My wife and I were walking around our neighborhood in Brooklyn this weekend.  She wanted to get a new pair of eyeglasses.  In one store we thought that looked good, she found a pair she liked.

When we started talking pricing with various features the clerk asked if she had insurance.  My wife explained this would be an out-of-pocket purchase.

The clerk then said in that case the glasses would be $100 cheaper. We walked out.

Legal?  In New York, yes.  Right?  No.

And while this might be a blatant example of our broken health care system in the US, it represents a much bigger problem.  According to World Health Organization’s report in 2000, the US ranked 37^th in health care quality… far behind countries like Colombia, Iceland and Cyprus.  In fact, America consistently ranks last in quality of health care compared to other “advanced” countries, according to the New York Times.

Yet it is the perception of many American that we have the best health care in the world.  And health care is by far not the only thing we think we are the best at!

Whether these perceptions are true or not, by just thinking you’re the best makes it difficult to stay the best.  Just ask any top athlete who stays at the top of their game over time:  Tiger Woods, Michael Jordan, Roger Federer and so on.

In business it is the same thing.

Complacency and arrogance breed ignorance.  All three combined breed lethargy.  And in business, especially in this economy, lethargy is the kiss of death.  Companies that grow quickly in the beginning only to crash when they become lethargic are what I call shooting stars.

Shooting star companies are a dime a dozen.

No matter where you are in the life cycle of your company:  idea, start-up, growth, high-growth, mature, or decline, it is crucial to keep your edge.

Five key ways to keep your edge in business:

• Stay Lean— at all times, especially when business is strong.  It is so easy to get complacent and lethargic when things are doing well;
• Stay Fit— constantly looking to refine your training, education, R&D, and new products/services
• Stay Young—bring in fresh ideas, talent and energy.  This energy will attract more of it.  It becomes contagious and others want to be involved with your company.
• Stay Aware—know what your competition is doing… at all times.  Make sure you position yourself as different, better or more successful.
• Stay Hungry—a mantra for your business can be: what’s next?  When you are passionate about what you do, you will always look for ways to do and achieve more.  Tap into this passion.  If it is not there, find it.

Keeping your edge is important if you want to be and stay the best.  Just know it takes work and consistency.  It also takes passion.

It is very hard to do this without passion.  In fact, it is almost impossible.

If this eyeglass place my wife and I visited over the weekend focused on competing and positioning themselves where discounting to out-of-pocket customers became unnecessary, it would not only ramp up sales dramatically, they would also not be contributing to the health care problem.

Instead, they would be part of the solution.

Action Steps for the Week:

How long have you been in business?  If you have been in business more than three years make sure you’ve done the following:

• Energy review—how are you feeling about biz?  Excited?  Passionate?  If no, find the passion before anything else.  Without it, you’ll be spinning your wheels.
• Team review—you guys old and slow or young and lean?  I don’t mean in years, but in heart and soul.  Makes more difference than you can imagine.
• Competition review—know your primary and secondary competition.   What is your USP (Unique Selling Proposition) compared to them?
• Technology review—whether you are service or product based, ramp up your technology.  Doing webinars, pod casts, video casts, social media?  Good place to start looking.

After your review, it will become clear where you should be spending your time and where to ramp up now.  Start with the lower hanging fruit first.  Work on the areas that need the most amount of attention that address the most important components of you business first.

Lastly, commit to an annual review of these areas to make sure you stay young, lean and passionate.

Gene finally got it.  His IT consulting business has been constantly pulling his attention from what he has known he needed to do:  develop his financial picture, both historic and forecasted.

Until September, he never gave developing his forecasts time, since last-minute crisis or unexpected challenges were constantly coming up.  Instead, each week we spoke we were working on putting out fires or managing just-in opportunities.

The funny thing is once he dug into the numbers and started to really understand how they worked in his business, it was like shining a flashlight in a previously dark room.  He could now make solid strategic decisions, as well as keep track of his progress.

Around the same time, Gene’s company, Point Consultants, started growing aggressively.  And 2010 became his best year yet.  Coincidence?  Maybe.  Most likely not.

Now that Gene has the financial system tight, he is constantly working his numbers and comparing them to what he forecasted and is adjusting plans and strategies a more timely way.

He is planning out his marketing and sales strategies, team building and new services to add to the business for 2011… all based on his numbers he already has a handle on.  And 2011 is already stronger than he expected.

Cool stuff, no doubt.  But it wasn’t easy for Gene to get going on this.  And he is by far not the only entrepreneur that struggles with getting their financials and forecasted projections together.

In fact, at least 50% of all entrepreneurs I’ve worked with rather do almost anything else than deal with planning their numbers.

And while an entrepreneur can have a great run without doing their numbers, that run will ultimately be short-lived if left unattended

Here are the five steps to plan your 2011 financial picture for the business:

1. What you want—start with the end in mind.  By the end of 2011, what specific and measurable financial goal do you want?  Make it UnReasonable.  Keep in mind there is a difference between being unreasonable and being unrealistic.  For example, “I want to land three major contracts with mid-sized corporations, totaling $250,000.
2. Work it backwards—take your 2011 goal and where do you need to be by the end of 3^rd quarter?  2^nd Quarter?  1^st Quarter?   In our example:  Q3:  $125K, Q2: $25K, Q1:  3 contracts in final negotiations
3. Break Q1 into months—March you already have (Q1’s goal).  Add February and January.  Just for the 1^st quarter.  Then when you are ready to start Q2, do the same, and so on.  In our example, Mar. 31^st:  3 contracts in final negotiations, Feb. 28^th: proposals to 7 companies, Jan. 31^st: setting up meetings with top 20 leads.
4. Work your expenses and expenditures—once you get the sales breakdown in place, you need to do the same thing for the one-time expenditures and regular expenses you will incur along the way.  Examples of expenditures:  redesigning your website or getting a delivery van.  Expenses: salary, rent, taxes, interest on loans.  Doing this for your 2011 goal will show you the impact it will have on your cash.
5. Play it forward—Now you are ready to work your plan forward.  With the forecasted sales, expenditures and expenses for each month for the quarter you are in, you will be able to monitor how things are going and adjust, if necessary.  When you get to the end of the quarter, you break out the next quarter into months.  If you didn’t hit your goal in the previous quarter, use the months in the new quarter to catch up to the end goal for that quarter.

When you set up a plan, you have given yourself something to focus on.  Make sure you have your support structures in place.  With both your plan and your structure it is more than likely your 2011 goal will become a done deal!

Action Steps for the Week:

If you have not thought through your 2011 financial goal, start with what you really want to make happen this year.

Then work the above five steps.  When you get to Jan. – March monthly goals, it will become clear to you if it is UnReasonable AND realistic.  If it appears unrealistic to you, adjust your 2011 goal and work it backwards again.

Keep doing that until you feel you have a basic plan in place that works for you.

Don’t forget the expenses and expenditure side.  You don’t want any surprises along the way.

Lastly, you know yourself… what is going to trip you up along the way?  Accountability?  Self-sabotage?  Distractions?  Over-committing?  What?

And then get that handled!  Get a colleague, peer, board member, experienced coach, whatever you need.

Otherwise, it is likely you’ll find yourself in a familiar pattern and your goal will start to collect dust on your shelf somewhere.