Solomon Bruce Consulting Blog

Monday, December 23, 2013

The Emergency Action Plan-- Do You Have One?

     Recently, a major storm arrived and brought with it snow, ice and freezing cold weather.  The wind was so strong that roofs were damaged and car ports were turned over.  In one downtown building, the water burst from a frozen pipe and allowed water and mud to flow into the electrical power distribution box that serviced the whole building.

      Well, guess what?  Now, 2 weeks later, the building is still under repair and the building's occupants are working from home, Starbucks, the Court House, Hawaii, the other office 4 counties over, anyplace other than the building downtown.  Why?  Well, until the whole power distribution box can be repaired, the whole building is not functional nor does it have any electricity.

       What happens if that is your building?  Do you have an emergency action back up plan?  If your building is damaged to the point where it is uninhabitable, what are you going to do?  Where are the back up files?  The servers-- does the Uninterpretable Power Supply (UPS) have enough power to run the servers?  What about file storage?  Are you in the "Cloud" or do you back up every night?  What about the phones?  Can they be answered?  Where are they forwarded to?  What about the mail?

        The questions come at 1000 miles an hour.  Most business owners don't think about it until after a damaging event occurs.  Now is the time to plan for an eventual disaster.  Go to SBA.GOV for checklists relating to business damage.  Fill the checklist out, carefully.  You may be amazed how valuable the exercise was, what you learned and what you will do if a disaster strikes your business or organization.

Friday, December 20, 2013

The 2 Pizza Rule For Team Sizing

     In today's modern world, teams are used to address, develop. solve and implement many problems.  However, most leaders make the team substantially larger and more cumbersome than it needs to be.

      Jeff Bezos of Amazon fame likes to use the "Two Pizza Rule" when developing teams used for strategy and development.  Bezos believes that if  2 pizzas cannot feed the whole team, then the team is too big!
Now, you might think that this is silly.  Research shows that the 2 Pizza Rule for team size actually came about from the Xerox Palo Alto Research Center in the 1970's.  Research work at Xerox Palo Alto determined that the smaller the size, the better the team end product tended to be.

      In your environment today, we believe that the same is true.  Smaller is normally better when working on any significant project.  Now, you have to insure that you have the right team members on the team, however, having a smaller number of them will normally yield better overall results.

       The next time that you are wondering about team size, just remember the 2 Pizza Rule.  If takes more than 2 Pizzas to feed the team, then the team it too big!  You will need to reduce the size of the team so that you achieve greater efficiency and not have to buy more than 2 pizzas to feed the whole team!

Wednesday, December 18, 2013

The Visit to the Banker-- Then What Happened!

   One of our consultants had lunch with a banker today.  The banker called and wanted to have lunch.  She said that she had a client that could use our services!  However, the conversation did not go very long before we both realized that the client needed not only a business consultant, but also some financial help.

    The business owner had lost his bookkeeper in 2012.  She left-- not sure what happened-- makes no difference, but what does make a difference is that it took the business owner all of 2013 to find a suitable replacement.  Ummm??

     The business owner brought in tax returns from 2010, 2012, but none from 2011 because he could not find them.  He told the banker that he needed a short term loan of $25,000 to "tide him over" from now, December 2013 to April 2014.  The banker asked to see the balance sheet-- all he brought was a profit and loss statement-- not enough data for the banker to work with.  However, this banker is in a small community bank and is very willing, we believe to work with clients.

      As the banker and the business owner talked, the business owner told the banker that he paid cash for everything-- the equipment was old and fully depreciated, thus showing no assets.  In the banker's eye, this business owner did not have records to document anything he owned.  She pointed that out and gave a couple of simple suggestions that the business owner would need to do before she could see if she could help.

      Sadly, the business owner left, not satisfied and today, sent a secretary in to retrieve the remaining financial paperwork left with the banker.

      The banker told our consultant that this business needed help.  We agreed.  However, if there is no money to work with, we won't be able to help.

       Here is what we suspect happened.  The business owner "shopped" around several other banks-- however, we suspect that the answer was always the same-- we need more documentation in order to assist you.

       The key here is to be sure that you have all of your documentation available when you go see the banker.  Many bankers that we have dealt with want to help-- if they can.  Banker's are not in the charity business-- they are in the business of helping business owners run their business and make money.  The bank has to make money as well-- that is just the way it is.

        If you go see a banker-- he/she will do the best that they can to help.  However, if they say no, it is generally believed that most other bankers will probably say no as well.  You can help yourself by having all of the documents you need the first time.  As consultants, we work with both the business owner and the banker to insure that your business grows and is prosperous.  Our goal is to help!  We want you to be successful!  Help us to help you!