Sunday, February 11, 2018

Business Management

Challenges Facing Small Business



There are many problems that are encountered by business owners throughout the course of managing their business. All entrepreneurs must be prepared for solving problems that come their way.
Here are some common  problems faces in businesses today.






1. Cash:
Finding it and managing it. There is never enough. Fast growing companies can outgrow available resources. Underperformers can’t acquire cash.
Leasing vs purchasing can lesson stress while commercial loans, credit cards and overdrafts are expensive. Care is needed to protect the business’ overall credit rating.

2. Lack of Planning
Many business owners don’t know how to plan. Lack of a plan can aggravate cash problems by wasting cash chasing tempting diversions; it is wasteful to throw money at problems hoping for a quick fix. Equally important is updating your plan according to changing economic and business conditions to ensure long term success.

3. Information Overload
The only thing constant is change! Change is continuous. New facts and data keeps emerging and replacing old beliefs and trends. This information overload sometimes makes it gets difficult to find effective solutions.

4. Lack of Execution
This may be the largest issue facing small business. This lack can be in a number of forms including: Poor execution of strategy, failure of new product development, owners spend only minimal time on strategy and are too much involved working in the business instead of on the business.

I hope this summary provides additional clarity and ideas on addressing daily business challenges. Please let me know your thoughts. gerry@poalrisgroupmc.com

Sunday, January 28, 2018

Business Management

Important Yardsticks for your Business



Good financial management is essential to allow business owners to make proper decisions through the year as business conditions change. Periodic quarterly or annual reviews are not adequate.
Performance should be reviewed monthly against goals established for the year.



Key indicators to review include:

1. Revenue Growth: 
are sales increasing year over year and meeting targets?

2. Profitability: 
is the business making adequate profit compared to goals. Are profit margins improving?

3. Liquidity: 
are short term obligations covered? What cash and easily converted assets are available for current operations?

4. Cash Flow: 
are you generating sufficient cash to operate? Is bank financing required to help fund growth?

Sometimes businesses can measure their performance against competition within the industry. That may help highlight areas where improvement may be needed.

It is important to not only make money in a business but it should be professional is its management approach and managing financials is an important step to achieving both goals.

These were just a few considerations. Please let me hear your thoughts.

Sunday, January 14, 2018

Exiting the Business




Determining when and how to exit a business can present issues often more challenging than starting the business.  Here are a few thought starters for owners looking for a way to exit their business.







1. Vision
 Is the business operated from strong principles of strategy with a clear vision? Can that vision be expressed and understood by those who manage the business or potential buyers? If you the owner cannot clearly state the purpose or reasons that you exist don’t expect new owners to invent it for you.
2. Return
How will you get the maximum return if you plan to sell? In cases where management/ownership is dominated by a single individual there is a risk that customers will not have confidence in new ownership unless the current owner can provide an effective transition plan that ensures continuity of the business operations. Current owners may need to plan for extensive transitional training.
3. Why Exit?
Factors that may support your decision to leave can grow out of many conditions. The most common are age or health related. A long career leading to a desire for more personal time; reap the rewards of your career. Age may not be the prime driver but longevity at the job could be creating burn out. It may be time to move on.
4. Sell from Strength
Look for opportunities to exit from positions of strength. A well trained and competent management group may provide the opportunity to offer a management buyout.  Managers may be able to pool resources to fund the buyout, you as owner may offer to finance all or part of the buyout or there may be an option to use company assets to finance the loans needed for the buyout. It also provides good opportunities for maintaining stability in the organization.
5. Know the Market
Finally, the marketplace may facilitate determining the right time to exit. Poor economic conditions or competitive activity can have a huge impact on if or when you should exit. Positive conditions too might bring a competitor to the door with a buyout offer.


So the options are many but not always easy to sort through. Timing is critical, business life changes, choose wisely.

I hope these suggestions help with any consideration involving exiting the business. Please let me know your thoughts. gerry@polarisgroupmc.com

Sunday, December 17, 2017

Time Management

Time Management  - a Key Issue for results



Do you feel the need to be more organized and/or more productive? Do you spend your day in a frenzy of activity and then wonder why you haven't accomplished much?

Time management skills are especially important in small business where owners often handle many responsibilities.


Here are a few tips to increase productivity and to stay calm and cool throughout the day.

1. Manage
No matter how organized you are there are only 24 hours every day. Focus on managing yourself and what you do with that time.

2. Time wasters.
It is easy to be side tracked and waste time “surfing the net”, reading emails, interruptions. Track your personal time so you can see where the focus of efforts are and how to improve time usage.

3. Plan.
Develop a plan to focus on changing behavior not changing time. Start with eliminating personal time wasters like taking personal phone calls at work. This will help improve productivity and reduce stress.

4. Prioritize.
Start the day with prioritizing tasks and benchmarking performance. If you have a list of 20 items, how many must be done that day?

5. Delegate.
Every effort should be made to have others share the work load. A review of activity will help determine what can be delegated or outsourced and allow you to focus on priorities.

Remember, time is one of the resources business owners have that is scarce, cannot be replaced once spent, and it cannot be borrowed or purchased. Manage it judiciously.


Sunday, December 3, 2017

Does your business have high standards for business ethics?



Have you ever wondered how many of the successful business get caught in the public spotlight and are criticised for the lack of integrity in the organization.






Clearly culture counts and it starts at the top with senior management or the board of directors. Organizations need to understand that compliance with influences or rules created outside doesn’t drive ethics it should be the opposite, ethics driving compliance in the organization and leadership in the organization is responsible for setting the tone.

There are different levels of ethical issues; there is workplace fraud and corruption, sometimes conducted at the highest levels of the organization, and ethical issues relating to how employee and customer relations are handled.

Checks and balances require care in how the organization structure is designed, how human resource decisions are made, and how overall business is conducted. It needs to be recognized that this is a very time consuming process and organization integrity is paramount; when difficult decisions are faced the instinct must be to default to core values.

Too often larger organizations pressure smaller business for concessions they can ill afford but if they don’t concede an entire contract may be lost. This happens even if the original pricing were agreed between the parties when the contract was signed. Where is the pride in living up to one’s word? What values are at the core of that behaviour?

 Ethics are derived from values and they make integrity a way of life in the organization. Honesty, respect, and responsibility can be pillars on which to build. It is essential that these values are shared throughout the organization through constant dialogue and through practice in decision making.

Corporate governance is used to promote business ethics and social responsibility. It also creates the framework for guidelines used by all individuals who are part of the organization. Fairness is one of the very basic business ethics concepts as it covers how the organization treats people in its commercial dealings.

The vast majority of businesses are ethical and at least have informal standards expressed through the behaviour of the CEO and senior managers. Anyone working in an organization that seems to behave in an overtly unethical way and chooses to stay or ignore the behaviour is part of the problem.

Sunday, November 5, 2017

Business Management

Networking tips




Networking can be a core tactic for both independent professionals and small business owners. Customers are more easily attained this way than through costly and time consuming cold calling. Here are a few ways to enhance your networking.


1. Set goals 
When attending networking meetings are you attending to learn? Make contacts? Or strictly making business connections.

2. Volunteer help
 This provides you with greater visibility and you give back to groups that help you. Act as a resource for others to enhance your role.

3. Clearly articulate your needs
Some people cannot answer a simple question like “How can I help you”?

4. Think long term
Connections open doors but relationships close deals. Networking is not just exchanging business cards and email addresses. Networking pays off when long-lasting mutually beneficial relationships are formed.

5. Follow-up
 If you receive referrals follow-up quickly. The way you respond is a reflection on the person providing the referral.


I hope these ideas help. Please let me know your thoughts. gerry@polarisgroupmc.com

Sunday, October 22, 2017

Do you have a handle on the finances of your business?



Keeping up with all of the day-to-day demands of operating a small business can cause owners to lose sight of the company’s overall fiscal situation. Owners should be proactive with company finances; here are a few tips that may be useful:







Benchmark
Know where you are and what your targets should be. A plan is useful and need not be too formal. As milestones are reached know how you are going to get to the next level and what financing may be needed.

Liquidity

How liquid is the business? Having immediate access to cash can reduce borrowing costs. With funds available you are able to make the most of capital-intensive business opportunities.

Profitability
If sales are growing but there seems too often to be a cash shortage after bills are paid, the business may have profitability issues. Monitoring profit margins instead of gross sales will help determine what the business is actually earning.


Stay involved
Business liquidity, profitability and other key ratios are important to evaluating the business – but only if owners spend time reviewing the information. It is necessary to schedule time every month to actually review the data.


While it is not necessary to review financial data daily, consistent reviews are the only way to know if the business is improving or regressing. Owners owe it to themselves and to shareholders to stay aware of the financial health of the business.

I hope the tips are useful, let me have your thoughts.

gerry@polarisgroupmc.com