8 crucial aspects to stay across as a small business owner //
It’s all very well to be smashing your turnover targets, but if your net profit margin is poor, or not growing in line with your turnover – then are you really succeeding? By the same token, if you’re working long hours; just to keep your business afloat- is there a better way that you could be doing things – in order to achieve the same (or a better) result?
Here are 8 priorities that I personally have found to be absolutely crucial to manage at all times in running our small business over the past 10+ years…
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- Running Costs as a % of your sales
The general rule of thumb is that the costs that you incur to keep your business running on a daily basis should not exceed 30%. In the case that they do; your net profit after all genuine business expenses (not including your own wage), should be a minimum of 30%.
- Cashflow
Ideally you want your business to have sufficient cashflow on a daily basis to meet expenses as they arise. If you’re constantly needing to shuffle money in from your personal savings account or racking up credit card debt, then it’s time to scrutinise your outgoings.
- Working hours
Working “on” your business rather than “in” it is the key to long-term success. This is likely to mean short-term pay cuts in return for longer-term gain as you spend money on staff, contractors, assets and software in order to save time and achieve economies of scale as you grow. If you’re burning the candle at both ends just in order to keep your business on its feet; then it’s time to re-strategise.
- Reputation & customer service
There is no excuse for poor customer service and now, more than ever with the entire world online; it is absolutely crucial that each and every customer is made to feel important and special. If you don’t have a clear system for handing complaints, owning your mistakes, and communicating with your clients and stakeholders – prepare to risk your reputation and negative reviews.
- Your target market
It is crucial to know your target market inside out in order to utilise your business’s strengths to capitalise on business opportunities as they present themselves. Ask yourself: What does your customer base need from you? What are you providing them currently? How can you improve further improve your offering and range of services without impacting your bottom line?
- Know your weaknesses. Identify threats
Do you have a disaster plan in place? What could go wrong? If it does go wrong – what will you do? Do you have up-to-date contracts in place with your staff and contractors? How will you manage the poor performance of a team member? Do you have enough resources on hand? Are your policies and procedures in line with professional ethical and regulatory standards?
- Stay educated
No matter how busy you are, it’s extremely important to set aside the time each week to stay across the legislation impacting your line-of-work. Regardless if you’re selling a product or service, knowing the rules around your trade is key to both protecting your business and identifying further grown opportunities. Furthermore, passing on your knowledge to your target market is a fantastic way to grow your following and market your business.
- Look after yourself!
Burnout happens when we take on too much, when we think we can do the impossible at the cost of our health, wellbeing and quality of daily life. If you’re feeling burned out, you’re no use to anyone or anything, let alone your business. Take the time to rest, eat well, get enough sleep and make good health choices generally in order that you guarantee yourself sufficient energy and brain-power to dedicate towards your business.
Running a successful business involves carefully managing all of the above factors- at all times!
