August 2009


Is your list of to-do’s getting longer and out of control?  

I bet mines bigger than yours

I bet mines bigger than yours

Well you’re not alone. Most of us are getting busier yet we do not seem to be getting through as much as we used to.

Here are 5 quick tips to get you back on track.

  1. Stop doing tasks and start focusing on the result.  You are more likely to achieve the related tasks if you know what the end result will be.
  2. Set a specific time-frame to achieve this result.
  3. Know what tasks you need to do and what task others will be contributing to the result.
  4. Priorities the results to those that will give you the biggest gain. In a business this should almost always be geared to more profit.
  5. Share this philosophy with others around you.

Focus on the results and you might just get that list manageable again.

If you have any tips on managing your time better I’d love to hear them. Please feel free to comment.

Advertisements

The Global Financial crisis has had an impact on every business I read about or encounter, some worse than others. So what should you do in your business to ensure you are around to enjoy the growth that occurs after any downturn?

Don’t Panic: Too many companies have battened down the hatches, stopped spending and are bracing for the worst. You certainly have to be more prudent in these times but if everyone keeps to themselves, the crisis only worsens because money doesn’t change hands and inevitably, someone falls out the bottom.

Review your Outgoings: Take a good look at the money you are spending and make sure you know exactly where your money is going and take this opportunity to trim your costs. There may be savings to be had in every area of your business, even spending which is vital to your business such as your telephony costs. During this period, if you have a little cash left over, if possible try and build up a piggy bank and put some money away to cover the dips. Remember, cash is King.

Put some extra effort into your existing customer base: Make sure you don’t neglect those who are spending money with you. Take the time to make sure you are provided they a good quality product or service and that the customer satisfaction level is higher than average. Last thing you want is for your clients (and their money) to go else ware.

Improve your Processes: Take a good look at how and why you are doing things the way you do. Step through each major process and see if there are any steps you can remove, make more efficient or delegate to a lower cost resource. This will help make your people more effective short and long term and potentially difer or remove the need to add staff when things pick up again. ( = more profit)

Focus on your strengths: Review your strengths and weaknesses as an organisation and use your strengths as a way to differentiate yourself amongst your competitors. Pick something that you are particularly good at and use this as your value proposition to prospective clients. If you can stand out from your competition you are more likely to get noticed ultimately leading to more sales.

If you can spend some time now looking at each of these areas it will not only improve what you are doing today but help immensely when things get busy again.

What other strategies are working for you in these interesting times?

After talking to many of my friends and assoicates that run small businesses two things are clear. All of us want regular payments from customers and all customers pay in different ways and time frames. This means tracking them and finding signs or problems is hard and time consuming.

After years of running businesses here is a summary of how I bring in the payments faster and more regular with some clear actions.

Invoices paid faster and more regular

Invoices paid faster and more regular

Being in business you will generally be dealing with business of roughly the same size. With only 50% of small business around after 5 years and only 30% around after 10 years, (small business trends failure rates of small businesses has more information) its critical to know what is going on before it effects you.

First, you need to list customers by profit and revenue. It will most likely become clear that 70% or 80% of your business comes from 20% of you customers. Why is the percentage always 80-20? If you know drop me a line. This is where you need to focus your time and effort, if you can bring in 80% of the revenue on time or earlier you’ll be doing well.

Action: ask your accountant or bookkeeper to rank your customers by revenue in the last year. Ordered by highest revenue customer first.

Once you know this you need to work out the average payment terms for each customer in the top percentage. What “top percentage” I hear you cry, start with 10% and see how much time this takes then increase it until you get to 70-80% of the revenue or ask your accountant for the top 80%. Your accountanting package will be able to provide this report.

Action: ask your accountant or bookkeeper to draw up the list of average payment terms for the last 12 months and the last 3 months. The payment term is the time from when you delivered the invoice to when the full amount was paid.

As a business you’ll probably know by now, that unless you are a retail or pay immediately service, terms of payments are just a guide and late payment penalties just annoy customers. There is an acceptable payment period that each customer has. This is the report you have just created.
Now four easy steps to get your invoices paid more regular and faster:-

  • Communicate, communicate to the top 20% regularly. Deliberately written twice as its such a key point. Monitor the top 20% of customers and their payment terms.When a customer reaches 60-70% of their payment term, for example: if company ABC normally pays within 30 days when they get to 20 days phone them. “Hi Jane, I’m just checking you received my invoice and are still ok to pay and have no questions about it.”

    Then follow the conversation with, “when do you think you’ll likely to get to pay it?” or “have you included it in the next payment run, and when would that be?”.  This is where you will hear any complaints or delays to payments, the first red flag.

    Ring again when the customer is 110% overdue so in this case 33 days. “I just noticed your invoice is still outstanding, was there a problem or did you just miss it?”

    Continue this line of nice polite reminders every few days, until its clear you have highlighted a potential risk of no payment or better yet been paid.

  • Send them statements regularly. This is a list of the invoices they have outstanding and how long. Your bookkeeper can prepare this from your accounting system then all you need to do is email it. This will help the disorganised customers people.
  • Create a watch list. List the companies that have regularly paid over the terms.Ring every single person on this list and find out why they normally pay out side the terms. This should be a polite conversation, “for my understanding of your payment process…..”.

    This could be that they only pay invoices on the last Friday of the month and you always send the invoices on the first Monday or they are forgetful / disorganised. Either way it will highlight hopefully if they are having troubles paying or another reason that you can quickly adjust. For example invoicing 1 particular customer on the last Monday instead of the first Monday of the month.

  • Ask for part payment, or move to a “milestone billing” model. A milestone billing model allows you to bill smaller amounts more regularly,for example a website designer may bill 3 times for 1 project, 1) the design phase and prototyping, 2) full website running and live, 3) SOE, Search engine optimisation adjustments and fine-tuning.

    You do need to apply common sense splitting a $100 invoice may be a pain rather than a benefit. To implement this, on your next proposal or contract simply state on the invoice schedule.

And just because I’m on a roll, an extra one,  a 5th way to get your customers to pay invoices faster and more regular.

  • Offer discounts on early payments. I have added reluctantly, however I don’t like this as a method as it eats into your profit margin. It might be good if you absolutely need cash quickly.

That’s it, four easy ways and two actions. Please write in the comments below any other ideas you have or progress you have made.

The Silver Bullet you have been looking for.

The Silver Bullet you have been looking for.

Have you been searching for a silver bullet that will kick start your business and make you a million dollars?

You are not alone. People spend years looking, try a few, maybe make a few bucks, maybe loose a few and then go looking again. Does it really exist??

There are thousands of examples of people out there who have found that million dollar idea so what did they do different to you or I?

In my view there are 4 major factors, one or more of which seem to be in play for every example I have come across.

  1. Timing: right time right place
  2. Unique Idea: Unique, interesting and popular.
  3. Execution: Methodical, calculated and consistent execution.
  4. Funds: enough capital to keep going even if its initially a loss.

For most of us, the thing we can most control of these four is the execution. Building processes to run your business, breaking the process into sections, measuring each one and them improving on the process.

For example: Instead of just going out there and trying to sell your product or service with no real methodology, create yourself a sales process. Break it into a number of small steps (not just 1 or 2, maybe 10 to 14 steps) set guidelines and expectations around each one of these steps and start to measure them. After a little while you will know if each step works or needs refining.

Test, measure, refine, test, measure, refine (never stop this cycle, it can always be better)

Do this in the major areas of your business and you WILL see results. It may not be the silver bullet you were looking for but I bet it will make a significant difference to your results.

What do you see as the major influencing factors for the Million Dollar ideas you have seen out there?

Cashflow is probably the number one issue for many businesses I come across. In these uncertain times even more so. Most peoples initial reaction is to slash costs out of the business. This is often a neccesary step to ensure your survival but what do you do when there are no more costs to cut?

Look at improving your profit.

A slight change in your mindset to take you from cost cutting to profit improvement will not only improve your general attitute but will most likely have a greater affect on your bottom line.

So what is profit improvement?

The obvious answer is to sell more, increase your prices or reduce your costs. But these are not always possible.

An alternative way to increase profit is to look at ways your particular business can improve productivity. For some that means producing more widgets, for others its providing more services. Whatever business you are in there will be a few areas where if you can improve productivity, you are likely to improve your profit.

Where to Start?

  • Define the primary things you do that make money.
  • Look at and document the processes to do these primary things. Something worth asking in this part of the review “is there a better, more efficient way to do this task?” if there is, now is a good time to look at making some changes.
  • Work out how long it would take your best performer to do this and take out any distractions that slow it down.
  • This is now your optimum target.
  • Now look at how this task is currently done in your business and take an average. I can alsmost guarentee that this average will be below the optimum target you defined earlier.
  • Now break that process into lots of bite sized chunks and look at ways to improve each piece.
  • Now use this to test and measure your employees on and work with each one to get them as close as possible to the optimum target.

By using these steps in each of the primary money making areas of your business you will have a greater and longer lasting affect on your profitability than short term cost cutting will ever have.

What is a virtual business mentor?

mentor: a trusted friend, counsellor or teacher, usually a more experienced person.

Every entrepreneur should have a mentor – some else who has actually travelled the road you are about start. This is some-one you respect and that has actually, not talked and written books about, but actually lived the journey. Anyone can talk about it, few survive and live though it.

virtual: in its meaning is not physically present. In this new day and information age we no longer require our business coaches and mentors to be in the next street or the city. We can access the best minds and experience the world has to offer. So, if you’re in Sydney or Melbourne Australia this does not mean you mentor can’t be a Silicon Valley genius.

A virtual business mentor is a mentor who is not physically present, who helps grow and guide you around the obstacles that starting and running a business presents.

How to find a virtual business mentor?

Know yourself: Consciously think about where you are, and where you would like to be. Consider your personality, strengths and weaknesses. Understand what it is you need to grow. If you don’t know yourself, start there, maybe ask a peer to help you constructive find the area you need to grow?

Results: A clear understanding of your purpose and desired result will ensure that you find a suitable mentor, and that you and your mentor find value in the relationship. This clarity also eliminates any future confusion.

Past: Whether deliberately or not, each of us has had mentors in our lives. Think about the people who have mentored you and the qualities that you appreciated most about them. Use these traits as guidelines to finding a mentor.

Referrals: Ask around friends, colleagues, a personal referral is the best method. Be clear about what you’re looking for and why.

Broader Search: use the industry associations, online communities, professors, and a better option can be other successful leaders in your industry. Do not be afraid to ask.

Open mind: A mentor is someone who will help you grow in the area(s) most important to you. Look for someone who exemplifies the traits and skills that you want to adopt. If your accountant models the mindset-management behaviours that you strive for, she could be your mentor.

So what steps are you going to take next or what do you think of my post ?

Work smarter, not harder!

It’s a tough economic climate right now. Many companies are running operations with fewer workers, and requesting more of remaining employees. Profitability can increase for the company, however the increased demands on employees can have a detrimental effect. Employee burnout and a loss of any work-life balance which may have existed, are frequent consequences.

So what can “work smarter, not harder” mean for a business owner?

One key aspect for me personally, is “mindset”;  for example, exploring other possibilities. I need to think beyond the normal “day to day” activities, look at the bigger picture and always strive to see a different solution to a challenge.

As a business owner, you can all too easily fall into many traps, such as:
– getting bogged down in day to day operational issues,
– assuming direct responsibility and associated workload for challenges which arise,
– an unwillingness to “let go” and let others actually do their job.

I’m sure you get the (bleak) picture. All you are doing it ensuring “you” as the business owner, remain FIRMLY working “IN” the business – you become a king-pin. Possibly good for the business in the short term to overcome a hurdle, however in the long term, it’s bad for the business and you personally.

I suggest a change in mindset will help immensely.

As a business owner one of your most important tasks is to grow the company and manage the growth in a sustainable fashion, after all “you” have the vision. You need to be able to take a step back; take that family holiday and allow your mind to rest easy that the business will continue – successfully!

Some pointers:

1) Keep an open mind – there is generally more than one way to solve a problem.
2) Systemise – use appropriate tools to help you.
3) Delegate – assuming you have a team – use them – that’s why you employed them!.
5) Utilise and build on your strengths; acknowledge your weaknesses.
6) Seek help and guidance when required.

I will leave you with three thoughts:

1) Think about your actions going forward. Ask yourself the questions:
Is this action/task going to make life easier or not? Am I working “Smarter” or simply “Harder” ?

2) Seek help, it is not a sign of “weakness or stupidity” – it IS a smart move. People are specialists in “their” field – use them!.

3) Don’t assume the “status quo” is correct! Question it, you will be surprised by the results …

Now it’s your turn. What do YOU do to work smarter not harder?

Next Page »