Welcome
To the blog for small and medium sized business (SME) owners.
What are the characteristics found in well run businesses?
Some key ones are:
1. Management of the business cash flow is priority
2. The business goals are set
3. An up to date business plan that meets the goals is used to measure actual business performance against
4. The business is controlled
5. Actions to correct/re-align actual performance back to the plan are recognised
6. Actions are TAKEN to correct unfavorable situations
7. Never afraid to ask for outside professional help when necessary
Unfortunately many business fail at step 1 in managing the cashflow and business life quickly moves from crisis to crisis.
Learn more visit the website dedicated to SME Business Owners.
Some examples of working wih a business mentor are:
• Learn from the knowledge and experience of the business mentor
• Receive good advice
• Be motivated
• Be challenged
• Gain confidence
• Receive support – ‘a shoulder to cry on’
• Discover how to control environments – become empowered
• Develop into a better business manager
• Remove the loneliness
Why is a business review important?
The business will be continually changing - either creating more wealth or not. Staff may change, new customer accounts won or existing ones lost, new products introduced and so on.
The impact of the continual changes in business and the management of those changes should be understood.
A business review will provide the opportunity for the business owner to assess the current business position, determine if the business goals will be met and to set revised strategies if necessary.
Learn more: What is a Strategic Business Review?
Is it:
• A sudden unexpected event that will devastate the business unless corrective action is taken
• Or the cumulative impact of small insignificant adverse events that at the time were considered unimportant to receive great attention?
Often the business owner is unprepared for either type of catastrophe and perhaps in a well meaning but unplanned, ill defined manner attempts to take remedial actions without understanding the impact those actions may have on other areas of the business.
The end result being ‘problem shifting’. The original concern is corrected in the short term but re-appears or manifests itself in another aspect of business life at a later stage.
Unless well skilled in financial management, change management, business turnaround or the like, the business owner will experience difficulty in implementing the necessary robust solutions and often aggravate a problem, resulting in a continued business downturn with the prospect of a short term solution less likely.
To protect your business employ experts who have the necessary skill sets to help you – the skill sets that may be missing in your business.
Many SME business owners are enthused at starting a business and may enjoy initial success. Others may be good at taking over and managing businesses that have been long established and require little change.
Whilst the business owners remain in their ‘comfort zone’ their new business may thrive and bring rewards. However, when the owners are challenged by a downturn in business fortunes many are found wanting, unable to manage the situation and find their businesses perhaps spiraling out of control.
What action should be taken?
It is not uncommon to find the business owner, who may be unskilled in turnaround work, attempting to take actions the consequences of which are not fully understood until too late or recruiting generalists who are not experienced in all aspects of business.
Do not risk losing your business engage a business turnaround expert early in the process.
If the owner is too close to a situation, often the obvious is missed or deliberately ignored to avoid embarrassment. Not many business owners willingly admit to mistakes until matters are critical, so it should be no surprise that business owners who manage their own turnaround without reference to business turnaround specialists often repeat the mistakes of their past with similar results.
If you want a gourmet meal you go to a top restaurant not cook in your kitchen. The analogy with employing a business turnaround specialist is no different.
Often in a family business conversations can degenerate into conflict. Family members may argue more because they are more comfortable with each other and less inclined to accept censorship than non-family workers.
The danger of workplace conflict damaging relationships among family members is real and it can reduce the family member's credibility and professionalism with other employees.
Learn how to create a successful family business.
How do you ensure your business turnaround work will not fail? How do you ensure business turnaround success?
The business may become:
1. More complex – perhaps overtrading
2. Demanding, problematic and stressful
3. Less successful than previously
4. Facing increased competition
5. Encountering pressure from investors
6. Suffering low staff morale, high staff turnover
7. Not generating positive cash flows
All features of the business environment that may result in business change.
Learn more on How to Ensure Your Business Turnaround Will Not Fail
There are regular questions asked by business owners regarding business planning. The 7 questions that figure highly in any list are:
1. What is the business planning process?
2. Why good business planning is important?
3. What should a good business plan include?
4. How do you develop business strategies?
5. What does SWOT stand for in a business plan?
6. How can you plan in a failing business?
7. What are the common mistakes made in business plans?
All important questions and for help with the answers contact DAW Consulting today for a free confidential discussion.
Business turnarounds are usual when a business is failing and an attempt is made to save all or part of it from closure.
This will be a time of anxiety and the typical concerns and issues arising include:
1. Is there a real desire to change?
2. Will the business turnaround strategies be palatable to the business owner?
3. The uncertainty regarding the business turnaround plan
4 What steps will be taken in the turnaround process?
5. Who will manage the business turnaround process?
6. Will expert help be required?
7. What will the reaction of stakeholders be to a turnaround?
8. How will the business turnaround process be communicated internally and externally?
9. What will the turnaround uncover, will there be real or implied criticism of the management?
10. What is the way forward after a successful business turnaround, and will the existing management team be part of the future?
The shortage of cash in a business is often not recognized or accepted until a catastrophic event occurs. At this time the business owner will focus on resolving the the cash flow problem.
What are the actions the business owner can take to remedy a failing situation?
Understand more - read 7 Actions to Avoid a Lack of Business Cash
If you are implementing a quality management system (QMS) avoid the 10 most common mistakes made.
The most important mistake is implenting a QMS for the wrong reason. If the business owner seeks only to receive the accreditation or award following the assessment of a QMS implementation, then all long term benefits will be lost.
Discover the remaining Quality Management System mistakes.
On many occasions the sales projections included in a Business Plan are not achieved. Whilst the numbers are understood to be forecasts of future performance, from time to time they are found to differ significantly from the actual results.
What gives rise to dramatic variances between forecast and actual business plan sales forecasts?
7 common reasons why differences arise are:
1. A too optimistic view that sales growth rates achieved by competitors or previously by the business can continue into the future.
2. The marketplace for new products or services has not been researched to ensure prospective customers exist.
3. The distribution channels not established resulting in product not reaching customers.
4. The launch of new products or services not effectively planned resulting in delays before product is available and sales materialize.
5. The reaction of competitors to more competition not factored into the business plan forecasts. Competitors may reduce prices or launch a higher specification product to combat the threat of losing market position.
6. Staff are not trained in or qualified to effectively deliver a new product to market.
7. The business suffers from a lack of investment or working capital, resulting in delays before the anticipated sales forecasts are achieved.
Undertake a strategic business review of your business.
Out of date, incomplete, inadequate or totally wrong data is often used in the business decision making process.
Benefit from understanding how your business can improve, address concerns and improve business performance.
Learn more read Gain from a Strategic Business Review of Your Business
The control of business overhead is critical to the ongoing success of any organization.
The ability to pass on increased costs in higher selling prices may be resisted by the customer and competitors may move to acquire your market share. Indeed customers may seek price reductions and the challenge for the business will be to offset any selling price reductions against savings derived from improved efficiency savings.
Understand your cost base!
The interrelationship of costs should be appreciated. Costs are generally fixed or variable in nature and the ability to recognize the impact on the cost base of:
- Changes in volumes
- Implementation of improvement programmes
- Process changes
- Technological changes
- Product design changes
- Cost price increases
- Under utilized or redundant fixed assets
- Obsolete stocks
- Duplication, waste, errors
is critical.
The above factors will change the cost structure and understanding how, by how much and when will allow the business owner to control the business more effectively.
Learn more contact David Willetts, DAW Consulting
Discover the steps to take to avoid your business spiralling out of control.
1. Review and Assess the Present Situation
2. Develop Plans and Business Strategy
3. Communicate With Key Employees
4. Communicate With Other Employees
5. Meet the Bank
6. Meet Customers
7. Meet Suppliers
8. Conserve Cash
9. Implement New/Update Systems and Procedures
10. Monitor, Measure and Take Action
More tips on How to Avoid Financial Disaster and Business Turnaround
If you need help in improving your business contact for a free confidential discussion.David Willetts
Business owner seek to grow their businesses. However, it is important to understand how your business can gain from undertaking a Strategic Business Review.
Why should a business review be undertaken if your business is growing and growing profitably? Well the review should not only recognise past performance, but also assess the prospects for the business in the future and recognising historical performance is no guarantee to future success.
Read Gain from a Strategic Business Review of Your Business
Have you considered the impact on your businesses of making mistakes?
Possibly not.
However, as SME business owners struggle to meet the ever demanding expectations of customers regarding service and price, the cost of rectifying mistakes should be viewed as an opportunity to reduce overall costs and improve profits.
It is important to understand what a mistake is.
Examples of common mistakes include:
1. products are not manufactured to specification first time, each and every time
2. services provided do not meet the expected standard and are re-visited
3. errors or omissions in communication render additional instructions being given
4. running out of supplies/parts
5. wrong delivery times, quantities or goods
6. invoice errors
7. misfiling of documents
The impact for the business will be increased cost but may also result in lost sales and lost customers.
What actions should be taken to eliminate waste, scrap or process duplication?
A business review should be undertaken and quality management systems be implemented. This may require the environment within the organization being changed; maybe a move to a no-blame culture, staff training increased and encouraging staff to become decision makers.
In addition the introduction, or updating, of ERP systems or the like should promote the documentation of systems and processes that will provide a platform on which a recognized and structured approach in communication and data collection can be adopted.
Learn more about quality management systems (QMS) and improve your business performance and profitability.
The control of receivables cash flow is critical in ensuring good cash flow for businesses.
However, it is often found easy changes in the cash collection processs will dramactically improve the timely amount of cash received. Discover The Ten Important Sales Ledger Tips to improve your cash flow.
Are all SME business owners good leaders – sadly not.
Many business owners possess the technical skills to develop, make or sell a product or service, but do not have the business acumen to convert their talents into a successful business.
Why is this?
It may be:
- a negativity towards the business world
- an unwillingness to add good leadership skills to their skill set
- time constraints preventing the learning of new skills
- a blasé attitude towards their business; “it has been OK in the past it will work in the future”
In many expanding SME businesses the role of the owner must change if success is to be achieved. The business will become more complex and the owner should devote more time to leading the business and less time actually executing the work.
This change will necessitate the gaining of leadership skills.
What are leadership skills?
Leadership is about having the vision for the business, setting the goals and having the ability to inspire and enthuse others to share and achieve those goals. The passion and drive to reach the goals is of paramount importance, however, directing others in a manner that will encourage their commitment to being part of ‘the team’ will be critical.
Learn more on how to improve your leadership skills
Care should be taken to ensure a business plan includes all important data about the business.
What is important will vary from business to business, however, there are 7 topics that will most probably be included in a business plan.
Read 7 Topics for Inclusion in a Business Plan
