* by Kathi Clarke
To build a successful business you need to get a few fundamentals in place from the start…
Destination: Where do you want to go?
During the early stages of a business, many owners are so caught up in the day-to-day running of their venture that many critical questions are not consciously or sufficiently articulated. Goals around where you are going, why, and to what end, are forgotten, and the focus, economy of motion and direction that these answers provide are lost. Stephen Covey (author of the internationally acclaimed 7 Habits series) encourages business builders to “start with the end in mind” and our tests and measures bear this idea out. By articulating what you want the business to look like in the end, what dreams this business will fund, and why you’ve chosen it as the vehicle to reach these dreams, will open you up to the opportunities around you. These may be people, information or coincidences that you would otherwise not have registered.
Knowing where you are going will also help you to push through when challenges and obstacles threaten to overwhelm you. Lastly, a long-term view provides a point of reference that will make prioritising day-to-day choices and actions easier to do.
Money: Do you know what is going on?
There is an old saying that “money makes the world go round” and when it comes to business this is so true. For entrepreneurs who start their own businesses because they are good at making or doing something, all the following points are important; capitalising right, learning how to turn on a sale when it’s needed, collecting money well, making the right decisions based on financial facts and setting up the team to sell well. All these require a financial fluency that they either don’t have or want to have. And as creatures of habit, we tend to stick to what we know. In business, this usually means focusing our efforts on the tasks we are good at and pushing aside that which doesn’t come easily.
In a small business environment, it’s crucial that business owners have sufficient financial savvy to get, understand and use key metrics from their income statement, balance sheet and cash flow reports monthly. The brutal truth is that you can have a profitable business and no money in the bank, or a healthy cash flow but a return on investment that means you’d be better off just leaving your money in the bank.
This may see you put your foot down on the marketing accelerator to grow your business, only to find that you are unable to fund the process. You can invest in great marketing that doesn’t sell. You can invest time and effort in finding customers who are actually unprofitable. Good and consistent financial information will help you to avoid making money errors like these. It will set you up to cost properly, budget properly (for both expenses and profit), control the cash gap properly, invest properly, plan properly and grow properly. It will help you to weather the unanticipated costs for things like strike action, owner illness or a vehicle breakdown. Together with your long-term goals it will also help you determine how you will allocate your resources for profitable success.
Time: Are you investing it or spending it?
We’ve all complained that there just aren’t enough hours in the day. But how many hours would we be able to find if we focused on the important tasks first and didn’t procrastinate over the tasks we don’t enjoy? What could we save in lost and wasted time by prioritising tasks according to our plan and focusing on what is both urgent and important in relation to that plan?
The art of delegation is also essential to master – don’t be afraid to pass on work to one of your skilled employees – not only will this free up your time to focus on what can’t be done by anyone else, but their hourly cost to company will definitely be less than yours.
The following will help you with time management:
- Set personally motivating goals for you and for your team to help prioritise tasks.
- Start your day with your most dreaded task – it won’t get less bearable if you put it off for later.
- Never finish off a work day without taking five minutes to list the tasks and priorities for the following day, not only will it give you clear direction for what needs to be done but you’ll also sleep better.
- Start a default diary by blocking out time for important tasks two months from now and don’t let unimportant things get in the way.
- Invest your valuable time on jobs that deliver a clear return on investment (ROI) and delegate or outsource the rest.
- Have agendas with clear objectives for meetings; five minutes before the meeting ends summarise who will do what by when.
- Use technology!
- Be accountable to someone, so when the urge to procrastinate arises, they have your permission to call you on it.
Delivery: Are you consistent?
Customers don’t like inconsistency. Delivering a consistent service is the foundation for healthy growth and word-of-mouth is a powerful tool that can make or break your business. News of a bad customer experience travels much faster than a good experience. So invest in the best staff you can afford, outline clear procedures to ensure that the customer experience is consistent and have stated values in place so that your team and customers know what to expect. Importantly, before you increase sales, orders and turnover, be sure to invest in the extra capacity (whether it is equipment, money, team members, hours, raw materials, space) that delivering this increased throughput will require.
* Kathi Clarke is an Industrial Psychologist, international award winning and certified ActionCOACH Business Coach and a business growth expert. With over 25 years’ experience in growing businesses in five different African countries, she returned to Cape Town in 2010 and has successfully helped more than 50 entrepreneurs to significantly grow their profits, develop entrepreneurial muscle and enjoy the lifestyle which prompted them to start their own business in the first place.