Education sessions at RetailNOW 2019 included a track for C-level executives with topics designed to help them build stronger, more successful businesses. Here are some highlights from RetailNOW presentations tailored to the C-suite.
Improving the Value of Your Business
Several presenters focused on topics related to business valuation. In a Tuesday session, Jim Kahrs, President of Prosperity Plus Management, shared key drivers of business value, including:
- Financial performance: Kahrs says the majority of business valuation is based on historical performance. Buyers look for a track record of growth and profitability and professional recordkeeping.
- Growth potential: Buyers will look at the market you serve, your portfolio, customer satisfaction, and the structure of your team to forecast growth. Kahrs points out that if a business owner is its top salesperson or integral to each process, a buyer may question the potential for growth.
- Dependence on particular employees, customers or supplier: Buyers will perceive more risk if most revenue comes from one customer, you rely too much on one employee’s skills and knowledge, or you only use one vendor for critical components or services.
- Cash flow: A buyer needs to see enough cash coming in to run the business, rather than reliance on credit lines. Kahrs comments that the recurring revenue model is changing valuation in a positive way; business owners should make sure as a Service contracts are written so they can be transferred to a buyer.
- Business differentiation: Kahrs explains that standing out from your competition can lead to higher revenues and profits, and therefore, higher business valuation.
Tom Bronson of Mastery Partners, presented a Base Track session that detailed more than 50 things you can do today that will increase the value of your business, emphasizing some of the most crucial practices, such as:
- Measuring key performance indicators (KPIs) weekly. Choose 10 or 12 business drivers, such as recurring revenue, customer retention, time to contact sales leads, and cash flow. RSPA members can download a target operating model that includes suggestions for which KPIs to track.
- Having employees sign noncompete, nonsolicitation, and nondisclosure agreements. Your business will retain more value if your employees cannot take what they’ve learned from you and the relationships they made through your business and become a competitor.
- Documenting all processes. Bronson says the single most important thing you can do to improve the value of your business is to establish and record duplicable processes. Documentation eliminates the problem of tribal knowledge that isn’t shared throughout an organization and provides you with the opportunity to evaluate and revise processes to make them more effective and efficient.
Both Bronson and Kahrs stressed the importance of planning well in advance to get the outcome you want from the sale of your business. “With no planning, you just get what you get,” said Kahrs.
Jeff Riley, CEO of Retail Management Hero, and Chris Rumpf, Founder and CEO of Flyght, co-presented a Monday breakout session on how VAR businesses can build business value by focusing on the SMB market.
Riley says SMBs benefit most from IT services. “This is the place our industry has to thrive in to add ongoing, lasting value,” he comments. Riley adds that there are also common patterns for what SMB businesses need with regard to IT services, point of sale (POS) and adjacent services, which VARs can build their portfolios around.
Rumpf says VARs must define their mission, vision and values and articulate them to their teams regularly, creating the basis for an effective sales and marketing strategy. Riley adds it’s crucial to listen to the market when making decisions about committing to or pivoting from a strategy.
Rumpf and Riley also stress the importance of recurring revenue. “If you get one customer to pay you more every month, you’re worth more as a business.” Rumpf comments.
The C-Level education track also included presentations devoted to developing leadership skills. Leaders understand that personal and professional development is important to their business’ long-term success, but they often struggle to find time for formal training. Kathy Meader, RSPA VP of Education Services, and Shannon Reichert, Leader of IP Sales Operations for Worldpay and the RSPA Education and Certification Committee Chair, led an interactive breakout session that demonstrated how simple leadership development can be.
Using quotes from two books from RSPA’s book clubs, “Leaders Eat Last,” by Simon Sinek and “The Culture Code,” by Daniele Coyle, Meader and Reichert led discussions on empowering employees to make decisions and how to create safe environments where employees aren’t afraid to speak up. Participants in the breakout session shared how they address those issues in their organizations and asked peers for advice.
Reichert says, “Discussions in book clubs will yield return. You’ll have a nugget that you can walk away with so you can build better organizations, and we can build a stronger association.”
Meader adds that the book clubs are open to all RSPA members and their teams, and “the discussions we have are well worth it.”
Chelsey Paulson, Director of HR at North Country Business Products, presented a Monday breakout session on another leadership topic: how to free up time and retain talent. Citing “The Coaching Habit: Say Less, Ask More & Change the Way You Lead Forever” by Michael Bungay Stainer, Paulson guided participants through a series of questions they can use to coach employees to take ownership and solve problems.
Paulson says asking the employee, “What’s on your mind?” can help an employee quickly get to the point when they to speak to you, and questions like, “What’s the real challenge here for you?” will help the employee look past symptoms to pinpoint the real problem.
Paulson stresses that it’s essential to learn to be comfortable with silence as your employee contemplates answers and to resist jumping in and taking over. “Let them know they have the autonomy to act and make decisions,” she says.
Ending conversations with the questions, “What was most useful to you?” Or “What did you learn?” Can make the conversation meaningful and give your employee a takeaway they can apply to their own development or helping their teams grow.