| The most common reason people are in business
is the opportunity to make more money than being
an employee, which in turn affords them the
opportunity to do things they otherwise couldn't,
be that holidays, opportunities for family, education
and so the list goes on.
Sometimes as we all get lost in the woods, and
forget the fundamental drivers of financial performance
and ability to extend the reward.
No one article can enlighten the whole picture every
step can contribute to a better outcome. This piece
will overview essential considerations and business
practices and in future issues I will build on them.
Profit is the result of income less expense, nothing
more nothing less. Grow sales, improve margins,
control expenses and profit will improve. Each of
these drivers have various elements which are worthy
of their own conversation.
Profit is one thing, cash is another. You might have
improved profit, but you can't see much, maybe your
customers have your money, maybe you could
control your stock levels better.
Do you spend more or less than you make? Too
many times I see business people who think business
budget and dismiss person budget and their business
suffers... the most successful business owners take care
of the business, their personal finances and themselves.
|| My business is my superannuation. Most likely it is,
but whilst it is, you are solely dependent on it and
most likely therefore you are doing what you didn't
set out to do. By all means it might be the best
return on investment, but likewise it may not be,
and diversification is an appropriate philosophy
for us all to consider. One day you will want a
base that is not about the business. Make the
business work for you and your future, not you for it.
I am not sure how I am doing (compared to others) -
Access benchmarking data, pitch yourself against
others, consider the pluses and minuses.
I struggle to step away and work on the business -
Allocate time to think, book time out of the business,
set projects, establish an advisory board, consult
with like business owners.
My children are now in the business and I want a
future for them in the business, but also want
security for myself - Develop a succession plan (not
just an estate plan) - think through the roles and
responsibilities, expectation, financial obligations
and rewards, encourage, develop but don't insist!
Family and business getting confused -
º Establish business rules re family and family
rules re business
º Understand everyone's expectations and goals
º Think about a family business constitution