Annual Sales Goals

SALES TEAM members are heavy lifters contributing to the success of their companies.

Therefore, it makes sense to prioritize an annual sales goal process as part of your business practice. These meetings offer a time to share the Company’s VISION MISSION, allowing TEAM members to know where they stand within the organization’s established benchmarked goals and objectives. And know if they are at Performance Standards, Below or a High Achiever.

Also of importance, it offers time to review the salespeople’s motivational desires they strive for before management cast out annual goal expectations.

This meeting process helps assure sales and management personnel on reaching obtainable revenue numbers they forecast and expect to achieve that alight with Company goals.

Need a process? Here’s a summary outline you may find helpful.

  1. Start with Group Messaging
    • Communicate the company’s current year-end (YE) results compared to goals. What went right and opportunities to capitalize on.
    • Review of the company’s longer-term Vision and Career Opportunities that avail. Include in careers, “What’s in it For Them” talk, facilitates retention plans and helps to attract the right people into the organization.
  2. One-on-One Meeting
    • Review with each salesperson their current YE sales revenue and personal income results.  Start now, project out to YE if necessary.
    • Compare their results with the goals forecasted to be achieved for this year.
    • Discuss in detail the metric measurements, controllable Key Performance Indicators (KPIs) that produced their sales revenues and income results.
    • Take time to define what they feel went well and what they would do differently to improve results.
    • Compare their contribution standing to the Company’s resulting Performance.
    • Goal Setting.  Discuss the income the salesperson wants to make for the coming year.  Tie the KPI metrics required to produce the level of sales revenue to generate their income goal.
    • Explore how sure they feel about the metrics required, and HOW they expect to accomplish.  Establish that both of you agree the sales revenues, KPIs, and income goals are obtainable.  If you or the salesperson feel they are too high or low, collaborate to reach a number you both believe is real.  It’s KEY for the salesperson and manager to agree on the income to sales revenue ratio and KIPs required are achievable.
    • Understand WHY the Income Goal is meaningful to them.  Knowing how they plan to spend their income provides a self-managing motivational tool.
    • Career Opportunity.  We all want to BE learning and growing.  Ask the salesperson what they want as the next step in their career.  Review with them the company’s projected growth and the Performance Standards representing this opportunity.
  3. Probe the commitment level they have for their goal ambitions.
    • Remember, people do things for their own reasons.  Knowing these reasons helps manage the process through the year.
  4. Support.  What will they need from you?  Be clear.  Is it training in sales, leads generation, product and/or service, greater depth on knowing the customers’ business, other?  Get specific.
    • Be sure to understand what THEY personally feel vs. what you feel they need.
    • This feedback clarifies what you are committing to when providing the needed support requirements.
  5. Check-Ins.  Standardize a Report Form they fill out to review Results Expected/Result Achieved.
    • Establish a time, weekly preferred.  If a new salesperson, daily.
    • Review successes and/or variances in the metric numbers and discuss strategy and tactic adjustment requirements of KPIs to achieve desired results.
    • If continually missing their metric KPIs, find out if their financial income goal priorities changed.
  • Note
    • This is a TEAM effort.  It’s important to stick with regular review meetings the salesperson and manager establish. 
    • Write and keep accurate notes of conversation agreements and commitments.
    • KPI metrics are controllable factors, must do requirements to achieve desired goals. 
    • Numbers can be readjusted during the year if they are off track.

If you have questions or would like a more in-depth conversation on framing a goal setting session, contact:

Jim Iden, CPC

713-927-3564

jiden@silverfox.org

Cheers and Happy Holidays!

How to Sell Your Business to a Buyer You Like

By: Herb Kalman, a Silver Fox Advisor

June’s job out of college was with a distribution company selling small widgets.  After a few years, thinking that there was more money in large widgets, June approached a large widget manufacturing company to represent their products in her market area. 

Twenty-five years later, with the business thriving, June started to receive inquiries regarding her interest in selling the business or selling part of the business.  She had discussions with prospective buyers, investors, and with colleagues who had sold their businesses.  The common theme of the sellers was regret.  Regret about selling too soon.  Regret about the changes to the company.  Regret about how the employees were treated.

The Employee Stock Ownership Plan (“ESOP”) was designed to allow business owners to sell stock indirectly to their employees by using a trust.  The initial ESOP occurred in 1956 in which the Profit-Sharing Plan of Peninsula Newspaper in San Francisco received a private letter ruling allowing it to acquire the Company’s stock from Company shareholders.  ESOPs are now part of ERISA and provide tax benefits for sellers in some cases and for the Company owned by the ESOP. 

June learned about ESOPs from her financial planner.  After consulting with the financial planner and her CPA, she decided to sell one-third of her stock to an ESOP.  Because the corporation was a “C-Corp,” she was able to defer taxes on the gain on the sale to the ESOP. 

June investigated the sale of 100% of the company to the ESOP with her team of a financial planner and CPA and an investment banker that specializes in ESOP transactions.  However, June decided to sell a minority interest and continue to grow the business.  Key managers have stepped up and assumed more responsibility.  The Company’s productivity has improved, and the annual value has been increasing.

June is now considering a second transaction to increase the ownership of the ESOP.  She has complete flexibility as to the number of shares she wishes to sell.  This transaction could be 100% of her remaining shares, which would make the ESOP own 100%.  Or it could be a smaller number of shares so that she could remain in control.  Or she could transfer control to the ESOP.

June has recently received calls from colleagues seeking an exit to learn about her ESOP experience.  She answers that she is selling the business to people she likes and has no regret of her decision.

Increasing the Pricing of Your Products and Services

Over the past several years I have written articles regarding product and service pricing and have made recommendations to my clients regarding the pricing of their products and services. These suggestions were based on my belief and experience that most businesses can pass on at least a 2 to 3 percentage price increase in their respective products and services to their customers each year and should do so annually at the same point in time, say January 1st.

Few customers if any will even notice that small an increase. If you are not doing this type of systematic pricing increase, your bottom-line profitability is going to suffer because the costs associated with running your business are increasing. If you don’t increase your pricing, you are simply absorbing the increases in your expenses (wages, insurance, rent, utilities, taxes, office supplies, advertising, and, the list goes on).  

An Example

One example I like to use to demonstrate this point is to take any year-end income statement for your business and add 3.0% to your revenue figure; see what that does to your gross profit margin and your net profit margin. Most business owners I ask to do that exercise will come back and tell me they are amazed, and they all wish they would have done something like that sooner.

What prompted me to write this article about increasing pricing for products and services is the present inflationary market we are experiencing. With the last published inflation rate of 9.1% (a 40 plus year high), if you are not increasing your product and service pricing right now by at least 9.1% your bottom line will be greatly affected in a negative way for 2022. I would almost guarantee you that you are experiencing increases in almost every expense item, like the ones I mentioned earlier.

Avoid the Wait

Further, if you wait until next year to increase your pricing, we could be operating in a much different business environment, perhaps a recession, and then it will be very difficult to pass product and service pricing on to your customers.

I recently heard of one business that decided to do a 25.0% increase in its service fee and add a 5.0% monthly fuel surcharge to its pricing, and it experienced had no questions or complaints.

I know and understand passing a double-digit price increase on to your customers might not be possible in every situation due to differences in competitive environments. But I would guess you could pass the inflationary rate of 9.1% on to your customers as a fair increase.

Lastly, I also know and understand that by increasing your product and service pricing you might feel like you are adding to the inflationary spiral. However, if you don’t increase your pricing as stated above, you will be simply absorbing the increases yourself in the goods and services that you have to pay. A simple saying, I have stated over the years might apply here: “Do you want to pay your mortgage payment, or do you want to pay someone else’s”?

Event Sponsorships Are Available

If you would like to sponsor an upcoming Silver fox Advisor event, like our Lunch & Learn program, opportunities are still available.

As an event sponsor, you will be provided reservations for a table of 8. And your company will be featured in all promotional announcements surrounding that event.

At the event, you will be introduced from the podium as well as afforded the opportunity to display your marketing information throughout the hall.

If you would like to know more, contact Doug Thorpe at dthorpe@silverfox.org or Don Baird at DBaird@silverfox.org

Highlighting Rich Hall

Silver Fox Advisors is proud of our members and would like for you to get to know them better.

Rich Hall has been a valued member of Silver Fox Advisors since 2020. He currently serves as a Board member, Chair of the Membership Committee, and Facilitator of two CEO Roundtables (The Woodlands area and in partnership with Houston’s Better Business Bureau).

As the founder of Rich Hall Group, he works with small business owners and leaders to help them achieve their vision of success for themselves and their company. He has extensive experience with family-owned businesses looking to grow, transition to the next generation, or prepare for a successful exit.

In addition to his advisory and coaching services, Rich is the proud father of 3 boys, Jeremy, Mark, and Daniel, and husband to his beautiful wife, Jamie. They’re active members of The Woodlands Methodist Church, and parents to pandemic puppies, Bucky and Riley.

If you would like to learn more about Mr. Hall, or Silver Fox Advisors, see our website at www.silverfox.org/directory

Top 5 Mistakes CEO’s Make When Trying to Grow Their Company

I work with a lot of CEO’s and a common trait is the desire to grow their company. Instead of reviewing how to grow, I thought I’d highlight some approaches that DON’T WORK!

Hire more sales people!

I was leading a CEO peer group when I heard a CEO say the solution was easy, “Just hire more sales people”.

If it was ONLY that easy.

Increasing revenue must come from an expanding market, new product or service, new form of lead generation, etc. Simply adding to your sales force will not ensure increased revenue.

Build it and they will come

This is not a baseball field.

Careful thought and planning should go into the product features, market demand, market research, buyer profiles, competitor analysis, etc.

Don’t build something new and hope.

Just work harder

I’ve heard owners say “we’ve got to grow and you’ve got to work harder”….as the CEO departed for happy hour.

How you grow is the responsibility of the owner/CEO and leadership team. Be very careful when you ask team members to work harder. That’s rarely the right answer.

Focus on increasing demand, not working harder.

Buy more social media ads

There are LOTS of gimmicks out there. People will promise leads through Google, Facebook, LinkedIn, etc. by hiring them. Don’t fall for it. If it sounds too good to be true, it usually is.

Can you generate leads via social media? Absolutely. It should be part of your growth strategy, depending on the industry you’re in.

If you’re unsure how, hire a reputable advisor to help you better understand how it works and to make recommendations.

Don’t chase the pretty penny

Most small business owners are entrepreneurs that get excited by trying new things. Unfortunately, many put their best and brightest on the new “project” while impacting the ongoing, bill-paying operations.

Consider developing a market research team of 2-3 people. Let them do the research and come back to you with a plan.

This doesn’t mean you don’t pivot when the market changes. A smart CEO always looks forward. Just don’t chase an idea without applying a process and logic to the approach.

Summary

We could probably come up with another 100 items a small business CEO shouldn’t do to grow their company. If you have additional ideas, send me a note at rhall@silverfox.org.

Perfecting the Art of Recruiting Key People

Are you prepared when recruiting key personnel into your organization? 

What is your process? 

Are you sourcing, identifying, and choosing the best candidates or simply choosing from the most available?

Should you be using a recruiting firm or are you sufficiently set up internally to handle this function effectively?  If you use a recruiting firm, make sure you are using one that is ROI focused and delivers prospects that can provide a return on your investment.

Here are seven steps to consider before starting your recruiting process.

  1. Yes, you must have a Job Description
    1. It’s important to know the title, duties, and responsibilities of the person to hire and where they fit into your organization chart.  This is a given.
  • An Extended Company Vision-Mission Statement. 
    • Have a clear vision of the company’s mission, including established goals and the required strategies and tactics of who’s doing what by when to achieve projected results. 
    • An accurately portrayed picture story of where you will be in 10 years adds value to your offering by proving growth opportunities and a security factor.  Know clearly and communicate how this position contributes to your company’s success. 
    • Knowing where you are, where you are going, and having a plan on how to get there is a confidence builder in the minds of desirable candidates. 
  • Your Company’s Value Proposition. 
    • What differentiates your company?  Why should someone consider you and why do current employees work for your company vs. pursuing other opportunity possibilities? 
    • Know the reasons your people work for you and your company and know what they are saying about working in the company.
  • Knowledge of your Company’s current and desired Culture
    • What attributes are you seeking in a candidate that match your company’s culture? 
    • Are you wanting a person who fits your current culture or someone who is a culture creator to help establish best practices for the company’s future direction? 
  • Return on Investment (ROI). 
    • When considering an employee’s cost, know what the return expectations are for hiring them. 
    • Having team members involved in specific strategies and tactics that drive mission goals, they become profit centers for your organization. Employees either make or save money for your company’s operation. 
    • A key personnel attraction and retention feature is employees experiencing a sense of pride, knowing their contributions add value to the growing success of the organization. 
    • Promotional Opportunities – Are they lateral or are they expected to move up the corporate ladder?  What are the performance expectations, the contribution requirements, and how far can they go?
  • Established Agreements
    • When recruiting, discuss critical success factors and key performance indicators required to achieve the company’s objectives and goals. 
    • Your best prospects are those you can establish agreements with on your processes. 
    • As an added benefit, this helps eliminate on-the-job expectation surprises, the ….we didn’t discuss that, after they’ve been hired.
  • Compensation Plan
    • People not only want a cultural environment where they can learn, grow, and feel secure, they want to feel competitively compensated for their contributions. 
    • Make sure they know the What’s In It for Me.  Communicate the career/promotional opportunities along with pay and incentive plans tied to performance results achieved when attracting the desired candidate.

For additional information on recruiting key personnel and/or other strategic questions, give me a call. 

Jim Iden, CPC

713 927 3564

jiden@silverfox.org

Lunch & Learn June 23 Featuring the BBB

At our next Lunch & Learn series event, the BBB will be featured. This year marks the Centennial Celebration for the BBB. To join in the celebration, we will host a panel of three prior Pinnacle Award winners from the BBB.

The Silver fox Advisors are proud of our working relationship with the BBB, serving as the judges for the Circle of Excellence awards each year. BBB member companies submit their stories for inclusion in the annual contest. Winners are then selected in various product and service classes.

At the June 23 Lunch & Learn, you will hear from three of the prior winners. Listen as they describe their journey as small business owners, growing and shaping their brands.

Tickets are on sale now. Visit SilverFox.org/reservations to buy your tickets.

When – June 23, 11:00-1:00

Where – Houston Racquet Club, 10709 Memorial Drive | Houston, TX 77024

Featuring Mary L. Kole

Silver Fox Advisors is proud of our members and would like for you to get to know them better.

Mary Kole is the founder of ML Kole, LLC, a consulting practice focused on assisting leaders of public and private companies with the development and implementation of strategies to achieve company or organization objectives. Mary is a professional Business Leadership Mentor, former Chairman, President, and Vice President of Silver Fox Advisors.

According to Silver Fox Advisors founder, Monte Pendleton, “Mary is the most capable person I have mentored in 30 years. She can do anything and do it well”.

If you would like to learn more about Ms. Kole or joining Silver Fox Advisors, visit our website.

Dr. Ken Wells

Featuring Dr. Ken Wells

Silver Fox Advisors is proud of our members and would like for you to get to know them better.

Dr. Ken Wells is one of our newest members. He is a seasoned executive with extensive corporate health experience spanning clinical medicine, health benefits, public health, and pharmacy. He is an Army reservist, flight surgeon, and pilot.

Ken serves as Vice-Chair of our CEO Roundtable Committee and an active participant in several of our programs including our recent Lunch & Learn on April 7th when we returned to an in-person gathering at the Houston Racquet Club. Ken joined a panel of other Silver Fox Advisors and updated those in attendance with information about “Hot Topics Facing Business Today.”

If you would like to learn more about Ken or join Silver Fox Advisors, visit our website.

UPCOMING EVENTS
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