What Gets Measured – Gets Done!

As a start-up or small business enterprise, one of the first things that you must master is your data components; and how to interpret the organization’s numbers. The leadership must then dumb those numbers down to the point where every department and/or individual has a single imperative but reasonable number that guides their day-to-day work initiatives. This set of numbers enables the founders and/or leadership to create a dashboard of clarity, accountability and responsibility throughout the organization. One can then track performance down to a granular level and a single person responsible for output and performance.

In that we practice what we advise, within Smith GruppeEvery Department And Individuals Has A Number”. Whether it be the underwriting department turning around a LOI (Letter Of Intent) for funding within 48-72 hours, or working capital cash flow department disbursing within 48 hours; we all have a number.

Here Are 8 Reasons To Measure!

 1. Numbers Communicate Clearly

When an owner ask the question of how the month is going to a sales manager, the response is usually “Great, and we should do well this month as we have a lot of great opportunities right now.”

In a numbers based culture that measures consistently, the answer is crystal clear. We have 6 deals closed against our monthly goal of 10, and we have 2 weeks remaining in the month. If the answer is 2, and the goal is 10 with only 2 weeks left in the month; then the lagging sales issue needs to be addressed. Better to address the issue now, rather than at the end of the month when you are way short of the goal.

Numbers are not just for that sales manager. It is a communication tool between the founder/leadership, the sales manager and the sales team, and the entire company creating the basis for comparison, unemotional dialogue, and most importantly constructive coaching to increase results.

2. Numbers Create Accountability

When a number is set and properly communicated, the expectations are clear. Accountability starts with clear expectations, and nothing is clearer than a specific number. Take our previous sales example, if in the entire sales department the team expectations are “increased sales,” that is ambiguous and unclear. However, if the sales team is to produce 10 closed transactions, $7,000 in fees per minimum transaction, or total new sales volume of $70,000, that is a clear expectation. The sales team and each salesperson know exactly what their target is.

3. Accountable Leaders Respect Numbers

The right butts in the right seats take great pride in the fact that they can be held accountable for the success of the business. This level of leadership within your business loves clarity. Knowing the numbers they need to hit, they enjoy being recognized as producers.

One of my mentors quoted, “people will work 10 times harder for recognition, than they will ever work for money.” Always recognize your producers and leaders as well as praising progress for the up and comers.

Accountable leaders within your business creates an esprit de corps and embrace an organizational culture where everyone is held accountable. This leads to overall business success because the right people want to be successful; whereas the wrong butts in the wrong seats will resist accountability because they are not producing.

4. Numbers Create Commitment

There is a major difference between commitment and compliance. Compliant team members will do just enough to comply or get by and not get fired, and you are likely to pay them enough for their nominal production that they will not quit – Bad Move!

Committed team members are clear on their numbers and have agreed that they can meet and/or exceed that number, this is commitment. There are no gray areas.

A great way to secure company-wide commitment is to post a Vision Board in the Conference Room or most frequently visited or visible place in the company. Share the sales goals and other key initiatives and/or quarterly themes with everyone, and tie their number to incentives.

This results in everyone knowing how their number and/or role contributes to the overall success of the company, and just how important their numbers are in the grand scheme of things.

5. Numbers Create Healthy Competition

Healthy internal competition and a little pressure is a good thing. As noted in Point #4, making the target numbers of all teams public knowledge and known to all teams creates competition.

Departments can then challenge each other to meet and/or exceed their number against other departments.

This is a healthy practice across multiple departments within the business because although each employee and department are in pursuit of their own number, they are aware that they are interdependently accountable for the overall company number; which lends to greater incentives and success for all. – It creates greater camaraderie between departments in that it illustrates how each role and responsibility supports a greater role and responsibility.

6. Numbers Produce Re$ults

Similar to the way Steve Jobs helped turn Apple around, knowing your number can create amazing results. If the sales department’s expectation is to up sell one existing client a month in order to increase the CLV (Customere Lifetime Value), by hitting this number, the ultimate result is increased customer retention and customer loyalty.

However, if your nPS (Net Promoter Score) process is to identify opportunities to warm transfer MQL’s (Marketing Qualified Leads) so that you increase your lead-to-conversion rate; and they know that 20% of your MQL’s result in a minimum of $3,000 in ancillary sales. You will typically meet and/or exceed your sales goals than if you don’t set a number. What gets watched also gets improved.

7. Teamwork Makes The Dream Work – Numbers Create Teamwork

When your entire business team has the right butts in the right seats, and they uniformly agree on a number to hit; they ask themselves “how can WE hit the number,” creating greater camaraderie and peer pressure.

When a team of top producers and leaders are challenged to produce at levels previously unattained, they will generally pull together and figure out a way to collectively meet and/or exceed the number. – This can b an excellent way of separating the creme from the milk, as it often results in those that aren’t pulling their weight or hitting their number being called out by the other team members that are performing to task.

8. Faster Problem-Solving Capabilities

When your business case is results oriented, it is often important to conduct an ABC (Activity Based Cost) Analysis. If your data indicates an increase in costs, and an activity-based number is out of line; identifying the number associated with bringing that cost back in line is tantamount to your survival. You can then take a proactive approach to attacking the issue in order to solve the problem.

Being proactive will allow for you to deal with the issue sooner, rather than later when it may be too late to adjust the number and have an impact on the end-result. Hard data allows you to cut through the noise of subjective and emotionally attached opinions.

In a small business enterprise, time is always of the essence and decisions have to be made quickly.


If you’re still stuck, Smith Gruppe offers training on understanding how to identify the 5-15 high-level weekly numbers that you should be looking at.

We do this through our tools and training on how to draft and create fACE (Functional Accountability Charts) and pACE (Process Accountability Charts). These charts allow for you to keep your finger on the pulse of the important numbers, as well as giving you the ability to predict the impact of adjusting the necessary numbers to drive revenue and increase the profitability and success of your business. Call us today at 980-221-9377 or e-mail us at info@SmithGruppe.com and request a FREE consultation on measuring the right “NUMBERS”.


Pivot – Deliver Value By Leveraging Strengths And Opportunities Ahead Of Industry Trends

A business “Pivot’ can be viewed in a couple of ways. In most cases, a pivot could be a complete restatement of your business model. It is not a set of incremental changes to a product or service that result from your business analytics. Rather, it could be high level adjustment in strategy or execution that affects the entire business model.

Take for example, you decide to adjust or replace a couple of features in a suite of product/service features, that does not constitute a pivot. However, if you were to disband all of the features associated with that product or service to reorient your business case around one core set of features, that would be a pivot.

Additional points of view on a pivot is as a compass check that results in charting a new course in a new direction. In today’s technology advanced global society of uncertainty, businesses need to mitigate risk by nimbly moving toward a customer/product-market fit. If you are able to predict how much time it will take to make the adjustment, and move through the pivot, along with the opportunity cost associated with that pivot, then you can successfully determine the number of pivots that can be achieved with the remainder of runway that you have.

Lastly, another description is that “pivots” are Vision-Mission Driven, not Test-Driven.

Now lets take a look at the different types of “Pivots” that a business may consider

Granular Pivot

In this scenario, what previously was deemed a single feature in product/service becomes the whole product/service. This spotlights the value of “focus” and leverages a cost advantage by delivering the product/service more quickly and efficiently.

Satellite View Pivot

In the reverse of the previous scenario, there are times when a single feature product/service is insufficient and out of line with the customer segment; and cannot support or deliver value to the customers needs. This pivot was considered when the previous whole product/service became a single feature product/service of a much larger product/service.

Customer Segment Pivot

The customer always being right, especially when your product/service can attract real customers, but not the customers in the original vision of your product/service. In other words, it addresses a problem, but needs to be re-positioned for a more engaging customer experience. The result is a more appreciative customer segment, and a differentiated value proposition for that customer segment.

Customer Needs Pivot

Awareness Stage customer feedback in the “Buyers Journey” is a clear indication that the problem that your product/service has solved is not that important to the customer, or that the price-point is above their purchase threshold. This also requires re-positioning, or a completely new product/service offering, to find the customer problem worth solving that can still generate profit for the business case.

Business Platform Pivot

In this case a change from an application to a platform, or vice-versa. Our experience has shown that during the Concept-Ideation Phase, founders envisioned their product/service as a platform for future products/services, but did not at the time have an innovative application yet. The majority of the customer marketplace buy solutions, not platforms.

Business Architecture Pivot

Jeffrey Immelt, many years ago, observed while leading GE that there are two results oriented business architectures: High Margin, Low Volume (complex corporate systems), or Low Margin, High Volume (volume-centric operations). Even large highly capable corporations are incapable of executing both models at the same time.

Value Driven Pivot

This is the innate ability to monetize the product/service to generate ongoing revenue. Adjustments to the way a small business enterprise captures and creates value can have a tremendous impact on the business, its products/services, and its overall ability to market its products/services. Business statistics validate the fact that the “FREE” model neither captures or delivers any value whatsoever. The landscape is littered with the skeletal remains of non-value driven business concepts.

Driver Of Growth Pivot

As we have educated and trained hundreds of start-ups, more than ever of late they use one of three particular growth concepts: viral, sticky and paid exponential growth models. Choosing the right model makes all the difference in the world as to whether or not you are successful, and most importantly the pace and profitability of your growth.

Distribution or Sales Channel Pivot

Using sales terminology, the mechanics by which a company delivers its products/services to customers is called the distribution and/or sales channel. Channel pivots require unique skill-sets and resources in pricing, feature, and competitive positioning adjustments.

Augment SWOT With SOT

For Entrepreneurs and Founders, Smith Gruppe proposes that you should augment the age-old SWOT (Strengths Weaknesses Opportunities Threats) with SOT (Strengths Opportunities Trends) model.

We’ve observed for decades how start-ups eventually fall behind and lose ground because they are blinded by their current reality. In other words they fall prey to constantly looking inward at their company and industry challenges, or what we call “inside/industry myopia,” which stunts growth and causes paralysis.

Entrepreneurs and Founders should look at major trends, such as changes in technology, distribution, product/service innovation, forward and backward integrated links in the value chain, consumer and social behavior within customer segments, and economic developments.

You need to look beyond the competitor across the street to a company on the other side of the world that might put you out of business, or disrupt the industry and cause a major shake-up. Ask yourself if there is anyone on the scene that may change how everyone in the industry does business?

We encourage our clients on a quarterly basis to identify and list the four to six trends that could shake up their industry and put them out of business? From there identify the handful of strengths (core competencies) that they possess and align them with an industry trend that would lead to a “blue ocean” opportunity for themselves. An opportunity where they change the rules of the game to their extreme competitive advantage.

If  you have any questions or need guidance in designing and implementing a “Pivot”, please call us at 980-221-9377 or Click Here to go to “Our Services” page to find more helpful information.

Small Business Drivers Of Value

As I educate and train small businesses across the land in various and sundry places, trade associations and higher education; I am often asked the million dollar question by most entrepreneurs “How does one create and sustain value as a small business?” Moreover, “Where and how does one intelligently invest time, energy in efforts in creating a Unique Value Proposition?”

The answer is actually quite simple and not overly complicated. Hopefully one has conducted a thorough market and competitive analysis at the concept and/or ideation phase of considering the undertaking of launching a business case.

A solution to a problem, or the ability to address a need should have been identified. In the process of identifying your customer and market segment, one should have also conducted enough research to have identified that market as a growth market or “Blue Ocean” opportunity. Doesn’t make a lot of sense to enter a market segment as a “New Entrant” in an eroding market; you are out of business before even getting started.

Revenue Growth

As noted in the infographic, as a new business case 60% of the focus of your time, energy and resources will be spent on generating revenue. Identifying with your “Buyer Persona’s”, and moving with them through the Buyers Journey. Whether that be educating them in the “Awareness Stage” of the Buyers Journey, nurturing them through the “Consideration Stage”, or positioning your product or service when your client/customer is at the “Decision Stage”.

Either way, you must be capable of delivering a differentiated value proposition in order to create and sustain “revenue” for your business. Ongoing and consistent “Cash Flow” that flows to the Top Line or Bottom Line in the form of “Profit” is what the game is all about.

This is your primary focus and where you will spend the majority of your time from Start-Up through Year 2.

Cost Reduction

At the end of year when you sit down with your “Trusted Business Advisor’s” as you should, you now begin to be properly educated and trained on raising your level of “Financial Intelligence”. This is where an additional 20% of your time, energy and efforts will be spent.

Your ability to take in and interpret the data/numbers on your Cash Flow Statement, Income Statement, and Balance Sheet is vitally important and a competency you should be developing.

The behavior of a company’s costs and its cost position are a result of the activities  company performs in competing in its market segment. In a meaningful cost analysis, you will learn to identify costs within the day-to-day business activities and not the costs of your company overall. Each value activity has its own costs associated to it, and once you learn how to reduce those costs; you ultimately increase your revenue streams and hopefully your profitability.

It’s all right in front of you in your financials!

Other – Strategy

Now that you are feeling pretty good about yourself and the fact that the business is actually making money and has established itself as a recognized brand in the marketplace – the real fun and hard work begins!

The legendary football coach Vince Lombardi started training camp every year of their dynasty with the same opening statement to his players, “All the hard work and everything that you have done up until this point to get you here as World Champions, will not be enough to keep you here as World Champions. You are going to have to get tougher, smarter and better than you have ever been before if you want to stay here as World Champions”!

The same is true for the great game of business.

You must now spend at least 20% of your time on “Strategy”. How to grow and increase your “Intellectual Property” advantages. What “Technology Enhancements” will make you better and more efficient in delivering your value proposition.

Securing the necessary coaching, mentoring and business/industry education and training to become a true entrepreneur; one who works on his/her business, not in his/her business.

Sustainability Over Survival

This is by no means a comprehensive or exhaustive end-all be-all solution. Launching and standing up a business in today’s global economy is an intimidating and daunting task.

It takes courage, tenacity and an enduring amount of faith to realize a “Vision”; however it can be done by following these few simple steps to “Sustainability Over Survival”.

At Smith Gruppe, we assist our clients in developing a “Sustainability Over Survival” mindset. Our clients not only survive, they “thrive” as a result of our comprehensive Trusted Advisor resources. Call us today for a FREE Consultation at 980-221-9377 or visit us at www. SmithGruppe.com and click on the “Our Services” tab.


Listen To Your Customer… And Increase Your Revenue!

Business owners often remind themselves that the primary reason that they are in business is to sell their products and services, but that is really just one piece of the overall puzzle in the grand scheme of things. It is a crucial mistake to forget that these four simple imperatives keep you in business:

  1. Getting more customers to buy from you.
  2. Getting them to buy more frequently.
  3. Getting them to spend more with you in each customer engagement with your business.
  4. Getting them to recommend you to your friends in a B2C environment, and colleagues and associates in a B2B environment.

So why, then, do most businesses concentrate all of their efforts on a SINGLE experience and/or transaction?

What if, instead of ending with a single purchase action by a converted customer, you began with the following actions and, in doing so, focused on 3 primary goals:

  1. Building solid, ongoing, and authentic relationships with your customers.
  2. Transforming customers/clients from a singular transaction into returning clients, and ultimately stark raving fans and advocates.
  3. Leveraging the unstoppable power of direct referrals, recommendations, and word-of-mouth for outreach to other potential customers through social networking. (Remember Know Me-Like Me- Trust Me, Buy From Me!) Referrals, recommendations, and word-of-mouth gives your business and established degree of trust.

What if, by following these rules, you were able to increase  your Top Line Growth by 25%-40%? Basically tapping into an existing resource (current customers), and creating a platform for future growth from your existing customer base.

Don’t Forget The 80/20 Rule

20 percent of your customers, likely produces anywhere in the range of 80 percent of your revenue.

Do you know where the majority percentage of your sales are coming from: new or returning customers?

Identify what percentage of your company’s sales come from first-time customers, and what percentage comes from existing customers who make repeat clients/customers, upgrade to  higher levels of spending, or refer other clients/customers to your business?

Once you have identified your higher percentages, and where the majority of  your sales are coming from; compare and contrast the total amount of money and time you spend on acquiring customers versus maintaining, nurturing and retaining your existing client/customers. You are likely to notice a huge imbalance between the two analyses.

It’s not just that you are likely spending the most amount of money and mis-allocating of resources on the customers that return the least value. What adds insult to injury is that, in doing so, you alienate your business from its most loyal buyers. How do the clients/customers that enjoy your product or service interpret the message that you send when offering new clients/customers extreme discounts and promotions? — They are likely feeling disenfranchised at the least when you are still charging them full price without any bonuses, but yet you offer bonuses and promotions to clients/customers who have never bought from you before.

Time To Stop Losing Customers

Let’s be clear: Losing a single customer is unacceptable. Ever. You need to obsess with customer retention.

  • No cable customer should ever have to switch from one provider to another.
  • No person should ever have to decide whether or not they need to try a new tooth paste.
  • No human being should ever have to switch from Sprint to Verizon – Can You Hear Me Now?

Yet, it happens every day. All too many businesses give their customer base too many reasons to consider an alternative to what they offer. They make it easy in the five following ways:

  1. Pure Neglect – Lack of caring.
  2. Horrible Customer Service.
  3. Losing Touch with their customers. (Not updating their Buyer Persona’s as market demand requires)
  4. Not using the customer feedback loop to improve the product/service or the buying experience. [EMPHASIS THROUGHOUT]NOT LISTENING!
  5. Lack of Innovation.

The Key To Success

Start with “Retention”, rather than as an ending point.

By increasing your ability to maintain and retain clients/customers, you invariably increase your competence in knowing how to retain clients/customers.

This will allow you to decrease your attrition rates, and turn your passive approach into a proactive and actionable approach ; and further allow you to be intentional and strategic in your imperative of growing Top Line Growth.

Lastly, it will allow you to break your addiction to client acquisition as a growth strategy!

Call us Today – 980-221-9377 if you need help! 

4 Reasons Why The SBA Will Turn Down Your Loan Request

Commercial mortgages backed by the Small Business Administration (SBA) are an attractive option for business owners because of their low rates and business-friendly terms.  And the banks and agency sponsors who offer SBA loans like them as well – mainly because the U.S. government guarantees up to 80% of each loan.

The problem is that the majority of small business owners are not able to qualify for SBA loans.  Most commercial loan officers who have sought this option for their small-balance clients know this.  But they may not know about the alternative to bank and SBA solutions that Smith Gruppe offers in today’s competitive market.

The SBA reports that around half of the 28 million small businesses in America are operated outside the home.  If you consider the fact that a sizable number of business owners are not able to qualify for SBA loans, the need for alternative to bank commercial finance solutions becomes clear.  Smith Gruppe is the #1 provider of alternative to bank financing for small business owners who have shown a pressing need for mortgage financing.

Here are the “4 Reasons” why small business owners fail to qualify for SBA loans, followed by fallout alternatives you can present to your clients.

Common Reasons For SBA Loan Rejection

Business owners must meet certain requirements to qualify for the SBA Certified Development Company (CDC)/504 or 7(a) programs, which are the real estate options offered.  Unfortunately, many borrowers fall short for the following reasons:

  1. Borrower/Business Make-Up

The structure of a business can render it ineligible for an SBA loan.  A few of the most common disqualifying factors include:

  • The applicant is not determined to be a small business
    • Avg. net income after taxes over the last 2 years must be less than $5 million
    • Tangible net worth needs to be $15 million or less
  • The business owners don’t have enough equity in their business
    • For a new business, the borrower should have approximately $1 of cash or business assets for each $3 of the loan
    • For an established business, the post-loan business balance sheet should show no more than $4 of total debt for each dollar of net worth (this may vary by industry)
  • The borrower has been in business less than a year and has no industry experience
  1. Ineligible Use For Funds

Business owners often wish to refinance their commercial property in order to consolidate debt.  Unfortunately, the CDC/504 Program lists that as an ineligible use of funds. SBA programs also prohibit borrowers from using the loan to repay delinquent IRS withholding taxes, sales taxes, or similar funds.

We offer 100% “Un-Restricted” Cash Out up to the full LTV of the loan. For example, if you qualify for an 80% LTV, you can get up to the full 80% with no restrictions and can use the excess cash beyond the property value for whatever you choose.

  1. Lack Of Documentation – Fair Credit

Many entrepreneurs and self-employed individuals have difficulty producing tax returns that accurately illustrate the success of their business.  Those who fall into this category face significant challenges when applying for an SBA loan.

You qualify for our loans with a minimum 640 Credit Score! – Poor or slow credit and anything less than a 720 credit score without a credible net worth will disqualify you for an SBA Loan.

  1. Ineligible Real Estate

A prospective borrower will fail to qualify for an SBA loan if the real estate in question is either an investor property or an owner-occupied property of which they occupy less than 51%.

We offer investor and/or Non Owner Occupied commercial real estate financing as well.

It is also worth mentioning that some borrowers who actually do qualify for an SBA program eventually back away from the deal when they learn about some of the associated fees, such as the loan guaranty fee of 3 to 3.5% of the SBA loan portion.

SBA Fallout Solutions

Borrowers who fail to qualify for SBA loans may not know that other options exist.  Here are 2 alternative to bank solutions you can use to secure the capital you need.

  1. Short-Term Bridge Financing

If you have a pressing need for financing, a short-term solution may be the best option to ensure you get the funding you need right now. Then you can work to address the reason for their denial and, if possible, correct it in time for another refinance down the road.

For instance, you may not be able to secure an SBA loan because of the business’ projected cash-flow. If you are confident that you can improve earnings within the next year, it could be a smart move to take out a bridge loan for the time being and try for the SBA loan again in a year’s time.

Since this type of loan is really just a stop-gap measure, it would be wise to consider the option as part of a larger plan for your finances. Then the you will be more likely to get approved when the need for a longer-term solution arises.

  1. Non-Bank Alternative Programs

Not all business owners who fail to qualify for an SBA loan are willing to settle for a hard money solution. We provide you with options that either closely mirror SBA programs or represent an equivalent value.

Those types of programs are less common, but they do exist. Here are 3 solutions Smith Gruppe offers to business owners looking for an SBA alternative:

  • Complete Program

Borrowers who require flexibility beyond what an SBA lender can offer may be a better fit for a standard non-bank solution, such as Smith Gruppe’s Complete Program. Many of the SBA restrictions on the use of loan proceeds and general borrower/business makeup are lifted, allowing a wider range of business owners to secure the funding they need.

Our Complete Program does feature higher interest rates than a typical SBA solution typically between 6% – 9%, but the increased flexibility and expedited transaction process are a reasonable trade-off for many business owners.

  • Stated Owner-Occupied Program

This stated income program is a smart alternative for borrowers who struggle to provide the documentation necessary to secure an SBA loan.

The Stated Owner-Occupied Program utilizes a proprietary algorithm that enables Smith Gruppe to pull data from various sources, meaning borrowers can get approved without having to provide business financial statements or personal/business tax returns. In fact, the only documents needed at the beginning of a transaction are a loan application and credit report.

You may be familiar with stated income alternatives, but they likely associate any such program with unfavorable terms and high interest rates. Our stated income program gives business owners the opportunity to secure a fully-amortizing, long-term 5-7 Year Loan with industry standard 25-30 Year Amortization Schedules at a competitive interest rate – much like an SBA loan.

  • Bank Statement Program

The Smith Gruppe Bank Statement Program is an innovative solution for credit-worthy borrowers who would rather use bank statements instead of tax returns to prove their income.

To determine whether you are able to repay a loan, our expert underwriters review 12 consecutive months of bank statements for the business’ operations to determine gross revenue.  We then apply an industry standard expense factor to determine the net cash flow available to cover the business, personal, and subject property debt obligations and debt service coverage.  It’s a simple way for successful business owners to qualify for commercial mortgage financing.

With some digging, you may be able to discover other non-bank lenders that offer additional SBA turn-down solutions.  Armed with these alternative options, we help underserved groups of business owners secure the funding they need.



The CDC/504 and 7(a) programs are fine solutions for eligible small business owners.  However, it’s important to remember that alternative to bank solutions do exist for those who fail to qualify for an SBA loan.  If you have are an investor or owner-occupied commercial business or real estate owner that needs financing, feel free to reach out to us today.  You can also get free information and pricing for your scenario by “Clicking Here”.