Slow down, reflect, and plan. Make sure your small business has a successful new year. Roger Forman, a Bank of America Small Business Executive, shares key resolutions. Tune in to the latest episode of “The Heartbeat of Main Street.”
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Roger Forman: The reality is a small business owner is the accountant, the Chief Operating Officer, they're the CEO, they're a mom, they're a dad, they're a janitor, they've got to do it all. Those that do it best are those that make a conscious effort to slow down, reflect, and plan, and many of them will schedule it. So I talk to business owners that say, "Hey, I've got a period of time between 5:30 and 6:00 on my drive home where I don't take a call, I'm not sitting in front of any kind of social media, and I just think about the business and what I need to get done," but it has to be a conscious effort. It's got to be something that you have top of mind because it's very easy to get passed up.
Gregg Stebben: I'm here with Roger Forman. He's the SVP and Northwest Small Business Division Executive for Bank of America. This is “The Heartbeat of Main Street” with ForbesBooks and Bank of America. We're deep into the holiday season, and I think, for small businesses in particular, it's an important time to start thinking about, well, what do I want to do, and what do I have to put in place to be prepared for a great new year ahead? And Roger, we invited you here to talk about some New Year's resolutions we might make for our small businesses. Welcome. And let's talk about this, starting with what is a good mindset for small business owners to have now in the middle of a holiday season to make sure they make the most of this season and make sure they're really prepared for the new year?
Roger Forman: Yeah. Gregg, well, first of all, thank you for having me, and three things that I would tell you that we talk to all of our clients about that are important, frankly, at any time of year, but especially in the context of New Year's resolutions, and they're relatively simple, it's: slow down, reflect and plan. When we think of the beginning of any new year, it's the perfect time to sit back and reflect on the successes and struggles of your business of the last 12 months and really make plans for the year ahead, so we'd recommend you take time to organize your priorities, set realistic long-term goals, and implement ways of measuring progress along the way to keep you on track.
Gregg Stebben: Roger, it's really interesting. The first thing you said here was slow down and then reflect and plan, and I have to think for many small businesses, those are three of the hardest things for them to do. So, can you almost get into the psyche of the small business owners that you talk with and help us with some secrets or tips about how to do those very specific three things? Slow down. I own a business, when do I have time to slow down? Reflect? When do I have time to do that? I always have to be looking ahead and planning. Can you give us some insider, some tips for that?
Roger Forman: Yes, you bet. It's interesting. So in my job, I get the opportunity to sit in front of small business owners every day of the week, and I'm in awe of the responsibility that they have. The reality is, a small business owner is the accountant, the Chief Operating Officer, they're the CEO, they're a mom, they're a dad, they're a janitor, they've got to do it all. So the reality is keeping everything together can be much like walking a tight rope.
The reality is those that do it best are those that make a conscious effort to do exactly those three things: slow down, reflect, and plan, and many of them will schedule it. So I talk to business owners that say, "Hey, I've got a period of time between 5:30 and 6:00 on my drive home where I don't take a call, I'm not sitting in front of any kind of social media, and I just think about the business and what I need to get down," but it has to be a conscious effort, Gregg. It's got to be something that you have top of mind because it's very easy to get passed up.
Gregg Stebben: One of the things I hear you saying is that business owners should not think about these things, again - slow down, reflect, and plan - you shouldn't think of them as nice to do or optional, but these are essential steps for you to be successful, and so you should not consider them as optional, but you should consider them as essential, and as you just described, make time in your day or in your schedule specifically for this and make a commitment to it 'cause if you don't make a commitment to it, it's not gonna happen. I think we all know that.
Roger Forman: Yeah, exactly. It can't be reactive, it's gotta be a proactive, conscious effort. Absolutely.
Gregg Stebben: And if you don't make time and schedule it regularly, you'll never get in the habit of doing it, and I suspect that business owners who are in the habit of slowing down, reflecting, and planning get the greatest benefit from it.
Roger Forman: It's like going to the gym. Exactly.
Gregg Stebben: Oh, you had to bring up going to the gym around a conversation of New Year's resolutions, that's very scary.
Roger Forman: That will be on mine, I'll tell you that much, Gregg.
Gregg Stebben: So this is a time of year where I think all of us begin to kind of lose the pieces of the organization around our lives. There's a lot of things going on that only happen once a year, it's real easy to begin to lose your routine, it's easy to get disorganized, and that certainly can happen in a small business. I'm wondering if you have any tips for small business owners about, okay, just maybe the thing to do is to accept that things are going to get a bit disorganized around this time of year, but do you have tips for how to get back on track so you don't start the new year in a state of disarray, but start it in a really good, solid place?
Roger Forman: Yeah, absolutely. During this time of year, the reality is we've got a lot of competing priorities, and I think we can all relate to exactly that. We're disorganized. So a couple ideas I would offer up. Number one, we've gotta set and keep a budget and keep it on track. So we believe that it's important to regularly review your organizational budget and update your year-end productions and your financial plans according. One of the things that we always recommend to our clients is when estimating for the upcoming year, evaluate last year's year-end projections in revenue to ensure that you've got the most accurate predictions.
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Secondly, we would tell you, "You gotta optimize your cash flow," and we hear from customers all the time that cash flow is king. We would agree, and we think that cash flow management really cannot be overstated, and New Year's is a perfect time to assess your business cash flow and find opportunities to improve your current situation. I would recommend that business owners determine how much working capital they need as well and be knowledgeable about how many days of expenses they can cover with their current cash on hand. If you're struggling with cash flow management, or if you're just even concerned about it, you should speak with your small business banker, who is an expert on the subject.
Additionally, there are some great tools out there than can help. We are incredibly excited. In 2019, Bank of America's launching a new digital tool called Business Advantage 360, and it's been completely designed to help small business owners manage all financial aspects of their business through one single digital platform built directly into our online and mobile banking systems.
And finally, Gregg, I'd end with this. It's relatively simple, but manage your goals. As a business owner, it's not enough to just set the goal, your planning has to include tangible steps to meet those goals, so whether it be studying sales trends, taking stock of your industry or your competition, or even exploring ways to expand your customer reach, having clearly outlined tasks will help any small business owner stay on track during these busy periods, holiday rush not to be excluded from that, and remain organized and hit their goals.
Gregg Stebben: We're talking with Roger Forman. He's the SVP and Northwest Small Business Division Executive for Bank of America. This is “The Heartbeat of Main Street” with ForbesBooks and Bank of America. Roger, it's really interesting to hear you walk through these things, starting with slowing down, reflecting, and planning, and then keeping your budget on track, optimizing cash flow, not just setting goals, but managing your goals because if you're a small business and you've had a great year in 2018, one of the things you may be thinking about, one of the goals you may be setting is it's time for me to grow by hiring more staff. What should I know about the job market at the end of 2018 that will help me be successful at adding to my head count in 2019?
Roger Forman: Gregg, to say that the current hiring environment is competitive would be an understatement. We're in a historically very tight job market right now. Being on the plane last night, I think unemployment is in the threes somewhere, 3.7. don't quote me on that, but good, right?
Gregg Stebben: Yes.
Roger Forman: So owners really shouldn't-
Gregg Stebben: Good and bad, right?
Roger Forman: Good and bad. That's true. Bad if you're trying to hire people. Owners, all of us, and anybody leading an organization should not take talent retention and acquisition for granted. We just did a Fall 2018 Small Business Owner Report, and nearly a quarter of all small business owners have lost at least one employee in the last 12 months, and of business owners who sought to hire in 2018, half of them believe the tight labor market had a direct impact on their ability to find and hire qualified people. So business owners who are looking to hire should be thinking about setting themselves apart from other employers. Competition's gonna be fierce, right? So, things like offering perks and benefits, flexible hours, flexible work locations. In addition, additional employee training, development programs, bonuses, things like that can go a long way towards generating loyalty.
Gregg Stebben: One of the things I hear you saying is it's not all about the salary…
Roger Forman: No, absolutely not.
Gregg Stebben: ... think about the perks.Roger Forman:Some of the benefits and the stock benefits of a company can be just as important.
Gregg Stebben: Can you offer suggestions of resources where we might go to get ideas for perks we may wanna use in hiring, or frankly, even for retention of the staff that we have?
Roger Forman: Yeah, couple things that I will tell you. When I talk to clients about where they get ideas and inspiration, it comes from multiple different facets. Some of it is other business owners, the local business owner community that they work in, the chambers have lots of activities, and then we also have the Small Business Communitythrough our bankofamerica.comsite that can give lots of tips and ideas. The reality is there's a ton of information out there. It's picking the one or two things that you can manage and that will work for you and your business and executing them better than your peer group.
Learn more about hiring and rewarding employees:
Gregg Stebben: One of the things that I wanna talk about is it's been a great year for business, and so a lot of businesses are looking forward to a great year ahead, and let's say I've done all of the things that we've talked about here. I've slowed down, I'm reflecting, I'm planning, I'm setting time to think about my business in the future, I'm doing all of these things. Are there things that you're hearing from businesses that they're doing to get ahead that are more creative that we should be thinking about?
Roger Forman: Yeah, a couple of thoughts I would share with you at top of my list is consider creating a referral rewards program. When you think about your customers, oftentimes your best and most dependable consistent business comes from referrals. I know much of ours do. So consider creating a consistent type of system for staying in touch with current customers and then rewarding them when they send new business your way, and that's gonna vary depending upon the business that you're in and you may have to get creative, but it's one of the single best ways to drive new business.
- Get 5 Simple Steps to Increase Business Referrals from Carol Roth
Second piece is reconnect with a mentor or become one. Mentors can give incredible feedback, they can make introductions, they can open doors, they can teach lessons, so it's as easy as setting up a coffee date with a mentor that you've fallen out of touch with, or if you have one and you feel like that's going well, be a mentor for someone else. You'll get as much out of that as you're putting into it.
And then finally, I would say evaluate next steps to grow and expand. So if you're sitting out there saying, "My business is in pretty darn good shape," I'd encourage you to start thinking about expansion, and now is the time. If your cash flow and your business plan are up to par, let's look at obtaining more capital in order to take your business to that next level.
Gregg Stebben: I wanna go back to a couple of things you've said here. I'm talking with Roger Forman. He's the SVP and Northwest Small Business Division Executive for Bank of America here on “The Heartbeat of Main Street.” One, I want to talk about the idea of having a mentor or being a mentor, specifically being a mentor, because I think sometimes in business, we think A, I don't have time, or B, I'm not really an expert or I don't really know anything that would be helpful to someone else, and I suspect that many people who are a mentor for the first time discover that, not only are they giving incredible value to someone else, like someone else probably did for them as a mentor for them, but also, they get incredible value out of it that they never would've expected and maybe discovered things about themselves and their business that they never would've discovered had they not been a mentor for someone else. Can you talk about that?
Roger Forman: Yeah. It goes back to that slow down, reflect, and plan conversation we had earlier, and I think people overcomplicate the mentor arrangement in my view. At the end of the day, it's about creating a connection with someone and having a conversation that will ultimately lead to learning. I have multiple mentors and coaches in my life, some of them in financial services, many of them in very different industries, yet we all have parallels in everything that we do. It may be the core parallel is how do you manage work and life and how do you keep that balance together, but being able to talk to someone else, listen to other ideas, is incredibly valuable, it's cathartic, and it's one of those things that you've got to put discipline around and you’ve got to be proactive with and go out and find it, but I find that that is one of the most valuable uses of my time today.
Gregg Stebben: So one of the things you're saying is don't make it into a big deal. It really can just be a relationship where you have someone you can talk with.
Roger Forman: Yeah, don't overcomplicate it. At the end of the day, maybe it's just that you have a great conversation then you realize you have someone in common or they can make a referral for you. You just never know where these things are gonna go, so don't overengineer it.
Gregg Stebben: The other thing is that we were talking earlier about evaluating next steps for your business to grow and expand, and I would imagine having conversations with others in your industry and outside of your industry so that you can get other perspectives would be hugely valuable in being able to really evaluate effectively where am I today, where could I go, and where are there opportunities to grow, because if you're doing that by yourself, you're kinda stuck with the same thoughts you've always had. You really need to bring the eyes and the insight of others into that conversation, and one or many of those conversations may be with people who are your mentors or who you might be mentoring.
Roger Forman: Yeah, they give inspiration at the end of the day and inspire you to do things you're not thinking about.
Gregg Stebben: One of the things you talked about, Roger, is, for instance, having a mentor who may help you manage both the combination of your personal life and your business life, as you said, manage work and life. I want to hear from you how you view your job and how you manage it with your personal life. So, since we've been talking about New Year's resolutions, can you talk about a personal New Year's resolution that you have for yourself? Let's say it's personal or even work-related.
Roger Forman: Is this some sort of forced accountability session? Maybe if I put it out there, I'll-
Gregg Stebben: I'm your new mentor.
Roger Forman: All right. I'll take it. I'll take it. Yeah, so here's the two things I'm thinking about now, and I will just declare, 'cause I'm sure my wife will listen to this, my pull-through ratio on some of my past personal resolutions has not been so hot, so I'm gonna keep it simple and easy. Here's the two things I'm thinking about: Number one: I've gotta get more quality sleep. It sounds sort of basic, but eight hours, apparently, is what the sleep gurus tell you is the magic number, and I'm not getting that today, and I challenge many of us, especially small business owners ... I bet there's a lot of people in that same boat. So here's what I'm thinking about. I think it's gonna be easier said than done, but no smartphone, no TV, no laptop after 10:00.
That's gonna segue into my number two, which is second priority for me, is I wanna start reading more. As I talk to you, business owners, and peers, a lot of people are bookworms. I know my wife is, and I'm jealous of her curling up on the couch with a great book and getting lost in a story, and I don't give myself the time to do that. I know it's great for your brain, it's great brain food, and frankly, there's a million topics out there to help me learn. So that's my plan: more sleep, no artificial light, turning off the laptop, and grabbing a book.
Gregg Stebben: So first of all, being part of ForbesBooks and this is “The Heartbeat of Main Street” with ForbesBooks and Bank of America, we love the idea that you're going to read more. We think everyone should adopt that resolution. I just wanna say that I think you've set the stage for others to look at their life and their lifestyle and think, "What could I do to make myself a better person at home, a better person at work, and frankly, a healthier person," which is going to help in every avenue of your life. Those sound like really great resolutions. I wish I had a great answer to the question. I was thinking of volunteering what my resolutions were, but I don't have a great answer, so what I've learned, so you've been a mentor to me, is I need to work on this between now and January 1st. We've been talking with Roger Forman. He's the SVP and Northwest Small Business Division Executive for Bank of America. This is “The Heartbeat of Main Street” with ForbesBooks and Bank of America. Roger, thanks so much for being here, and happy holidays and a great new year to you.
Roger Forman: Gregg, likewise. Thank you for having me.