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Is Your Business Failing or Faltering?

I know many people who run and start their businesses from their hearts. But as they add a marriage and children or aging parents as dependents, the reality of running a business becomes more desperate. Something they had the freedom to do as they pleased prior to more personal responsibilities. But once it comes down to desperate days when needs of the other partner, children or other personal responsibilities weighs heavily, then the business is looked to for a bail out plan. So if the business is not a Fortune 500 company, chances are it will be looked at with an overly critical eye.

On the other hand, some people are intent on running their business from their hearts and prefer it that way. No amount of pointing out the short comings for fixing up will lead a business owner back on the right path.

The key point here is that if your business is not paying you what you expect for your time, then you may have to rethink it.

Here are the stages to any successful business:

There are three stages to any successful business. These apply to service businesses as well as product businesses.

Stage One:

First a person or people set up the business. Often this is done by a step-by-step process. Investment one leads to a payoff, that leads to another investment and so it goes the way of snowball rolling. It can often take a lot of money to set-up a business but unless you are willing to commit to a bank loan on the never never, it is often easier to set up this kind of investment in your business. Most banks also cannot lend to a business before two years of tax returns have been filed.

People can be trapped in the first stage for years alongside their business.

Stage Two:

The second phase is identifying waste and cutting expenses. If you have too many staff members or too much of an expense account for hydro and natural gas, then it may be time to find other sources of energy like a heat pump. It may be time to trade in the inefficient light bulbs for the LED variety.

It may be time to look at staffers and let them go because their wages are too high and they refuse to take a reduction. Or, in some cases the cost of the rent is astronomical. With squandering all the money on rent, there will be no way to invest in a longterm, sustainable place to do business.

Stage Three:

This stage is the final one where things are improved after expenses are cut and some form of investment is put forth to make it possible to save more money or to make more money by introducing a new service or product.

Here are some warning signs that your business is in trouble:

1. Your business consistently pays out over fifty percent for rent and wages as well as advertising. Above 50 percent, your business is not working its hardest. If you bring in 4,000, but pay out 2500, then your business needs some help.

Apply stage one to three and find out where your business is, then work forward to correct its inefficiencies.

2. You are consistently using a part-time job to pay for staff or rent. This is a terrible idea as a general rule. It is fine for the stage before having your business or in stage one but if it is still going on, then your business is not as viable as you are thinking it is.

Apply stage two and find out if there are enough expenses to bring it to the point where the business carries itself clear. Once you get to that point, you can rethink it and work on investing to pay for it.

3. Your business is located at a rented facility and it eats all your profits. This isn’t accesptable. If your rent is the albatross around your businesses’ neck, consider scaling back your business and putting it in your house or apartment. If it is a warehouse, consider buddying up with someone with a warehouse to hold the contents, reducing your rent from full liability to a shared portion.

4. Your staff want more money all the time. You’re in trouble here again because greed is running your bottom line. Remember there are always more employees in the sea. No question there. Sure, you may have to look for them or train them but you shouldn’t be on the receiving end of a staff out for more money.

Consider asking your current staff to take a pay cut or become contract workers. By a contract worker, you no longer make deductions to their pay and they are left to do that. This can save a fair amount of money. If they are just out for more money and it exceeds what is standard in the industry your business operates in, consider switching your hardest working, most humble employees into key spots while trimming the dead weight.

5. Is your business always out of money? This is a problem with unexpected expenses. Everything is budgeted too closely.

You can resolve cash flow by opening up a money box at a bank. Put money orders of amounts of money into the money box until you have enough money for term deposits or GICs. By doing this though, you can always make sure you have a money order under 1,000 for direct use. Your secure investments are less liquid such as term deposits. Money orders have the ability to completely take the money out of the account and make it much harder to access.

Another way is to get a credit card you pay each month. This kind of credit card is available from Money Mart. It doesn’t allow you to spend one more cent than you gave it. Unexpected expenses are no problem with this kind of card.

6. You owe too much! Some people suggest putting your credit cards into the freezer. I suggest boiling them and melting them back to their original plastic. By the nature of a business, it is supposed to generate money for spending so by exceeding the money you have with plastic, you are now eating next months profits. Go the high road and get rid of them.

If in doubt, compare your business to the three stages. These three stages can keep you on the straight and narrow but can also give you an idea of how well you’ve been doing running your own business.

Managing In Today’s Business Environment

Managing a business, as you know, is both an art and a science. You can learn quite a bit from materials available in the market. However, you can get the feel of the business only when you apply those lessons and suggestions, interact with people experienced professionals and then go back again to your lessons. Now you are armed with your own valuable experience. But the question is – what is so special about today’s Business Environment? Is today’s business environment something different than what it was earlier? The answer would be a firm ‘yes’.

Earlier the world was divided into isolated zones. If you were given the task of leading a small business, you were expected to keep your views confined to your particular zone only. But now, the world is one entity, despite the political divides. Communication technology has advanced so much that two persons in two different hemispheres can get in touch any moment and instantly. You can travel from one part of the world to the other at very high speed.

With technological advancement business avenues have gone up rapidly. Let us take a simple example. Look around you and see the profusion of electronic gadgets in the market. But against all these rosy images, pressure on today’s business leaders is on the rise since competition is getting stiff by the day. So unless one manages his business with all seriousness and with full utilization of his skills, it is quite possible that instead of rising up the business ladder, he may fall head down. Therefore he has to learn the intricacies of different aspects of managing today’s business environment.

While you manage your business you have to constantly go through many formalities that have to co-relate with your basic business activities. You have to register with many associations, maintain a list of different authorities so that you can seek advice and help, whenever the need arises. Be conversant with the basics of tax matters and relevant rules and regulations.

Acquiring or organizing funds is the most important task. But it may not be as difficult as others that lie ahead. You can take loans from banks and even from your well-wishers. Lease financing and factoring are other sources. You can very well go public. You will succeed this way or the other if there is an able leader at the helm of affairs in this venture. This is because a true leader can transform a business beginning from scratch into a gold mine. You too must have seen or heard that a small business often makes spectacular progress by the sole dedication and sincerity of its leader. Can you not be a leader among leaders? Of course, you can.

The leader has to love the tasks before him. Sincerity will automatically flow from that. He will give additional hours for the organization on his own. He should have a sixth sense for business opportunities so that he can harness richer pastures. But the most important qualification would be to understand his employees with whom he should be friendly while maintaining his professional distance. He should be able to judge each of his employee’s strength and weakness and then allocate jobs accordingly. He should fairly decide rewards and punishments. Inter-personal relationship skills are therefore very important for a true leader. The leader should have the mind and attitude to take his own decisions. In a very large organization, too many persons may adhere to the throne of leadership and that may suffocate the leader with real merits.

A true leader will proceed with a business plan. This business plan should be available in writing in an easily readable, easily understood form that also grabs attention for its presentation. This is his true selling point – on this depends the trust in the organization.

The leader will have to pay attention to so many things all the time. He has to think of marketing strategies, sales boosting, personnel matters, legal issues, accounts modalities, uninterrupted fund flow, procurement and storing, timely transfer of materials, and even day-to-day office administration. He has to curtail unnecessary expenditure. And above all he has to find out the shortest ways to boost profits.

As a good marketing strategist he has to find out how to create an indelible impression in his niche market. Of course, advertising is the solution. He has to judge which media he can depend upon, considering the amount that has been earmarked for the purpose and expected impact from the move. But even if there is fund constraint for advertising in print or electronic media he should not be disheartened. There are other ways too, like issuing coupons, arranging competitions, etc. Offering gifts too can be a good marketing strategy.

So far as sales promotion is concerned, it is well within the knowledge of an able leader that the old technique of telling the customers about the quality of the goods again and again is passé. But if you can understand the problems faced by the customers and try to solve those with the help of your organization, you can very well attract them by this customer-focused sales promotion method.

The leader should even think how to make packaging of his products more attractive. For the customers believe in first impressions.

In the past, there was no scope for sales promotion through web-sites and emails or sending SMS messages through cell phones. But in the modern age why should you not think of utilizing those facilities? You can start by designing a useful and attractive web-site that will enhance the fame of your organization. However, a good leader knows that caution in the matter is to be exerted while sending SMS messages or emails etc. so that the customers do not take it as an infringement on their privacy. Otherwise such misadventures may bring in adverse effects on your business.

Your strategy should be to hold out the truth about your products or services and not exaggerate them. Sometimes money-sucking leaders lure customers by trying to convince them with flowery words. But if the customer is dissatisfied he will definitely defame your products or services. And bad news travels fast. An able leader, on the other hand, tries to pay attention to the complaints received from customers. If those are not genuine, he instructs his employees to explain courteously before the agitated customer. But if such complaints are genuine, he takes every effort to redress the grievance. A good leader cares for good public relation skills of his employees. He does not spare any negligence in after-sales service if that service is applicable to his organization.

To guess correctly the strategy of a competitor and chalk out one’s own strategy accordingly depends on leadership ability. However, the leader should not antagonize his competitors and should be a fair sportsman when he meets the latter.

The leader has to keep track of research going on around the world that concerns his particular business. If possible, he may think of making provision for some research activities within his business zone too. The leader should encourage his capable employees to participate in seminars and workshops that have relevance to the activities of his business area. The articles the latter may contribute for such events will help spread the name of his organization.

He who sells best sells most. A business leader needs to fix a price so that he is way ahead of his competitors.

Among the assets of a business are its machinery and equipment, house etc., workshop, warehouse, vehicles etc. But a sincere and skilled workforce is the most priceless asset for a business enterprise. A business becomes a money-rolling machine without the sincere involvement of the employees. Therefore, if anyone is unwilling to give importance to personnel management he can do that at his own peril or by ruining his business prosperity.

Start from the recruitment stage. Proper selection of personnel can give you a healthy business. You can select them through written tests followed by practical tests and interviews. Sometimes leaders bully candidates to test their skill levels. Such leaders are anything but successful. For your job is to find out the right candidate and not exhibit your strengths. The candidate believes he is facing an experienced professional and it would be thoroughly unprofessional to outgrow him at the interview. But if the interviewer loses his own patience and amiable nature, it spoils the very purpose of the recruitment process.

Once the selection process is over, it is the job of the leader to train them. At every stage the leader should monitor their performance and that will be of great help to assess further the new recruits.

An able leader sees to it that his team members talk to him without hesitation, discuss their problems and volunteer suggestions. A good leader motivates the employees under him. To motivate further, rewards should be declared at intervals. Even if the rewards are nominal, they play an important role. The staff concerned will realize that his performance has been monitored and assessed correctly. That will inspire him to move forward with added zeal.

The staff should be encouraged to join courses that will be helpful for the business. There should be incentives for that. In-house training courses too should be organized.

Sometimes people think that just by raising salary, employees can be motivated. That is a wrong concept. Just sudden jumps in salaries without caring to assess the individual merits do not promise improvement in staff performance. Good pay for good work should be the aim of the business.

How should aggressive, careless and trouble-makers be treated? An able leader does know that firmness in those cases will generally help those persons to rectify themselves. If simple cautions do not work, warnings should be issued. But before any punitive action is taken, it should be ensured that the person concerned had been given ample scope to come back on the right track.

Sometimes firing a staff may become unavoidable. But steady progress eliminates such possibilities. Even if there is any need for firing a staff, the leader should be careful to minimize that as far as practicable. The existing staff will also appreciate his efforts in the matter.

To his staff a good leader should be a good friend and a strict taskmaster whose heart is full with affection for every individual.

Thus, in today’s changed world the leader has to be more conscious about new ideas and inventions. With imagination, sincerity and diligence he has to move ahead with his dreams. But his health is an important factor because his health and the health of the business are tuned together. He should maintain discipline in his life if he is to maintain discipline in his business.
It is quite natural for the staff in general to follow their leader if they are convinced that the latter is an ideal one.

A business becomes very prospective when everyone, be he in sales or accounts or engineering or public relations, feels that he is very much a part of that family. If the business does prosper everyone is delighted and if it fails, everyone is grieved. If a business is successful, sheer team spirit will roll it forward.

Both the past and present have produced great leaders and amazing workforce. That is a salute to the one person who had and has the ability to manage business and man force.

A good leader can inspire team spirit in his staff. A good leader begets good business. A happy and contented leader will bring happiness in everyone working with him. And this is achievable even in the toughest of times.

10 Business Street Smarts

Many business owners or people who are about to start a business have idealistic views about their new venture. People who are experienced in business know that there are some basics and some fundamentals that you must get right if you are to succeed. This article outlines a list of “Street Smarts” which have been distilled from the knowledge and experience of many successful business people. Read them carefully!

1. The fatal mistake of many business people – thinking that because they are a good mechanic, baker, accountant, that they understand what it takes to run a mechanical business, bakery business, accountancy business. The most important skill for any business person is to know how to run a business. How much management & business & marketing training have you invested in yourself?

2. Make sure you clearly understand the concept of working on your business as distinct from working in your business. The most successful business owners spend a great deal of time working on their business – learn from them! Read The E Myth by Michael Gerber – a must read!

3. Work out what it would take in dollars to pay someone to do what you do, for the hours you put into your business. Are you paying yourself the same amount? If not, why not? You are clearly worth it! Many people would argue that if you are not paying yourself that same amount, then you don’t have a business, you have bought yourself a job – and perhaps a low paid one!

4. Learn from other people, especially their mistakes – you cannot live long enough to make them all yourself! This means that you must be willing to embrace change – in every aspect of what you do. The one certainty is that change will continue and increase! The definition of insanity is “doing the same things in the same way and expecting different result.” If you want a different or better outcome – change!

5. Can your business run without you for up to a month? If it cannot, then you have a job, not a business. Are you taking a holiday each year? Why not, your staff do! If you are a one or two person business, then bring in a relief person for the time you are away. Pharmacists, doctors, & dentists, do it all the time – why not mechanics, bakers, accountants or home based businesses?

6. Prepare yourself for this one! If you have had the same accountant, for more than 7 years, then get “a second opinion” from a completely new source. Evaluate their advice against your “regular” and see which is more likely to deliver the lifestyle you want. Two important things to note about this: a) if your adviser advises you against this – what does that tell you? and, b) if your accountant does not understand how and why a business should “deliver a lifestyle”, then it’s time to update your advice.

7. Embrace technology at a personal and business level. If you are not on email and checking it at least every day, then the world is passing you by and you don’t even know it! Among other resources, there are literally thousands of free email newsletters available which will help you make your business more profitable – mechanic, baker, accountant or farmer!

8. To get where you want to go, mix with people who are already there. Talk to the best people in your business – you will learn from them. Avoid the negative complainers – they’ll drag you down. The majority of business today comes from networking.

9. It doesn’t matter how much money your business makes. What matters is how much you keep! Turnover is a very misleading measure of the success of a business. Do not fool yourself (and others) by thinking that a “large” turnover necessarily means a great business.

10. If you are in business, then you are in marketing. The more time you spend on marketing your business, the more profitable your business will become. The single greatest skill to develop and learn and keep developing is marketing. 11. Bonus Point! What have you read or listened to this month? Become thirsty for knowledge and both you and your business will grow.