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Make Your Small Business a Gold Mine in 4 Steps!
Posted by B2B on: 2006-02-13 10:51:02
Make Your Small Business a Gold Mine in 4 Steps!
By Gene Pepper
If you follow these powerful suggestions in running your small business you will have an excellent chance of creating your own Gold Mine. No Kidding.
Here’s how:
1. Make sure that your business, whatever it is today, has the legs to grow into the future.
If your business is in a dying industry, and you know it, then find an economical, sensible way to get out. For instance, I have clients in industries that are losing business to China…and I mean rapidly. If these domestic companies don’t quickly find joint venture partners in China they won’t survive another three years, maybe less. Research like crazy to be sure that your company’s products/services have survivability.
2. Make a business plan for this current year and for each year for the next five years
Do not delay in doing this. I know that making a business plan is a pain, particularly if you’ve never created one. It’s also hard seeing five years out. But try anyway. Think what your customers and their marketplace will be looking for five years down the road. Get out from behind your desk and go see your customers. Ask them questions. Listen carefully to their answers.
3. Hire the best people you can find and do whatever you can to keep them enthused and happy.
Give them responsibility. Help them plan their own careers and their personal lives around your company. Try to give/ sell your key people equity in the business. At best you can create ownership for your people. Your success and financial future is in lock-step with your employees. Be hard nosed about hiring and keeping the best people. Set up a “not to be violated” model for employee re-cruiting. Do not waver. Never hire an inferior person because you might be needy at that time. Be sure your people understand what you want from them. Even more important is that you know what they want from your company---then help them get what they want and you will realize much more than you even planned for.
4. Watch your cash and your cash flow.
That isn’t saying the same thing. Whatever your system you use, complex or simple, get a cash balance everyday. You also should look at how much cash has come in for the week to date, month to date and year to date. These are simple items and are easy to generate. You must also receive a daily cash outgo report. Demand that a Profit and Loss Statement and a Balance Sheet are on your desk no later than 10 days after the end of the previous month. Do not accept excuses for not receiving this information. At the end of every week, look ahead to the next week to forecast your AR and the AP list. Run current aging reports every month. Speak to your outside accountant once a month when you receive your financials from the prior month.
Once a year ask your accountant for an appraisal for the market value of your company. Basically, it’s nice to know information, even though retirement may be years away. Do not depend on anyone, nor count on any “outside” retirement plan to fund enough money for your retirement.
Check out these links for almost every day-news about retirement age people who have been victimized by their own employers and the economy:
* Disappearing Pensions
* Breaking the Bank
Some day you may want to sell your company. If you’ve planned correctly--you could have your own private gold mine or better still your own private Bank.
Just so we’re clear…I think working for a corporation as a career is folly. In subsequent articles I’m going to make my point that depending on a long term job, with a large company that will be financially sound 15-25-40 years from now is not good planning. There are all kinds of small business opportunities today, like never before, that can bring financial independence to you and your family. I will offer examples in future articles.
Gene Pepper Consulting
Your Common-Sense Consultant
http://www.genepepperconsulting.com
Gene has extensive experience in strategic business planning, business coaching, turnarounds, and exit strategies. His common-sense approach leads to highly successful business transactions. Contact Gene at http://genepepperconsulting.com
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