When it comes to running a business, there are numerous issues that need to be looked at. Some of these occur on a daily basis, such as “are we keeping our customers happy by replying to their queries on our products quickly”. Others might be more long term issues, such as:
- Are we making enough sales to achieve our monthly target?
- Have we put a plan in place for the new legislation that begins in six months?
- What do we need to do to raise funding next year?
Keeping on top of issues such of these is important. One person who knows about doing this is John Crawley. As The Finance Expert, he advises public and private sector businesses on how to manage their companies.
In this article, he shares five key issues that small business owners need to focus on.
1. Was the business ever a good idea and does it have a focus?
There is a wonderful quotation: “If you don’t know where you are going then any road will get you there.”
Business owners need to reassess the reason for their business. Is the original idea still good and if necessary has it adapted to the opportunities it now wishes to explore?
2. Do the business owners have what it takes to continue?
Having an energised team to lead the business forward is essential. A tough recession will have tired even the hardiest.
Before taking on the opportunities ahead, take time out to decide on the right team. It might be the case that a good rest (a mini break) is all that is required.
On the other hand, there is nothing wrong with standing back and letting others take the reins. Those others may be new young blood or some “grey haired” experience.
3. How is the business going to be financed in the future?
I like to use a breakfast analogy to describe how to get the business funding mix right.
A chicken makes a contribution in the form of an egg to a breakfast plate and moves on. A pig makes a considerable sacrifice by providing a rasher and is very committed to a breakfast plate.
Chicken financiers are those that lend money to the business. They take a fixed return and usually move on when they get their money back. Pig investors usually provide equity to the business. They are around for the long haul.
As a business owner you need to figure out the right mix of chickens and pigs you need around you.
4. What is the best way of measuring the business as it continues?
Accountants, and I am one, have a lot to answer for designing accounts that are, in far too many cases, utterly useless. Measuring performance is about identifying the key indicators that tell you whether you are on track.
Business owners need measurement information that shows trends, directions, comparisons and risk prioritisation.
Less is more when it comes to good information. Colourful and simple visual presentation is much more effective than reams of mind-numbing figures.
Ask your accountant to give you weekly information without using numbers. Only allow him or her use traffic light symbols, arrows, happy and sad faces.
5. What does “good” look like?
A simple but effective tip is to create an image of what you think “good” looks like for your business. It will keep you motivated and focused on achieving and maintaining it.
Usually “good” will have four strands (a bit like a four leaf clover):
- Good idea and direction – confidence that you are doing the right thing and going in the right direction
- Good people – being satisfied that you have the right team
- Good finance – having an appropriate mix of chickens and pigs
- Good luck – you can make your own luck especially if you measure well and spot early trends. If you operate with the Irish, you also have a good luck charm.
As we say in Ireland “go n’éirí an bóthar leat”, which translates as “may the road rise to meet you”.
Recommended Next Read
Budget 2024: What the announcements mean for your business
Subscribe to the Sage Advice newsletter
Join 1.5 million subscribers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.