The best advisory boards are made up of business owners and professionals who will ALL benefit from its formation. Here’s how to put one together:

Itemize the “give and take.”

Make two lists: one of the skills and expertise that you have to offer others, and another of the skills and expertise that you need (from others) to better operate your own business.

For instance, are you a whiz at dreaming up great promotions but a bust at understanding the tax laws that affect your business? Can you cold call with the best of them, but unsure of how to put together an impressive client presentation?

Knowing what your strengths are and where your weaknesses fall will help to determine whom to approach about forming your mutually beneficial advisory board.

Seek out potential board members.

Finding your board members may be easier than you think.

Do you belong to an association or the local chamber of commerce? Don’t just attend the meetings – network to find good board member candidates and to spread the word about what you’re trying to accomplish. Ask contacts for other names of entrepreneurs, chief executive officers of small, privately held companies or consultants to small businesses. Talk to your banker, vendors or accountant and ask them for leads. Review the business section of your local newspaper or specific business listings from the yellow pages of a telephone directory.

Contact each prospective member individually.

Once you’ve chosen candidates, call each one to introduce yourself, discuss your objectives and determine mutual benefits of forming the board. If you do not personally know the individual, invite him/her to lunch to get acquainted. Tell prospective board members about your business, market and specific challenges. Invite them to tour your offices and meet your employees. Give them your company brochure and relevant industry information.

Know what you want to accomplish.

How often you meet will be determined by what you want to accomplish. There may be times when one-on-one meetings will be more productive, but schedule full board meetings no less than quarterly to solicit input and feedback about your specific business objectives, progress and accomplishments. Remember that members are there to ADVISE you, not to do the work FOR you. While you may eventually decide to barter for services with other members, that is a separate action from the intent and purpose of an advisory board, and should be negotiated outside of the board meetings.

Be prepared to get what you ask for.

Understand that when you ask for advice, honest feedback and others’ opinions, criticism will often creep into the mix. Suppress your natural reflex to defend your actions, listen to your peers and use the information constructively.

Final thoughts . . .

If an advisory board sounds too formal for your fledgling business, but you still need access to one-on-one expert advice, contact the nearest chapter of SCORE. This organization of retired executives can prove to be an excellent resource to help answer your questions and connect you with free or low-cost resources.

Most of us find ourselves in the typical entrepreneurial Catch-22. If business is on the upswing, you’re working long hours to meet deadlines and keep customers happy. If business is shaky, you spend as many or more hours just trying to find new solutions to bring business up. Yet, whether you are struggling to revive a sluggish bottom line or trying to keep up with an unplanned surge of customer demands, you need to take a step back, reassess your challenges and make room for the solutions to come to you instead of you trying to find them.

What the heck does THAT mean?

It means that your mind, your business day and your life have become so crammed with day-to-day, hour-by-hour, minute-by-minute worries about NOT finding the “glue” to hold things together that there’s no room to allow your creative, natural instinct for resolve to get through.

You’ve buried your can-do attitude under a pile of can’t-do excuses.

Let me ask you this …

Have you ever wrestled with trying to remember the name of a person or a place and the harder you think about it, you just can’t come up with the name? You get all around it … you can name that person’s spouse and kids, recall how you first met, where you were at the time and, perhaps, be able to give a perfect recitation of your first conversation. But you can’t remember that person’s name!

Then, suddenly later that day as you’re watching the news or reading a book, or in the middle of the night … voila! The name comes to you out of nowhere.

Now think about how this same of concept of distraction applies in your own business …. You solve your clients’ problems every day, yet, your own seem to be building a barrier between you and your next step forward. That’s because you are detached from your client’s biggest problems but you are engulfed by your own. You bring new perspective to your clients’ problems; you bring only your own emotional perspective to your own.

It’s time to create a PURPOSEFUL distraction (a.k.a. take a vacation) to challenge your business perspective. I like to call this “positive vacationing” because a vacation from business-as-usual usually results in new and positive revelations on how to conquer the challenges that previously seemed monumental.

Here’s an example of how the power of positive vacationing has worked for me.

The last vacation my husband and I took was to the coast of Maine. I came back with two new book ideas and a marketing strategy for one of my clients that brought in phenomenal business for her grand opening.

The book ideas were sparked by a casual conversation I had with the owner of a small restaurant we visited for a late afternoon lunch. The marketing strategy was the result of putting a new twist on a tactic I noticed being used in a newspaper ad by a small coastal retail shop.

My husband came home with a new idea on how to expand his business. Yup, you guessed it — another inspiration from “purposeful distraction”. While taking a foot tour of a quaint coastal town, he noticed the signage on one of the Main Street storefronts and an add-on service idea for his own business just popped into his head.

Just as importantly, we both came back with gorgeous photographs taken while driving from Bar Harbor to Kennibunkport and the taste of fresh Maine lobster still in our mouths. Other benefits?

• We spent valuable time together away from home and business.
• We’re more interesting to our friends and family because we have more than just business to talk about when we get together.
• We’re more energized and interested in our clients and our businesses.
• We both found solutions to some challenging aspects of our individual businesses without even looking for them.

Set the stage to reenergize your business using purposeful distraction — take a vacation. It doesn’t have to be elaborate, expensive or even very far away. And it can even be a working vacation if you set some ground rules.

Your reenergized spirit will show in the way you feel about yourself, relate to your family, and treat your clients, employees, associates and vendors.

I’ve recently received an increasing number of emails from micro business owners and independents sharing the many fears that come with such economic uncertainty. While there is no one-size-fits-all solution to survive the downturn, a good place to start is to “read between the numbers.”

How?

We are all quick to notice that the economy is affecting profits. Yet, it’s important to identify what’s really going on by examining the numbers of your own sales reports more closely. Compare your most recent report to one that was more profitable, then ask yourself questions like:

• Am I making fewer sales-per-customer?
• Am I making the same average sale-per-customer, but getting fewer customers?
• What products or services attract the majority of sales?
• What products or services attract the least amount of sales?
• How much business came from new customers? Where did those new customers come from? What are they buying?
• How much business came from repeat customers? How often do those repeat customers come back? What are they buying?
• What promotions spiked sales, but resulted in minimal profits?
• What promotions contributed to my greatest profits?

Gathering and comparing this kind of information puts control back into your hands.

Then what?

The worst thing you can do is sit back and hope the economy will turn back in your favor. The best thing you can do is take action and move your business in the direction your research points you. Armed with this comparison information you can:

Reassess what your customers are doing. Customers and clients are moving targets. What they wanted yesterday may not be what they want tomorrow. Ask yourself:

• Does my target customer still exist?
• Can that target customer still afford, or still want, what I have to offer?
• Has a different target market emerged BECAUSE of the changed economy? If so, how can I revise my marketing strategy to reach them?

Reassess what you’re doing. Are the products and services you offer still valuable to your target market? The products and services you offer must be valuable to your customers. If they aren’t, no amount of promotion will significantly change the numbers you found on your profit and loss statement. Ask yourself:

• What product/service do I count on for the majority of sales? Has there been a significant decline in demand for this product/service?
• How can I update, add to, or reposition this product/service to add value for the customer?
• If I can’t, is there a secondary product/service that is a potential candidate for becoming the primary?

Implement change. By reassessing your target market and your products / services, you’ll be able to determine what, if any, changes need to be made to get your business back on track. Do you need to:

• Change your target market to better fit your products and services?
• Change your products and services to better fit your target market?
• Change your methods for reaching – and keeping – new and repeat customers?

Being able to ask yourself honest questions and adapt to the changes you can’t control, by implementing changes you can control, will keep your business strong, and force you into practicing the kind of flexibility needed for long-term existence – and growth.

I’ll be first to admit that I’d rather devise some incredibly creative marketing promotion than stare at and analyze numbers all day. Yet, I’m also willing to concede that, by taking the time to ‘read between the numbers’, that creative marketing promotion is destined to bring in far more profitable results in a challenging economy.

I love that stuff. It’s amazing. It’s magic.

But it wasn’t until I tried to learn a few simple magic tricks myself that I discovered the key to such effortless success. It didn’t come from the words being uttered, or the brand of top hat being used, or the type of cape being flung … those are just the props and tools of the trade. The success of the magic comes from  something we don’t see on stage … the endless hours of repetitive practice. Even simple slight of hand isn’t really simple … it is practiced and perfected before it is ever performed. The resulting trick performed to an audience must become seemingly effortless and automatic. It can be re-choreographed. It can be reinvented. Yet, the success is in being able to do it over and over again; not in being able to do it once every third or fourth try.

Can you guess where I’m going with this in how it relates to your business?

You are the magician of your business, and your customers are your audience.

Your customers are the ones who pay to receive whatever you promise to deliver. Whether it is a magic show, a product, or a service, you owe your audience (customers) an experience they’ll want to have over and over again.

The goal of simplicity begins with focused, rehearsed, and perfected behind-the-scenes work to achieve consistency.

Give your customers consistency, and you’ll solidify loyalty.

If you embellish with a few magic words and a prop or two, that’s great – but if you aren’t consistent, your audience (customers) won’t be loyal enough to keep paying the entry fee to see your show, or buy your products and services.

My long time followers of my former ezine and this blog know that consistency is my droning mantra of just about everything I write or try to advise on. And I’ll continue to drone on and on about it because it holds tremendous value to the ongoing success of your business.

Many of us focus on the props – promotions, signage, advertising – yes, these things are extremely important to attract people to your services and products. But if you are not delivering consistency to your customers and clients who are attracted to your props, they will not come back for more. Roughly 80% of your sales will come from 20% of your customers. That’s right, long-term success is in repeat business, not in pulling in new customers with gags and gimmicks only to have them leave after the first show.

Build consistency into your business by remembering the magician.

An audience may be dazzled by the words, hats, and capes, but if the tiger doesn’t disappear every single time, that audience won’t likely come back to see a second show.

As the old adage goes, old habits die hard. It happens just as frequently in one-person operations as it does in businesses with 10s, 100s, or even 1,000s of employees. It’s just easier to take the path of least resistance by doing what we have always done. And, until you realize how ‘doing what you’ve always done’ dramatically affects your bottom line, change is less likely to occur. For any change in behavior, procedure or practice, there must be a desire for it – the benefits of change must become more attractive than the comfort of keeping old habits.

So how can a desire for change be ignited?

That’s where the “no pain, no change” discussion starts. Quite simply, I relate the recommendations I make to actual bottom-line benefits. Let me demonstrate by using a real-life client example.

Overtime Expense Skyrockets

In a business assessment I did last year for a property management company, processing tenant payments was a four-step process from the moment the payment arrived, to the final posting and deposit of the funds. The company had two co-owners and four employees. Three of the four employees were involved in the payment processing procedure.

Now, this may sound like no big deal to you, but keep in mind that, as a property management company, they receive several hundreds of payments from tenants nearly every week for all of the properties they manage. There are many days when no other work is tended to, and they clock overtime to process checks the same day they are received; and then they clock more overtime to catch up on the work that was cast to the side. The more property contracts the business acquires, the more time it takes to process payments. The more time it takes, the more man hours are clocked. The more man hours needed, the less efficient – and more costly – the process becomes.

After talking with employees to understand the process they were using, and listening to the frustrations they were experiencing, it quickly became evident that the current procedure had lost significant value. What used to work perfectly had now become not only more vulnerable to errors, but costly. And, with the business continuing to grow, this was not a short-term challenge.

Cost-Containing Solution

With minimal investigation I discovered that the process could be shortened to two steps, performed by two employees, with one simple solution — an upgrade of the property management software they were using.

Naturally, the software upgrade was prominently placed in my assessment and recommendations report. I knew, however, that the owners would view this as an expense that would cost them more than $2,000 and, therefore would not likely top their To-Do list.

Time for the “no pain, no change” discussion.

In addition to recommending the software upgrade, I detailed a conservative estimation of the current ‘real’ costs associated with this procedure that primarily consisted of overtime and error reconciliation. I then detailed the estimated resulting costs associated with implementing the upgrade. The difference? A savings of nearly $7,500 a year! That’s a significant profit leak for a small, 6-person operation.

Do you think the owners were more motivated to change the habit that currently supports the $7,500 profit-draining leak? You bet they were! Suddenly, it was evident that the $2,000 software upgrade was an investment, not an expense. It carries measurable ROI.

Because I could demonstrate an immediate (financial) pain, there was an increase in desire for immediate (procedural) change. Every critical process of your own business should be looked at with this same “no pain, no change” assessment.

What is it really costing you to do what you’ve always done?

Identify the pain, and you’ll increase desire for change.

It’s a little overused these days.

It’s an age-old buzzword that has surged back into popularity with the advent of doing business on the Internet. Why? A turnkey business is an automated business. And, on the Internet, this automation is imperative to be successful and serve customers who are fast becoming accustomed to getting products and services in lightning fast time.

Ironically, this concept of automating the business process makes sense to successful online business owners, yet the benefits of an automated, turnkey business often escapes offline business owners – even though the development of a ‘turnkey’ business has been a business-builder for decades. Perhaps it’s because there is an assumption that turnkey directly relates to technology.

It doesn’t. The definition of turnkey is nothing more than, “ready for use or operation.” Here’s a great example of a turnkey system.

A few years ago the PGA Championship Golf Tournament was hosted at the Hazeltine Golf Course in Chaska, Minnesota, a suburb of Minneapolis, not far from the suburb I live in.

One of our local television news stations did a week long broadcast from Hazeltine. The crowds were record-breaking and the media coverage was constant. In one of the early morning interviews with the local person in charge of the tournament media relations and marketing, he was asked about how he was able to prepare and cope with the throngs of media attendance from all over the world. He said, “It’s amazing. The PGA brought their system and we were able to just plug our volunteers into it.” The PGA system provides quick training for a streamlined, effective way to work with and accommodate media.

The system goes wherever the tournament goes and “plugs in to” the host city’s operation. The PGA is happy. The media is happy. And, the host city is happy.

That’s a perfect example of a turnkey system at work.

You don’t have to be a golfing fanatic to understand how valuable the PGA system is to every course they choose to host a tournament. And, hopefully, this example inspires you to start thinking about how finely-tuned your business runs – or could run – if you think in terms of “turnkey” operations.

Whether you start a new venture online, or do business in the traditional brick and mortar way, the more ‘turnkey’ your business is, the more you increase your chances of success … and making more money.

How will a turnkey business make you more money? Here are just 7 ways:

1) Eliminates redundancy

We (and our employees) are notorious for doing things that have already been done, or redoing something that’s been done incorrectly. That wastes time (and, after all, time is money). Something as simple as a written instruction on a quick To Do checklist that says, “the last person on the last shift of the day is responsible to vacuum the floor before leaving for the day,” eliminates any doubt that the first person on the first shift of the next day should be doing something else.

Sounds pretty petty, doesn’t it? Yet, without a clear understanding of who should do what, those 30 minutes of redundancy each day add up to 10 hours of wasted time a month  — more than a full day’s pay. That’s pretty expensive vacuuming time!

2) Reduces training costs

How do you train a new employee? Do you ever forget to tell him/her something until it’s too late? A turnkey system includes tasks, responsibilities, how-to checklists, and more that make it easy to quickly train someone on procedures without ever having to say, “Oh, I forgot to tell you to …” – this phrase alone often comes after a costly blunder by a well-meaning new employee. At the very least, it interrupts workflow through the office.

A turnkey system comes with its own self-study guide to quickly train someone who’s never worked for you before. Remember the PGA example above?

3) Streamlines productivity

This one is the hardest to do but gives you the greatest reward, whether you have employees or are a self-employed, one-person operation. As a turnkey system is developed, careful thought is given to how the entire operation runs, start to finish. This overview of the entire operation puts control directly into your hands to objectively evaluate how each department or function affects another department or function.

By taking the time to see your business as a whole instead of as separate functions or departments, you can determine what’s missing, getting in the way, or slowing things down. Then you can change it, improve it, eliminate it, or revamp it.

4) Increases efficiency

Just as a clogged up filter can significantly reduce the efficiency of your furnace (costing you big bucks in heating bills), so can a clogged up operation reduce the efficiency of your business.

Once you see your business as a whole operation, you can focus on improving the individual functions of each department that will contribute to a more efficient whole.

5) Ensures great customer service

If you want your customers to love doing business with you, it starts with a solid, reliable, core business. When your employees (or you) know  what to do, when to do it, and how to do it efficiently, you will truly serve your customers and clients in a way that will make a big impression.  You build their confidence in your business and that brings them back to you for more products or services.

Unfortunately, in many cases, businesses get business because they are “the lesser of two evils” instead of being the first, competent choice. Don’t let this be you!

6) Protects against economic downturns

When the economy slows, every business owner gets a little nervous. With a turnkey business, there is a built-in plan for getting new customers, and keeping old customers. Turnkey operations have an established, proven marketing plan to follow. You know your business cycles and can plan for them. You know “what’s next” to fire up business. You are prepared to respond quickly, and with confidence.

7) Adds value to your business should you ever want to sell it or pass it on

You know how to start a business, but have you thought about how to end it? What happens to the business when you’re ready to retire? Will you pass it on to your children? Or maybe you just want to build a business, sell it for a hefty profit and then go build another one.

Whether it becomes part of your legacy (and your children’s inheritance) or you seek a new buyer, the value of your business increases significantly when you can offer it is a turnkey operation. “Here are the keys. Here is the manual. You’re ready to make a profit your first day in business.” Now, THAT is a business that will attract buyers (and bankers who have to finance them).

TIP: Here is one BIG way a turnkey operation won’t make you more money: If you let it become stagnant.  Your market, industry, and potential customers demand change. You need to change with them. Once you’ve developed your turnkey system, if your first instinct is to say, “Whew, that’s done,” and check it off your to-do list, you need to reconsider that position. True, the biggest part is done. Yet, it needs to change and transition along with the market.  Review your system every year; make adjustments that will benefit your business as you go. Do your homework on your industry. What’s changed? How does that affect you? What can you do about it? How can you improve on what you’re doing?  As you make improvements to your business system, you’ll also see big improvements in your profits while making your job as business owner easier and easier.

As an independent myself, I face these same challenges. In large companies, the red tape is long and knotted – and if there’s just one little hold up in the approval process, you can be waiting 45-60-90 days for payment. It eats up a lot of follow up time that could be better spent on building your business, not serving as bill collector. Sometimes you can plead your case and get paid quicker, and sometimes you have to resign yourself to their system.

However,  a handful of small business clients ignored my “net 10 days” invoices, too. As my Accounts Receivables grew, so did my anger. So, instead of just sending “past due” notices, I got on the phone (something that is hard for me to do since I’m pretty non-confrontational) to ask, “What’s the deal”?

The majority of the responses I received all boiled down to one, domino-ing reason: “I can’t pay you because my customers aren’t paying me.”

Can I understand this explanation? Yes, most definitely.

Will I accept it? No, most definitely not!

It doesn’t matter how much compassion I feel for another business owner, my priority is to my business and the people who rely on me to keep it running. I cannot – correct that – I WILL not allow a client to pass his/her money problems on to me. I find ways to pay my bills, even when clients aren’t paying me, and I expect the same from those who owe me money.

Here are the two solutions that helped me take more control of getting paid and could help you, too:

1. Establish a Merchant Account

Whether you sell products or offer services, establishing a merchant account is the easiest way to ensure you get paid.

A merchant account, in my view, is the top headache relief medicine for any small business owner. The small percentage you are charged for each transaction is a pittance compared to the time, postage, worry and frustration of constantly sending out reminder and “past due” notices.

This one action has eliminated 99% of my accounts receivable problems. If you initiate very few transactions or don’t want to go through the hassle of working through a bank to establish an account, the easiest way to accept credit cards is through PayPal.

2. Get Signed Payments Agreement

So what about the clients who do not have business account credit cards, or simply choose not to use them? State payment terms right up front. You must let people know immediately what your expectation for payment is. For example:

In a retail business, cash or credit card payment is the norm. If you stick with simply having a merchant account for the major cards, you will have few problems. If you have a store credit system or “house” accounts, then you are leaving yourself open to greater risk. Make sure terms, limits and conditions are stated – and enforced. If there is a late penalty, make sure it’s immediately charged. If a payment is missed, further credit will be suspended until the account is up to date. If you fear losing the business of someone you consider “one of my best customers” but they owe you thousands of dollars, how good can that customer possibly be?

In my business, a typical project can span a 3-6 month time frame from start to finish. However, just as it would be unreasonable for me to ask for total payment upfront, it would also be stupid of me to begin a project without some monetary commitment. So, I use an incremental payment agreement that is presented at the same time I submit my project proposal. When the client signs the agreement for the project, he/she is also signing the agreement for payment that is tied to the delivery of the work. No payment–no delivery. Period.