Women In Business

Four ways to run your business better

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There are dozens of reasons or causes espoused as to why a business is struggling or not meeting expectations – cash flow or lack thereof, the environment, the strength of the currency, lack of sales, banks pulled the lending facility, your main customer’s business failed, cost of product inputs went up etc… However, these are excuses and symptoms of the real reasons businesses struggle – either a lack of business skills in the business, or a lack of attention to applying business skills within the business, or spending the majority of the time working in the business rather than on the business. With that in mind, here are four ways to run your business better.

1. Work on the business rather than in the business

Michael E. Gerber, esteemed author of the best-selling book E-Myth Revisited, nailed it when he said:

‘The assumption is that they understand the business because they understand – and maybe are experts at – the technical work of the business.  They think they know the work, they are qualified to run the business.’

What he means is you may be a technical expert or genius practitioner but you also need to know how to run a business. The good news is that running a business is a skill – and skills can be learned. All you need is some devotion and time.  Running a business is a separate skill and job and therefore requires time and investment to learn and develop these skills to become capable and competent to do the job well. If you’re looking for ways to market your business more successfully, check out 4site-implementation.com — they are great at marketing any company, big or small. It’s just what they do.

2. Planning

Although this is a generalisation, almost all small businesses – and the majority of medium- sized businesses – don’t have a strategic plan, or any plan for that matter.

Some have a financial plan ‘because the bank needed one’. But this has long since been filed in the drawer and never been reviewed.

Plans help you stay organised and help you co-ordinate your efforts but planning is not easy.  Two things to consider though – that the goals of the business are the business’ goals, and no one else cares if they achieve their goals or not, and that not setting a goal or plan is like turning up at the airport without a ticket and not knowing their destination.  The process of planning is far more valuable than the plan itself.  As Dwight D. Eisenhower said: ‘No battle was ever won according to a plan, but no battle was won without one… plans are useless, but planning is indispensable.’

3. Systemise your business

If you had a dollar for every time you heard people say they are either too busy to have a holiday, or they couldn’t leave it to others to run the business while they were away, or it wouldn’t be a holiday as they would be tethered via technology to their emails and phone calls and disengaged from their families, you’d be able to go on holiday and still make money.

How do you overcome this – systemise your business.  Systemising is the process of documenting everything you do in your business – from answering the phone and opening the mail, to pricing work, and after-care service.  Without putting systems and processes in place, your business will become all-absorbing, with endless tasks to complete – like painting the Sydney Harbour Bridge.

Systems and processes allow others to share the load. These people then become what a studio recording is to Taylor Swift. A Taylor Swift song can be played by millions of people all at the same time. It sounds the same every time it is played and Taylor Swift collects a royalty every time the recording is played. Create a recording – a system – of your business, your talents, your way of doing something, and then, like a song, replicate it, market it, distribute it and manage the revenue.

4. Understanding the numbers

Most people in business are great at what they do but when you talk to them about financial figures they run for the hills. There are some basic numbers and ratios every business owner just needs to know. Don’t worry, you don’t need to become an accountant but you do need a basic understanding of the financial drivers of your business.

The numbers, ratios and margins are important because they tell us whether your company is making an adequate return. An ‘adequate’ return is subjective – what is adequate to one person, one investor, one owner, one banker, or one industry may be different to what others consider adequate.  Luckily financial ratios and margins are easy to learn and to understand.  Invest a little time to understand the numbers.

Four ways to run your business betterThis is an edited extract from Stephen Barnes’ new book Run Your Business Better. Yes, we know it’s got a bearded person on the cover, but there’s good advice inside.

About Stephen Barnes

Stephen Barnes is the principal of management consultancy Byronvale Advisors. He has over 20 years advising clients from new business start-ups to publicly listed companies and across a wide array of industries. He prides himself on quickly understanding the client’s business and issues, and synthesising problems to develop pragmatic solutions. He is also the author of ‘Run Your Business Better - Essential Information Every Business Owner Should Know and Use’. To find out how Stephen can help you run your business better visit www.byronvaleadvisors.com.

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