For Business owners, we will look at 5 tips for 2023.
So much happens in such a short time it is difficult to have thinking time. Work, family, events, and now Christmas presents and the Christmas dinner. It is hectic. You will relate to this
“By working faithfully eight hours a day you may eventually get to be boss and work twelve hours a day” Robert Frost
You will get some thinking time over the break and that will be good for you and your business too. You can catch up on that business book that caught your eye.
It got me thinking if I was to put a top 5 tips for a business owner for 2023 what would they be? These are what I came up with
Mattress Matt calls into you and you look at his numbers. €250k in the bank and the numbers look amazing. MM has some business. But he’s wrecked-looking. Matt are you ok? Have you had Covid recently for the third time?
“No am grand It’s just been very busy and people are mad to get a new Emma for Christmas. Great springs on those ones. There’ll be some passion over the holidays”
You enquire further. When you say you are busy what does that mean? And the reply goes something like this.
“Well, I open the warehouse at 5 in the morning. Then I start the vans to make sure they are all working, check the orders, and pack the vans. After that, I plan the routes for the day, and I do Munster. Was off to Kerry at 9 and got back at 8 last night. Got home then and did the books. Bed at 11 and up again at 5 this morning.
Wow Matt that is hectic. I am exhausted listening to that list. You’ll be the richest man in the graveyard if you keep that up. What about the 4 lads working for you? You can guess the reply. They are useless. You can’t get anyone any good. Take your pick!
The question to ask is can your business function without you? Would the world end if you went on two weeks holidays? Is there someone to open the business in the morning and close the doors at night? As the owner of the business, it is your job to put the right team in place. Your team must be happy and motivated. If they are they will look after your clients/customers very well
How do I motivate them? Pay them fairly and train.
We see this a bit with some of our clients but not as much as before. This works two ways. The price you charge and the price your suppliers charge you. How do we increase our profits? Three ways
- Sell more
- Charge more
- Reduce our costs
Matt has 20 large hotel customers that he gets €10000 per year from, so €200000 in total. He looks at his pricing and decides to increase it by 10% in 2023. Sales from these 20 will increase to €220000. But because of the price increase, one customer leaves him. Now, he’s got 19 customers that will give him €11000 or €209000 in total.
A larger sales number but fewer customers. He works less and his focus is to get new and better customers to replace the one he lost.
Matt is “getting thick” with all the increases in bank charges and is looking to see if he can get a better deal. That Swipe crowd are charging him a fortune. He calls up Drover and they offer him a much better deal. He will save €2000 in 2023
Price drives profit and profit is good. Why is that? Because profit pays the bills and the wages of the team that you are trying to keep happy and motivated. Profits pays mortgages, pensions, car loans and taxes. Your duty is to make a profit to expand and grow the business. Strong companies are those with cash in the bank.
Sell more to new clients and existing clients. It can be easier to sell to existing clients as they know you and trust your service or product. You need to get that first sale with a new customer to build up that level of trust. A small paid thing!
Matt is very excited about a new stand-up bed range called the “Tubridy”. It’s a tall thin standing bed that’s hitting the yoga world in Australia by storm. It has an inbuilt electric blanket and a sock holder to put your feet into. Great for your back and you get a super night’s sleep. Matt will now instal the bed and sell the mattress as part of the package
This will generate more sales for him. Sales are looking strong as he will have more products and services to sell. But how will people know about these new ways to sleep and the amazing range of mattresses? Sure, isn’t business ticking along nicely as it is? The question I would ask is how do your customers find you?
One word. Google. They google it. “Oh Mary the back is killing me I would fancy replacing the mattress/you with an Emma” says Billy. Billy googles mattresses that help with back pain. Does Emma appear on the first page of Google with Matt’s website? If yes, then super. If not, then he needs to be on page 1.
That’s where your marketing comes in. You start writing blogs about mattresses. The advantages of an Emma compared to a Maura. You do some short videos and send out a mail shot to clients. Your team starts telling everyone about Emma and the new Tubridy range. Good marketing will lead to sales. While it is a cost it’s an investment too, and the businesses that do it, and do it well, will thrive over those that don’t.
Have you heard of Xero? Cloud accounting. The old way of doing your accounts and taxes is dead in the water. Looking at your numbers during the year will show you how are doing. Eliminate the guesswork.
We did a blog years ago about the traditional v the modern accountant. The traditional accountant gives you historic numbers that are useful for compliance purposes. They are of use to calculate taxes and because you must do them. You see it as a cost, and you get the tax bill and the accountancy bill at the same time. A double whammy.
That is not the accountant’s fault. It is yours. The traditional accountant will be overworked and stressed but will always help you out. Look at your numbers during the year. How am I doing in the first 3 months of 2023? How was the second quarter of the year compared to the first quarter? And how do those numbers compare with the first and second quarters of last year?
Oh no, but I had more sales in Q2 and my profit was lower. Why was that? Turn your accountancy service on the head and invest in your bookkeeping. You can look at it in two ways. A cost or an investment. For an investment, you expect to get value.
Ask your accountant if he/she can do management accounts for you. If he/she can’t then go to someone who can. And know the key numbers for your business. You’ll get so much value from them that, dare I say it, accountancy and taxes will become interesting!
Well Matt do you enjoy what you do?
“You know what I absolutely love most of it, but I hate having to open up in the morning. And I hate doing the books after work”
Matt loves meeting customers and sells more when he’s on the road. He’d rather watch a replay of the Connacht football final than do the Vat. He hates numbers and paperwork.
Two words for you Matt. Delegate and outsource. Leave Billy open in the morning as he’s up early to go to the gym most mornings. Give the bookkeeping to your accountant to sort. Why give it to an accountant and not a bookkeeper? Above all, by giving it to your accountant you are getting a team of people that will help you.
They have Vat and payroll experts. Tax people that can help you. You are getting a team and not just one person.
After all, you are working 50 hours a week and why would you spend 10 hours of that doing something you hate? Imagine you are on your deathbed it is very unlikely you will look back and say “I wish I did more Vat returns”. Getting yourself away from the stuff you hate doing will result in a happier you and a better business too.
You can free up your time to do the stuff you like doing. The things you are good at and that you can charge for.
I hope the above is a small benefit to you. It isn’t meant to come across as we know best, and you should do this and that. You know this stuff already. Being in business is difficult and often the issue is having the time to think about these things. None of us should be beating ourselves up over what we haven’t done.
Small steps will lead to continuous improvement over time. Hard work and small changes will pay off for you. Only you can do it.
“Opportunity is missed by most people because it is dressed in overalls and looks like work” Thomas Edison
Looking to make small changes in 2023 and need help with your numbers? If so, Start Here