Today’s guest post is written by Lindy Asimus, Personal Business Coach of Design Business Engineering. Lindy works with business owners to review, and improve systems and profitability, communications within the business, and overall best outcomes for the business owner. She is also the owner of www.gethelp.com.au and you can follow Lindy on Twitter or read her blog ActionBites.
Recently I’ve been asked several times “What should businesses owners do to survive the recession?” I’ve thought about it quite a bit before attempting to write this. Every way I look at it I come up with the same answer:
“Do what you should do when there is no recession.”
This is not a glib answer and it is at the heart of the coaching that I do with Clients who need a better way of handling their business than they’ve managed until now.
Recently I started work with the owner of a small business who has been making a nice living, but not marketing to generate much business, and in many ways just coasting along on what business came looking for him. His office was a mess. His financial records were okay and handled reasonably well up to a point, but the rest of his documentation in a less than desirable state.
This was a great place to start, and so we did. Getting rid of the clutter, and getting the essential elements of the business organised is a great way to get on top of your business and begin to run your business, instead of it running you.
Clutter doesn’t just live on the desk. It invades your mind and is as an invisible weight on your shoulders. You don’t need that.
Have A System For All That You Do
A system for the purpose of:
– Handling inbound enquiries
– A template for calculating a quotation for work to be done
– Writing the quotation – what else needs to go with the quote?
– Following up after the quote is sent
– Filing the quote
– Ongoing process for following up until the customer accepts the quote, or declines
– What happens when the quote is accepted
– What happens when the quote is declined
– Process for responding to declined quotations (There is often another opportunity in the future)
– A marketing database and managing that is crucial. Maintain records of customers and for prospective customers
– Analyse the cost to provide your service
– Analyse the amount you charge for your service. If you are working for less than it costs you – STOP it
– If you don’t know the numbers in your business – LEARN them
Know Who Does What
In businesses where there are employees, and even where there are not, it is essential to be able to illustrate all the roles that need to be carried out in a business, and identify all the tasks that go to make up that role.
Who does them at this point is irrelevant. Know what needs to be done, and which role that task attaches, and only after that, assign it to the person who will be accountable. If it is a one-person business, that will be you for all the roles! When you do this, you quickly see where there are elements not being done that should be, and roles that are not your strength and would more properly be done by someone whose skills they are.
There is no faster way to burn money than by not spending money on the critical areas of the business that need to be done, even when you can’t do them. “Not doing” those things that are essential and basic functions of the business is poor management and quite false economy. It will cost you business and prevent you from realising the profit in the business that could be captured.
Have a system for managing and monitoring performance of all people in the business – including yours!
Whether you like it or not, your business needs things that you may not think are necessary. The business may need things that you don’t want. The first thing to realise, and this is not always a popular idea, is that the business is not you.
“The money in the business is not your money.”
Understanding this separateness is a bit like when a baby learns to distinguish itself from mother.
The business has a need to run efficiently and effectively with sufficient resources available to do so. As the business owner, you need to be compensated for your efforts. Pay yourself a wage! Work on a plan to get the money back out of the business that it owes you. A healthy well-run business will build into a valuable asset. Don’t get in the way and prevent the business from becoming an attractive and saleable asset for you.
What Does Your Business Need?
It needs a business plan. It needs a real business plan, not a made up document of fantasy for presenting to the bank because you want to borrow money. The business plan does not have to be a huge document and it should say everything about how you will drive the business and nothing about things that you don’t intend to do. It is the blueprint for your future and the success you want to achieve going forward. It is a dynamic document and will adapt as circumstances or opportunities change.
It needs policies and procedures documented. So anyone can step into a role and know exactly what they need to do, and how they should do it. It allows employees to know “What To Do If…” and “What To Do When…”
It needs a system to recruit good people into a well-run business they will be proud to work in, and good management in place that manages the performance of staff, and encourages their best efforts and provides the training and resources for staff to perform their duties to the best of their ability.
It needs a system to manage all things relating to interaction with customers from marketing, through sales, and fulfilment and possibly even delivery of goods bought.
It needs good management of the financial numbers in the business. Best prices obtained on orders bought, and good attention paid to margins and mark-ups and the close attention to the breakeven point of the business. Selling items at sustainable prices and delivering the right products for the market that you serve.
It needs you to be a great manager and a leader. Not a passenger, or worse still, a parasite. And plan for what you want the business to be in 5 years time. Know your exit strategy now. Long before you need or want to leave.
Take control of your business, and create your vision.
Lindy Asimus
lindyasimus@gmail.com
