The following is a post that was first seen in the Maufacturing and Technology eJournal for the week of December 14, 2012. The post was written by Bill McBean, the author of the book The Facts of Business Life: What Every Successful Business Owner Knows That You Don’t (Wiley, October 2012, ISBN: 978-1-1180949-6-9, $24.95, www.FactsOfBusinessLife.com).
All year long you’ve been in frantic motion. You’ve put out fires. Solved employee snafus and issues. Juggled conflicting priorities. Fielded exhausting back-to-back meetings, telephone calls, and endless emails. Motivated yourself and others. And, kept blocking and tackling month after month by leading and managing your company toward achieving the objectives and goals you set.
In other words, it’s been a typical year in the life of a small business owner, and, suddenly, 2013 is right around the corner. With a little focused thought, the last month of 2012 can also be the most valuable one. There is no better time to tear yourself away from the daily grind long enough to do
some end-of-the-year or early-next-year reflection and forward planning.
Typically, entrepreneurs and small business owners have trouble seeing above the action and the dust it creates. But maintaining a cool and measured perspective on where you are, where you’re headed, and—most importantly—exactly what you need to do to get there is crucial to next year’s
In the new book, The Facts of Business Life, explains how to do this. As the title suggests, the book lays out seven of the most critical facts successful business owners use to their advantage every day. Most importantly, it delve into how those facts play out through the five levels of every business’s
life cycle, from determining whether a business opportunity even exists to moving on when it’s time to go.
Too many owners and their senior staff just get so caught up in the daily whirlwind that they lose sight of the realities of business ownership. When that happens, success may not evaporate overnight, but it will, inevitably, slip away. It doesn’t have to be this way. It pays to step back and reevaluate your market and your company’s place in it by making sure your practices are in line with “the facts.”
Here are eight “must-dos” to tackle before the end of the year:
Hold a 2012 post-mortem. Start by analyzing whether you’ve been an effective leader. Good leadership begins with defining the destination and direction of the company and deciding how the business should look and operate when it arrives. If you haven’t done those things, you aren’t leading, and if you aren’t leading, no one will follow.
Ask yourself: Did your business have a successful year? What did it do well? What could it have done better? Where are the future opportunities that will grow your business? What are the threats to your company’s success, or what is holding your business back? These are serious questions that demand serious answers. And once answered, then it’s up to you to define the leadership skills needed to move your business from where it is today to where you want it to be tomorrow.
The good news is that the most important aspects of leadership can be learned. And, the sooner you start, the better your likelihood of long-term success. But a note of caution: Before you can lead a business forward, you have to define where it is today, evaluate your personal strengths and those of your business, and compare those evaluations to those of your competitors. This self-evaluation is an important part of being a successful leader.
Do a top-to-bottom walk-through of your systems and procedures. Examine what is working and what isn’t. You may find that a system that once worked well no longer does or that your business has fallen into bad habits that hinder success. In particular, look for inconsistencies in how employees handle tasks, especially those that directly impact customers and those who handle the data you use to make decisions about the business. This allows you to catch problems before they develop into crises.
It may not be politically correct to say so, but if you’re not controlling your procedures and processes, you don’t really “own” your business. You’re just a spectator watching others play with your money.
Pinpoint your best customers. Give them a heartfelt end-of-the-year thank you. Insist that protecting your company’s assets is job one. Those assets are not just monetary—far from it. Customers are some of the most important. (After all, without them, no one gets paid.) What’s more, all customers are not created equal. Some are more profitable than others, and they’re not always who you think they are.
Once you’ve identified your VIPs, create ways to enrich the relationship and continually create added value for them. Obviously, saying thank you doesn’t hurt, no matter how often they hear it. No one likes to be taken for granted. A call or letter from you will show them that you don’t. It’s amazing the ROI you’ll get from such a simple action.
Don’t neglect your other big “asset”: employees. If possible, meet with each one ndividually. Even if it’s not a “formal” performance review, a quick end-of-year conversation one-on-one can help you shore up relationships, challenge low performers to do better, and reward and rerecruit your highest performers.
The idea is to show employees that you recognize and appreciate their contributions. A heartfelt thank you, a compliment passed along from a customer, an inquiry into an employee’s goals and aspirations, or a simple handshake and acknowledgment can be incredibly meaningful. A good motto to follow is “Be firm—but fair, and show them you care.”
Review your marketing campaign. Does what you’re doing make sense for you? It takes marketing to bring customers in and it takes marketing to keep them. Ask yourself some specific questions: Are you marketing aggressively enough to attack the market, or are you trying to coast by, letting your competitors stir up the market? Are you targeting the best possible markets and customers?
Meet with your accountant, your attorney, and other key advisors. These specialists almost certainly know things you don’t. Their perspective can be extremely valuable to an entrepreneur who has been chained to his or her desk all year (and, as a result, is out of touch with changes in the external business environment). Planning for a future you can’t predict is part of a business owner’s job, and these advisors can help you gather the information needed to get the “lay of the land” and make smart decisions.
Kick off a cost-cutting, gross-profit-building mission. When tough times and financial
uncertainty loom, it’s always a good idea to have some cash on hand. And, one of the best ways to create cash is to find added gross profit and at the same time cut some expenses. That said, it is suggested you ask yourself: What expensive mistakes did we make last year? How can we avoid them next year? And what can we do to build up the cash cushion that might help us get through any market corrections or uncertainty?
Look for smart, well-thought-out ways to save money and start building up your cash cushion. Think about Ford Motor Company. Years before the 2008/2009 credit crunch, they began to restructure their debt and build up their cash reserves. So when their competitors needed bailouts, they didn’t. That’s what smart planning can do for you. We all have heard “Cash is king” and it is, especially when it’s there when you need it.
Set some realistic goals for next year. Then, dial up the “aggression factor” just a little bit more. In other words, aim high. Don’t be lulled into complacency or let the continued talk of doom and gloom handcuff you. You might be okay now, but that doesn’t mean you will be tomorrow and you have to keep pushing the market. Successful owners know they have to fight not only to win market share but to retain it as well.
This last point is perhaps the heart and soul of this philosophy. To succeed and to stay successful, companies must be “on their game” 24/7. And that warrior mindset begins and ends with the business owner.
Being an owner has its ups and downs, just like most things in life. But it can be an immensely rewarding career, especially if you do a yearly check-up and prepare yourself and your business by building on the success of 2012 and prepare yourself and your business for 2013 and beyond.
To learn more about this post and the book The Facts of Business Life, please contact the LEAN Accountants of McKonly and Asbury, LLP.