Hi guys….my last post was about the woes of having your own business. This post is a continuation based on the points I listed before and what I started to share .
The 10 biggest challenges businesses face today
- Uncertainty about the future.
- Financial management.
- Monitoring performance.
- Regulation and compliance.
- Competencies and recruiting the right talent.
- Exploding data.
- Customer service.
Uncertainty about the future
With my Coaching Business and in any business the first point goes for everyone. You can’t run a business without worrying about the future and hope that everything runs smoothly but that is not the reality. Every business runs into some type of challenge at some point whether its finances, staff, clients, facilities……something must and will go off at some point, it’s how you ride it out and deal with the situation. It’s the same in life…no matter what comes at you it’s not the problem but how you deal with the problem and what you learn from it and how it made you grow. Everyone is the way they are due to the challenges they encountered in life and what they learned from them. So based on that premise lets look at the each point.
To prevent yourself from worrying about the future you must have a business plan, a strategic plan for the next 3-4-5 years and even some personal goals for yourself because this will dictate what changes may be needed or what projects you need to gain. This guides your steps. Do you want the business to grow after 3 years then what do you need to do to get it there? And how or what direction do you want it to grow? Why do you want to go in that direction? and what is the objective for you and for the business in going in that direction? Questions, questions, questions. But answers, answers, answers are required if you want to succeed.
What is Financial Management when it comes to a small business? One thing it is not, is a business who hires an accountant to do its books…or should I say do its 2 books, the real book and the one they show the government. We’ve been asked that question by an accountant. He wanted to know if we wanted him to do our financials that way. We adamantly refused. Being brought up by Catholic families and being grounded in Jesus….no way were we choosing that method. We prefer to do it properly and pay our taxes as demanded by the Government…”pay unto Caesar what is Caesar’s”. Plus I’m too wary of the repercussions of bad decisions like that, that come back to haunt you later in life.
What does Financial Management Entail?
- Developing financial processes and procedures.
- Business finance and loans.
- Budgets and forecasts.
- Profit & loss and balance sheets.
- Providing credit to customers.
- Getting paid on time.
- Recover a debt through the Magistrates Court.
No matter your size you have to develop some procedures/processes that ensure you are saving money for the business, investing money for the business, paying all expenses etc. Does your business need an overdraft facility? Then your financial statements must show that you are making enough to repay any overdrawn overdraft. Do you need a loan to purchase materials, again your financials must show that you make enough money and profits to be able to repay that loan monthly. Do you provide credit to your clients (not an advisable option especially in these times) but this means that you must have a fairly sizeable amount of cash flow available to sustain you until your customers are able to pay.
Do you get paid on time by your clients? I’m sure everyone has stories where this definitely is an issue, whether its a huge client or a small one. They all falter or drag when it’s time to pay their bill, some more than others. This will of course affect your plan and again if you don’t have enough extra cash flow you will end up in a bind and again have to possibly approach the banks for extra overdraft. This is why your financials are very important and must always be up to date because you don’t know when any of those challenges could occur and this will mean you have to pull out the Financial statements proving your ability to repay any request for excess cash. How do you manage your financials daily?
Stay on top of the day-to-day money management
- Properly manage your accounting. You can hire a good bookkeeper/accountant or purchase DIY accounting software like Peachtree
- Review your costs. Keep track of all of your small business expenses. Use Excel to track via a spreadsheet
- Make financial projections.
- Don’t get slack on invoicing. Invoice jobs ASAP.
It is essential that, even in a boom period, you keep control of the situation.
- Define your growth objectives. …
- Do a growth diagnosis of your company. …
- Ensure your growth is sustainable. …
- Prepare a growth strategy. …
- Forecast your cash requirements. …
- Analyze receivables and payables. …
- Control costs. …
- Control debt.
Here are seven tips that will help to ensure your business is a success:
- Have a written plan. …
- Don’t marry your plan. …
- Keep your ego in check and listen to others. …
- Keep track of everything, and manage by the numbers. …
- Delegate to employees and avoid micromanaging them. …
- Use the Internet. …
- Reinvent your business.
You can make sure to start off your business right by researching all the plans and performance processes and procedures you think you need and then simply implement. It’s not as hard as people think, I feel the hardest part is monitoring your expenses versus your income to make sure you’re making that profit.
I’ve worked in the Human Resources aspect of all the companies I’ve worked with and even now as a Leadership Development Coach I am basically still within the HR area, so performance is my baby. I work and coach people everyday to be better at what they do, be more productive, manage their teams, manage their lives, manage themselves, lead others, influence others, monitor performance, assist in building their tams’ performance. So performance is an area that is not only vital to the continuation of your business, it is critical to your mental health.
Why is monitoring performance important?
Measuring and managing employee performance is important because it gives you the ability to properly gauge worker efficiency, identify who is working hard and who isn’t, determine how to properly compensate your workforce, and improve your workplace’s overall productivity.
Having poor performers can and will be a huge bag of worry. So how do you prevent or at least ensure that this is at a minimal? Decide the type of values you want as the foundation of your business. Set the parameters of behaviour you want and expect from those who work for you, practice that behaviour yourself and immediately correct any behaviour is counter to what you expect and want in your company. Then track your performers so that they can be adequately rewarded for their great performance or soundly disciplined for their inappropriate or poor performance. Tracking is key, not just their Key performance Indicator tasks but track and have in place a way to track behaviour.
How do you track your employee performance?
The 7 Best Ways to (Really) Track Employee Performance
- #1 Set expectations and goals first.
- #2 Measure both short-term and long-term.
- #3 Go backwards.
- #4 Check in often.
- #5 Measure in a way that encourages working smarter, not longer.
- #6 Always keep an eye on the bottom line.
- #7 Ask the employees themselves.
What are some of the ways you can ensure you have a great team?
7 Powerful Ways That Will Lead Your Team to Greatness
- Give them the freedom to use their talents.
- Guide them to work together toward a compelling vision.
- Show up as the leader and develop leaders within.
- Give them what they need to be successful.
- Create an environment of fun and enjoyment.
- Model accountability and teach responsibility.
- Be decisive and purposeful.
How do you track or monitor performance?
There are five ways to monitor the actions of employees:
- Watch employees work. One of the most effective ways to monitor an employee’s performance is with your own eyes.
- Ask for an account.
- Help employees use self-monitoring tools.
- Review work in progress on a regular basis.
- Ask around a little.
Develop or choose the method that suits you or your business best and don’t over think the process. keep it simple is a rule I tend to follow or stick with the basics, it never fails you.
Regulation & Compliance
What the heck is this????
Regulatory compliance is an organization’s adherence to laws, regulations, guidelines and specifications relevant to its business processes. Violations of regulatory compliance regulations often result in legal punishment including federal fines. Download this free guide.
Why is this important?
Regulatory compliance is an organization’s adherence to laws, regulations, guidelines and specifications relevant to its business processes. Violations of regulatory compliance regulations often result in legal punishment including federal fines. Download this free guide. I won’t go into this in any great detail as each country has different regulatory and compliance rule and regulations. In my country the financial institutions get their compliance and regulations from the central Bank and the Securities & Exchange Commission. Depending on the type of business you run their are certain rules you will need to abide by or regulatory restrictions to uphold, an example of compliance is when a financial report is prepared that adheres to standard accounting principles.
This area I’ll leave for you to do your own research as per your type of business. Plus this too technical and confusing for me. I simply make sure to pay my taxes and follow any rules when importing my materials. Usually whoever you hire to purchase your materials/products etc, like a broker or agent will update you on all the rules you have to adhere to.
So people I will continue or complete the last 4 areas:
- Competencies and recruiting the right talent.
- Exploding data.
- Customer service.
in my next blog post. So for now check you later and have a great day.