The new year offers the ideal time for rebirth, a new start enabling business owners to start the year with a clear focus, drive and direction. Some guidance below on what you can be doing now to help make 2018 successful.
Invest time now in understanding
It's vital that management and staff understand their business. Useful business information is essential. You and your team need to understand in detail what is going on within the business. For the small business owner, many just check the cash that's in the bank and don’t look at the full picture, how the business has performed and key information.
Keep it simple and collate the information that is needed which helps understanding and decision making. It doesn't have to be too detailed, better to have information that is used within the business then masses of data that is ignored. Getting a handle on business information ready for next year will reap dividends.
Be happy to say no to business
Understand which segments/products/clients generate the most - and least - sales and profit, you want to attract more of the best ones. Business owners can feel a need to say YES to all business, don’t be afraid to choose to phase out or stop trading with the bottom clients. Almost every company has at least a few problematic, time-consuming clients, revenue may be low and dealing with them burdensome. When you consider the time cost and resources, are they even profitable? Will they help your business grow in the way you want?
Many businesses I have worked with when we look at “real profitability” the results can be surprising. For example, one training service provider when considering the time spent on clients had about 15 members of staff servicing one account. Admittedly it was the most significant account in revenue terms, but other accounts were far more profitable. It changed the director’s perception and the way they thought about their business, huge clients sound good on the corporate profile but don’t necessarily deliver the best returns.
What do you want?
For the business owner, it is essential to understand your perspective what you want, as well to understand what you want the business to achieve. Not everyone wants to grow a business to be the size of Google! There is nothing wrong with wanting a “lifestyle” business or running a family business which can support more family members. Being clear about what you want will help this become a reality.
Set out what you want to achieve next year (including a budget), and what needs to be done. This doesn’t have to be complicated - keep it simple, a single page could do. Use this as a way of clarifying what you want to achieve next year, how you are going to do so and will enable you to hold yourself and the business accountable. Check back each month against this and see if you’re on track.
As part of the plan, consider if you have the funds to afford what you want to do. Cash will always be king. If you need to buy new equipment, hire new staff or open a new office, these all take cash. By thinking ahead and careful planning you can look to find creative ways to plug the gap, and the more time you have, the easier this will be.
Business owners are always busy. In most business, they are the hardest working - it’s their business and the buck stops with them. As a business owner is this why you decided to set up your own business in the first place? Probably not. Understanding and managing your team is essential.
In almost every business I meet, owners plug the gaps for the weaknesses in their team. They usually do so by working longer and harder. One client - an engineering business - hired a highly paid contract manager, which the owner failed to use correctly, “as he liked to be too involved and do things his way”. So, naturally, he ended up working seven days a week to keep on top of things. By training and delegating more, he could have freed himself up.
Another business - an ironmonger, take great pride in delivering a premium product, making sure the finish was impeccable. So much so that the Director was too involved in the product level which included checking deliveries. He was doing work that the production team should have done! Business development and key / new trade clients are what he wants to do to grow his business but he was too involved in operations to be able to do so.
Business owners and management should remember their time costs money, and it’s a finite resource. They should consider doing the services, which inevitably deliver the best return per hour, the biggest bang for their buck. For example, if you value your time at £200, £400, £500, £1000 per day etc. How would this affect what you chose to do? In our last example would we want to pay someone £1,000 per day to help with deliveries? It’s safe to say no.
A new year and a new drive do not mean more work. Aim for less by doing only work you should. Focus on getting a clear direction for the business and communicate this to staff. Get the right team in place with clear roles, responsibilities and training and everyone should be focused on achieving the same results.
I hope that it is clear by working smartly and with a defined strategy you should be able to achieve more next year without having to put more in.
Remember "Be the Conductor of the orchestra". If the conductor tried to play all the instruments, it would soon fall apart.