need while also thinking about the needs and wants of others?” Expanding one’s horizon beyond self-interest allows for the possibility of taking in additional ideas and contributions from others.

No one person has all the answers. A group working to solve problems and learn from each other’s experiences tends to result in higher level outcomes than does a single person working alone. In the process of working out bugs, communicating about what needs to happen, and sharing individual know-how, a higher level of performance emerges based upon the group’s collective abilities.

It does take patience to listen as one member of the group, and then another, talks about how their experiences are relevant to the situation at hand. It may feel as though there isn’t enough time to wade through the clutter of multiple participants inputting what they consider to be important. In the process of trying to saving time, it’s easy to overlook the nuggets that each team member can add to a group project.

People in the organization look to the owners for leadership and guidance. Behaving without regard for your peers, ignoring the goals and motivations of other team members, shutting off discussion – are these really the things you want to be known for? Or would you rather be seen as a person who encourages the talent around you, as someone who helps people grow by fostering an environment of cooperation and collaboration while working towards the greater good?

Consider compromise to find the balance between what you want and accommodating the needs of other team members. Allow for the possibility that helping each other may lead to new insights and experiences that could never have emerged if you were working on your own.

Use the process of defining and setting specific, tangible goals to your advantage. Discussion, documentation and negotiation are all great toold to help you better understand where your teammates are coming from, and to educate them about what you consider to be important. Ask all team members to join in it will remind them that they are crucial to the growth of the company, and will make them committed to achieving the goals. Use breakdowns in communication and teamwork to your advantage, treat them as learning and strengthening opportunities. Refuse to walk away when things get tough. Hold your team members accountable for doing the same.

Looking for a good book? Good Luck, Creating the Conditions for Success in Life and in Business, by Alex Rovira and Fernando Trias de Bes.


Deciding to Buy or Rent as Your Company Grows

We are out of room. We need to decide if we’re going to stay here or move. Staying as we are means picking up additional space, which I think is going to be expensive. Our other option would be to buy, or lease someplace else. If we want to buy, I know that will take some time. Maybe I need to rent space short term while we work on buying. Seems really complicated. What should I do?

Thoughts of the Day: Buying a building is very often a good idea if you can afford it. Know your company’s long term plans before you decide what to do next. Moving a business takes planning. If you can’t afford to buy now, work on a 3-5 year plan to get where you want to go.

Most privately held businesses don’t have enough tangible equity. When owners need leverage, they often can’t get the financing they need because there isn’t enough in real asset value available in the company. And given the slow housing market, many business owners are also struggling to prove they have equity at home that they can lend back into the business in case of need.

Financing is based on comparing debt and equity. Banks are looking for more than historical net income performance. They want to see that the business has access to cash and accounts receivable net of accounts payable and credit card balances.

Over 70% of today’s economy is comprised of service based businesses. Their primary assets, personnel, aren’t valued on the balance sheet. Combine that with reduced debt: equity ratios and a slow-to-recover economy. Lenders are much more careful about knowing what’s available to repay their loans and avoiding situations where back up funds might not be adequate.

Buying a building is one of the few purchases a company can make wherey the cash laid out immediately turns into additional value on the balance sheet. 20% cash down turns into 20% additional value on the balance sheet, if not more. Any money spent to improve the building yields an increase in the value of the asset, often a multiple of what was spent.

Before jumping on board with a plan to buy a building, make sure you know what your company’s plans are for the mid and long term. When things are cramped and you’re deciding what to do next, look at more than direct costs.

How much space will your company need in 3-5 years? Does the space you’re looking at have expansion ability, either because you can remove existing tenants, you can build out, or you can re-arrange the space to fit in more?

Planning to sell the business in the next couple years? What are the chances the future owner will want to stay in the current space? Can your space be leased to someone else if the new owner moves out?

Is the neighborhood safe for your staff to come and go at all hours? Enough parking to accommodate everyone? How convenient is transportation? Will current employees follow the move to the new location?

Will the building likely appreciate in value over the next 5+ years? Are you prepared to hire a property manager, or similar? How much space are you planning on renting out? How much in the way of building improvements has to be done within the first year in order to bring the building up to your standards?

Do you have enough money to pay 20% down? If now, where are you going to get that money from? How long will it take you to assemble the down payment?

Try to time your move during your slow periods. Set up a team of people to work on space planning. Decide what equipment you’ll bring with you, and what gets replaced. Take this time to replace outdated computers, phones, furniture and cubicles. Add that in to an overall moving budget and talk to the bank about funds to cover those expenses. Overestimate what you need so you don’t get caught short.

Not sure you have the funds right now. Check to see if there are funds available from the state to help. Work on a plan to put away the money you need over the next 3-5 years. Move or stay where you are and add a space near-by, to solve short term needs. Often moving accounting or sales to a new location can fix the immediate space crunch and buy you some time.

Think of building assets as job #1 for yourself as business owner. Use the business as a vehicle for building those assets. If you have to pay rent anyway, you might as well pay yourself while you get the appreciation and depreciation value of a building.

Looking for a good book? Confessions of a Real Estate Entrepreneur: What It Takes to Win in High-Stakes Commercial Real Estate, by John A. Randel.