Okay. I love the game of golf. And if you let me stretch the metaphor, I think it has a lot to do with business. This month (April), we took a poll of our close to 140 clients with Custom Advisory Boards or Community Advisory Boards (CEO Circles). “What are the five numbers in your business that you watch every day or every week? These are the numbers that in golf, keep us focused on a great round. The answers may surprise you:
1. Cash (almost every PowerLink client watched cash on hand as a ratio against upcoming payables and payroll). Only a handful actually maintained their own weekly cash flow forecast. But we agreed that it would be great to see that report daily.
2. Billable vs. Non billable time (almost all PowerLink companies watch project profitability and agree that they could be watching it even more closely)
3. Recurring revenue vs. Project revenue (One company said their percentage of total expenses less total recurring revenue had to be at least $1 per month. In other words, they had to keep all expenses below recurring revenue to make money).
4. Overall profitability (payroll and overhead had to be below 60% or most companies will go broke). But a surprising number of owners did not know their true profit percentage goals (like a handicap goal in golf).
5. One of my favorite numbers was the Favored Quick Ratio (Cash plus AR less AP and short-term debt and 1 month of payroll should equal at least $50k).
The May CEO Circle Topic is on Leadership. But the requests from our clients may surprise you. We are going to be talking about the following:
1. How do you lead now?
2. What is one leadership trait you wish you had as a CEO?
3. How do you change your leadership style?
4. What is the one trait that can transform your company?
All the CEO Circles in May are posted on our website or you have already received a personal invitation.
Succession….we are being asked this question by a number of our Advisory Board clients. What does this mean? Each company seems to have a very personal definition and we are learning the breadth of options and planning required. If you feel you navigated this chapter successfully or have helped others do it, Please reach out to me. I am building at least three succession boards that could use your input.