I know that you want to be successful in business. Why else would you do it? There is no point to putting your family home at risk and sacrifice time with your family and friends if you didn’t want to be successful. You went into business to make a profit, as a profit enables you to live the life you want to live. Whether that be providing for your family, taking holidays when you want or building your asset for retirement – you need profits from your business to help get you there.
What is the first stepping stone of a successful business? It is Strategy. You don’t get in your car and drive unless you know where you are going and how to get there. The same applies to business.
Here are my five top tips to help you be successful in business:
Have a Strategic Plan & Document it – Strategy is about vision and direction and where we want to take it. Often, we are really good at operational things – the doing. Strategy is hard because you are thinking about the future and where the business is going. I recommend getting away from your business to do this. Turn off your emails and phones and go out of your normal work environment. A good way to think is to imagine that you are reporting to room of shareholders in 12 months’ time. What was the results you achieved? What were the problems or issues you encountered? What did you do well? Look at your resources – your people and your processes. Think about your customers – who are they and why do they buy from you. What do they need from you? The important thing is to document it. Once it is in writing, you are more likely to remember and stick to it. There are also no disagreements with business partners about what was discussed.
Set KPI’s – Once you have your strategic plan, you need to measure how you are going. KPI’s help measure the activity you need to do to lead to an outcome you want. KPI’s can include number of sales meetings, job turn-around times, productivity etc. If you are not achieving these KPI’s you know that you will be offtrack on achieving your goals decided on the strategic plan. KPI’s also help your team members know what they need to do. If you give them outcomes, they are not always clear on what they need to do to achieve those outcomes. KPI’s can make the invisible, visible.
Set a budget – Your strategic plan may say that you want to make a record profit this year, but do you know what it takes to achieve this? A budget helps you understand what you need to achieve in revenue to meet your profit goals. It also considers fluctuations or cycles in the business so that you have enough cashflow to get you through. Begin your budget with the end in mind. This is also called a bottom up budget. If you want to make a profit of say, $300,000 – work backward to know what sales you need. Include this budget in your documented strategic plan.
Understand your Financial Reports & Results – Financial reports report the outcome of your hard work. Understanding what they are telling you is important. Some business owners go through no knowing how they are performing – all they look at is a bank account. Unfortunately, if you ask a liquidator one of the key reasons for businesses failing, they are guilty of this and not really knowing what their results are telling them. Talk with your accountant about these results and get them to train you on their meaning.
Regular Accountability Meetings – If you are training for a marathon, you might get a personal trainer or coach to help you get there. This is the same with anything in life – but especially so in business. Reviewing the last month or quarters performance, comparing this to your strategic plan and setting new goals or priorities for the next 90 days will help you achieve your goals, but having someone to answer to about why you didn’t do what you said you would do really motivates you. A good accountant can help you with this. They can help you keep focused on what is important and advise you on dealing with any issues or problems. Think of them as your personal accountability coach! You will be amazed and what you can achieve if you have someone encouraging and pushing you to do your best.
If you’re keen to review your business goals and plans for the next year, have a chat with one of our trusted advisors.