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Showing posts with label growth. Show all posts
Showing posts with label growth. Show all posts
Thursday, 4 February 2010
Tuesday, 5 January 2010
PREPARING TO WIN – IMPROVING YOUR MANAGEMENT & LEADERSHIP SKILLS
The management and leadership skill of a small business owner is often one area that is neglected in a small business. Taking the time out for personal and professionally development is equally as important as securing new business.
Improving management and leadership skills is often a task that remains on the ‘to do list’. It is understandable given the nature of a small business. That is many small business owners frequently work long hours or take on several tasks within the business – hence there is little time left to focus on professional development.
Taking time out to engage in additional management and leadership training can lead to improved productivity and employee performance. Motivating employees and sharing your vision with them can go a long way towards improving business productivity. Your business can only develop as much as the owner develops professionally.
Traits of an Effective Leader
Being able to create and share your vision
Everyone involved in your business should be aware of your vision. As employees work, the organisation’s vision should be in the forefront of their mind. Understanding of how roles and responsibilities aid the business promotes a feeling of being involved in the business and a set of advocates that will promote and advertise your business freely.
A leader must have passion
Passion is an important ingredient in motivating employees. If you are not passionate about your business and its future then you cannot expect your employees to be. Connecting employees to your vision will help to build an effective team that is capable of producing good results. Employees buying into your vision will create enthusiasm about driving your vision forward and growing your business.
Be a great decision maker
Making the right decision is never easy having too much information can be as bad as not having sufficient information.
•Decisions should be made in a timely fashion not too hasty but not at a snails pace.
•Provide the necessary resources to support your decisions.
•Be committed to your decision but not too rigid.
A leader must be a team builder
A fantastic team can dramatically change your business for the better. Being able to choose the right people and build a great team is a must for any leader. Being able to delegate, recognise and reward good work are essential ingredients of creating an effective team.
In conclusion, it’s important not to forget about personal and professional development when running a small business. The right support and training can improve management and leadership skills and facilitate quality decisions and actions.
Often good leadership is what separates the successful business from a failed one.
Improving management and leadership skills is often a task that remains on the ‘to do list’. It is understandable given the nature of a small business. That is many small business owners frequently work long hours or take on several tasks within the business – hence there is little time left to focus on professional development.
Taking time out to engage in additional management and leadership training can lead to improved productivity and employee performance. Motivating employees and sharing your vision with them can go a long way towards improving business productivity. Your business can only develop as much as the owner develops professionally.
Traits of an Effective Leader
Being able to create and share your vision
Everyone involved in your business should be aware of your vision. As employees work, the organisation’s vision should be in the forefront of their mind. Understanding of how roles and responsibilities aid the business promotes a feeling of being involved in the business and a set of advocates that will promote and advertise your business freely.
A leader must have passion
Passion is an important ingredient in motivating employees. If you are not passionate about your business and its future then you cannot expect your employees to be. Connecting employees to your vision will help to build an effective team that is capable of producing good results. Employees buying into your vision will create enthusiasm about driving your vision forward and growing your business.
Be a great decision maker
Making the right decision is never easy having too much information can be as bad as not having sufficient information.
•Decisions should be made in a timely fashion not too hasty but not at a snails pace.
•Provide the necessary resources to support your decisions.
•Be committed to your decision but not too rigid.
A leader must be a team builder
A fantastic team can dramatically change your business for the better. Being able to choose the right people and build a great team is a must for any leader. Being able to delegate, recognise and reward good work are essential ingredients of creating an effective team.
In conclusion, it’s important not to forget about personal and professional development when running a small business. The right support and training can improve management and leadership skills and facilitate quality decisions and actions.
Often good leadership is what separates the successful business from a failed one.
Thursday, 24 December 2009
DAVID vs. GOLIATH: A NEW WAY TO THINK ABOUT BEING A SMALL BUSINESS
The tale of David and Goliath is a biblical tale with which most people are familiar. The story of David and Goliath centre’s on a shepherd boy confronting a giant named Goliath on a battle field armed with only a slingshot to defend himself. Against all odds and against adversity David manages to slay Goliath with a stone that is carefully targeted towards Goliath’s forehead and then finishes him of with a sword.
On Saturday 6th November 11, 2009 a modern day version of David and Goliath was replayed in a boxing ring. Londoner David Haye triumphed over Russian Nikolai Valuev to win the WBA heavyweight belt. A considerable difference in stature and boxing style set the two contenders apart – even so the significantly smaller Londoner emerged as the winner.
It is not uncommon for many small businesses to find themselves in David’s shoes. That is facing competitors that are more than twice their size. There is a constant battle to find ways to grow and develop against competitors that appear to be in a totally different league. Battling with larger competitors is a familiar everyday scenario for small business owners.
Many of the growth options that are available to larger businesses are neither practical nor appropriate for smaller businesses. Growth tactics and strategies therefore become vitally important for small business owners. Some of the objectives of a small business owner are to:
To increase market share
Increase profitability
Reduce costs
Create repeat business
Attract new business
Maintain quality
What Can Small Businesses Learn From The David & Goliath Story?
The other side of the coin reveals that not everyone ‘roots’ for the underdog. There are consumers who will naturally choose the larger more well known competitor. Many of the reasons are based on perceptions relating to quality, price and after sales service. It is therefore essential for small business owners to give customers a reason to use their services or buy their products.
The more successful your business becomes the more competition that your business will face. Each new contender will bring new challenges and a desire to exploit your weaknesses. Just as in the world of boxing, there will be competitors that analyse your business in order to acquire business intelligence that they may use against you. In other words David has now been transformed into the new Goliath. Maintaining and managing the position of Goliath brings with it its own challenges.
In the world of business David vs. Goliath is not always as dramatic or as well publicised as the recent boxing bout or as the original story. The story does however, offer encouragement and opportunities for small businesses to learn. The story has been retold many times in the business world. There are numerous examples of small businesses that have flourished and achieved considerable growth against all odds.
If you run a small business and are struggling to find a suitable accountant or business advisor to help why not consider calling WS Accountancy today.
On Saturday 6th November 11, 2009 a modern day version of David and Goliath was replayed in a boxing ring. Londoner David Haye triumphed over Russian Nikolai Valuev to win the WBA heavyweight belt. A considerable difference in stature and boxing style set the two contenders apart – even so the significantly smaller Londoner emerged as the winner.
It is not uncommon for many small businesses to find themselves in David’s shoes. That is facing competitors that are more than twice their size. There is a constant battle to find ways to grow and develop against competitors that appear to be in a totally different league. Battling with larger competitors is a familiar everyday scenario for small business owners.
Many of the growth options that are available to larger businesses are neither practical nor appropriate for smaller businesses. Growth tactics and strategies therefore become vitally important for small business owners. Some of the objectives of a small business owner are to:
To increase market share
Increase profitability
Reduce costs
Create repeat business
Attract new business
Maintain quality
What Can Small Businesses Learn From The David & Goliath Story?
The other side of the coin reveals that not everyone ‘roots’ for the underdog. There are consumers who will naturally choose the larger more well known competitor. Many of the reasons are based on perceptions relating to quality, price and after sales service. It is therefore essential for small business owners to give customers a reason to use their services or buy their products.
The more successful your business becomes the more competition that your business will face. Each new contender will bring new challenges and a desire to exploit your weaknesses. Just as in the world of boxing, there will be competitors that analyse your business in order to acquire business intelligence that they may use against you. In other words David has now been transformed into the new Goliath. Maintaining and managing the position of Goliath brings with it its own challenges.
In the world of business David vs. Goliath is not always as dramatic or as well publicised as the recent boxing bout or as the original story. The story does however, offer encouragement and opportunities for small businesses to learn. The story has been retold many times in the business world. There are numerous examples of small businesses that have flourished and achieved considerable growth against all odds.
If you run a small business and are struggling to find a suitable accountant or business advisor to help why not consider calling WS Accountancy today.
EXISTING BUSINESSES NEED PLANNING TOO!!!
Every business needs to plan
There is a common myth that associates planning with start-up businesses. This misconception often leads to existing businesses suffering from inertia, or fire fighting on a regular basis. There are a host of other reasons why existing businesses do not seek help. As a result they miss out on the opportunity to manage themselves better and to produce improved results.
As an owner or manager of a small or medium business, can you afford not to plan? Do you often plan on the back of a beer mat and let your business develop according to external events? Or do you plan for priorities, and manage your growth proactively. Like any other business activity planning takes time and may not be seen as a priority.
A strategic plan, annual plan, operational plan; it does not really matter what term you choose to use. What does matter is the implementation and the management of the plan.
Benefits
Guide your growth: the growth of your business will depend a lot of variable factors, including overall economic trends, location, market trends and other elements. Prior planning acts as satellite navigation system for your business. That is its purpose, is to guide and influence business growth, so that businesses can move proactively towards defined objectives rather than just reacting to external events.
Manage priorities: Strategy is focus. Following a strategy will enable resources to be allocated to where they will provide the most leverage. It will also enable you to work towards your strengths and away from your weaknesses. Developing your company by doing the most important things, according to your long-term objectives will certainly lead to a sustainable business.
Assign responsibilities: Finding the right staff will very much depend on organisational priorities and the long term vision for the business.
Track progress: Alternatively you could think of a plan as a business positioning device. With a plan, you can track your progress towards goals, measure results, and manage the business. Without a plan, how do you know whether or not you are moving in the right direction? What do you measure against?
Plan for cash: Profits are not cash, and cash is not intuitive. You spend cash, you don’t spend profits. Many businesses do not plan well for cash, hence the difficulties encountered with cash flow. Whatever else, you do you will have to plan for cash.
Food for thought
Specific responsibilities, activities, deadlines, and budgets: Can be thought of as milestones. They are the bricks and mortar of a business. Your business will only grow if you are able to cement all the bricks together to build an identifiable structure.
Financial plan: One of the most important gains from an annual plan is the financial plan, which of course focuses on cash flow. A business needs to organise its priorities to ensure that they attain the right level of income in order to remain in business. Growth costs cash.
There is a common myth that associates planning with start-up businesses. This misconception often leads to existing businesses suffering from inertia, or fire fighting on a regular basis. There are a host of other reasons why existing businesses do not seek help. As a result they miss out on the opportunity to manage themselves better and to produce improved results.
As an owner or manager of a small or medium business, can you afford not to plan? Do you often plan on the back of a beer mat and let your business develop according to external events? Or do you plan for priorities, and manage your growth proactively. Like any other business activity planning takes time and may not be seen as a priority.
A strategic plan, annual plan, operational plan; it does not really matter what term you choose to use. What does matter is the implementation and the management of the plan.
Benefits
Guide your growth: the growth of your business will depend a lot of variable factors, including overall economic trends, location, market trends and other elements. Prior planning acts as satellite navigation system for your business. That is its purpose, is to guide and influence business growth, so that businesses can move proactively towards defined objectives rather than just reacting to external events.
Manage priorities: Strategy is focus. Following a strategy will enable resources to be allocated to where they will provide the most leverage. It will also enable you to work towards your strengths and away from your weaknesses. Developing your company by doing the most important things, according to your long-term objectives will certainly lead to a sustainable business.
Assign responsibilities: Finding the right staff will very much depend on organisational priorities and the long term vision for the business.
Track progress: Alternatively you could think of a plan as a business positioning device. With a plan, you can track your progress towards goals, measure results, and manage the business. Without a plan, how do you know whether or not you are moving in the right direction? What do you measure against?
Plan for cash: Profits are not cash, and cash is not intuitive. You spend cash, you don’t spend profits. Many businesses do not plan well for cash, hence the difficulties encountered with cash flow. Whatever else, you do you will have to plan for cash.
Food for thought
Specific responsibilities, activities, deadlines, and budgets: Can be thought of as milestones. They are the bricks and mortar of a business. Your business will only grow if you are able to cement all the bricks together to build an identifiable structure.
Financial plan: One of the most important gains from an annual plan is the financial plan, which of course focuses on cash flow. A business needs to organise its priorities to ensure that they attain the right level of income in order to remain in business. Growth costs cash.
Do you know when will your business make a profit?
Managing business performance is always a balancing act. That is an act in which certain cost formulas must be balanced in order to achieve optimum output and maximise the profitability of the business.
A review of your company’s financial statements is not always the best way to acquire an accurate picture of how a business is performing. There are a number of useful analysis techniques that can be used to arrive at a more comprehensive understanding and picture of a company’s financial health. Finding a companies break-even point is one method that can be used to assess your company’s financial health.
To properly asses a company’s financial health, analysis techniques such as reviewing fixed costs, variable costs, the break-even point and the contribution margin can be used. These analytical tools are able to present a far more in depth picture of the financial health of your business. For example a break-even analysis is based on fixed costs, variable costs per unit of sales and revenue per unit of sales.
Fixed and Variable Costs
Fixed costs are those costs that are always present, regardless of how much or how little is sold. Some examples of fixed costs include rent, insurance and salaries. Variable costs are the costs that increase or decrease in proportion to sales. Some examples of variable costs are raw materials, delivery expenses and sales commissions.
The contribution margin is calculated as the total revenue from a product or service less the total variable cost. The key point in understanding contribution margin is to understand that as revenues increase from selling more products or services, variable expenses will increase at a proportionate rate. The contribution margin will also increase at a proportionate rate.
Using the contribution margin as an analysis tool will help gauge the impact of cost and sales volume changes on operating income. Understanding the contribution margin as well as fixed costs, variable costs and the break-even point, are important points as they lend much insight into income, costs and profits.
Being able to track fixed costs and variable costs is a necessary component of running a business. These are extremely important costs to track as they affect a company’s bottom line. There is not a singular ratio or analysis technique that will offer all the financial information relating to the running of a business.
In essence a successful business requires more than just basic bookkeeping formulas. Running a business often involves a far more complex financial knowledge than what the average lay person possesses. Ultimately the choice is yours as to how your business is run and the level of management information that you think is necessary. The recent ‘credit crunch’ has proven that getting the financial side of business right is more difficult than some people think. The continued growth of a business depends on the profits that are made.
A review of your company’s financial statements is not always the best way to acquire an accurate picture of how a business is performing. There are a number of useful analysis techniques that can be used to arrive at a more comprehensive understanding and picture of a company’s financial health. Finding a companies break-even point is one method that can be used to assess your company’s financial health.
To properly asses a company’s financial health, analysis techniques such as reviewing fixed costs, variable costs, the break-even point and the contribution margin can be used. These analytical tools are able to present a far more in depth picture of the financial health of your business. For example a break-even analysis is based on fixed costs, variable costs per unit of sales and revenue per unit of sales.
Fixed and Variable Costs
Fixed costs are those costs that are always present, regardless of how much or how little is sold. Some examples of fixed costs include rent, insurance and salaries. Variable costs are the costs that increase or decrease in proportion to sales. Some examples of variable costs are raw materials, delivery expenses and sales commissions.
The contribution margin is calculated as the total revenue from a product or service less the total variable cost. The key point in understanding contribution margin is to understand that as revenues increase from selling more products or services, variable expenses will increase at a proportionate rate. The contribution margin will also increase at a proportionate rate.
Using the contribution margin as an analysis tool will help gauge the impact of cost and sales volume changes on operating income. Understanding the contribution margin as well as fixed costs, variable costs and the break-even point, are important points as they lend much insight into income, costs and profits.
Being able to track fixed costs and variable costs is a necessary component of running a business. These are extremely important costs to track as they affect a company’s bottom line. There is not a singular ratio or analysis technique that will offer all the financial information relating to the running of a business.
In essence a successful business requires more than just basic bookkeeping formulas. Running a business often involves a far more complex financial knowledge than what the average lay person possesses. Ultimately the choice is yours as to how your business is run and the level of management information that you think is necessary. The recent ‘credit crunch’ has proven that getting the financial side of business right is more difficult than some people think. The continued growth of a business depends on the profits that are made.
Planning Strategically for Business Growth1:33pm - Oct 17, 2009
There are 100s of business books, articles, seminars and a large number of business gurus that all claim to have the secret of creating a multi million pound business. If only it were that easy – we would all be millionaires by now! At WS Accountancy we take a more hands on approach to helping a business to grow. We have noticed our most successful businesses have certain characteristics in common.
One of these characteristics being that they all have a strategic plan that they are working to. I hear you say ‘but we have a business plan’. Whilst a strategic and a business plan should complement each other they remain very different in essence.
A strategic plan determines the direction in which you would like your business to evolve and grow. In other words it is the big vision that your business is aspiring to. Conversely a business plan focuses on the day-to-day operations of the business.
Some of the items that a strategic plan should take into consideration are:
Exit strategy for the owner – It is doubtful that anyone would want to continue working beyond a certain age. It is therefore important to consider carefully the need to have an exit strategy plan in place.
Geographical location of the business – whilst it is great to work from home, or near to home it may not always be the best profitability strategy. Being accessible to an increased number of customers or accessible to future employees will go a long way towards increased sales.
Ownership structure – the right business structure not only facilitates growth but also brings additional tax advantage. One of the easiest ways to grow a business is through giving a percentage share of the business in return for a financial investment. It is unlikely that investors would be interested in investing a business that is run by a sole proprietor.
Do I need a strategic plan to grow my business?
Whilst a small business can generate a good turnover, it is unlikely to be able generate the same income as a larger business. Employing more staff or having a larger site necessitates a move away from hands on management to strategic management. This in turn has implications for quality and risk management to name a few areas.
As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.
To do this, you will also need to start collecting and analysing a wider range of business intelligence about your business and the external world in which it operates. Whilst it is good to have a plan, it is far more important to implement it – not just file it away.
One of these characteristics being that they all have a strategic plan that they are working to. I hear you say ‘but we have a business plan’. Whilst a strategic and a business plan should complement each other they remain very different in essence.
A strategic plan determines the direction in which you would like your business to evolve and grow. In other words it is the big vision that your business is aspiring to. Conversely a business plan focuses on the day-to-day operations of the business.
Some of the items that a strategic plan should take into consideration are:
Exit strategy for the owner – It is doubtful that anyone would want to continue working beyond a certain age. It is therefore important to consider carefully the need to have an exit strategy plan in place.
Geographical location of the business – whilst it is great to work from home, or near to home it may not always be the best profitability strategy. Being accessible to an increased number of customers or accessible to future employees will go a long way towards increased sales.
Ownership structure – the right business structure not only facilitates growth but also brings additional tax advantage. One of the easiest ways to grow a business is through giving a percentage share of the business in return for a financial investment. It is unlikely that investors would be interested in investing a business that is run by a sole proprietor.
Do I need a strategic plan to grow my business?
Whilst a small business can generate a good turnover, it is unlikely to be able generate the same income as a larger business. Employing more staff or having a larger site necessitates a move away from hands on management to strategic management. This in turn has implications for quality and risk management to name a few areas.
As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.
To do this, you will also need to start collecting and analysing a wider range of business intelligence about your business and the external world in which it operates. Whilst it is good to have a plan, it is far more important to implement it – not just file it away.
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