Revenue OK, profitability sucks?

 

If this is true (that revenue is OK), then we need to look at the effectiveness of your business. This is such a big area it can be hard to know where to start. Often people know about a particular area, so that gets their focus. But in high-level terms, there are some foundational issues that need to be explored. Ideally this is done in a logical, structured way. Owners of SME's generally don't have the time and resources to either do this themselves, or to select and pay someone with appropriate skills to do this reliably for them. However, having the bigger picture in mind can ensure that effort spent on an area is consistent with the long term picture.

 

Many attribute a saying to Gary Player - but he was simply quoting an earlier player, who it seems also borrowed the saying. Although there is doubt about who said it first, there is no doubt about the meaning: The harder I practise the luckier I get. In business you do get lucky breaks from time to time  - but in general the second law of thermodynamics rules. Left to itself the path is downwards. So if you want to move your business onwards and upwards, you (and nobody else) must drive it forward.

 

At a very high level, here are some basic issues many business owners neglect, but are part of the way forward.

 

Develop a mission and goals. Understanding the real purpose of being in business can help you build better processes, develop business plans, set goals and build understanding and trust with both team members and customers.

 

Understand your strengths, weaknesses, opportunities and threats (SWOT). A SWOT analysis helps to improve problem areas and use what you do well to full advantage. As well as looking at you and your business, It involves an analysis of your industry, competition and customers. It measures your current operational performance - so is best to be conducted regularly, to ensure trends are picked up.

 

Work ON not IN the business. Being stuck doing the day-to-day activities means you don’t have time to implement any new ideas. Step back and look at your business objectively to see what needs to be improved to help it grow. Free yourself up to implement those new strategies.

 

Systematise processes. This frees up more of your time to work ON the business. It makes the business run smoothly, and creates a consistent way of doing things for team members. It makes your business more valuable because it doesn’t have to depend entirely on you to operate.

 

Build a team. A ‘team’ is important to creating a positive work environment. Involve your team in growing your business. Having systems and delegating responsibility makes team members feel valued and motivated. Training is critical for empowering and keeping good team members.

 

Contact us

Email results@businessacademy.nz

 

Skype PhilANZ

 

Phone 04 920 0911

 

P.O. Box 30-545, Lower Hutt 5040

Click here to learn to improve the long-term profability of your business

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