Last year at my aunt’s 80th birthday gathering, I talked business with one of my cousins, Phil Ochoa. Phil and his wife, Sharyn, started a company, Federal Defense Industries, out of the garage of their Southern California home. Ten years later, they are the family success story, with eight-figure revenue, and they have traded way up and out of their office with the Genie door opener.
They have an interesting niche business that finds and sells spare parts for military equipment that the United States has sold to its overseas allies. Phil talks about entrepreneurship with a mixture of reverence and sport. Quotes from Sam Walton and Zig Ziglar pepper his conversation. He and Sharyn asked me to come out to California for a couple of days to review their marketing strategies and to suggest some new ones.
So, last December, I visited the Los Angeles area, learned a lot about their business and left them with some marketing strategies and tactics. But it was I who really benefited, getting to see how astutely they ran the business side of their business. Oh, that, you say! You see, I opened my advertising agency 16 years ago with a love for doing creative work. Years later, I’ve hired people who are much better at that than I am, and my role has shifted to managing the business. There is no pride when I admit this, but we’ve been in business for the better part of two decades, and I have never had a business plan or an annual budget. (I hope my banker isn’t reading this!)
What I have learned about managing a business has come from talking to friends, picking the brains of top business folks, and reading, reading, reading . . . business articles, business books, the other You’re the Boss bloggers. I’ve even hired the occasional consultant for our really blind spots. Truth be told, running the business has always been the least interesting part of my job, and I have never given it much of an embrace. But with these past few recession years and the “learning opportunities” they have presented, I have discovered new interest in running the business well. So I asked Phil and Sharyn if they would mind making a trip to Austin to take a look and share their thoughts.
The Ochoas booked their flights within a day of being asked. They requested financials for airplane reading, took an outsider’s and client’s eye to our Web site, sent some prep questions, and once here spent a January weekend poring over our books, asking more questions and probing about processes, procedures and people. What surprised me was how vulnerable I felt — expecting them to discover some skeleton in my business closet that I didn’t know existed.
I know I’ve been very lucky on many levels, kind of making it up as I go and mostly succeeding. I treated hiccups in my business practices like an unraveled hem, stapling it back and moving fast so people wouldn’t notice, but never going back and putting the right processes in place for the long run. What would their final analysis be? Had I been, sob, a bad business mother?
An hour before we were to head to the airport, we regrouped in the conference room. Being the good managers they are, they started with the compliments. The business is in good order, they said, but there are some areas that could be improved. Phil used a formula to analyze our billable hours and determined that we were pretty far off target for the percentage of billable hours vs. administrative hours — we were at 57-percent billable instead of 80 percent. Behind that was the challenge of getting everyone to fill out time sheets weekly in order to create the most realistic estimates and track time against budgeted hours. And who was the biggest transgressor? That would be me. “If you don’t value your time,” Phil said, “no one else will.”
Other suggestions included reviewing our business pitches, reassessing our wins and losses from 2010 and our targets for 2011 — making sure to focus on the ones that offer the best opportunities for profit. They also recommended building an advisory board, comparing actual hours against allocated hours at our weekly status meeting, reviewing our accounting records regularly with our accountant, developing proprietary services and products and, yes, creating an annual operations plan and budget.
“Do you have a vision board?” they asked. White board? Check. No, they said, a vision board. Explain, please? Get some poster board, some magazines and cut out pictures of what success looks like to you and stick them on the board. Put it in a prominent place where you can see it daily. They encouraged me to spend more time visualizing where I want the business to be and how it will feel when we get there. Before you go to an important meeting, they suggested, sit down and imagine what you want that meeting to be like. Create a mock financial statement (for visualization purposes only) that shows huge profits. Think of everything you are grateful for, and focus on those positive thoughts.
Lastly, Phil walked over to my desk and seeing it covered in papers shook his head. “This is where you work?” he asked. “Clean it up, and you’ll be amazed at how much more you will achieve. Read ‘Office Feng Shui.’” I cleaned my desk, made a couple other prescribed tweaks, shifted the location of my computer and I am amazed how my energy at my desk has lifted.
The time they took to help me with my business is one of the most generous gifts I’ve ever received. Phil and Sharyn’s attention to the agency inspired me beyond the list they left. I’ll share with you how I’m progressing with my “business of running a business” list in future posts. Working on managing things better is like the P90X of business workouts, only there is no 90-day endpoint for this exercise. Learning to enjoy this side of business may never be up there with doing the creative (or even with nachos and beer), but I’m determined to look better in that spreadsheet swimsuit.
MP Mueller is the founder of Door Number 3, a boutique advertising agency in Austin, Tex. Follow Door Number 3 on Facebook.
Article source: http://feeds.nytimes.com/click.phdo?i=fb1701bc04ce9d1010e853d7bd28f4dc
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