What are the top issues facing businesses? For some, it’s scary, somewhat daunting, for others they are rolling up their sleeves.
The main issues I have seen for businesses are:
1. Cash flow
2. Staffing issues
3. Dealing with declining sales and profitability
For many businesses, cash flow can be a significant issue. Virtually every decision in your business has a financial impact. The impact of these decisions is summarised in the financial statements of your business.
If a business is experiencing tight cash flow, typically there are a number of issues that need to be considered.
I am an advocate of rolling cash flow projections for businesses. Depending upon the business needs these can be done monthly or quarterly. The owner needs to know the cash flow requirements of the business up front so they can deal with the issues before it impedes on the business.
Discussing the cash flow and other aspects of the business with the owner is an excellent opportunity to get off the tools and work on your business more strategically.
Most small business owners are spending too much time working in the business on everyday tasks, rather than working on the business – improving the business operations and strategic approach.
Staff are probably the most critical asset for micro and small businesses. Typically, they are the most substantial cost, particularly for service-based businesses.
According to ABS data, 70% of micro-business and 48% of small business spend little to no time on key Human Resource measures such as skills development, performance assessment or job satisfaction.
Personality profiling has a significant influence when employing staff. There are some free tools such as Myers & Briggs. However, I have not found these very useful. I use a psychologist to conduct these assessments. Employing the wrong staff member typically costs the organisation 1.5 to 5 times their annual salary. Please free to make contact with if you would like further details on the tools I am now using.
Dealing with declining sales and profitability
Around half of business owners reflect a high level of concern about declining sales and profits.
Most business owners are optimistic about opportunities to develop and grow their business. However, very few are actively pursuing those activities.
According to research, only 23% of business have a strategic plan. Research has proved that having a written strategic plan significantly increases the chance of your business succeeding.
From my personal experience business is tough. As a business owner, you want the odds stacked in your favour!
There are some aspects to a strategic business plan that doesn’t change over time. For example, mission, vision and core values. However, there are other aspects to the strategic plan that do change.
Businesses need to be agile and continuously measuring. If necessary, you need to adapt your business to the changing environment.
As a child, I wanted to be an astronaut. One interesting statistic I recall was when the Lunar Module Spacecraft was going to the moon it was only on track 3% of the time. Business owners need to be monitoring, tracking and changing the key business drivers.
Make this year, a year of change. Go on challenge yourself. Not with more of the same, not with an increased workload but more enjoyment and the reason you got into business in the first place.
If you are wanting to double your profits and smile more make contact today.