Ahern Advisory Procrastination - A Fatal Disease Part II

(prHWY.com) January 14, 2013 - Phoenix, AZ -- Last week, I discussed why some individuals struggle to avoid difficult tasks.

I stated that procrastination is a "learned behavior" that can be changed - but to change implies discipline.

I discussed business planning as part of "the process" to change procrastination in a business.

I have developed 5 guidelines that every Manager should embrace:

1. Make profits your first item of expense. Determine what kind of profits you should be making - 5%, 8%, 15%? Then calculate where you are going. In order to do that, you must calculate profits first and then work expenses to meet your profit goal.

2. Recognize what day of the year is your breakâ€even day. This is a very valuable tool in evaluating expense control.

3. Learn to understand finances, as it is the key to profits. Your operating statements are essential for cost control. Learn what to look for in your operating statements and make sure that you receive them monthly.

4. Demand specific reports be given to you monthly. If you are not getting those reports, find out why you are not getting them and make sure that you reâ€educate the individuals responsible so that you can receive proper information to make intelligent decisions, and;

5. If you are a trucking company, and you have inventory, inventory control can make or break profits. Look at your cost control for inventory - how often do you take physical inventory? What do you do with any obsolete inventory? And are there better ways to manage your inventory?

It is important to recognize success in the marketplace is increasingly linked to an organization's ability to manage and leverage its intellectual capital, the intangible and often invisible assets such as knowledge and competence of people, intellectual property and information systems that do not show up directly on the balance sheet, but are more valuable than financial assets.

I am amazed when I speak to some owners that they don't recognize or place a value on their business based upon their "brand". Banks value a business according to their financial assets and sales, their real estate holdings and other tangible assets. You may ask why and it is simple - banks like to attach assets. Banks like to feel comfortable that they are over collateralized.

But these financial measures are clearly inadequate when it comes to measuring the value of service companies, which have few visible assets.

As we move further into the next decade, other measures of value will start coming to the forefront. For example, what price is assigned to creativity, service standards, alliances or unique computer systems? Unfortunately, traditional accounting methods simply do not reflect the work of such vital, yet intangible keys to sustain growth. Human capital represents the intellectual, the knowledge, the skill, capability of individual employees to provide solutions to customers: to solving problems within the company.

Structural capital consists of everything that remains when all the employees go home, such as databases, files, software, manuals, trademarks, organizational structures, etc.

Recently, I was working on a very large project for a huge conglomerate that owns several trucking divisions and we were competing against some of the largest and most respected consulting companies in the country. When it came time to make a decision, we were awarded the contract, not because Ahern was smarter than our competition, but because Ahern offered and captured what they were looking for: knowledge The point made in my presentation was that;

* All of Ahern's auditors are exâ€Presidents and CEO's of trucking and logistics companies;

* They retired early; received their "Golden Parachutes"; don't have to work but want to keep active;

* They have the knowledge, experience and understand the trucking industry, not to mention;

* The "battle scars" of surviving and growing in trucking during challenging times.

* Ahern's Model captured the intellectual capital the client was looking for.

My point was knowledge is power. Practical Experience cannot be achieved in a textbook.

I personally believe that as you are building your business; as you are establishing a business plan; as you are achieving your goals and objectives; you need to focus on vital, intellectual capital. I also believe that in the next decade, intellectual capital will be as valuable, if not more valuable, than hard assets.

The most successful trucking and logistics companies in the next 10 years will be those who do the best job of capturing, storing and leveraging what their employees know.

And don't forget Ahern's philosophy - if ain't broke, break it!

In closing, if you own a trucking or logistics company, in order to survive and grow, you must learn to plan; execute and continually change your business model. You should focus on surrounding yourself with people much smarter than yourself and reward them based upon their performance.

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