Business Corner: Do's and Don'ts of Successful Business - Part 5
This is the final installment in our successful small business basics series. We love entrepreneurs and what they contribute to society and the economy. But unfortunately only a small number of new start up businesses survive, and even fewer thrive. We want to help your business as much as we can, so here are some helpful do’s and don’ts:
Create a roadmap for growth
Project your cash flow
Hire and retain the best workers
Forget to plan for trouble
Wait to get help
Use cash to buy long-term assets
This month's suggestions:
DO #5: Measure performance
By measuring your company's performance in key areas, you can evaluate how you are doing compared to your goals and industry benchmarks.
That means you need to know what the key drivers are in your business. Is it sales? Managing profit? Internal systems? Or the bigger impact and legacy of your business? Once you know what are the most important things in your business right now, measure them!
Financial measures are key to any business. But according to BDC only 50% of small businesses can measure revenue targets against actual results. Also, only 50% make cash flow predictions. These are key drivers in any and all businesses. If you don't have systems that can produce that information, or you aren't currently reviewing your financial results on a monthly and quarterly basis, then speak with your friendly neighborhood accountant. We can help! (I know, I say that a lot... but it can make or break your business to do these things.)
DON'T #5: Make it too complicated
Having a dashboard of 20 different measures of your company will probably be counterproductive. You can only focus on a small number of things at a time in the business.
A great book that considers how to determine what is your current priority is Fix This Next by Mike Michalowicz. I've highlighted Mike's work before, but he really is a guru for small business. The book breaks down virtually all business activities into a pyramid of priorities:
Then those are broken down into subcategories. The item at the lowest end of the pyramid is what should get your attention NOW. Once that area has been addressed, then you re-do the process. It's a great way of determining which one of the many priorities in business should get the focus at this moment.
(Note: thanks to the folks at BDC - Business Development Bank of Canada - for the inspiration for this series.)