Recently, George Germanos made a presentation to a large number of businesses on ways to improve business finance and cash flow. Below are the notes and the power point presentation.
I am often asked, what makes a successful business?
My response is the business owner and management.
For this presentation, we will consider management and business owners as one.
In this image, we see a bird trying to survive – Obtaining water out of a bowl.
The first image shows the bird trying to raise the water by putting the stones in the water to raise its level.
The second part shows the bird with a straw.
In the first image, the bird may dehydrate itself before it gets water.
Cash, or Barter, is now required by people for survival. Although it is not a life necessity, however it is now a part of everyday life. Historically, tools, weapons and food were used as forms of cash. Cash is a means of rewarding effort.
Are you working in your business the smartest possible? Or are you dehydrating yourself of cash?
As a business owner or manager, you should be working on the business, not the business working you.
A key issue with business owners is that unfortunately, they treat the business as work, they treat themselves as employees. A business owner’s role is to not prepare the product or service that a business outputs, but to run the business that creates the output.
Although funds may be tight initially at start-up, a business owner should prepare a plan from day one of where he sees the business to be.
There are two models of business:
From day one, you will need to define what type of business you wish to be. If you are an established business, than define it from now! Will you be able to do what you are doing when you near retirement? Can you handle the physical work and the hours you put in to your business?
A successful business is one where the owner puts in steps to ensure the successful running of the business without the owner having to be in the business, rather than just the production of its end item.
Looking at your numbers does not mean that you have to be a business accountant. There are many ways you can look at your numbers, and the best way to do it, is the way that you are most comfortable with.
You can look at your numbers by:
Review your numbers, daily, weekly, monthly and yearly!
If you look at your numbers enough times, they will start to make sense.
You will start to recognise trends.
The numbers do not even need to be financial – they can be key indicative figures of business growth and success such as the number of leads, the number of conversions, days taken to complete work, etc.
Set goals of where you want your sales to be for without goals, you aim endlessly to nowhere.
Items to keep an eye out include:
Finance in your own business
As mentioned earlier, businesses come at a risk.
Diversification is key – consider using your business as a way to fund your personal investments so that should anything happen, you have investments outside of your business such as property or shares.
Having said that, you should not look at your business only as a way to produce income, but you should also be looking at it as an asset.
A profitable business could be sold when you decide to leave. After all, a business is worth as much as a buyer is willing to pay.
Ways to grow the value of your business include having processes and procedures in place and increasing customer loyalty/returning customers. Look at implementing a loyalty program.