Financial Measures

Keep your eye on these financial yardsticks

 

 

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:

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

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

·       Liquidity: are short term obligations covered?

·       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.

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

Gerry@polarisgroupmc.com

 

Stress Management Tips

Almost by definition as a small business owner you face a variety of tasks daily that pull you in many directions simultaneously. At times it seems you may buckle under the pressure of impossible demands but this good news is these anxiety attacks are temporary.

Here are a few things you might do to keep stress down:

1.     Think Positive. Often stress starts with negative thoughts. Thinking positive weeds out the bad thoughts. That doesn’t mean wearing rose coloured glasses and ignoring issues it just means dealing with problems and emphasizing the positive.

2.     Let it go. Many things are beyond our control. Accept whatever your limitations are and don’t worry about factors over which you have no control.

3.     Stay Fit. Learn to relax, stretch and find some quiet time to ward off anxiety. Find the time to exercise regularly; being in shape helps deflect stress. A well balanced diet also improves fitness levels. Finally, get enough sleep to allow the body to restore itself. Deadlines may be more flexible than you think.

4.     Say no. As owner you become a jack of all trades and get stuck doing it all. Sometimes the hat just doesn’t fit so you have to say no and get someone with the appropriate skillset to do the task.

5.     Manage your time. Find a method that works well for you. Tools are available on line to manage daily workflow. Strengthen your skills for delegating, communicating and using the team.

 

Those are some of my thoughts for keeping the fun in the job and reducing stress. Let me know what you think.

gerry@polarisgroupmc.com

 

Business Planning

Benefits of a Business Plan

This is a continuation of last week’s discussion and provides insight into some of the benefits derived from developing a business plan.

 

·       A business plan can be used to set targets for new alliances and selected portions of the plan may be shared with key partners.

·       A plan is a useful document to share with professionals that support your business. Sharing your plan with your lawyer, accountant and others may allow them to provide stronger support because they better understand the business through the plan.

·       Planning to sell? A plan helps buyers understand the business, what it is, what it’s worth and why they want to buy.

·       Valuation. A plan facilitates valuation of the business for formal transactions such as divorce, inheritance, estate planning and tax issues.

·       A business plan is needed when starting a new business or if you are looking to create a new business or expand your existing business.

·       Exit Strategy. Finally, if you are planning to exit the business to retire or to change business interest a plan is a vital element for success.

 

As part of my role in the business community I have shared many ideas with owners and facilitating business plan development has been one of those functions for which business owners have contacted me.

 

Business Planning

Why do I need a Business Plan?

 

 

 

 

A business plan is an essential ingredient to executing your business strategy.

Benefits include:

·       It provides owners with a current assessment of the business and a roadmap for the future.

·       It is necessary to secure financing for growth.

·       It is a process that requires you to think through every part of your business and may prevent serious mistakes.

·       It allows owners to oversee the business and measure performance against goals.

Own it

For a business plan to be effective those who have to implement it should own it. Good management requires setting objectives and managers must participate in goal setting. The strategic planning process can be an exciting way to engage key managers and contribute to strong team building and thus ownership of the plan.

Share the Process

It is critical for owners to share their ambitions and goals with managers. Business objectives should be explained with the management team, employees and new hires. Parts of the plan can be shared with new employees as part of introduction and training in the business.

The next blog will provide additional insights into the benefits derived from having a business plan.