Welcome
To the blog for small and medium sized business (SME) owners.
Your business mentor should possess the necessary skills to guide you in achieving your goals. The business mentor will display many attributes that will be necessary to help you achieve success and include:
1. Relationship building – building trust
2. Honesty
3. Commitment
4. Experience
5. Acting as a sounding board - 'a shoulder to cry on'
6. Independence
7. Objectivity
8. Retaining a balanced perspective
9. Robustness
10. Elimination of the ‘loneliness’ of the business owner
There are several factors that will determine the success or otherwise of the small business entrepreneur.
There will be business associated factors that will influence the success of the entrepreneur, however, personal characteristics will also set him/her aside from others and afford greater chance of achieving success.
7 characteristics that help mold a successful entrepreneur include:
1. The person will ooze self confidence
2. There will be a zero or very low fear of failing
3. Clear goals for the business will be set
4. The person will possess an abundant supply of energy and drive
5. Responsibility for the development of the business will be personal and rarely delegated
6. A ‘controlled’ level of risk taking will enjoyed
7. Use of all freely available resources
For more advice on leadership and entrepreneurship visit DAW Consulting.
Why should there be need for a business turnaround?
Unfortunately, business turnaround happens when the financial expectations of the business fail to materialize, a situation that may result from:
- Failure to regularly review the financial performance and to take corrective action if required
- Poor internal business controls
- Fraud
- Major errors of judgement
- Events outside of the control of the business owner.
A regular review of the business should identify the causes that give rise to areas of weakness or poor performance. The 7 symptoms that often result in a business turnaround are:
1. Cash flow difficulties
2. No business growth, declining markets
3. Expansion of the business has been too rapid resulting in a lack of working capital
4. Quality of the product or service fails to meet the customer expectations
5. The business lacks strategy, no long term goals and exists from day to day
6. Low staff morale resulting in high staff turnover
7. Lack of specialist skills
If your business needs help to avoid a business turnaround then seek expert help quickly.
Most business plans include a SWOT analysis, but what does SWOT stand for?
The acroym SWOT represents:
S Strengths
W Weaknesses
O Opportunities
T Threats
A SWOT analysis is a planning tool used by companies to identify the above features within their organisations. Its purpose is to critically assess the strengths, weaknesses, opportunities and threats in order to indentify and take action to eliminate areas of concern or extract further value.
A serious self assessment of the business should be regularly undertaken, otherwise the speed of change may overwhelm and place the business at risk. However, when preparing business plans the inclusion of a SWOT analysis will provide evidence to a potential investor of control within the business, that is knowing what is going on within the organisation.
For further help visit Business Planning.
An interim finance director can be appointed to undertake a specific project or into a line position where the interim FD becomes a member of the management team.
When and why should you use an interim finance manager?
What are the factors that determine the success, or otherwise, of the part time finance director in a small (SME) business.
It is becoming more accepted that many business owners require the skill set that a finance professional can bring to their organisation, but they are unable to afford the person on a full time basis. Hence the increase in demand for the part-time FD.
The person should offer much more than the business accountant who may be focused only on reporting the numbers (the history). The part time finance director should be more active in making the history, implementing plans, improving systems and creating value.
Discover the factors that determine the success of the part time FD.
What is Factoring and Invoice Discounting?
Factoring and invoice discounting enables the business owner to raise finance for the business. This is done through the borrowing of monies against the sales invoices raised that will be settled by the customer after an agreed period of credit.
A significant advantage is that the amount 'borrowed' at any time is in direct relation to the growth of the business. The higher the turnover the greater the sum available through factoring.
The sum 'borrowed' will be repaid to the factoring company out of the monies received when the customer settles the account.
This arrangement may be advantageous to business because it may eliminate the need to seek overdraft extentions to support ongoing business growth.
Learn more on factoring and other forms of funding.
What are the issues affecting many small business owners?
Some common questions and topics relating to cash are shown below:
- What is cash management?
- What does the cash flow terminology mean?
- Invoice queries
- Factors causing cash flow problem to SMEs
- Asset finance terminology
- Credit control process flow
- Finance for equipment
- What are important factors in choosing a bank?
- The benefits of having a bank account
- Sales invoice and cash invoicing
- The impact of lacking loan finance for small business
- How do you manage receivables and credit functions?
- How long does it take to secure funding venture capital?
- Factors to consider when choosing type of finance
- How to control debtors for SMEs?
- How to manage cash shortage?
- What are the ways of securing funding for business?
Do you have any to add?
After you have prepared your business plan, what do you do with it?
Some business owners may file the business plan away, others correctly use it in the management of the business.
The purpose of the business plan is for it not only to be a 'live' document that is updated to reflect changes in the business, but also to be a target against which actual results (financial and non financial) are measured. If the business is well controlled any changes to the business plan should be minor and reflect on going operational changes in the business. Should a complete re-write of the plan be necessary, it may be indicative that controls within the business are inadequate.
Tips: Take control of your business, review your business plan regularly and update as necessary.
Some members of the UK business community have been upset during recent years over the decision by the European Commission to impose metric measurements throughout the community.
That decision has now been reversed and small businesses can now legally sell in imperial units (pounds, ounces, pints etc) and well as in the metric equivalents if desired. The 2010 deadline for full conversation has now been abandoned.
The importance of controlling working capital becomes evident to many business owners only when cash flow is negative and little or no cash is freely available to sustain day to day operations.
To address this situation the reaction may include the robust chasing of all receivable overdues and the delaying of payment to creditors for as long as possible. Work to perhaps reduce inventory levels may be undertaken, but this may not immediately reflect in improving the cash position.
The SME business owner should take steps to safe guard the business position. Plan to avoid cash flow shortages and implement those plans. If the work is outside the skill set of the small business owner - seek professional help and protect your business.
Related Topics
The Benefits of Using a part time FD
Manage your Cash
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