Wednesday, May 07, 2014

No Money And No Time In Your Business?




Too little money or too little time? 


What's the problem with your business that stops you doing the things you want to do?

There are so many different facets to running a business that can stymie our attempts to have the business that we most want.  Michael Gerber outlined this well in his book The E-Myth and referred to the entrepreneurial myth that exists - where business owners are often acting more like technicians in their business, than they are operating as entrepreneurs.

Too Little Money In The Business

It's often the case when I speak with business owners about the activities in their business that are not happening or don't have budget allocated to them to enable the business to be more effective, that there is simply "no money" for that activity.

No money is a clear sign that the business is not operating at the level it needs to be to deserve the amount of time and effort going into it.

The conundrum with this is that the business won't be able to operate optimally, when it is starved of the money and resources it needs to carry out all of the functions it need to do to be healthy and productive.

Funding for the essential elements of the business is not an optional or "nice to have" expense. It is part of the cost of doing business, and is as necessary to a healthy business, as good food and good lifestyle choices are.

Let's look at the various activities in a business that are vital.

Production
If you create products or make things to sell, or whatever it is that your business does at an operational level, it needs to be able to provide a consistent quality product and output. That might mean ensuring materials for the production is working right and you have all the materials you need to produce what you make. It will include the right levels of staffing to ensure that you can maintain the levels of production you need and ensure that customer are able to buy what you sell when they need it and when they want it. If your business distributes product that others make then your inventory will be important too - you want to have sufficient stocks to cover you for your sales and for the period between when orders can be delivered to you so that you have stock to sell, but not piles of money invested in stock sitting around not selling.

Administration
Let's include things like purchasing well in this section. Buying well with not only the right amount of stock, but also at the right price and the best deals you can arrange with your suppliers. There is no "one price" when it comes to negotiating terms and you need to be good at getting the best arrangement you can - and monitoring the suppliers to ensure they deliver at the price negotiated and the quantities specified and the terms agreed upon. Trust is not appropriate at this time and you need to make sure that you are getting what you have ordered.

Admin duties around accounts payable, and best times to pay without making payments too soon or too late and gaining a reputation as a poor customer who can't be trusted.  Ensuring that employees in these positions are on top of their game and not skimming money out of the business - yes it happens surprisingly often - is another of the responsibilities of the owner or manager.

Compliance obligations
Employee benefits and pay rates, managing rosters and staff performance are all things that need to be done, and are not optional, for a healthy business. 

Sales performance
Recruiting well - the right people for the right job, training in product and soft skills. These are vital to the business selling the most they can and at the right price. Discounting is often a sign of poor sales skills and poor preparation and training  - or dud products and lack of understanding of what is of value to customers. Independent businesses are unlikely to be able to compete on prices for the same stock as large companies and online stores, so product differentiation and sales experience for customers in store and in your online store is the key to being relevant to customers. While sales and relationship with customers is where the money flows into the business, there is often precious little training being done to optimise that transaction period during the sale, and in the after sale period.

Marketing
Marketing is like the lungs of the business. Just as you breathe without thinking about it so too your marketing should be happening ongoing and all the time - not just when you think about it. Not just when you remember. That wouldn't work for your breathing - and it won't work for your business.

What we call marketing now has changed too. The channels for marketing and activities of marketing are much broader now.  Your website, your online social profiles and your ability to engage with both customers and potential customers is much more community based now and the ability to be seen by friends of those who are customers has never been more available to business. That can work superbly for a business doing right by customers - or brand you as a dud if you are not treating your customers in a good way and providing them with good products at prices that are fair and consistent with the wider marketplace. Think you will overcharge for products that are available anywhere and you are dead in the water. Customers know what things cost, so treat them like intelligent people they are. Social media is another facet of business activity, not a game. It needs to be treated with the same respect and professional training as every other aspect of the business.

Customer Service 
Customers pay the wages. Customers pay all the wages. That doesn't mean they are not a pain in the neck sometimes but that's part of managing the business. Providing a service or products in a way that is easy for customers to get what they want without a lot of hassle. That's your job as the business owner or manager to ensure. If customers are regularly complaining about the same things, then it's time to take notice of the feedback and fix whatever is causing the problem. That doesn't mean you put up with customers treating you badly as there is no reason to accept that as part of the day, but developing the soft skills of your staff and having good customer-friendly policies and protocols will help with that. Customers can't fix the problems in your business, you must.

Training is a basic part of running a successful business

What happens when you have a well trained and competent workforce in your business?

Each of these areas of the business outlined require a high degree of good management within the business. That means ensuring that good policies and procedures are in place that serve a desired purpose for the business. Not just haphazard, not just "we do it this way because that's just how we do it". That's not good managing that is letting the business down and bad for the business.


Good management compounds the advantages to the business. 

The upside of good management. Good staff, well trained with checks and balances in place and with good governance and oversight by a good manager has many rewards.

It means efficiency in the operational matters within the business.
It means high sales conversions and best margins possible are attained.
It means product mix and pricing is right for customers.
It means customers feel welcome to shop with you and feel confident they are being respected and well served.
It means optimised profit for the business.

And the spin off for the owner? As well as all that ... it means that you have time to think. Time to focus on the things that only you can do.

It means that you can get time away from the business. You manage your business instead of the business dictating what you can do with your time. 

It means that you have the pressure off and the time to act as the CEO of your business, and not one of the hired hands.

That's a gain in the health of the business.
And a gain for you in Time and Money. 

And that's a nice place to be.

Related

Online coaching and how to choose a coach that's right for you
Prepare your business now to sell it later for the best price 
Your business plan needs a compelling vision to drive it
Manage your effectiveness as a manager with coaching 
New habits are the foundation to motivation and successful change 



Like to discuss your business?
Lindy Asimus
0403 365 855
Business & Life Coaching
Based in Newcastle NSW, Australia.

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