Peer pressure can be a good thing !
Finance BY ROD BRISTOL
Performance Groups
Peer pressure can be a good thing !
“ If you always do what you ’ ve always done ...”
You know the ending to this old saw , and when it comes to your company ’ s financial results it is absolutely true .
By now , you are well into Q1 2017 . Are you receiving a P & L statement and balance sheet by the 15th day following the close of business at the end of each month ? If not , you ’ re already behind .
So how is it going ? Are you ahead of last year , dead even , or are you falling behind in sales , profits , and cash flow ? And if you are falling behind , how are you going to improve things ?
Think about this : What is the hardest thing for any business owner to do ? Find a new product ? Fire someone ? Get a loan ?
None of the above ! The hardest thing for a business owner to do is something different !
You attend conferences and hear great speakers share new ways of doing things . However , you come back and the same alligators that were eating you before you left start chopping you up once again , and all those great ideas and aspirations fall by the wayside , just like last time . If you ’ re truly interested in doing something different , maybe it ’ s time to consider a performance group .
A performance group is a group of business owners who meet regularly to share operational and planning ideas and act as a board of advisors to each of its members . These groups use a skilled facilitator , financial benchmarks , structured agendas , financial analysis training , and have administrative support .
What is their impact ? With consistent accountability , members integrate financial benchmarking into the ongoing process of monitoring and managing their business . Applying this process with a group of peers provides a pool of “ best practices ,” or standards , to draw from when implementing new plans .
What makes it work ? The members working together . Participating in a performance group gives owners a resource for solving business management chal-
lenges faster and more effectively .
What are the results ? By focusing management efforts toward a plan , group members can go beyond crisis management and actually create the company they want to own . Members achieve their goals far more quickly and efficiently than doing it on their own . Here is one franchisee ’ s answer after participating in a Profit Mastery performance group :
“ In my honest opinion , this program is
by far ( the franchisor ’ s ) most valuable initiative . As confident as I was about my ability to manage and control my office ’ s financial and operational metrics , I was very humbled as soon as I saw my financial and KPI results compared with the other owners in our group .
The improvements in our business have been dramatic across the board : financial improvements , operational improvements , process improvements , quality improvements , and employee satisfaction improvements . The breadth and extent of the improvements are both humbling and inspiring !”
Adding up the benefits The following data from a previous performance group participant will give you a sense of the benefits of the program in
only one of these areas : owner profits , arguably the most important metric to most owners .
• Our 2011 owner ’ s discretionary profit ( ODP ) was 11.6 percent .
• In the four quarters since starting the program ( 2012 Q2 , Q3 , Q4 and 2013 Q1 ) our ODP averaged 15.4 percent .
• This increased ODP percentage equals an actual increase of $ 170,000 in ODP dollars for the previous four quarters ( compared with what my ODP dollars would have been if I was still at my 2011 ODP percentage level ).
• In the past two quarters ( 2012 Q4 and 2013 Q1 ) my ODP percentage increased to 16.7 percent , which equals an annualized increase in ODP dollars of $ 238,000 ( compared with 2011 ODP percentage levels ).
About right now you ’ re probably saying , “ I don ’ t have a performance group available to join , but I do need an accountability partner .” If you ’ re interested in learning more about our performance group process , I would be happy to share that information with you . Please feel free to contact me .
If it ’ s not possible for you to join a group , I have a solution for you ! America ’ s SBDC ( Small Business Development Centers ) provides free counseling services to business owners throughout the country . Their counselors are often former business owners and bankers who bring a great deal of experience to their counseling activities and provide terrific services to clients .
To find the nearest SBDC center , search online for America ’ s SBDC and type in your ZIP code . Set up an appointment , become a client , and your SBDC counselor will assist you in driving up the success of your business by helping you set goals , measure them , and manage better to achieve them .
Rod Bristol is executive vice president at Profit Mastery . For over 30 years , franchisors and franchisees have improved their financial performance and unit profitability by following the Profit Mastery process : financial training , benchmarking , and accountability / bankability modeling . Learn more at www . profitmastery . net , 800-488-3520 x13 or email bristol @ brs-seattle . com .
74 MULTI-UNIT FRANCHISEE ISSUE I , 2017