Business StrategyEssential business advice with former bank manager Keith Farmer, now chief advisor at BFES
Do not stick your head in the sand
When trouble arrives as sure as Monday follows
Sunday then you need to do something about it. Sticking your head in the sand blinds you from what is going on around
you and stops you from taking action.
All businesses will undergo some sort of problem be
it cash flow, falling sales, increased direct costs, local/national economic
factors, personnel etc. These need to be
dealt with before they drag the company down. There is support out there and talking to an
independent adviser can help. Take professional advice and act upon it.
Have enough financial backing
A study showed that most small business start-ups
were:
- Under-capitalised
- Burdened with the wrong mix
of short & long-term deb
- Ignorant of sources of
finance open to them
- Ignorant of the real need
for adequate cash planning & financial control.
How many businesses target sales, pay salespeople
bonuses yet do not pay bonuses to the accounts department to get the money in
from the sales! A sale is not a sale
until you receive the money.
Do not carry excess baggage
You should continually review pricing/ costing and
look at productivity/efficiency. You should consider the following:
- Are you paying more in wages
to produce the same turnover?
- Is stock being turned over
or do you have obsolete stock?
- Are you carrying too many
overheads in comparison to your competitors?
- Are your overheads
increasing as a percentage of your sales?
- Do you monitor sales to see
where they come from and therefore spend your money in the most productive
manner?
Communicate
It is important that you communicate your
ideas/plans to staff in a clear and concise way that they understand. Communicate with customers; listen to what
they are saying. Don’t pay lip service to customer service – do it.
Take your people with you
Respect is earned not a right.
Always remember that we all tend to think differently
about home, our family values, work values and these will figure high on your
employee’s agenda. Our values are not always the same as our
colleagues, and we should not impose our demands on others when this is
reflected on the quality of their lives.
Work on the business, not in it
Imagine creating a prototype business that can be
sold 5000 times. You cannot create a business that can be sold twice
if it is totally dependent upon you.
If you do create this business based upon your skills/knowledge/drive etc. what happens to the business if anything happens to
you?
Create an organisational chart of your business and
put systems into the boxes not people. Then
train & develop people to operate the systems. Continually develop the systems to improve
your competitive edge. Whilst you may
not like Disney & McDonalds they are a good example of how they have
developed and continue to expand.
Draw the line
Before venturing into business or expanding into new
products/services decide how much you are prepared to lose. You should always be in control and the loss
you are prepared to sustain should not be such that it affects your life and
that of your family.
When you reach that
loss you should reflect on why you decided on that amount and what good reasons
there are now for increasing that loss. Continue to seek advice & support as running a
business can be a lonely existence.
Keith provides
training and support with the backing of Banks Accountants at only £30 per
half-day. You can book a place by
contacting Shelly on 01793 616284
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