Posts Tagged ‘Tom Sponsel’

Focus on the Long-Term Vision

By Tom Sponsel, CPA/ABV, CFF
Managing Partner
tsponsel@sponselcpagroup.com 

Convincing stakeholders (employees, managers, shareholders, vendors and customers) to invest resources in your business can be a daunting task, especially if you are focusing on a Long-Term Vision over numerous operating business cycles. Staying committed to building a company isn’t always easy, as the day-to-day headaches can get in the way of the leader’s vision! But with a little time, perseverance, focus of a committed team and faith, you can work toward creating a consistent pattern of growth and keeping your stakeholders committed and energized!

In order to keep growing as a company, it’s important for everyone involved to never lose sight of the BIG PICTURE — that vision thing! Look beyond the ever-moving peaks and valleys of your place in your respective marketplace and focus on goals for the future. Perseverance is the key. The Stock Market ebbs and flows, but in the closely held business world, don’t get distracted by what goes on in the Publicly Traded Company world. Always be aware and vigilant over the macro-economic environment, but focus on the Key Performance Indicators for your respective industry and most importantly your business enterprise.

A good start is to develop a three-to-five-year plan. Determine the most essential resources you’ll need to reach the level of success you desire and have planned for. Outline your goals and the course of action you will take to achieve them. Establish a timeline with milestones to measure your progress. Share your vision with all your stakeholders and set realistic expectations. Remind them that the seeds of investments take time to germinate. The most beautiful flowers don’t bloom right away, so to speak.

Building a business takes patience and a positive attitude. Don’t let minor setbacks get you down. You’re bound to hit a few bumps on the road toward a bright future. Allow your LONG-TERM vision to be your “Guiding Light!”

If we can assist you with achieving success in your business or personal affairs, please contact Tom Sponsel at (317) 608-6691 or email tsponsel@sponselcpagroup.com.

Responsibility Breeds Motivation

By Tom Sponsel, CPA/ABV, CFF
Managing Partner
TSponsel@sponselcpagroup.com 

Every good manager knows that the key to improving productivity is to hire talented people with skill sets that are commensurate with the needs of the workforce. But as a business grows and more managers are necessary to supervise a larger number of employees, breakdowns can sometimes occur when it comes to delegating responsibility.

Good delegation requires adequate orientation to the task or duty, timely follow-up, meeting deadlines and holding the delegate accountable for the quality of the project. Where managers become frustrated is when they do not see the results they wanted at the end of the process.

A mistake often made is when the supervisor takes the project back and completes it himself or herself. While it may serve as a quick-fix, it only increases the burden on the manager, reducing their capacity to act in a supervisory mode. And it sends the message to the employee that they do not have your trust.

While it’s tempting to blame problems on a lack of drive on the part of the employee, in my experience responsibility actually breeds motivation. The majority of workers desire to do well in their endeavors, and will raise their level of performance to meet higher expectations.

The secret is that the delegation of authority must be performed in a way where the employee is held accountable to the level of expectations. When a project is turned in with sub-par results, the manager should explain where their work is lacking and have them fix what’s wrong, rather than the manager allowing it to boomerang back to them to fix or complete.

Good management is in many ways a teaching process, and that takes time and patience. By omitting the learning experience that comes with timely feedback and accountability, a supervisor is only setting the employee up for more failure.

I believe that when employees know they are solely responsible for the delegated project and that you’re depending on them to deliver at a commensurate level and on a timely basis, they will become more motivated to meet those expectations.

If you really want to motivate your staff, you should delegate liberally, providing clearly defined expectations and giving employees the autonomy they need to complete a task. And let them know they’ll be held accountable to that prescribed high standard.

The only way to build a capable and qualified staff that will help your company grow is by investing your trust in them, so managers feel comfortable delegating important duties, and employees are properly motivated to deliver polished returns.

In the end, you’ll find you have a stronger team of employees, a less frustrated manager, and a culture of coaching that workers will pass on as they move up the chain.

If we can assist you with achieving success in your business or personal affairs, please contact Tom Sponsel at (317) 608-6691 or email tsponsel@sponselcpagroup.com.

Does Your Business Have Any ‘Broken Windows?’

Tom SponselBy Tom Sponsel, CPA/ABV, CFF
Managing Partner

You may have heard of the “broken windows” theory, but probably in connection with politics and law enforcement. Former New York City Mayor Rudy Giuliani famously employed this philosophy in the 1990s to clean up his city.

The basic idea of broken windows, which was first introduced by George L. Kelling and James Q. Wilson in The Atlantic in 1982, is that if you let the little problems slip, like broken windows, vandalism and rampant graffiti, bigger problems eventually become insurmountable. Ignoring tiny errors or mistakes, invites ambivalence to much larger problems!!

Some years later author Michael Levine adapted the theory to the business world in his book, Broken Windows, Broken Business: How the Smallest Remedies Reap the Biggest Rewards. His take was that if you let the little things degrade in your operation, particularly how you treat your customers, it will eventually impact the entire company.

When problems go unaddressed, they tend to repeat themselves. Soon a mistake becomes standard operating procedure. That sets the bar even lower for other areas of your operations. Employees start to take less pride in what they do, impacting productivity and morale. Clients notice they aren’t getting the level of customer service they’re accustomed to, and begin to look for other partnerships.

Say you’re walking by a restaurant and you’re hungry. You notice the windows are so dirty you can hardly see inside. Would you want to go in? Or you do enter and notice there is flaking paint and chipped plaster on the walls near the cooking area. Does the grumbling in your stomach suddenly stop?

Even though these things may have no impact on the quality of the meal you receive, they send a signal to customers — that management doesn’t care about the details and makes you wonder what else are they cutting short and ignoring a commitment to quality.

Transfer the example to a professional office setting. Is the carpet in the reception area worn? Is there nobody manning the front desk, or the person there seems disengaged and bored? Do your employees dress and behave in a professional manner? When people call your office, are they put on hold for long periods with an automated message telling them, Your call is very important to us?”

If you are the owner or manager of a business, you have to take on an almost obsessive-compulsive personality when it comes to how the organization runs on a daily basis. You must manage the organization in a very meticulous, deliberate way so that any problems are quickly discovered and addressed.

Take the initiative to see your company from the perspective of a current or potential customer. Are they getting the experience they want from the engagement? Are there shortcomings, even minor ones that could be remedied to improve how they view your organization and their overall experience in interacting with your company?

The best way to determine how people see your business is to ask your customers. Reach out to them for feedback from time to time, and ask them to report flaws in what you do. Invite constructive criticism—to make your operation BETTER!! Some industries even use secret shoppers or other monitoring services to report back with unfiltered information you can use.

We can apply the broken windows idea to virtually every aspect of a business. Is your website up to date and easy to use on every platform? Is it simple for people to find and contact your company? Is the method for receiving incoming inquiries monitored constantly and professionally?

In finding the little flaws in your business – and keeping them from becoming big ones – the secret is to think about the type of brand you want to build for your organization, and then work to make it reality. Envision the customer service experience you want your customers to have, then find out if that’s what they are actually getting. As the owner– it is OK to be OCD about customer service and your customer’s experience!!

If you find there are any broken windows in your business, even teeny cracks the customer can’t yet see, fix them quickly before they become the new normal. Duct tape may keep the glass from shattering, but replacement allows the customer to enjoy the experience.

If you need any advice about how to find and fix any issues challenging your organization, please call Tom Sponsel at (317) 608-6691 or email TSponsel@sponselcpagroup.com.

 

CPA Celebration Honorees

INCPAS honors

Tom Sponsel, Emily Campbell and Ryan Hodell (l-r) were honored at the 2017 INCPAS CPA Celebration on May 12.

The Indiana CPA Society (INCPAS) held their annual CPA Celebration on May 12th. Sponsel CPA Group had several team members recognized for their accomplishments.

Emily Campbell and Ryan Hodell were recognized for successfully passing the rigorous CPA Examination!! Tom Sponsel was recognized for reaching his 40th anniversary of INCPAS membership.

We would also like to congratulate Brandon Hoge, who has also successfully passed the CPA Exam. He will be recognized at next year’s CPA Celebration after attaining two years of public accounting experience.

We are very proud of all our team members, but want to congratulate those that were recognized at this annual INCPAS event!

Should I Fire My Largest Customer?

Tom SponselBy Tom Sponsel, CPA/ABV, CFF
Managing Partner

Everyone who’s ever run a business understands the concept of having a customer who’s more important than the rest. After all, nothing happens without a sale, and no sale occurs unless there’s a customer. But a very large customer may not always be the best thing for your company.

Often we find that a business owner/manager hasn’t performed adequate analysis to see if their biggest customer is really producing the outcomes they desire. They may look at the top line and see that their largest client is responsible for a huge chunk of total revenue. What they don’t realize, is that single customer may be eating up a disproportionate share of resources and thus not having the impact on the bottom line as assumed.

It’s also not healthy when a firm has a customer so big that they are economically dependent on them. When this happens, we even see the customer starting to dictate policies, procedures and prices. They monopolize resources and hinder the ability of a company to grow and evolve. Soon your business becomes a mere extension of their business. They many times become a barrier to growing the enterprise with new customers, even some which may have greater bottom line potential impact!

The corporate world is littered with people who built a great company, but depended on a single client for 60 or 70 percent of their revenues. When that went away …the firm floundered.

Leaders should strive to have a customer base that is large and diverse enough, that the sudden loss of any single customer would not threaten their continued viability as a going concern. Always preserve your independence to the point you have the freedom to “fire” your biggest customer, if the relationship is no longer mutually beneficial.

It’s easy to become bedazzled by a big client. You enjoy the prestige of partnering with a high-profile company, and the numbers on your gross revenue spreadsheets are eye-popping.

But when is the last time you performed a gross profit analysis, looking at not only sources of revenue, but how much you are spending to serve them? Explore beyond the topline numbers to reveal the true cost of having them as a customer. Are there other initiatives you’ve been wanting to explore, but your team is so monopolized there isn’t time pursue them?

There’s nothing wrong with having a big client who generates profits for your business. But a prudent business leader will look at the longer term, and manage clients so as best to perpetuate the sustainability of your own organization, including your overarching mission and the welfare of your employees. You want every relationship between your company and its customers to be win-win for both parties.

The example of one of our clients best illustrates this point. During the Great Recession, they lost a major customer and as a result a big portion of their topline revenue. But they were surprised to find that their profitability actually INCREASED! That’s because they had lost sight of how much it was costing the business to serve that one client. By being forced to explore other opportunities, they were able to make up the difference – and more.

In another case, the largest customer demanded and was provided terms which allowed payment of invoices within 75 days rather than the normal 30 days. Thus company was being “the Bank” for the large customer thus requiring the company to increase their working capital line of credit to fund the accounts receivable extended terms, thus increasing their risk and interest costs.

This is why it’s prudent to run an analysis from time to time on your customers. Take a look at not just the benefits, but also the risks of having a large customer.

If the overall profitability of a customer is not commensurate with the level of services they are demanding, or if you find yourself unable to adequately meet other customers’ needs, or if you find yourself economically dependent on the leadership of another company, you might want to consider severing or altering that relationship.

It’s better to fire your biggest customer than become beholden to them, which may stifle your own ability to GROW! Because when that happens, for all intents and purposes, they own your company as well as their own. They may squeeze your profit margins that they become razor thin, and/or demand additional services that further squeeze your profitability. You find yourself in a vicious cycle of trading dollars, but not realizing an adequate rate of return on your investment.

In every healthy business relationship, it must be mutually beneficial for both parties. Just make sure your well intended desire to hang on to that BIG customer, does not get in the way of other growth objectives of your business!!

If you need any advice about how to analyze your customer profitability, please call Tom Sponsel at (317) 608-6691 or email TSponsel@sponselcpagroup.com.

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