Your business is there to support you and your life. Not the other way around. Some business owners spend so much of their life in their business they lose sight of what’s outside. That’s no life.
Start with a plan for your goals in all areas of your life.
• Business
• Family & Relationships
• Financial Wellbeing
• Self Education & Personal Development
• Health
• Recreation and Free Time
• Contribution
• Spirituality
Think about the future beyond the next 12 months and five years. Plan the things you want to accomplish. Plot them on your schedule. Make time for the things that give you pleasure. Make time for family and community and the things that make life worthwhile.
Build your business to be as great as it can be.
Create a map for your future and set and meet the goals that you need to, to reach your best future possible. Consult your map every day and make it something that you can look back on and be proud of what you’ve achieved, and make that hard work really pay off.
Lindy Asimus works with business owners using these principles and more, to empower them get what they want from their business and their life.
For private coaching enquiries contact Lindy …
7 Steps: The Checklist – Available on Request!
Contact Lindy with your request if you’d like to receive this to get your business growing and healthy.
Friday, July 16, 2010
Step 6: Be Clear –And Across All Your Responsibilities
You are the owner of your business. So what role will you take on? Are you prepared to be CEO of the business? Are you a better manager? Or are you not a good manager and is hiring a good manager a better way for the business to go forward?
Are you doing the things in the business that only you are capable of doing?
As the strategic driver in the business, you need to know where your strengths lie and where they don’t. If you can promote your business and drive it to heights, by setting up and brokering high level deals, and setting up joint ventures, and being the Rainmaker, then you do your business no favour by hanging around and looking over the shoulders of your employees, or sweeping the floor because “nobody else can do it like you do” instead.
Ensure that everyone knows clearly what their job is (written down) and that includes you.
Define your role, and be accountable for what you need to do.
Make sure that whoever reports to you as the owner, does exactly that, as and when they are supposed to report to you.
Make sure they report to you on all the areas of which you need to be aware.
Remember this is your business, and your asset. Treat it as such, with all the diligence and the respect that it deserves.
Are you doing the things in the business that only you are capable of doing?
As the strategic driver in the business, you need to know where your strengths lie and where they don’t. If you can promote your business and drive it to heights, by setting up and brokering high level deals, and setting up joint ventures, and being the Rainmaker, then you do your business no favour by hanging around and looking over the shoulders of your employees, or sweeping the floor because “nobody else can do it like you do” instead.
Ensure that everyone knows clearly what their job is (written down) and that includes you.
Define your role, and be accountable for what you need to do.
Make sure that whoever reports to you as the owner, does exactly that, as and when they are supposed to report to you.
Make sure they report to you on all the areas of which you need to be aware.
Remember this is your business, and your asset. Treat it as such, with all the diligence and the respect that it deserves.
Step 5: Know The Numbers In Your Business - Pt 7
Buying & Selling A Business
Buying a business or selling one, each of us wants the best deal possible. If you are running a business now, then make it one that is reaching the potential it has so that you can command the best price when you sell AND make the most of it while you are running it.
If you want someone to buy your business, understand, they are not going to want to spend any more than they have to for it. So ensure that your business looks appealing by having it ‘sale ready’ at all times. This may take some time to accomplish, so start now, and begin working on those areas that are taking away from the value of the business to someone else – and to you!
Start by knowing what your business is worth right now and work from there.
Succession
This really relates to the previous topic on buying and selling business. In some cases, a business owner will wish to pass the business on to a member of the family, or someone else.
If you want to pass on the business, then:
• Will they have the money to buy?
• Who else would have the money and be interested in buying?
• How will you get paid for your business?
And if you sell the business to one child in the family, what about the others? There is much to consider when looking at succession within a family, and in the marketplace generally. Not everyone with the skills to run it may be in a financial position to buy it when you want to get out. If your children buy it, will they have to deprive the business of money to do so? Or will you face a miserable retirement because you don’t want to ask for the money you are due?
Succession is something to consider at the very beginning of starting your business, since the decisions you make along the way can be affected by the outcomes that you seek to generate. If you haven’t done this already, then do it now. Revisit your exit strategy every five years forward and ensure that your management plan is on track to achieve what you want in terms of final price and profit today and tomorrow.
Set your targets, and prioritize and recalibrate your budget and spending as required to be consistent with your aims.
Your exit strategy should be incorporated into your plan for the business, from the day you start. Revise over time, if your intentions or circumstances change.
Buying a business or selling one, each of us wants the best deal possible. If you are running a business now, then make it one that is reaching the potential it has so that you can command the best price when you sell AND make the most of it while you are running it.
If you want someone to buy your business, understand, they are not going to want to spend any more than they have to for it. So ensure that your business looks appealing by having it ‘sale ready’ at all times. This may take some time to accomplish, so start now, and begin working on those areas that are taking away from the value of the business to someone else – and to you!
Start by knowing what your business is worth right now and work from there.
Succession
This really relates to the previous topic on buying and selling business. In some cases, a business owner will wish to pass the business on to a member of the family, or someone else.
If you want to pass on the business, then:
• Will they have the money to buy?
• Who else would have the money and be interested in buying?
• How will you get paid for your business?
And if you sell the business to one child in the family, what about the others? There is much to consider when looking at succession within a family, and in the marketplace generally. Not everyone with the skills to run it may be in a financial position to buy it when you want to get out. If your children buy it, will they have to deprive the business of money to do so? Or will you face a miserable retirement because you don’t want to ask for the money you are due?
Succession is something to consider at the very beginning of starting your business, since the decisions you make along the way can be affected by the outcomes that you seek to generate. If you haven’t done this already, then do it now. Revisit your exit strategy every five years forward and ensure that your management plan is on track to achieve what you want in terms of final price and profit today and tomorrow.
Set your targets, and prioritize and recalibrate your budget and spending as required to be consistent with your aims.
Your exit strategy should be incorporated into your plan for the business, from the day you start. Revise over time, if your intentions or circumstances change.
Step 5: Know The Numbers In Your Business - Pt 6
Financial
The financial side of your business needs good oversight and in choosing an accountant to help you in your business, be clear from the start, what you want from them and communicate this to them. If they are unable or unwilling to provide you with the service you need, at a price that offers value for the money you will spend, then keep looking until you find one who is.
Trying to penny-pinch on an accountant who can offer you good business advice and guidance as well as complete your compliance requirements is a false economy. Find out up-front what it is going to cost, if you can spread your payments to ease your budgeting and ensure you know just what you are getting for your money. Make notes and make sure you get what you are promised.
Remember too, that your financial strategy needs to not only cover what you have – it needs to protect it from being lost too. Sickness, and accidents can rip away your plans and dreams if you don’t have your income and financial assets protected. Proper risk management lets you protect your current assets and your future assets. Many business owners are exposed to great financial risk, and never know it.
Shining some light on this so you can do something to protect yourself should happen while you can still get this covered. It is worth remembering that insurance is not a ‘right’ and can be hard or even impossible to get, when you realise you need it now. Similarly, growing your assets is admirable, and safeguarding them from loss is just as important. Loss can happen though many ways. Sometimes it can be personal injury or illness, but it can also be because of claims against a business. Many business owners have lost their assets because of poor structuring of their business, and no thought or action into setting up the business to quarantine personal assets.
To ensure that you have all possible scenarios covered, there may be a choice you need to make. Work through with both a legal practitioner specialising in commercial and business law, and your accountant to balance those wishes that you have regarding your tax planning and what you want regarding safeguarding your assets. This is a choice that every business owner should be consciously aware that they are making.
Every action has a consequence, and that bit of tax you save, may or may not be worth having compared to the downside risk. Use the expertise of your advisors to guide you through these issues, and bring it up with them, if they haven’t asked you about these matters. We often assume that our advisors will tell us anything we need to know. Very often that isn’t what happens.
Be proactive about knowing what you need to know and take responsibility to be conscious of the needs of your business, and your family.
The financial side of your business needs good oversight and in choosing an accountant to help you in your business, be clear from the start, what you want from them and communicate this to them. If they are unable or unwilling to provide you with the service you need, at a price that offers value for the money you will spend, then keep looking until you find one who is.
Trying to penny-pinch on an accountant who can offer you good business advice and guidance as well as complete your compliance requirements is a false economy. Find out up-front what it is going to cost, if you can spread your payments to ease your budgeting and ensure you know just what you are getting for your money. Make notes and make sure you get what you are promised.
Remember too, that your financial strategy needs to not only cover what you have – it needs to protect it from being lost too. Sickness, and accidents can rip away your plans and dreams if you don’t have your income and financial assets protected. Proper risk management lets you protect your current assets and your future assets. Many business owners are exposed to great financial risk, and never know it.
Shining some light on this so you can do something to protect yourself should happen while you can still get this covered. It is worth remembering that insurance is not a ‘right’ and can be hard or even impossible to get, when you realise you need it now. Similarly, growing your assets is admirable, and safeguarding them from loss is just as important. Loss can happen though many ways. Sometimes it can be personal injury or illness, but it can also be because of claims against a business. Many business owners have lost their assets because of poor structuring of their business, and no thought or action into setting up the business to quarantine personal assets.
To ensure that you have all possible scenarios covered, there may be a choice you need to make. Work through with both a legal practitioner specialising in commercial and business law, and your accountant to balance those wishes that you have regarding your tax planning and what you want regarding safeguarding your assets. This is a choice that every business owner should be consciously aware that they are making.
Every action has a consequence, and that bit of tax you save, may or may not be worth having compared to the downside risk. Use the expertise of your advisors to guide you through these issues, and bring it up with them, if they haven’t asked you about these matters. We often assume that our advisors will tell us anything we need to know. Very often that isn’t what happens.
Be proactive about knowing what you need to know and take responsibility to be conscious of the needs of your business, and your family.
Step 5: Know The Numbers In Your Business - Pt 5
Break-even
The ‘break-even point’ of any business is the dollar value of sales the business must achieve to cover its fixed costs or overheads and so achieve a profit of $0. Knowing the breakeven point is helpful in deciding prices, setting sales budgets and preparing a business plan.
The break-even point has important strategic implications as well. The more certain a business is of reaching the breakeven point (due to, say, regular customers, guaranteed or contracted income), the lower the level of business risk. In other words, it is the minimum level of sales the business needs to avoid losing money.
To explore this further...
Calculating the break-even point
Break-even (unit sales)* =
Total fixed costs $
Selling price (per unit) – Variable cost (per unit)
* The number of units of goods you need to sell to break even
Break-even ($ sales revenue)** =
Break-even (unit sales) X Selling price (per unit)
** The total value of sales needed to break even
Example of Break-even point
XY Company has:
Selling price (per unit) $10
Variable cost (per unit) $4
Total fixed costs $1,500
Break-even (unit sales) =
$1,500 / $10 - $4 = 250 units
That is to say, 250 units you need to sell to break-even. 250 units before you start to make a profit.
How much do you need to achieve every week, every month to break even… before you are making your profit? How much profit on top of that, do you need to be bothered going to all that trouble of running your business?
Understand what these numbers are so you can set and meet your targets knowingly and with full intention.
Keep track of these break-even numbers and you can know when you are starting to go off track and take steps to get back on track right away.
Problems come when you find out only months later that you’d lost your way.
The ‘break-even point’ of any business is the dollar value of sales the business must achieve to cover its fixed costs or overheads and so achieve a profit of $0. Knowing the breakeven point is helpful in deciding prices, setting sales budgets and preparing a business plan.
The break-even point has important strategic implications as well. The more certain a business is of reaching the breakeven point (due to, say, regular customers, guaranteed or contracted income), the lower the level of business risk. In other words, it is the minimum level of sales the business needs to avoid losing money.
To explore this further...
Calculating the break-even point
Break-even (unit sales)* =
Total fixed costs $
Selling price (per unit) – Variable cost (per unit)
* The number of units of goods you need to sell to break even
Break-even ($ sales revenue)** =
Break-even (unit sales) X Selling price (per unit)
** The total value of sales needed to break even
Example of Break-even point
XY Company has:
Selling price (per unit) $10
Variable cost (per unit) $4
Total fixed costs $1,500
Break-even (unit sales) =
$1,500 / $10 - $4 = 250 units
That is to say, 250 units you need to sell to break-even. 250 units before you start to make a profit.
How much do you need to achieve every week, every month to break even… before you are making your profit? How much profit on top of that, do you need to be bothered going to all that trouble of running your business?
Understand what these numbers are so you can set and meet your targets knowingly and with full intention.
Keep track of these break-even numbers and you can know when you are starting to go off track and take steps to get back on track right away.
Problems come when you find out only months later that you’d lost your way.
Step 5: Know The Numbers In Your Business - Pt 4
Operations
Analyze the operations in your business, as you do every department.
Beware the trap of allowing someone in the business to hold your business hostage. How do you tell if someone is doing that? You’ll know by how easy it is to tell what they do in their work.
Tell-tales signs could be that you have someone in a critical role who is the only one that knows exactly what they do. They hold access to some part of the business that isn’t available to others. They are the only ones with the access password, or the skill to get in to certain parts of the business, or reports that you need to manage effectively. “They are the only one who knows how to do X” is a good indicator that you are in danger of losing control over your own affairs.
This can be a factor in IT areas particularly, and is a dangerous situation to allow it to continue. In this case, it can be worthwhile to have your external IT supplier oversee what is happening to ensure that your business systems etc are running optimally. Make sure you are not being controlled by someone with limited expertise setting themselves up as in-house ‘guru’ with only limited knowledge of the topic.
This is important as it can affect decisions and be costing you untold thousands of dollars of value in loss of facility to manage your business because of this stranglehold. You will eliminate the possibility of this by ensuring that all tasks are identified, documented and available in the procedure manual and position description for each role identified fully. If someone is away, someone else can grab the manual and know exactly how to do what is required. And you have the knowledge you need to assess their performance throughout the year.
You can’t afford your business to be captive to someone else. Ensure that your knowledge-base remains within the business, and the wisdom in your business is not walking out the door when someone leaves, or holding you afraid of getting rid of non-performers, or keeping employees who are not carrying their weight because they are the only ones with the knowledge of that role.
While overseeing employees is vital, let the systems you set up help you manage this. This should be something you can do easily and without taking enormous amounts of time or requiring you to micromanage every staff member. That’s not your job!
If setting up systems is not your strong suit, then get help from outside to put this into place. Remember: Not having systems in your business is costing you money that won’t show up any place on your balance sheet. It is like ‘leaving money on the table’, and it is through working out your systems that you can find this extra opportunity and money that you would otherwise let slip through your fingers without notice.
Analyze the operations in your business, as you do every department.
Beware the trap of allowing someone in the business to hold your business hostage. How do you tell if someone is doing that? You’ll know by how easy it is to tell what they do in their work.
Tell-tales signs could be that you have someone in a critical role who is the only one that knows exactly what they do. They hold access to some part of the business that isn’t available to others. They are the only ones with the access password, or the skill to get in to certain parts of the business, or reports that you need to manage effectively. “They are the only one who knows how to do X” is a good indicator that you are in danger of losing control over your own affairs.
This can be a factor in IT areas particularly, and is a dangerous situation to allow it to continue. In this case, it can be worthwhile to have your external IT supplier oversee what is happening to ensure that your business systems etc are running optimally. Make sure you are not being controlled by someone with limited expertise setting themselves up as in-house ‘guru’ with only limited knowledge of the topic.
This is important as it can affect decisions and be costing you untold thousands of dollars of value in loss of facility to manage your business because of this stranglehold. You will eliminate the possibility of this by ensuring that all tasks are identified, documented and available in the procedure manual and position description for each role identified fully. If someone is away, someone else can grab the manual and know exactly how to do what is required. And you have the knowledge you need to assess their performance throughout the year.
You can’t afford your business to be captive to someone else. Ensure that your knowledge-base remains within the business, and the wisdom in your business is not walking out the door when someone leaves, or holding you afraid of getting rid of non-performers, or keeping employees who are not carrying their weight because they are the only ones with the knowledge of that role.
While overseeing employees is vital, let the systems you set up help you manage this. This should be something you can do easily and without taking enormous amounts of time or requiring you to micromanage every staff member. That’s not your job!
If setting up systems is not your strong suit, then get help from outside to put this into place. Remember: Not having systems in your business is costing you money that won’t show up any place on your balance sheet. It is like ‘leaving money on the table’, and it is through working out your systems that you can find this extra opportunity and money that you would otherwise let slip through your fingers without notice.
Step 5: Know The Numbers In Your Business - Pt 3
Administration
Again, your procedures should be up-to-date and adhered to, in the administration of your business, as in each and every other department.
Your administrative staff and especially those in charge of paying your accounts and purchasing items are in a particularly sensitive role and need to be overseen in their activities, by you. Make sure you know what is happening with the accounts in your business. Set up guidelines that make sure you are ‘in the loop’ and there are failsafe measures in place to know what your cash position is every day. Many a business owner has passed this work to others only to find out months or years later that they have been embezzled by those who were most trusted.
Trust your staff and have steps in place to ensure that their actions are verified.
Check regularly to ensure that your compliance obligations are up-to-date, and the monies owed to you are being paid on time. If your business is running accounts that are behind in payment then the time to do something about is now. Don’t let delinquent accounts cost you money in loss of discounts you can negotiate for goods you purchase, and don’t let bad payers have you exposed to risk of non-payment. Don’t tolerate deadbeats who don’t pay you – and don’t be one yourself! Pay your bills in good time, no sooner than necessary, but no later.
Again, your procedures should be up-to-date and adhered to, in the administration of your business, as in each and every other department.
Your administrative staff and especially those in charge of paying your accounts and purchasing items are in a particularly sensitive role and need to be overseen in their activities, by you. Make sure you know what is happening with the accounts in your business. Set up guidelines that make sure you are ‘in the loop’ and there are failsafe measures in place to know what your cash position is every day. Many a business owner has passed this work to others only to find out months or years later that they have been embezzled by those who were most trusted.
Trust your staff and have steps in place to ensure that their actions are verified.
Check regularly to ensure that your compliance obligations are up-to-date, and the monies owed to you are being paid on time. If your business is running accounts that are behind in payment then the time to do something about is now. Don’t let delinquent accounts cost you money in loss of discounts you can negotiate for goods you purchase, and don’t let bad payers have you exposed to risk of non-payment. Don’t tolerate deadbeats who don’t pay you – and don’t be one yourself! Pay your bills in good time, no sooner than necessary, but no later.
Subscribe to:
Posts (Atom)