A-Head for Success

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A-Z of Business: F – Finance – 5 Tips to Help Your Business Succeed

 

1.  Cash is King

Cash flow is the main reason for business succeeding or failing.  An apparently successful business may have a full order book, and even good levels of projected profit, but if funds cannot be collected from customers in a reasonable timescale the business will fail.  You should ensure your customers are aware of your payment terms before carrying out tasks and where possible advanced payments, should be requested.

Tip – Get paid on time by ensuring you have regular communication with your customer and that you have an effective credit control procedure.

 

2.  Overtrading

This is where a business has a full order book but struggles to convert turnover (sales) into profit.  This situation usually develops when tasks are taken on at a cheaper rate when compared to competitors in order to secure orders.  Subsequently, the business becomes very busy but the income generated is not sufficient in order make a profit, and so the business fails.  This strategy can be used carefully in order to try and build a reputation but for small businesses it should not be used in the long-term.  Remember “turnover is vanity, but profit is sanity”.

Tip – You are usually in business to make money so ensure you do not under-sell your products or services unless you have a clearly defined plan.

3.  Control the Controllable

Fixed costs – these costs do not vary regardless of the business activity undertaken, i.e. rent and rates.

Variable costs – these are dependant on the level of activity, i.e. heat and light or staff overtime.

Tight control and effective monitoring of these costs is essential.  Whilst fixed costs by their very nature are easier to control, effective negotiation with suppliers is an important step.  Variable costs can often get out of control if not properly managed, i.e. buying stock recklessly can tie up cash and may lead to unforeseen losses.

Tip – Ensure there is an efficient method of recording  and managing costs.  Monitor them on a regular basis.

4.  Supplier Relationships

Negotiating with your suppliers is important in order to gain value for money but when evaluating a potential supplier do not focus solely on the costs.  You should try and build a close working relationship with your suppliers and also consider the following:

  1. Product efficiency – do they have a good reputation for supplying reliable products?
  2. Delivery – can delivery be made in a timely manner?
  3. Payment Terms – extended terms can often ease your own cash flow concerns.

Tip – Ensure you question potential suppliers to ensure they meet your key criteria.

5.  Initial Funding

Many small businesses often underestimate the amount of necessary funding needed to commence trading or start a new product line or service.  This lack of funding will immediately restrict any business capacity and will greatly threaten the potential growth and stability of your business.  Always identify and try to properly estimate the amount of money needed to launch your business and to cover the costs for at least the first year which should include both running expenses and capital investment.

Tip – Take time to plan the financial implications of your business plans.

With thanks to:

Colin Bentall FCCA
Ford Bentall LLP
www.fordbentall.co.uk

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A-Z of Business: E – Employees: The Ten Fundamentals for Motivated and Productive Staff

Employees can make or break your business.  Finding the right ones, putting them in the right roles and keeping them motivated can feel like a full time job in itself.  Making poor hiring decisions and mismanaging your employees is alarmingly expensive, and can influence the morale of the rest of your team, as well as having a detrimental impact on your business and your time.  Here are my ten fundamentals to get you started:

  1. When hiring, be clear about the skills, knowledge, attitudes and motivations you want from the individual.  If they don’t have the right attitude, no matter how skilful a leader you are, keeping them focussed, productive and positive will be a drain on your energy, your team and your business.
  2. Being clear about what motivates an individual helps you match them to your vacancy.  An extrovert will not thrive in an isolated role; a big thinker will make expensive errors in a job requiring lots of detail work.  Their motivation will drop quicker than you can say “job satisfaction”.
  3. An effective interview process ensures that you treat every applicant equally, you leave no stone unturned and that you are making a balanced business decision, rather than reacting to their charm at interview.  Charm over substance is never a good hiring strategy.  In addition, many hiring decisions are based on urgent need – consequences are not considered until they are experienced in glorious and painful high definition.
  4. Make sure you involve the right people in your interview process.  Having input and feedback from people who will be working with the new recruit is invaluable – not just to have a second opinion, but also to make sure they buy into the hiring decision.
  5. A comprehensive induction process will make sure your new hire gets up to speed and feels part of the company as quickly as possible.  Things to consider are:  computer, phone and desk (yes, some people forget to plan these for new recruits!); meeting work colleagues, other departments, learning about the company, it’s products, values, processes and procedures, what to do and where to go if there are any problems.
  6. Make sure your new recruit is pre-announced to the rest of the team so they are expecting them and can extend a warm welcome.  I have seen new-hires feel shunned because their team-members were not expecting them and didn’t understand the reason for them joining.
  7. Have regular 1:1s to discuss progress, plans and projects.  It is also a good time to discuss any concerns they have and, do please make sure you take action promised – it can be very demoralising otherwise.  1:1s, well run, are hugely motivational and can be a great way of increasing confidence, productivity and motivation.
  8. Delegate well.  To do this, you need to understand the skillset and motivation levels of each individual member of your team.  Some people need a lot of support and direction, others will require more autonomy.  Delegation is not about abdication, nor does it involve micro-management.  It’s about giving them what they need to perform well.  This is a complex and important area that could benefit from a several blogs in its own right.
  9. Know when to take remedial action.  A disciplinary – formal or otherwise – is about improvement.  Inaction can make a bad problem worse as the employee believes that poor performance is acceptable.  Worse, fellow-employees may also see that this is the new standard they can relax into.  Worse still, if you decide to dismiss someone after a period of inaction, it may be difficult to prove your case in a tribunal.  Dealing with problems as they arise is essential.
  10. Develop your individuals.  You need to develop them in the right way, in the right things.  You can develop them through training, coaching, increased responsibility, new projects, and secondments.

Hiring and managing employees is highly rewarding when done well.  It is, however, a minefield.  If you are even slightly concerned, or are not getting the results you want, do seek support.  With the right structures and skills in place, you can experience the rewards on several levels:  a better relationship with your staff, an empowered and motivated workforce, happier customers, greater profit and a reputation as being an employer of choice.

To your success.

Tricia Woolfrey

PS For help with hiring the right people and effective people management and development call 0845 130 0854.  This is not something you want to leave to chance.

© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: D – Decision Making

 

Of all the things you have to do in business, making effective decisions is probably the most important.  Decisions can vary from a simple yes” or “no”, or between a variety of options or even to determine what the options are.  The subject of the decision can also be varied from hiring and firing, appointing the right supplier, deciding whether to increase your product portfolio or consolidate, expand or downsize, borrow or cut costs.  Each of these decisions can have long term consequences so it’s prudent to make sure your decision-making is pretty robust.  Delay can be as destructive as the bad decision.

Here are my top ten tips to effective decision-making:

  1. Clarify the problem you want to resolve – different people may have a different perspective on what the problem is.
  2. Include relevant stakeholders in the decision-making process – if the right people are not involved, they can adversely impact the implementation of your decision.
  3. Brainstorm all the options – don’t judge them yet, just put all the options down on paper.  Essentially this is about becoming aware of what you could do before you decide what you should do.  If you go into the shoulds too early, you cut yourself off from creativity.
  4. Determine what will let you know the decision was a good one.
  5. Make a list of the pros and cons of each option and for each stakeholder including:
    • Costs involved, especially whether the solution outweighs the problem it is intended to resolve
    • Effect on profit
    • Effect on customer relations
    • Impact on employees and workflow
    • Ability to support the decision in terms of skills, time and resources (a lot of good decisions don’t work out because of the lack of infrastructure to make them happen).
  6. Ask yourself whether it is line with your personal and business values – if it is not, it is bound to lead you into hot water at some point.
  7. If you are not at peace with the decision ask yourself what the concern is.  Is there a way of addressing this concern whilst going forward with the decision?
  8. Make sure the solution is treating the cause of the problem rather than the results.
  9. Consider any negative outcomes which may result from your decision and minimise those as much as possible – even the best decisions can have negative consequences – sometimes the best decision is not the most popular so it’s important to think of the short-term and long-term implications and how you can mediate those.
  10. Last, but by no means least, develop an implementation plan – no point in going through all of this if it isn’t going to bear fruit.

Finally, problems to avoid:

  • Analysis paralysis – you can spend too much time gathering data to make your decision – get the balance right.  Often the information being collected is to provide comfort rather than to influence your decision either way. Gather only what you need.
  • Procrastination – the enemy of success and the refuge for those who fear failure.  Procrastination can cause missed deadlines, missed opportunities, wasted resources, delayed projects, and frustrated customers, vendors, employees and co-workers .  It can often cause a loss of respect.  The worst thing is not to do anything.  Much better to anticipate problems and plan for them.
  • Impulsivity.  This is often the curse of the enthusiast.  They often rely on their “gut” but the decisions are not backed up by critical thinking around consequences and implementation issues.  Make calculated decisions and then your gut will tell you if it’s right or not.   A “niggle” can tell you that there is something you’ve overlooked.
  • Ignoring different viewpoints.  Sometimes the best ideas come from the most unexpected places and if you are filtering information through your ego, you are closed off to this.  At the same time, you don’t want to pander to people’s ideas if they don’t work.  It’s important simply to be open and receptive. Sometimes someone else’s idea might not be right in itself but is the seed for something which is.

I can’t resist one more tip:  ask yourself whether it will feel like the right decision a year from now.  This often flushes out any unconscious concerns or validates a difficult decision.

To your success,

Tricia Woolfrey
© Tricia Woolfrey 2012

About Tricia Woolfrey – click HERE to find out about the author.

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A-Z of Business: C – Customer

Customers are the lifeblood of any business.  It doesn’t matter how good your product or service, if you don’t have customers willing to buy, you have nothing.  In such challenging times, and considering the cost of attracting just one customer (have you ever done the maths on this?), customer retention is a stronger strategy than customer attraction could ever be.

Yet, it seems that customer care has taken a back seat to profit.  A short-term tactic with long-term consequences.  And yet, effective customer care does not have to be costly.  Not only that, you can expect to see your profits increase as your customers stay longer, buy more and refer more.  And the benefits don’t end there – your employees will be happier.  I am always struck by the check out staff at supermarkets who don’t acknowledge you – how unhappy they look.  I pay extra where the staff are happier – it makes such a difference to the buying experience.

Below are my top ten tips for customer retention.

All customers:

  1. Acknowledge them by name if known, and a warm smile – a genuine smile even comes across over the phone.
  2. Tell them you’ll be with them in a moment if you are busy with someone else.  If it will be more than a moment – let them know in advance.  Set realistic expectations.
  3. Ask yourself how your processes and actions serve customer needs and affects their experience .
  4. Make sure your staff are knowledgeable and find answers to questions if in doubt.  Saying “I don’t know” is just not acceptable.
  5. Under-promise and over-deliver – essential for trust.  Do keep them updated if delays are foreseen.
  6. Hire and train staff who have a strong customer service orientation – be uncompromising about this.  Any apathy or negativity affects profit and morale of other staff members.
  7. Treat your customers how you want to be treated yourself.  You know how it feels when you are respected and when you are treated well.  I am reminded of a friend of mine who recently reported that she closed her bank account as her bank was offering new customers a better interest rate, despite the fact she had been a loyal customer for years.

The biggest risk factor in terms of customers is how you deal with them when there’s a problem.  Here are my top tips to deal with unhappy customers:

  1. Respond positively and empathetically:
    • Thank them – their feedback is a gift and helps you improve your business.
    • Be quick to apologise authentically.
  2. Inform them of what you will do with their feedback – and then make sure you do what you say you will do– it will help build your business in all kinds of positive ways.
  3. Resolve problems quickly and thoroughly.  Be sure to give a little extra to make up for the inconvenience.

Responding well to complaints can not only redeem you in the eyes of the customers but make a complainant into an ambassador for your company, bringing in new business.

Finally, one last thought – do make it easy for people to do business with you – don’t let apathy be your only weapon for customer retention.  Delight them and make raving fans.

To your success!

Tricia Woolfrey

PS  Customer attraction and retention are a very complex area – to book a consultation to find out how you can gain more business through customers new and existing, call 0845 130 0854.

© Tricia Woolfrey 2012

About Tricia Woolfrey

Tricia Woolfrey is a business, performance and productivity coach, helping people to succeed in their business, and for their business to succeed. She has extensive experience with clients across several business sectors, including IT, telecoms, event management, entertainment, recruitment, finance, PR, coaching and therapy, support services, legal and more, ranging from large corporates to start-ups and the solo-preneurs. 

Prior to running her own consultancy, she was Group HR Director for a multi-national organisation and is a member of the Chartered Institute for Professional Development. Her integrative approach to change has had profound results for individuals and organisations alike.

“The results there were nothing short of fantastic”- Guy Apple, VP Marketing & Sales, NVT, UK

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A-Z of Business: B – Brand

We normally think of brand in terms of  company name, tag-line or logo and it’s an important part of your marketing.  Personally, I view brand as much more than this.  Let’s say your company name is  “Precision Accountancy Partners”, there is a promise implied in that name which suggests a level of accuracy and professionalism.

This message can be undermined unless you make sure that the following supports this message:

  • The quality and design of your business card and website
  • Your personal image – how you dress and how well you are groomed
  • Your voice
  • The words and language you use
  • Your body language
  • The behaviours you choose
  • The decisions you make
  • The quality of your work
  • Whether you deliver on promises
  • Whether you turn up on time
  • How organised you are

Whether you mean to or not, you are constantly communicating your brand.  I wonder what message you are sending out?  How does this compare with how you want to be perceived?  If there is a mismatch, what can you do to get back on track?  Sending out the right message can make all the difference for you and your business or career.

As Michael Eisner, former CEO of Disney said “A brand is a living entity – and it is enriched or undermined cumulatively over time, the product of a thousand small gestures.”  If you want to know more, why not book a session so you give your business the best chance of ongoing success?  Call me on 0845 130 0854 to find out more.

To your success!

Tricia Woolfrey

PS  Have you recently had a psychometric profile?  This can really help you to understand your strengths and blindspots so you can work at your very best.  Call me on 0845 130 0854 to find out more.

© Tricia Woolfrey 2012

About Tricia Woolfrey

Tricia Woolfrey is a business, performance and productivity coach, helping people to succeed in their business, and for their business to succeed. She has extensive experience with clients across several business sectors, including IT, telecoms, event management, entertainment, recruitment, finance, PR, coaching and therapy, support services, legal and more, ranging from large corporates to start-ups and the solo-preneurs.

Prior to running her own consultancy, she was Group HR Director for a multi-national organisation and is a member of the Chartered Institute for Professional Development. Her integrative approach to change has had profound results for individuals and organisations alike.

“The results there were nothing short of fantastic”- Guy Apple, VP Marketing & Sales, NVT, UK

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A-Z of Business: A – Appraisals


 

 

 

 

 

 

 

Now, you may be thinking of appraisals as something you do to your staff to tell them where they are going wrong and put them on the right track.  But it is more than that and it is more than just about your staff.  Done well, it is motivational and inspiring.

Appraisals are something you can do for yourself, your business as well as your staff.  It is a way of looking at:

  • What’s going well so you can do more of it
  • What could be improved so you are continuously evolving
  • Progress against goals so you can get back on track if you need to
  • Adjust your goals so that they are relevant to changing conditions such as market, environment, competition, etc
  • Plan for the future

It can help you really stay on top of your game if you are conducting regular appraisals of yourself, your business and your individual staff members.  You first of all need a list of competencies and measures of success to appraise.

If you want to know more about how to do these well, why not book a session so you give your business the best chance of ongoing success?  Call me on 0845 130 0854 to find out more.

To your success!

Tricia Woolfrey

PS  Have you recently had a psychometric profile?  This can really help you to understand your strengths and blindspots so you can work at your very best.  Call me on 0845 130 0854 to find out more.

© Tricia Woolfrey 2012

About Tricia Woolfrey

Tricia Woolfrey is a business, performance and productivity coach, helping people to succeed in their business, and for their business to succeed. She has extensive experience with clients across several business sectors, including IT, telecoms, event management, entertainment, recruitment, finance, PR, coaching and therapy, support services, legal and more, ranging from large corporates to start-ups and the solo-preneurs.

Prior to running her own consultancy, she was Group HR Director for a multi-national organisation and is a member of the Chartered Institute for Professional Development. Her integrative approach to change has had profound results for individuals and organisations alike.

“The results there were nothing short of fantastic”- Guy Apple, VP Marketing & Sales, NVT, UK

Continue reading...