The year is nearly over…..where has it gone is a common small talk phrase at the moment! It really has flown. As we get close to the year end it is a good time to reflect on 2018 (did you achieve all you set out to achieve?) and also to plan for 2019. If you didn’t have as successful a 2018 as you had hoped for that is now history. The beauty of a new year is that it is a fresh start. A chance to make those business changes that you have wanted to make but have not yet made. The reasons that you have not achieved what you hoped to are probably varied but in reality it probably all comes back to a plan. Without a proper plan to actually go about implementing change or achieve targets the likelihood is it won’t happen.
Self Employed v Business Owner
When you are self-employed the default option is to “get it done” and self-employed people have an unbelievable work ethic in that regard. Long hours are never the issue. If a problem arises you will do whatever it takes to correct it. The issue here is that the same problem may well arise again in the future and, guess what, you will have to solve it again. The challenge is giving yourself the time to think and see how things can possibly be done better.
By constantly “doing” it means that all those changes you wanted to make in your business don’t get done! This is the most significant difference between somebody who is self- employed as opposed to being a business owner. It is a difficult transition to make but you owe it to your customers, to your staff and most importantly to you and your family to act like a business owner so that you are constantly trying to improve the experience for everyone.
Where do I start?
Make 2019 the year that you change. Put aside half a day between now and the end of the year to sit and think……turn off the phone, turn off the e mail and get yourself a blank piece of paper. Think about the business you currently have, what kind of life that gives you, what are the problems and frustrations that consistently occur. Then visualise the business you would like to have, how does this give you the life you want and what difference would that make to your family and friends. This could be something as simple as not having to work weekends anymore, being able to take a proper family holiday knowing your business still runs smoothly or maybe some extra profits to allow you upgrade the car.
Once you have visualised the type of business you want you then have to design a plan as to how to get there. This is probably a plan that will take a number of years to achieve so you have to break this down into annual and quarterly steps (or goals) along the journey.
All sounds good but give me something practical!
Ok, so let’s say that as part of the overall goal you want a business that allows you to take a two week holiday twice a year with little or no impact on your business. The problem with this is that at present you don’t believe the team you have can run the business without you. The default option is probably to give out and talk about how terrible it is….”if only they understand my stresses etc. etc”. The proper reaction to solving this problem lies with the team. Aspects such as:
This is where it probably gets a little more difficult. The process for the team starts well before the hiring process, but at a minimum you have to have proper ways to monitor performance, ways to provide proper feedback, training schedules and accountability. To be honest in this process you have to be consistent and also ensure you set aside the appropriate time, on a regular basis, for you to assess and provide feedback. Fixing the problems by reverting to your default of “getting it done” will not work over the long term and will mean you still cannot go on that holiday. There is no learning in that for the team and you will be fixing for every more.
One key monitor that you should have in place for your business (at a minimum) is an ability to monitor financial performance throughout the year. Prior to the start of the year establish a reasonable financial budget. This does not have to go into great detail if finance is not your thing but as a business owner you cannot ignore the finances. The budget should cover budgeted sales and costs on a monthly or quarterly basis.
Through the year the key numbers that you should be able to monitor would be:
- Sales year to date by customer compared to last year and the current year budget
- Gross profit or gross margins made on those sales (again compared to last year)
- If you are in a manufacturing or service delivery business you should be able to monitor payroll costs as a % of your overall sales and again be able to compare this to last year
- Total actual monthly overhead cost compared with your budget
By having a simple process in place to monitor the above will allow you to make informed business decisions throughout the year.
We ourselves are a growing business and have experienced many of the problems that a small business owner is going through. While we certainly don’t have all the answers, the team at Comerford Foley are working with growing and ambitious businesses every day. We learn from this and would love to see if we can help you grow your business also. If you would like to discuss or arrange a consultation feel free to contact us.