Keep a close eye on cash flow. Probably the best lesson I ever learned was to manage the business every day, manage the cash flow every day. I’m not a CPA, but I do manage the cash flow of the business on a daily basis.
I do know what we expect in, which businesses need cash, which businesses are doing well. That was a lesson I learned early on in my business career. I’ve learned I can read a financial statement as well as any of these guys, and I remember the numbers. I get cash reports and I monitor that very closely.
As the owner of a business, that’s your responsibility. Don’t worry about what your depreciation and your write-offs and all that are. The accountants take care of that at the end of the year. What you need to manage is the day-to-day cash flow of the business, how healthy the business is. You can make a business look healthy when you start taking write-offs and depreciation.
EBITDA doesn’t pay your bills. You still have to pay your taxes and you still have to pay interest and principal. I couldn’t divorce myself from that. I couldn’t say I’m going to be in sales and marketing, I’m going to be a CEO and let those guys take care of that stuff.
Don’t cling to the details. I delegate a lot of authority to people. It’s the only way we’ve been successful in growing this business.
I haven’t tried to hang on to trying to understand every detail of everything that’s happening every day, because then you get lost in the details and you’re not really thinking about the big picture. So from my perspective, the reason the company’s grown a lot is because I’ve been willing to trust other people and give them a lot of responsibility and let them run with it.
Create your own luck. I don’t think I’m that much smarter than anyone else. I didn’t win any awards in school, I wasn’t a Ph.D., I didn’t invent anything.
I think it’s basically getting up every day with a single focus - this is what I’m doing today, where I’m spending the next 10 or 12 hours of my day, and let’s go get it. I think it’s like anything else. There’s a certain amount of hard work involved, there’s a certain amount of vision involved.
I really believe you make your own luck by being out there in the front lines and working hard every day. When opportunities come, you sort through them and you’re there to grab them.
Measure results relentlessly. We measure just about everything. We’ve really got into measurements over the past 12 to 15 years. We measure everything we do, every piece of paper that goes out the door, every phone call that’s made, we track every phone call that comes in, all client contacts. We measure every bit of that, what kinds of response we’re getting from clients.
We’re pretty adamant about that. A lot of that was designed just to be able to respond to clients. It’s pretty compelling when you can go in and lay something on someone’s desk and say, ‘Here’s what we’ve done, and here’s how we’re communicating back to your people on what we’ve done.’ And then we have performance measurement, not only for operational issues but we have financial performance review.
We measure each division on operating cost and sales, we track those month-over-month, year-over-year on expenses, sales and profitability.
Retain an entrepreneurial outlook. Most businesses that are successful are constantly changing their mix because they have an entrepreneurial approach. The major drug companies are always looking out for the best new drug.
They’re constantly looking to get into new areas. You take a company that’s headquartered here in Cincinnati like Procter & Gamble, they sell divisions and buy new businesses that they think are going to be better fits for them.
That’s all part of that entrepreneurial spirit. The last guy you want to be is the last guy selling buggy whips - so I think the entrepreneurial spirit, no matter whether you’re small or big, is important in any business.
Opportunities are where you find them. We bought a premium merchandising business about a year and a half ago, where we manage the premium and awards incentives programs for companies. An interesting business opportunity, but totally unrelated to managing data. I think the bottom line is we bought this premium business based on the fact that we liked the business because it was in a fragmented industry and, the No. 1 reason we bought it was we liked the guy who ran it.
He’s a young guy that started it and really needed capital to grow, and he wanted to be part of something bigger and was willing to give up control of the business to have access to capital and the other things we can provide to help grow the business. You ensure a lot of this through people and who you’re doing business with.
Be a selling CEO. Nothing happens in business until somebody sells something. Until we convince a client to pay the money for whatever services we provide, we can’t do anything.
So all of the stuff we do in the background, none of that would happen unless we went out and found the client. Marketing and sales are critical to any business. As a CEO, you need to keep driving the business forward and you need to have that outlook that we need to be looking for the next client. As a CEO, you’re selling every day, you’re selling the belief in the business, the belief in its future.
You’re selling your idea to the banks and the people you want to hire and the people you want to retain.
How to reach: The Sheakley Group of Companies, www.sheakley.com