Starting or running a
business is a thrilling prospect. But once the money starts rolling in, many
business owners put financial budgeting on the back burner.
The fact is,
structured planning can make all the difference to the growth of your business.
Knowing where your business stands in a financial sense allows you to focus on
growing profits, reduce operational costs and improve your margins.
Budgeting is a great
way to keep businesses on track with finances, growth and profits.
Although formalising this
process on paper doesn’t have to be time-consuming, only one in three business
owners regularly spends time on strategic and business planning, according to
research by Sydney financial services firm Hill Rogers.
And, while 69 per cent
of SMEs have a trusted advisor, many have never discussed their business
concerns with them, the research also revealed.
Budget benefits
Producing a financial
report is an empowering process. It serves as a forward projection of the
business’ expenditure and earnings, enabling you to make sound business decisions
and continuous improvements, as well as obtaining finance during growth phases.
“Setting a budget is
about becoming financially literate, which is an important skill. The better
you understand your business finances, the higher chance you have at success in
business,” says TAFE NSW management and small business teacher and Skills for
Business program coordinator, Anthony Jones.
He reminds small
business owners that those without a budget tend to struggle to reach growth
milestones. Less understanding of cash flow makes it difficult to implement
strategic growth plans, he adds.
“Businesses without a
budget often feel as though they never have the money to purchase what they
need to run their business,” says Jones. Hiring new staff, equipment purchases
or marketing activity all costs money, after all.
Budgets help keep a
plan of upcoming expenses, as well as ensure that profit isn't turning into
loss.
“Budgeting is critical
to the management planning process. Without one, you have no idea of upcoming
expenses. A budget will ensure you don’t get stuck paying for items that can
turn profit into loss.”
How to tackle it
A basic spreadsheet is
a good start. Make sure you dip into your accounting program to ensure you’re
using accurate figures. This is no time for guesswork.
Some other figures
you’ll need for your budget include recurring income and expenses, predictions
of future income, business overheads, staffing costs, and debt repayments.
Strong revenue figures
are great, but if you’ve got more outgoings than revenue coming in, you could
be in strife. Your business may be able to sustain higher outgoings for a short
period if you’ve got cash available to survive the ups and downs, but
longer-term dips spell trouble.
A spreadsheet is a
great way to keep track of a budget.
Make sure your budget
covers a specific timeframe. This process will also enable you to identify
seasonal patterns, which is useful for price adjustment decisions.
“Having a well-planned
business budget mapped out like this can mean the difference between success
and failure. And this is true whether the business is a sole trader or a larger
company structure,” says Jones.
So often in sales we think the answer has to be complicated.
This is particularly the case when it comes to getting more
clients (prospecting).
There are all sorts of advanced systems for finding and
converting new customers. These can be very expensive, complex and dangerous – seducing
business owners and sales staff into spending too much time studying how they
work them and then, relying far too heavily on them.
I worked for a company that introduced such a CRM system when
just this scenario happened. After endless webinars and hours training
in the field a Sales Manager said to me ‘listen Julian, do you want me to be an
expert with this CRM or sell, as I can’t do both’ A real wake-up call!!!!!
The reality is, there are
some really simple ways you can greatly increase how much money you make in
your business through new customers. One of these is so basic, so elementary,
that most business owners and sales staff ignore it:
Endlessly stay in touch with potential customers.
A phone call every couple of months but, not just with the
message ‘just checking in’, have a reason for calling. It could be news about
your company with a new or revised product or service or, you read something
about their company that you would like to learn more about.
A e-newsletter with relevant information on your company every month
or so.
Sending them new samples.
Invite them into your place of work to experience a new product
or service. Maybe make it an ‘open-house’ with other prospects…..and customers (now,
there’s a great combination) with some refreshments....also to meet other members of your team. I have some examples of doing just this with some amazing results - call me to find out more.
Pass on an article you might have read which you feel they may not have seen but would find useful/interesting.
If they support a sporting team that does particularly well call
to congratulate them but, make sure you know what you are talking about as this
strategy (and these are all planned strategies) could horribly back-fire.
This is really simple stuff but, works enormously well and costs
very little but, very few business owners or sales staff do it, (spending too
much time ‘IN’ their business and not enough time ‘ON’ their business!)
So, before you invest in some ultra slick CRM system or begin
studying the latest cutting-edge Jedi sales persuasion tricks, take a moment to
ask yourself this:
Am I constantly staying in touch with at least twenty potential
customers?
Because, this one exceedingly simple sales strategy alone WILL help
you grow your business.
Watching an episode of ‘The Good Fight’ the other evening, one of the lawyers had to do some work in call centre. Next to her screen was a
mirror and a sign in the middle saying ‘SMILE’. When she asked the supervisor
why, he said that “you sound so much better to the person on the other end of
the phone when you smile”, which is very true…..try it, I’ve put a sign like
that up in front of me. This made me think of something Siimon Reynolds, one of the world's leading business mentors, recently
posted titled How Your Energy Affects
Your Business Success. When it comes to winning clients, everyone talks about the same
things. Have a great product. Market well. Be price competitive. Go the
extra mile. That kind of stuff. But there’s another major element that is at least as important
to succeed in business. Yet virtually nobody talks about it. It’s the quality of your energy. Meaning, how do people feel around you? Are you a neutral or
down force, or do you uplift people within your environment with your
positivity, passion and interest? We all know that business is hyper competitive. It’s hard to get
any material advantage over your competitors at all - and even those you manage
to obtain are usually copied and nullified within months. There’s always someone who can do it cheaper. And many times,
better and cheaper. So, in a business environment like this, how can we win? By exuding a better energy. By making people feel fabulous in
your presence. By emanating a sense of possibility.
By being upbeat and light, even as you discuss issues that are
heavy.
By being somebody, people feel really good around.
We are kidding ourselves if we think business is done purely on
the rational level. Numerous times, and you would have experienced this, decisions
made based on how a CEO ‘feels’ about a person or company. Whether they’d enjoy spending their days working with them. If you are not doing as well as you could be, take a moment to
consider what kind of energy you are giving out. A better-quality energy changes everything.
Sunday, 3 February 2019
Learning from wild animals
In some circles this is
considered one of the best photos of the century – read how mankind could learn
from it!!! A lioness and her cub were crossing the savanna in Africa, the heat
was excessive and the cub was having great difficulty walking. An
elephant realized that the cub would probably die so, carried it by its trunk
to a waterhole, and walking beside, looking quite calm, its mother!
And yet we call them
'wild animals'! What a great lesson this interaction is for mankind, who spend
a lot of time hating, fighting and killing one another. I’m going to use this picture as my screensaver
to remind me every day, why don’t you.
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