Yes, I know that 12
things to fix in 2012 would have a much better ring, but who has time for 12
things. In fact, I think 6 things may be
pushing it. At least 12 is divisible by 6. You know what, just read this list and pick
out 2 or 3 that you are comfortable with, and stick with those.
1.
Poor
cash flow management
Problem: Payment doesn't
always match outflow and it's up to the business owner to make up the
difference.
Solution: Fill out a cash
flow (not P/L statement) and identify shortfalls. Do not extend credit to all customers. Bill customers quicker in order to speed up
the collection process (billing cycle) and get funds into the business
faster. Eliminate or reduce some overhead or fixed costs to reduce
monthly expenses. Pull frequent (weekly) accounts receivable reports in order
to examine how effective the business is at collecting funds.
2.
Lack
of planning
Problem: On average, people
spend more time planning a vacation or wedding than they do for running their
small business. The business should last a lot longer than a seven day
vacation or a one night wedding.
Solution: Create goals
for your business and a plan to reach those goals through marketing,
management, and financial planning. Obtain an annual business check-up.
Meet with an accountant, banker, or TSBDC counselor to review financial
statements and get advice on how to improve performance.
3.
Marketing
Problem: Set up a real marketing budget. It should be
at least .5% - 8% of your monthly expenditures.
Solution: Identify your
target market and a good marketing mix to attract that target market. Track where your sales come from, such as internet,
coupons, chamber contacts, etc.
4.
Delegation
Problem: If you want
something done right, you have to do it yourself. If you want to own your
business longer than a few years, learn to delegate and deal with imperfection.
Solution:
Hire the right people using systematic processes to operate the business. Recognize what you are not good at and
delegate that role so you can spend time managing your business
5.
Personal
use of business funds
Problem: DO NOT GET
THAT NEW DIAMOND ENCRUSTED IPAD YET!
Solution: Monitor the
amount of money that is being used for activities unrelated to the
business. Keep personal use of funds separate from all business funds, by
using different accounts.
6. Unexpected growth
Problem: Perform
an annual SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to
determine what your business will likely be experiencing and create a plan to
meet that growth.
Solution: Have a growth plan and stick to it. This may mean turning
down customers.
How to Start a Small Business workshop of Volunteer State Community
College's Tennessee Small Business Development Center, 3-5 p.m. Tuesday,
February 14, 1480 Nashville Pike, Gallatin, TN in the Betty Gibson Hall, Gibson
Conf Room 104. Registration is required. Reserve online. www.tsbdc.org. Free.
