Michael's Comments - August 2022
As a business owner myself, I understand the frustration and pressures that business is facing. We’re currently seeing inflation at a 32 year high, a shortage of skilled employees, scarce supplies of products and materials, lack of immigration etc.
Now is the time to consider doing things differently.
The catch phrase “strive to thrive” is just not a reality for some business owners at present. In an ideal world we would be in business to thrive but sadly I’m hearing more and more about businesses surviving rather than thriving.
Some of the same fundamentals that drive growth in businesses may also help with business survival. In his book “Scaling Up” Verne Harnish notes - People, Strategy, Execution and Cash, as the four major decisions that every business must get right to sustainably scale a business and avoid leaving significant revenues, profits, and time on the table.
People – attracting and retaining the right people
Strategy – differentiate your strategy
Execution – drive immaculate execution
Cash – increase the flow of cash
People – have you attracted, and can you retain the right people in your business? As a business owner it takes a conscious effort to remain connected with your employees - is your perception of your business culture aligned with that of your employees?
It is important to know what your employees value most in their roles as this will be a factor in your retention strategy.
In today’s buoyant employment market, good employees leave for a myriad of reasons, and often not just for better money. Always take the time to seek feedback from exiting employees and understand if there are aspects of your business that need improving. What prompted the exiting employee to look elsewhere and what do they value most about the new opportunity they are going to? Better still, initiate these conversations prior to employees resigning from your business.
Strategy – if your strategic plan pre-dates 2020 then it needs to be re-visited. Do you have the right strategy, a clear vision and have you shared this with your team? Whilst your vision may be the same, you will need to reconsider what you need to focus on in the next 90 days and set your goals accordingly in order to thrive or survive.
Execution – can you do things differently and are you focussed on the right things? Look at your processes and systems with a continuous improvement mindset. Are there efficiencies to be gained? If you are struggling to attract and retain employees, can you outsource some tasks? Remember, profitability can only be improved so much by cost cutting – the real gains are to be had in increasing revenue. Understand your products and services, differentiate them from others and sell that value.
Cash – is the oxygen of your business. How can you increase the flow of cash? Could your debtor days be improved? What are your inventory levels like? Is your pricing set correctly? Do you have a cashflow forecast and are you measuring your cash collections? Cash provides you with options and in a tough economic environment it’s vitally important to have a good handle on this aspect of your business.
The definition of insanity is doing the same thing over and over and expecting different results. If you want different results for your business, then you need to look at doing things differently and change the inputs.
Please get in touch if you would like any assistance as we can provide an external perspective that’s often a great starting point. I’m always happy to help.