Is Your Business Inbred?
The following is a shortlist of DO’s and DON’T’s to assist in keeping your small business healthy and functional. Some of these mistakes I have made myself and the rest I have observed with business colleagues and clients over the years. Many businesses have gone broke because these basic fundamentals were not observed.
Identify Your Clients
This is a basic marketing fundamental, by characterising your ideal client you can then workout where they are and how to engineer a marketing campaign towards them. Passive marketing like Yellow Pages or a website is in itself not enough. A target, cross platform approach is an excellent way to get more bang for your marketing buck.
The following is a shortlist of DO’s and DON’T’s to assist in keeping your small business healthy and functional. Some mistakes I have made myself and the rest I have observed with business colleagues and clients over the years. Many businesses have gone broke because these basic fundamentals were not observed.
Jack of all trades, master of none
There’s an old business cliché “Do what you do best and get someone else to do the rest.” Refusing to outsource business or insisting on providing a service to clients that is not your skillset can be bad for business. Undertaking a task that is not within your skillset, the results could be mediocre; the risk is the client will perceive your whole service the same way. By refusing to outsource and not advising your client on other more appropriate services, the perception is you don’t care about your clients outcomes.
Finding individuals and companies that are experts in their field and researching their background will help ensure they are a good reputable company to deal with. Setting up alliances with them will have an additional impact in that they may access your skill set for their clients –that’s good for business.
Don’t wait for the phone to ring
It’s easy to assume that everyone knows you and how awesome you are at your job. But they don’t AND YOU HAVE TO TELL THEM.
For small businesses it has never been easier to network. Social media, industry events, BNI & other network functions are some of many platforms for your business development. Like the concept of business development –it’s not automatic, it needs developing.
Every client is different, every deal is different
Everyone is different, with different reasons for using your service, different motivations, different ways they focus on their own lives and businesses which brings different strengths and weaknesses to the table when seeking out your service. Your work must reflect their different needs and if you’re going to deal with clients the same way every time then you’re like everyone else offering the same service –you’re not going to be unique.
Keep up to date with industry events:
All industries should have an active industry body that will be involved in lobbying Governments, influencing legislation changes, presence in the media and providing training and developing skills in your respected role. Industries like Accounting, Financial Planning and Mortgage Broking are dynamic and
are constantly evolving –you MUST evolve with it.
In the information world we live, the public are becoming savvier, you must stay in tune with changes otherwise your advice and service will become outdated.
Make sure your qualifications are up to date
Running a compliancy obligated business without being compliant will in time attract ASIC’s attention and fines, suspension of trade and even jail terms may follow. It really doesn’t matter whether or not you had good intentions or you didn’t have time to get up to date, it’s not worth the risk.
Employ a relative that needs a job
Need I say more? Well, the best of us have made this mistake and paid the price so I suppose I do need to say more. Effectively you may have an employee with an extra clause in their employment contract titled “family union benefits”. That is to say, you treat them like an employee and you’re off the whole families Christmas card list. This is not to say it cannot work, it can and often does, but it‘s fraught with danger. There must be very clear boundaries when employing a relative. Remember to express what you’re clear expectations are.
Watertight Employment Agreement
Forget the GFC, employing badly is the fastest way to bankruptcy. When you hire an employee or contractor you have every good intention for that employee, however they may not have the work ethic they boasted about in the interview. Without proper interview processes, fact checking, seeking two or three referees, performance appraisal reviews and a watertight employment agreement you will be exposing yourself and your business to all kinds of dangers or at least unnecessary disputes. There are plenty of online templates you can use and adjust the wording for your own business, send the document to your lawyer for further scrutiny. You’ll find you will tailor these documents and processes for all new employees.
Do what you say, say what you do:
Sometimes I hear on business people’s voicemail the promise they will return my message within two hours, it’s impressive when they actually do this. The point is when a professional does what they say they’ll do, you can trust them on their word. Otherwise the customer will lose confidence in your words and in your service. When a difficult question is asked, I always respect the person who says “I don’t know, let me get back to you”
How much time do you waste looking for missing documents? Both your computer and filing system needs to be maintained and regularly cleaned up.
Documents on your desk and bookshelves quickly build up to skyscrapers, and not just with current documents. Recently I observed a desk with industry articles from 2012, electricity bills from 2010 and a bus ticket from 1998.
Scan all documents onto a backup system and only keep physical documents required by your industries’ standards & legislation. Being organised will help your business become efficient, present professionally and keep your mind focused on the job ahead.
Your financial affairs
The bank is your best friend when you’re making money, but be warned, the bank is a fickle friend. If or when your business is on the down turn, albeit temporary, the bank may call in your debt with only a ’30 days notice’.
Consider your debt levels and debt serviceability before investing in business growth, many profitable small businesses are now insolvent because they either used debt or ignored existing debt to pursue business growth.
Regularly review your bills and seek out ways to save money. Our office was spending $800 per month buying coffees for staff and clients, we decided to buy a coffee machine for $1,500 which paid for itself in 2 months.
Also, always remember the golden rule: Keep your BAS up to date and pay your taxes.
Laurence Hugo is the director of Credit Mediation Service Pty Ltd. He has worked in small business and debt negotiations for 25 years and he pioneered debt negotiations in its current form in Australia.
Debt Negotiation is a service in which individuals or businesses employ a specialist negotiator to reduce their Tax or Bank debts by half or more without involving bankruptcy. You can contact Laurence on [email protected] or www.creditmediation.com.au