I am in the process of redesigning my business coaching and facilitation web site and I was thinking of all the areas that the managing director or owner of a small and medium sized business needs to think about.
A small and medium sized business owner needs to think about a great deal of things and these include:
- Building a vision. What turnover, what profit margin, what markets do I need to serve in 3 years time? You need a business goal, otherwise failing to plan is planning to fail.
- Values. In my experience not many small and medium sized business owners think about the values that the business needs to embody in order to be successful. Businesses run by genuinely nice people (i.e. do unto others as you would do for you) and great values. They treat people with respect.
- 6 months objectives. It is great to have a vision of where you need to be in 3 years’ time but with so much pressure on a small and medium sized business owner it is also necessary to have a list of 3 or 4 items that need to be completed in 6 months’ time so that progress is made to the longer term goal.
- Marketing system. The business needs a regular source of new leads or enquiries. A lot of small and medium sized business owners tend to focus on what they are good at and often struggle with spending time and money developing a coherent marketing strategy and system that generates regular leads or enquiries.
- Sales process. Some small and medium sized business owners employ a sales person. This can be a fraught time for both the owner and the sales person as all the faults and problems faced by the business through poor sales are dumped on the poor sales person. That said, finding good proactive sales people is hard for a small and medium sized business owner as good hunter sales people are hard to find and therefore don’t come cheap. What does seem to work is if the marketing process or system can be made to work then a good telesales person can often develop the leads. Most small and medium sized business owners can then convert the larger projects as they have the benefit of “the owners eyes”. That is that deep engrained passion and knowledge for the product or service that will beat a sales person every time.
- Customer services. When a customer places an order with your business there is an expectation that the order will flow through the business without a problem. For standard orders this should always be the case and if it isn’t then you need to flow chart your processes and remove any blockages or places where it can get lost. However, customers have a habit of wanting things that you can do but are not standard in some way. The larger the customer they are, the more likely that this will be the case.
- Operations or Production. Whether you deliver a service or make things, you need to make sure that your processes are both efficient and effective. That is, you deliver what the customer has asked for and without wasted time, effort and resources. The principles of lean can be applied to all areas of the business, not just manufacturing. So as a small and medium sized business owner you need to understand and apply the principles of lean throughout your business whether you make products or supply services.
- Accounts. I haven’t seen it for a while but quite often I have been into a business that is having cash flow problems, only to find that they invoice late. If the customers receive the invoice late then they are going to pay late and that will affect the cash flow. An order isn’t a sale until you have been paid. Cash is king. The small and medium sized business owner needs to ensure that every system in the business is geared to ensuring that customers’ orders are processed and delivered as effectively and efficiently as possible and that the associated paperwork is processed in the same manner so that the money can be collected quickly and put back into the business.
- Human resources. This has now become one of the most difficult areas that a business owner faces. Getting the right people doing the right things and keeping compliant with the law is no easy task. It has grown so complex that I now recommend that a small and medium sized business owner takes a retainer with a specialist who can provide all the policies and resources needed in order to keep the business legal and less likely to be taken to an employment tribunal.
- Health and Safety. Human resources. Along with human resources, this has now become one of the most difficult areas that a business owner faces. It has grown so complex that I now recommend that a small and medium sized business owner takes a retainer with a specialist who can provide all the policies and guidance needed in order to keep the business legal and safe.
- Management accounts. Monthly management accounts are key to keeping on top of the business. If the customers are being invoiced in a timely fashion then it should be relatively easy to produce the monthly management accounts by the middle of the following week. For those businesses with a steady sales stream then weekly or even daily sales figures should be possible together with figures for gross profit by product.
- Key performance indicators. From having worked with a large number of small and medium sized business owners, getting non-financial key performance measures in place has got to be one of the hardest tasks. Key performance indicators (KPIs) are used to measure non-financial measures of performance. These include marketing statistics (web site visitors, enquiries, quotations), sales activity (e.g. orders, average order value, conversion ratios), production stats (e.g. WIP, stock turn, waste, process times), even accounts such as profitability per job, customer or product.
The role of a business coach is to work with a small and medium sized business owner on all these issues and to help identify actions that the owner can carry out in order to progress and complete them.
If you would like a free half hour coaching session then please go to: http://www.kub-uk.net/business-coach/