Archive for June, 2013

3 Business Mistakes You Must Avoid

Saturday, June 29th, 2013

If you think you need to spend more money on marketing, or hire a sales person, or buy the latest and greatness gadget for your business, I have some advice for you. STOP! Here are 3 of the biggest mistakes business owners make every day. Get these nailed and then start planning your next step.

Mistake #1:  Not knowing the costs of running your business.
You have to know what it costs you to keep the doors of your business open. Guessing isn’t an option. I worked with a business owner who was five years into her business and was struggling to turn a profit. Each time I asked her ‘what does it cost you each month to run your business’? After giving me excuses such as, ‘I don’t have time to worry about that, I need to be focused on sales’, or ‘I have a good idea’, or ‘I put everything on credit cards’ (as if that solved the problem). The reality was this: once we spent the time and dissected her costs, they were over $2000 a month more than what she thought they were. ‘No wonder I’m not making any money’ was her reality check. Don’t delay. Figure this one out now.

Mistake #2:  Not projecting the amount of sales you intend to drive into your business every month.
If you aren’t creating a profit plan for your business, you are flying an airplane without an altimeter and you will crash. It’s just a matter of time. A profit plan is my name for a budget. But since the ‘b’ word only causes business owners to run from the room screaming, I prefer to ask business owners if they would like to create a plan to be profitable. A profit plan forces you to be real. Once you know what it costs you to run your business (see Mistake #1) you know that you have to bring in at least that amount of money every month to breakeven. By projecting your revenues over a 12 month period, you’ll know immediately what’s working and what isn’t by comparing your projections to your actuals.

Mistake #3:  Not understanding how fast your cash is coming into your business and going out of your business every day.
When I’m talking with small business owners, I ask two questions:  Do you know how much cash you have in the bank today? Do you know how much cash you’ll have in the bank next week? Knowing the answers to these two questions is what drives successful businesses. Cash IS king. But too many business owners treat it like a distant (and not much loved) relative! Managing your cash flow, when cash is coming into your business and when cash is going out of your business, is the #1 focus for any business owner. If you aren’t managing your cash, you aren’t managing your business.

While the financials aren’t the sexiest part of your business, they are the most critical.

If you become passionate about the financial aspects of your business, you’ll always have a business to be passionate about.

Want to learn to love your financials? Learn the positive side of making a plan that works and drives more profit to your bottom line?  My Destination, Greatness program lays the foundation for growth while helping you proactively plan for your success.

 

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Financial Dos and Don’ts When Running a Business

Wednesday, June 26th, 2013

As an experienced business owner, I know the value of keeping things simple, especially when it comes to running a business. As business owners we get bombarded every day with challenges that have to be dealt with (they won’t wait), decisions that have to be made (they can’t wait) and ideas that can scatter our thinking so we chase those ‘shiny white objects’ instead of focusing on our core competencies (they have to wait).

Over the years, my clients have found these five simple concepts helpful. Remember, it’s not the big things that take good businesses down, it’s the small things.

#1:  Follow the Money — Adopt this MANTRA as you produce more revenue so you can grow your business.

DON’T waste time on activities that don’t bring in revenue.

DO focus every single day on 3 – 4 activities that you can do that will start your Revenue Machine working.

DON’T waste time networking with groups that aren’t going to move your business ahead.

DO be very picky about where you spend your time. If a group offers great contacts where you can plant seeds for growth, great. If the group is only a ‘feel good’ group, or a reason for you to get away from the real work of generating income, rethink the time you are spending with them.

#2:  Get something productive done every single day that moves you toward making money.

DON’T spend untold hours during the day entering data into your database (or filing, or cleaning out your office). Do this work at night, not during the productive working hours of the day.

DO create lists of people to contact and make a commitment to talk to 75% of them every day.

DON’T run out and buy every gadget, every new tape dispenser, the latest ‘get rich quick’ marketing scheme.

DO spend time thinking about what you need to really generate money. If the expenditure of the dollar has the potential of bringing you in two dollars, that may be a good deal. If the expenditure has long term ability to add to your productivity, like a contact manager database, find the money.

#3:  Track your money.

DON’T make the assumption that since you don’t have any money, there’s really no reason to track the comings and goings of your money.

DO put together an easy-to-use Profit Plan and Cash Flow report that outlines where and when your income is hitting your pocket and where and when your expenses are leaving your pocket.

DON’T make rash decisions when you panic because no money is coming in.

DO go back over the ‘seeds’ you have planted and find other ways of harvesting those seeds.

#4:  Create partnerships.

DON’T try and build a successful business on your own.

DO start thinking about what you offer that someone else could profit from and see if there are partnership opportunities with people who have been around a lot longer than you have.

DON’T give away the farm in these partnerships. Think clearly and confidently about what you bring to the table and NEVER lose sight of the value you bring. NEVER let yourself believe someone knows YOUR business better than you do.

DO find people who share your values, your beliefs and that get excited about your vision. Explore ways to work together even if at first, it’s only sharing links on websites.

#5:  Be very clear about what you want.

DON’T think you can simply muddle along and your business will run itself or that hiring someone right out of the box will solve all of your problems. You are the critical component in your business.

DO write down the Vision and your Values and where you see yourself in 3 – 5 years. If you can SEE the future, you can build the future. Letting the future happen won’t cut it.

DON’T be afraid to dream big, to talk to people who are more successful than you are, to find people you can ask for help from.

DO get outside your comfort zone – every day, every week, every month.

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