Written by: David Bay, The Business Plan Company
It is useful to step away from your business and examine every opportunity for improvement. Safeguarding your business is an ongoing process and it is important to have procedures in place to ensure sustainable, better-quality growth and to safeguard its intellectual assets.
Here are 7 tips to consider:
1. Consider engaging a Business Coach
Often in small business, owners do everything from sweeping the floor, to meeting the bankers and planning the next marketing campaign. It is normal, but equally as often this could be holding the business back. The reasons for this are many but consider this; if you spent $3,000 per month to engage a business coach, which in time increased your revenue by $10,000 per month, would that be a good deal? You may be thinking “but no one knows my business like I do”. That in itself is an issue, see point 2.
But, back to the coach. Imagine having someone work side by side with you who can challenge your ideas. That someone needs to be experienced in business, but not necessarily your business as they can bring fresh ideas, thoughts and possibilities and will not be blinkered like small business owners often can be, simply because they are busy. In this highly competitive business environment, innovation and rapid change are necessary to even stand still, let alone grow. The advantages of an independent, creative mind doing some strategic planning for you and your businesses are immense. Choosing the right coach for your business is important, it might help to keep these points in mind when going through the process:
- Find someone who has actually been in business.
- Find someone you can work with, like and trust as they are going to be all over your business.
- Make sure they get to know what you think is important and speak in language that makes sense.
- Find someone who seems to understand and show enthusiasm for what you do.
- If you don’t have the ‘how’ your business operates documented, you are placing your business at risk.
2. Organise your procedures
Be proactive and have the ‘how’s’ and ‘why’s’ proceduralised so that if something were to happen to you, the business could continue. This need not be an ordeal, and the advantage of doing it is that you can discover areas for streamlining and improvement. Often businesses follow procedures that are redundant simply because that is the way it’s always been done. Perhaps there are better and quicker ways? You won’t discover these if you don’t look.
3. Safeguard your data
It is virtually certain, unless you are using solid state hard drives in your computer, that your hard disc will fail. Maybe not this year, maybe not next year but fail it will. When it does you run the risk of all your business intelligence (files, data, workbooks, etc) being irretrievably lost. External backups are one step you can take to be able to recover, however moving your data to the cloud is even more secure. Choosing a cloud service is another issue, however the advantages are the continual backup of what is important, so, when the inevitable happens you can be up and running with the least possible loss of time.
4. Be vigilant with your receivables
If you have someone else managing your accounts receivable, that is great, but you need to be checking them and making sure you are getting paid. You may need to talk directly with the slow payers and remind them that you have expenses as well, carrying them is unhealthy for your business. Often it is possible to grant payment plans as getting some cash flowing in from them, improves your cash flow and reduces the opportunity for default. Something every week is much better than nothing ever month.
5. Review your customers
Sometimes, especially if your business has been running for a long time, there is a certain collection of customers who take up a lot of time, and either don’t pay or complain about the bills and drag out payment. You are better off having a cold hard look at where you could offer more services to the better customers and letting the balance go.
6. Monitor your advertising spend
Many times, when businesses are reviewed, the advertising campaigns have not been updated, or worse are not measured in some way. If you don’t measure it, how do you know it is effective? If you don’t try different strategies, how do you know if it could do better? Consider the first point made in this article, and perhaps have an independent review. Advertising agencies are great if you can afford them, however there are plenty of talented individuals who can also help.
7. Consider how to diversify
When times are good, it is normal to focus on growth, but remember it is profits not revenue that are required. All too often business owners focus on a narrow range of products. In our rapidly changing world, business owners need to be aware of imitations, disruptors and advances that leap incrementally and quickly leaving stragglers behind. Video stores are good examples of this. For the small business owner, the first advantage that will put you in good stead is in offering outstanding service. The second is to diversify so that not all your eggs are in one basket.
David Bay is a Senior Business Planner with the Business Plan Company. He also provides a small range of consulting services through his own business Davolyn Consulting in Perth and is available to work with business owners anywhere in Australia.