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Dear
Friends,
Our book Pillars of Business
Success is out now!
This extract talks about an
issue that most business
owners eventually face -
building the right
foundations to support your
businesses growth.
Invest in your business'
future, by having resources
in the right places.
Regards
Tony Gattari
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Available Now!
The Pillars
OF BUSINESS SUCCESS
Foreword by Peter Irvine
Co-Founder of Gloria Jean's Coffees
Build the Foundations
Businesses go under
because they run out of cash. A business accelerates when it markets
itself successfully. Your business is sustainable when the right
foundations are put in place, and has all of the functions of the
business allocated to responsible people who are motivated to succeed.
‘Your people are your asset’ should not be a token saying but should be
your business mantra. Invest in your assets or your people should be
done wisely and no money should be invested unless there is a return on
investment.
But what areas should
you have people allocated in? Sometimes as a business grows rapidly, the
owner recruits a whole heap of people to handle the increase in demand.
The people are busy, but busy doing what! The owner recruits these
people, with no real plan in mind, “Just get the bodies out there!”
shouts the overwhelmed owner. The new recruits are given no direction,
no job description, no performance reviews. They all work hard, but
mainly surviving the chaos that has been created.
Then the market turns
for the worse. Business slows down.
“I am spending that
much on wages!” shouts the business owner, as he sits down with the book
keeper. Cut, cut, cut. The owner starts to layoff people. The remaining
employees are overstretched. Customer orders are not being delivered on
time, and the complaints register every day. The owner says to himself
“What went wrong? We were doing so well?”
The Functions of Every
Business
A house collapses, when
it has weak foundations. The business collapses when it has weak
foundations. If you do not have the foundations in the critical areas of
your business, cracks in business performance start to appear. It is
like in the game of soccer, when the fullback moves up the field to
attack, it leaves the backs exposed. A well drilled team would ensure
that a midfielder would slot into the vacant position, so the
foundations of the team, the defense, is always at full strength. It is
the same in your business, are you covering all positions?
Remember your business
is an investment, don’t be tight, and try to penny pinch, it will only
hurt your ability to grow the business. So the areas to possibly
outsource;
Finance:
The role of ensuring that the books balance, could be handed over to a
bookkeeper or an accountant. Outsourcing book keeping is not overly
expensive, and will save a lot of unnecessary time in entering all the
invoices and payments into an accounting program. Also some debt
collection agencies have an accounts receivable service, which is paid
as a commission on invoice amount collected. As mentioned in the
previous chapter, when you hand over the books, do not abdicate your
responsibility in reviewing your numbers on a regular basis.
Production/Operations:
You
do not have to be a ‘jack of all trades’. If you have an advertising
agency, you may outsource some of the excess work to a graphic designer.
If you are a supplier, you could outsource the installation and delivery
to a contractor. This also helps not only freeing up your time, but also
helps with cash flow, by only paying a ‘variable cost’ of hired labour,
as opposed to hiring in a ‘fixed cost’ of a full time employee.
What is the area that
you are spending most of your time in? This is the area that you should
seriously consider bringing on extra help. A business grows when the
owner spends more than 50% of their time in the sales and marketing
functions of the business; these are the areas which grow the business.
Think of it this way. No one buys from you unless they know what you do
(Marketing), and nothing is ever produced unless a sale is made. You
cannot grow the business by producing more goods. Set your business up,
so that you can dedicate more time to the sales and marketing functions
of the business.
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