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May 23, 2007

Phoenix Offers “8 Operational Tips for Business Success”

If you are like most business owners, the last thing you want to confront is the possibility that your business plan has gone awry and you may need outside assistance to get things back on track. Here are some tips to help you maintain focus on the important elements of your business:

  1. Have a strategic plan ” Key elements would include a mission statement and an identification of the attributes that differentiate you from your competitors. How are you “known” by your customers? Is this the role in the market you want to fill? Set some intermediate (6-12 months) and longer-term strategic goals for your firm and make sure that your senior team appreciates the importance of working towards these goals. One thing is for certain ” if you don”t continuously adapt to the changing marketplace, you will find yourself in trouble.
  2. Surround yourself with talent ” The vast majority of the companies with which we get involved suffer, in part, from a management void in one or more key positions. Management talent is often the differentiating factor in determining success and most business owners spend far too little time on developing and mentoring their most important asset.
  3. Manage your key business drivers ” What are the operating metrics that you measure on a daily and weekly basis? I am continually astounded that many companies fail to measure and monitor their operating performance. Depending upon your industry, items such as fill rates, manufacturing defects, labor efficiency, parts per hour, chargebacks, daily shipments, or open orders may be critical to success. Monitor these metrics, develop plans to improve them and, by all means, hold your team accountable and responsible for the results.
  4. Know your customers ” Today more than ever it is important to develop deep relationships with your customers. There is nothing more devastating to a Company than to lose (or learn that you are about to lose) a key customer. Create a culture that values understanding the direction and corporate mandates of your customers as well as the personalities of their decision-makers. The more you know about your customers, the more value you can add to your product or service, thereby helping to ensure your spot as a preferred vendor.
  5. Know your competition ” Markets today continue to get more competitive with the continued adoption of technological advances, margin compression from customers and, in certain industries, transparency of input costs. Keeping abreast of your competitors in terms of new product or service introductions, hirings/firings, and customer gains/losses, will enhance your understanding of the marketplace and enable you to seize opportunities (or at least react) when appropriate.
  6. Develop great relationships with financial partners ” For most businesses, the lender is the financial lifeline that should be treated as a valued partner rather than the “enemy.” Regardless of your size or life cycle position, it is critical to develop and maintain strong relationships with existing and prospective funding sources. The lending and equity markets continue to be frothy and overheated. Funding is generally available to assist struggling companies if used judiciously in conjunction with a well-developed turnaround plan.
  7. Manage cash ” It’s true. Cash is still king. Cash doesn”t lie. Understanding the cash flow characteristics of your business and aggressively managing cash flow is critical, even for healthy companies. It may highlight problems with a particular customer, or climbing payroll or expenses.
  8. Address problems early ” Everyone nods their head to this “ism.” It is logical, sensible, and can”t be refuted in concept. Unfortunately, when it comes to reality, things like ego and denial often muddy the water.

Running a business of any size or scope is a challenging, multi-faceted endeavor. Paying attention to these items will help ensure the long-term success of your business.

As published in the Turnaround Management Associations’s supplement to the Philadelphia Business Journal, May 18, 2007

About Phoenix

Michael E. Jacoby is a Managing Director and Shareholder of Phoenix Management Services, Inc. Phoenix Management Services is an operationally-focused advisory firm, providing turnaround, crisis and interim management and capital advisory services to middle market companies in transition. Since 1985, Phoenix has aggressively advocated on behalf of its clients in over 800 assignments nationwide across a variety of situations and industries. With offices in Philadelphia, New York, Boston, Atlanta and Fort Lauderdale, Phoenix preserves and enhances the value of its clients’ companies by focusing on the operational and financial challenges they encounter. Mr. Jacoby can be reached at (610) 358-4700, or via email at

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