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?

I’ve heard the expression “I don’t know what I don’t know” quite a lot lately and no more so than from those who are running a small business.

People typically start a business with what they think is a good idea, they might even have a skill they are going to use as a basis to start that business ie Carpenter, Butcher, IT guy etc but thats where the business skills often stop and enthusiasm takes over.  The business owner now needs to become proficient at all sorts of things such as sales, marketing, HR and legal just to name a few.  The problem is, no matter how enthusiastic you are it doesn’t mean you can be good or even average at all of these skills.  The next problem is you can’t necessarily afford to pay for all of these people either. Rock meet hard place.

Starting a business is easy but running a successful (profitable) business is another thing.

Take a good look at your own strengths and weaknesses and use those to define the roles you do think you can cope with and those you just know you are going to be terrible at. For example, if you are no good with numbers, chances are your not going to be the greatest bookkeeper. Once you have made this admission make sure someone is fulfilling the roles required.

Here are 7 tips to help you fill the voids:

1. DO LOTS OF READING. There are millions and millions of useful snippets of information out there and particularly easy to get to on the web. Don’t believe everything you read out there so start with trusted sources such as government websites in your country.

2. Ask your employees if they have any secondary skill you may not know about. Some may be able to take on a dual role and fill the gaps were you are weakest.

3. Do a course or at least buy some books to help you improve on the skills you need. You won’t have to time to do a degree in each skill you need but there are some great courses and books out there but be careful, not everything you read that may have worked for others will necessarily work as well or at all for you.

4. Leverage people you may know in the fields you need help with and see if there is some way you could help each other out. Maybe you could offer some assistance in what you are good at in return for help from them.

5. Network with like minded business owners, its amazing what you can learn from those who are going through the same things as you are. Be open and willing to talk to get the most from these encounters.

6. Get yourself a mentor. Someone who has been in business for a while and can point out the traps and pitfalls. Over time you can use this person as a confidant to share your highs and lows. You’ll find people out there willing to help as they often know and remember how hard it was starting out themselves and are often all too glad to help another along the path.

7. For the roles you absolutely need to make your business successful, don’t be afraid to take on a great employee, partner or outsource to a trusted company to fill this gap. Sometimes you just have to pay to make your business tick.

The hard bit is putting your hard earnt cash to the best use.

Let me leave you with a final tip. Friends and family are often all too eager to give you advice but unless they are in business themselves and have some experience or they are skilled in a specific area “DO NOT USE THEM AS ADVISORS” You wouldn’t or at least shouldn’t take financial advice from your Yoga teacher so tread lightly with advice you get from your eager buddies.

Are you a business owner or an entrepreneur? While these terms are often used interchangeably, I’m hearing an increasing number of people who are making a clear distinction between the two. This is particularly relevant at the moment – when there is talk of a challenging economy – because the business owners will react very differently to entrepreneurs in such an environment. So what’s the difference?

The distinction … is that an entrepreneur is trying to make money while s/he sleeps, and does it with someone else’s money that scales for a long time, that is about processes and markets.

A small businessperson, on the other hand, is largely a freelancer with support, someone who understands the natural size of their business and wants to enjoy the craft of doing it every day.

Keys:-

Leverage your time – Find a way to go from “hours for dollars” to “hours for heaps of dollars” and finally to “hardly any hours for heaps of dollars”. Of course, I’m being slightly facetious but my sentiment is serious.

Expand your thinking by hanging out with like-minded entrepreneurs – Make a point to be around people who think bigger than you usually do, who can challenge you and support your wacky ideas.

Feed your entrepreneurial soul – Try this for a while. When the stock prices come on TV, tune out. When you hear your friends do the “gloom and doom” talk around the barbecue, walk away. Actively disengage from these conversations and fill your mind with books, audio programs or seminars that will feed you. This will also help you expand your thinking.

Ultimately, it’s not really a series of systems or staff numbers that will transform you from a business owner to an entrepreneur. It’s your mindset. Feeding your business brain and expanding your mind to what’s possible in your business is vital in order to get it to next level.

Comment below and let me know what things are you doing to expand your brain?