Thoughts on Building a Business

With our busy lives (particularly in running a Small Business), we quite often forget about key concepts or strategies that we know are important to our business. It just takes someone or something to remind us of it, to get us refocussed again.

This happened to me recently at a Networking Event when the Guest Speaker very quickly brushed over the Cashflow Quadrant by Robert Kiyosaki (Author of "Rich Dad, Poor Dad"). For those of you not familiar, the Cashflow Quadrant is:

This essentially shows you the normal stages of someone starting their business and growing it to its full potential. It is also a powerful concept when you think about what you want to acheive with your business.

Now this is something that I used continually as a Business Advisor to help explain the importance of growing your business beyond yourself. It shows how by doing this you can open up unlimited streams of income from your business as well as improve your overall lifestyle. On top of this, it also explains why growing a business beyond you is not easy and can lead to a lot of pain before you get there. But the journey is well worth it, because the destination can be so good.

If you would like to hear my take, simply download my Cashflow Quadrant info sheet.

The start of the year is a great time to take some time out to review your business and set some goals for the year ahead. Even though my business operates on the Financial Year, I find that the first week of January is a great time to do my Budget and Cashflow Forecasts for the year ahead. The trouble with trying to do this at the start of the Financial Year is that we are normally flat out. For this reason, I simply use this time to review and correct what I put in place in January.

So how do I do this?

Firstly, I take some time to revisit my overall Business Vision. This helps me get re-inspired and reminds me why I got into business in the first place. In some years, I may even rejig it a bit, depending on where I am at.

Secondly, now that I am inspired, I start to set some overall goals for the year. These might be Sales, Profit, Staff Numbers, Markets, Products or maybe even how many hours I want to be working. Just remember to make these goals, Smart Goals.

If you want to know more about Vision, Mission and SMART Goals, download here.

Thirdly, I now fill out my Budget/Cashflow Forecast spreadsheet to set clear monthly Financial Targets that I can then measure on a monthly basis. It also helps me make sure that my Goals are realistic.

Lastly, I compile my first 90 day plan for the year. This sets out the Actions I will be taking for the first quarter to ensure that I reach my Goals.

So what have you done to make sure that 2009 is a great year for you and your business?
 

Today I wanted to write a follow up to my last post on my frustration with the media and the "Financial Crisis". Specifically, I wanted to write about what I believe you should do if you are a Business Owner.

Firstly, as I stated in my last post, there are always people who make money during a recession. It is also true that there are always people who will lose money and become bankrupt during a recession. If you are like me, you should be excited by this news. Why I hear you ask?

Downturns in the economy are a good way to separate those businesses that are well run with solid foundations from those businesses that aren't. When the economy is booming, there is always a flurry of new businesses that make money in spite of themselves. These are the sorts of businesses that can (not always) give your industry a bad reputation and make it harder for you to make a sensible profit, by continually undercutting and providing poor service. As the economy slows, they are generally poorer placed to handle the lower revenues and go "belly up".

So even though the industry spend may drop, there are fewer businesses sharing in it. So in fact you can still turn over the same if not more. Furthermore, some of the businesses that do survive, start cutting all of their expenses (including Marketing) and go into their shell to try and weather the storm.

So what we need to do is make sure that we are the businesses that not only survive the slowing economy, but prosper in it. My suggestions would be:

• Focus on your fundamentals to ensure that they are solid (ie: cashflow forecasting and reporting)
• Review all your expenses and look for opportunities to lower them (as long as it doesn't impact on your products or services)
• Continue spending money on marketing (or even increase it). It's easier to be noticed when your competitors are all cutting back on advertising
• Keep an open mind and look for new opportunities
• Whatever you do, do not blame the economy. It is an easy cop out and may make you miss what the real underlying problem is
• And lastly, choose not to partake in the "Recession", but focus on achieving your goals.

Time really flies when your busy. The only problem with being busy, is that you can start to lose sight of the bigger picture. You become so entrenched in the day to day activities of trying to keep up with your workload, that all the peripheral activities (usually the important ones at that) take a back seat. I've recently found myself falling into this trap. It's what I call the curse of the Small Business Owner. We end up creating a Yo-Yo effect, where we start by focussing on getting work, then switching to doing the work only to realise that we've run out of work and going back to step 1. The problem with this, is that we never really get the business under control and end up being a bit like a dog chasing its tail.

So what's the solution?

The solution is to do what I'm attempting to do and start tracking exactly what tasks you are doing each day. Once you have a couple of weeks tasks, review them and decide what tasks you can let go of and delegate to someone else. Then you simply put all of these tasks into a Job Description to give to them. Better yet, you can look around at other businesses and see if there are any opportunities to outsource to them. The advantage of this is that you only pay for work completed and don't have to hire someone and then worry about giving them enough work.

A common excuse I get from people about doing this is; "I can't afford it". But Common Sense would argue that if you freed up more time to spend on Sales and Marketing, you would have more money coming in to afford it. So give it a go, it's the first big step to growing a successful business.

I thought I would talk about myself as a way of explaining what I believe is one of the key differences between successful businesses and ones that just get by. To have a great business, you need to start with the end in mind. You need to have a big Vision of what you want your business to look like and then think about what you need to do to get you there. This way you dictate to the business rather then the other way around.

With Probity Partners my dream is to have Individual Businesses (owned by Probity Partners and Alliance Partners) that specialise in a particular service - all under the one umbrella Company. The umbrella company (Probity Partners) will then take care of all Marketing, Sales and Accounts for these businesses to enable them to focus on what they are good at - the Business Service. Our customers will build a relationship with 1 Business Development Manager who will help them find any Service Provider they need and then oversee it to make sure that they are happy. Our customers will start with using 1 service and after seeing how much better we are, will begin using us more and more. We will become successful by helping other Businesses to get successful. Our individual businesses will be specialists at what they do (not trying to offer more than one service), will live by our values and will work closely with the other Businesses to amplify their service.

So that is the dream. The reality is that at the moment it is just me with a group of Alliance Businesses. This is merely the starting point and I have roughly mapped out a plan on how I will get there. This plan is a living document and is continually being refined. But I never lose my way, because I keep going back to the vision to make sure that I am still heading in the right direction.

So if you haven't got one, get yourself a big vision and start working out how you are going to get there.