Small Business Strategies for Long Term Success

Salim Omar, CPA interviews Doug Utberg on the Straight Talk About Small Business Success podcast to share tips, strategies, and resources on how to take your business to the next level.

Background - Who is Doug Utberg?

After completing his undergrad in 2000, Utberg delved into the world of accounting and finance taking on his first job at Intel Corporation Finance. "I feel the kinship with the CPAs because of the accounting and finance aspect." He worked at Intel for close to 20 years. He then moved on to Lattice Semiconductor—a company in the tech space. He climbed the corporate ladder, hitting bumps along the way. Utberg took on the position as Director of Program Management Office and Information Technology. Even though he was in IT he found himself working in the finance department and in charge of the budget. Swift changes came when the pandemic hit‐new management took over and Utberg found himself unemployed.  "They got rid of everybody who was in the old guy's inner circle. I was first on the list. I got a half-hour meeting on my calendar with no subject, the first thing he said was, "Unfortunately we have to eliminate your position.""

This was a turning point for Utberg. He found another job in a corporation to stay afloat. However it wasn't easy, putting in up to 400 applications.

"I got the feedback that—Hey, you were really good, but you weren't quite at the top of the heap— I decided I can either keep hitting my head against the wall, or I can figure out how to do my own thing. I'm in the midst of figuring out how to do my own thing, which in my experience means a combination of hustles."

Utberg does contract roles, short-term consulting and podcasts. According to Utberg, podcasts are a labor of love and require a good amount of time to become financially self-sustaining.

"The great advantage is that the content lives forever, unlike Facebook Live where it's gone the moment you record it. This allows you to build your podcast over time, providing a compounding value effect."

Utberg's passions include both small business and larger enterprises, but from different angles. His talent lies in putting together world-class teams. He uses his wide range of previous experiences in IT and finance to develop and grow these teams.

"To create a world-class team is to break from the mold, put together a flat organization structure, and replace things that companies do with human effort, with either repeatable systems that you can outsource or ideally with technology which you can automate."

According to Utberg this does two things:

• It lets you run a more effective business 
• It changes the economics so that you can afford to pay more for your individual contributors

"This is what we are seeing right now. Acquiring talent is expensive and trying to do that inside of a 1990’s style General Electric hierarchy becomes uneconomical very fast."

Advice for Small Business Owners on Making Payroll and Processes Affordable, Streamlined and Effective.

Utberg’s advice is to segment your operations into documented processes. 

 "I'm a fan of the APQC or American Productivity & Quality Center Process Classification Framework. It creates a framework and storage space for all your processes." This is where you start our marketing or finance processes. Have a goal to document your processes.

"One of the things that I do for my business is I have a weekly goal to document two to four extra processes. I'm not going to get there in a month, but if I give it a number of years, I will get quite a few things documented." According to Utberg there's a beautiful and magical thing that happens when things are documented, especially if they're documented in a way that the common person can handle. 

Outsourcing 

Having your processes documented makes it easier to outsource your labor to places who have a developing economy, saving you costs. However Utberg warns that this could cause confusion and delays if you rely solely on things to occur across borders.

"I call that wasting time for less money."

Use Technology 

There are many processes that small and large companies can execute with people that can be done with technology. If you're a small business, this is a place where you have a huge advantage. There are a wide range of technology that can simplify your processes. These include CRM and auto responders which allow for automated repetitive tasks and are more cost effective for small businesses.

According to Utberg the rules that small businesses want to keep in mind are:

• Is the technology replacing manual labor?
• Is the technology requiring more manual labor? 

Usually you will require some labor to set up and establish your technology.

Utberg uses the example of sales marketing.

"A traditional way that a lot of companies tackle sales and marketing is that they'll go to trade shows, which involves a large amount of manual labor and time. Another tactic is that they'll have a sales team that gets on the phone and starts calling people." According to Utberg these are the oldest and least effective sales model in the world."

Utberg suggests that small businesses focus on using digital advertising. Places like Facebook, LinkedIn, Google or through direct mail. 

• Create and hone lists of your ideal client market directing to them with some kind of offer.
•  Get them to come to you so that you can focus on those people's efforts.

Growing revenue is one of the toughest things to do and most small businesses don't have great visibility into which marketing is producing what results.

• The amount of money that you spend on a marketing medium should either be zero or as much as you can possibly afford. 

"I think the places where businesses run into roadblocks is that you don't know where you should press the gas and where you should be pumping the brakes. When you have visibility on your return on investment, you can get more of your functions from your budget. You can not go over budget for any reason. Whenever you have things that are ROI-driven instead of budget-driven, your budget doesn't matter anymore. If your ROI is significantly higher than a hundred percent, put as much into it as you possibly can."

How Important is Incentive-Based Compensation for an Effective Team? 

Utberg views compensation as a table of stakes.

Whatever way you choose to structure compensation, you're going to need to be competitive. For every extra hoop that you ask people to jump through, whether it is being on-site versus virtual, or whether it's secondary skill sets, you are going to have to compensate your workers or they will leave.

• Having people who fit within the organization once your compensation is in the right realm is important. If your compensation isn't right, you're going to lose the people no matter what you do."
• On the other hand, if your compensation is right and you have a toxic organization, you're going to lose people fast."

How compensation is structured is less important than making sure that you are compensating in the range for what you're asking for. In small businesses, there's not necessarily a career path for people. Be upfront about this. This shows you respect and care about your employees.

How do you Balance Personal Life and the Demands of a Small Business?

"At some point you draw the line." Every small business owner must prioritize what means most to them. You understand that you may lose value in business so that you have time with family, or vice versa. It is up to the individual to decide. 

Utberg suggests that small business owners take time off for themselves to prevent becoming overwhelmed and overworked. "You may feel like you are multitasking but in reality you are actually doing several things at a mediocre level.”

Small businesses should ask themselves, "what is the most important thing that I should be doing?"

Business is a highly dynamic environment—I hope that five years from now all of us will be billionaires but I have no clue what the path will look like. This is why small business owners should ask themselves the question— based on what I know about everything I'm doing, how does that come back to the one thing I need to be doing next?" 

Focus on one goal because if you compound that over time, you end up accomplishing far more than you might think.

You can reach Doug Utberg on his website terminalvalue.biz or listen to his podcast, the Terminal Value podcast. You can also subscribe to his weekly digest. 

Straight Talk about Small Business Success podcast is brought to you by Salim Omar, CPA. Straight Talk CPAs is a virtual CPA firm that provides CFO, accounting, tax planning and pax preparation services to entrepreneurial businesses across North America..