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Improving Business Fitness

Monday, April 07, 2014   By Mike Reddy

 

Improve-Business-Fitness
I'm fast coming to the conclusion that small business owners have a lot in common with gym members. Perhaps most gym members own a small business, I can’t be sure.

But I was reading that gyms almost unanimously report a sudden drop off in member activity about halfway through February every single year.

All of those courageous New Year's resolutions become just that as energy and enthusiasm levels decline and that steel resolve turns into wet cardboard.

And our own research in the Sydney small business community shows that business owners suffer a similar decline in financial terms.

Maintaining a healthy business can be as challenging as keeping up with those regular workouts. It requires strategy - an action plan - complete with realistic goals and deadlines.

So it's probably a great opportunity for some self reflection. There's no point in repeating the same mistakes time after time.  Yet that's one of the bad (and expensive) business habits we can sometimes get ourselves into.

So consider what has NOT worked in the past - and learn from it.

Here are some areas that you might want to focus on:

  • Control your spending.  Most small businesses I work with are already lean and mean. The challenge is to focus on smart ways to control costs. It's not about cutting costs but making sure you are getting a good return for your buck. There is always a quality/price trade off. Ask your business advisor about running your figures through an Activity Based Costing scenario in order to work out where some real savings can be made.

  • Pay on time. I suggest you not only set up reminders but also reminders for your reminders. Not only will it make you the customer your suppliers want to do business with, it also means you can improve your margin - providing you negotiate a discount for your reliable prompt payment - and why wouldn’t you? And if your cash flow is a problem - well that's what a good business coach is all about!

  • Remember to set aside an emergency fund. If you have your marketing, pricing and business model set up correctly you will be able to put something aside for a rainy day.

  • Write down your goals and remember to make them specific - "getting rich" doesn’t cut the mustard.

There is no need to panic if it all seems a bit much. As the personal trainer at your local gym would suggest, it's just a matter of one step at a time.

And just like the distractions that tempt you from your fitness goals, there will also be factors outside your control that get in the way of your business improvement plan.

Just accept them as a part of life. The important thing is to ensure you do not give in.

Constantly monitor your major costs. Focus on your investment in advertising and marketing. Identify the best channels and leverage them.

A good business manager knows their numbers. Check your leads, conversion rates, margins, the lot. Blast the bulge and do what it takes to burn off that excess fat.

Signing up for the race is one thing, crossing the finish line is quite another.


Mike Reddy is a Chartered Accountant, business coach and advisor helping businesses in Sydney, Melbourne, Brisbane and Gold Coast to easily increase their profits and cash flow. He is currently President of the North Sydney Chamber of Commerce, a Regional Councillor for Sydney North East and a member of the Institute of Chartered Accountants Sydney leadership team. As well as advising businesses, Mike presents business development seminars and webinars and is regularly contacted by the media to comment on small business matters. You can connect with him on Facebook, Twitter and Google+.