When faced with a new year, a business owner should assess where things stand and how they could be improved going forward, says the ICAEW’s head of enterprise, Clive Lewis
With 2014 around the corner, it is a chance to review and decide what we want to achieve in the year ahead. This also applies to businesses. An SME owner is dependent on the company’s health. When you’re running a business day-to-day, it’s so easy to get overwhelmed and frantically busy. Every now and then, it’s great to find the time to step back and recap – and the new year provides that opportunity. It’s a chance to go back to basics and remind yourself what being in business is really all about.
Essentially, there are five key areas to any healthy business. We call these your ‘permanent priorities’ – i.e. areas you need to keep tabs on all the time.
First and foremost are your customers. Your focus always needs to be on winning and keeping customers, continually improving your understanding of them and the competitive environment in which you’re operating. The new year could be the time to refine your marketing plans and take advantage of new opportunities, all the while not forgetting to promote your business and your products.
Second is cashflow. This, of course, is the balance of all money flowing in and out of your business, with the main inflow generally coming from sales. Our advice would be to look ahead for peaks and troughs. The more warning there is, the more time you have to deal with them. You must know when to focus completely on sales and get your invoices paid. Planning ahead will make it much easier to line up any further funding you may need.
Then there are employees. They are a critical component of any business machine. You need to make sure everyone in your team is performing well and overcoming any problems. A good starting point is recruiting the right people. You must also lead and motivate staff whilst monitoring performance by holding regular reviews. Failure to discuss and resolve any problems and frustrations means you run the risk of people leaving.
Selling skills are also critical. If you don’t subscribe to the hard-sell ABC mantra that you should ‘always be closing’, you should at least be aware that as you are the representative of your business, you are always being evaluated and judged. Therefore, it pays to make sure you establish the right attitude, training and approach, and constantly develop selling skills above all else.
The final thing to remember is costs. You need to control your costs carefully. Apart from anything else, this is often the easiest way to improve short-term profitability and the cash that you need flowing back into sustaining your business.
If you understand all of the above, then you’re well on your way to a winning formula.
For more info visit: businessadviceserviceblog.com/reports/key-issues-running-business/