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Posted on by Mike

“Taking Care of Business”: Two Lists Small Business Owners Can Use Now

TCB01Too frequently the small business owner moves from one short-term focus to the next paying little attention to the mid or long term goals and strategies that are real “force multipliers” to increase sales, lower risk, retain the best employees and maximize profit.

If “taking care of business” consists of a weekly or monthly check of your receipts to see that more came in then was paid-out, then hear the oft quoted refrain, “Houston, we have a problem.” While cash flow management is critical, it is simply not enough. Measuring success by cash flow alone is living hand to mouth. It’s paramount to saying, “All is well. We haven’t crashed yet!”

To help you “Think in Advance” I have created two lists that will help you “Take Care of Business.” One list is minimal and the other is closer to “Best Practice.”

List 1: The Bare Minimum

TCB02Step back and ask, “What are the minimum “taking care of business” activities you should be engaged in?

  1. Do you have a budget? This will force you to do some tactical planning for the future.
  2. Do you have a current and forecasted sales plan? This will force you to manage where revenue should come from.
  3. Do I regularly measure my company’s actual performance against my budget plan? This will force you to confront reality in time to take corrective action.
  4. Are you complying with mandatory laws and regulations? This will insure you are lawful and can pass regulatory audits.
  5. Are you paying yourself a fair wage? This will force you to measure if your business is worth the effort, risk and frankly the aggravation. 

List 2: For Best Practice For Best Results

TCB03Once you’ve met the minimum, “Think in Advance” about maximizing your results by asking, “What are the best practices for my small business?” The following questions will help:

 

  1. Is my marketing all it can be? This will force you to NOT LEAVE MONEY ON THE TABLE. It should answer questions, like:
    1. Am I selling the right things to the right audience?
    2. Is there a niche I am missing or can I do better?
    3. Can I monetize my value offer to my prospects (What’s it worth to them?)
    4. Do I have a feedback tools to objectively hear what my paid customers think of my product or service?
    5. How well am I keeping the promise of my brand?
    6. What do my competitors offer and how am I different?
    7. How effective is my marketing spend to get known trusted and liked?
    8. Is “cause” marketing for me?
  2. Am I enforcing a “sales process improvement” strategy? Take the test.
    1. How effective is my rate of conversion from marketing to closed sales?
    2. Do I have a disciplined sales process?
    3. Do I formally manage my sales pipeline manually (like in Excel) or automatically (using some CRM tool)?
    4. Have I formalized a referral and/or loyalty program?
    5. Have I assessed the order to cash cycle to determine its customer effectiveness?
    6. How effective is my after sales customer care? Is it generating “raving fans?”
  3. Have I optimized my procurement strategy? These questions challenge what you’re getting for what you are paying. Better procurement results help your competiveness and increase profit margins.
    1. When’s the last time that I compared my supplier pricing with the supplier’s competitors or assessed their level of service?
    2. Am I jeopardizing quality by choosing the lowest cost purchases?
    3. Have I asked my vendors to recommend me? Remember, you are their customer and when you win, they win.
    4. Is their any chance to purchase through bartering?
    5. Am I missing opportunities to seize volume discounts or negotiate longer terms of payment?
  4. Is my business operation optimized? That is, when I pull it all together are my people, machines and space as efficient as they should be?
    1. Am I hiring the right help?
    2. Do I have a competitive pay scale?
    3. Am I managing employees to defined job position roles and responsibilities or simply tolerating a “friend” or relative?
    4. Am I getting credits from my employees for work benefits that I provide in addition to their pay-checks?
    5. Do I have an employee handbook that clearly states my company’s core values, expectations and work rules?
    6. Have I analyzed the capacity and measured the utilization of my people, machines and floor space?
    7. Do I feedback capacity under-utilization information back to improve marketing or reinvigorate sales efforts?
  5. Am I treating, myself, the owner, fairly?
    1. Do I have an objective measure of what fair compensation is for myself? Or do I simply take random draws or whatever is “left over?”
    2. How am I planning for the proverbial “rainy day?”
    3. Is the company paying for my healthcare insurance?
    4. Do I have any kind of retirement plan?
    5. Do I have or need disability insurance?
    6. Does my business generate enough and regular cash surplus income to establish a company pension?
    7. Am I accurately recording all of my business expenses?
    8. Will I be meeting with my accountant during the 4th quarter of ny fiscal year to decide effective tax planning?
    9. Do I have a financial planner or wealth manager to professionally manage my combined personal and business assets and risks?

Don’t Just Know It, Believe It and Do It

TCB04

I encourage you to strive to achieve “Best Practice” (2nd list). You will be glad you did. Don’t forget to email or call if I can help you further.

 

 

 

 




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