All last year you were in frantic motion. You put out fires; solved employee snafus and issues; juggled conflicting priorities; fielded exhausting back-to-back meetings, telephone calls and endless emails; motivated yourself and others; and kept blocking and tackling month after month by leading and managing your company toward achieving the objectives and goals you set. You may have done this by introducing the Objectives and Key Results (OKR) approach, from somewhere like Profit, as this can help you to set and effectively manage the progression of the goals across your business so that you have a better idea of what you need to achieve and when. If you did this, it may have put you in a good position for achieving success in the new year. In other words, 2012 was a typical year in the life of a small business owner and, suddenly, 2013 is here.
Typically, entrepreneurs and small business owners have trouble seeing above the action and the dust it creates. But maintaining a cool and measured perspective on where you are, where you’re headed, and-most important-exactly what you need to do to get there is crucial to this year’s success.
Too many owners and their senior staff just get so caught up in the daily whirlwind that they lose sight of the realities of business ownership. When that happens, success may not evaporate overnight, but it will inevitably slip away. It doesn’t have to be this way. It pays to step back and re-evaluate your market and your company’s place in it by making sure your practices are in line with “the facts.”
Here are eight “must-dos” to tackle for the new year:
Hold a 2012 post-mortem. Start by analyzing whether you have been an effective leader. A skill every great leader has is the ability to self-analyze, away from the high fives of success and the consistent pressure tight cash flow brings.
This is a good chance to gauge the effectiveness of your leadership. Good leadership begins with defining the destination and direction of your company and deciding how the business should look and operate when it arrives. If you haven’t done those things, you aren’t leading, and if you aren’t leading , no one will follow.
Ask yourself: Did your business have a successful year? What did it do well? What could it have done better? Where are the future opportunities that will grow your business? What are the threats to your company’s success, or what is holding your business back? These are serious questions that demand serious answers. And once answered, then it’s up to you to define the leadership skills needed to move your business from where it is today to where you want it to be tomorrow.
The good news is that the most important aspects of leadership can be learned. And, the sooner you start, the better your likelihood of long term success. But a note of caution: Before you can lead a business forward, you have to define where it is today, evaluate your personal strengths and those of your business, and compare those evaluations to those of your competitors. This self-evaluation is an important part of being a successful leader. Because at the end of the day, if your business is equal to those of your competitors, it’s the owner’s skill that makes the difference between one business being successful and another being below average.
Do a top-to-bottom walk-through of your systems and procedures. Examine what is working and what isn’t. You may find that a system that once worked well no longer does (because the marketplace has changed, your competitors have changed tactics and strategies, or your customers’ needs have shifted) or that your business has fallen into bad habits that hinder success. In particular, look for inconsistencies in how employees handle tasks, especially those that directly impact customers and those who handle the data you use to make decisions about the business. This allows you to catch problems before they develop into crises.
It may not be politically correct to say so, but if you’re not controlling your procedures and processes, you don’t really “own” your business. You’re just a spectator watching others play with your money. Great procedures and processes need controls, and these controls in turn create great results and skilled employees. The key to understanding the importance of processes is to understand the concept that processes operate your business-and employees operate the processes.
Pinpoint your best customers. Give them a heartfelt thank you. I insist that protecting your company’s assets is job one. Those assets are not just monetary-far from it. Customers are some of the most important assets (after all, without them, no one gets paid). What’s more, all customers are not created equal-some are more profitable than others, and they’re not always who you think they are.
Once you’ve identified your VIPs, create ways to enrich the relationship and continually create added value for them. Obviously, saying thank you doesn’t hurt, no matter how often they hear it. No one likes to be taken for granted. A call or letter from you will show them that you don’t. It’s amazing the ROI you’ll get from such a simple action.
The bottom line for all owners is this. Both the gross profit and net profit you make is actually your competitor’s opportunity. Just as your opportunity is their customers and the gross profits they generate-and they are worth attracting and worth fighting for.
Don’t neglect your other big asset-employees. If possible, meet with each one individually. Even if it’s not a “formal” performance review, a quick end-of-year conversation one-on-one can help you shore up relationships, challenge low performers to do better, and reward and re-recruit your highest performers. (Rewards don’t have to come in the form of a big end-of-year bonus. You might offer an extra couple of days off, a gym membership, or a gift card for a spa treatment as a thank you for a job well done.)
The idea is to show employees that you recognize and appreciate their contributions. A heartfelt thank you, a compliment passed along from a customer, an inquiry into an employee’s goals and aspirations, or a simple handshake and acknowledgment can be incredibly meaningful. A good motto to follow is: “Be firm-but fair, and show them you care.”
Review your marketing campaign. Does what you’re doing make sense for you? Ask yourself some specific questions: Are you marketing aggressively enough to attack the market, or are you trying to coast by, letting your competitors stir up the market? Are you targeting the best possible markets and customers? Might a customer reward program improve repeat purchases? Would the money you’re pouring into ad placement be better spent on direct mail? Does a huge social media campaign really make sense for your company, or are you tweeting fruitlessly into cyberspace just because everyone else is doing it?
It takes marketing to bring customers in and it takes marketing to keep them, whether you’re learning how to market to attorneys, bus drivers, or real estate agents. Many companies see marketing as an expense, but it’s actually an investment and deserves your focused attention. There are two key points often neglected when business people think of marketing. The first key is: Marketing without measurement is being reckless with your money. Results matter and have to be measured. In other words, create an objective and measure results against it. Second, your best market opportunity may in fact be your own customer base. If you ever want to know the power of marketing and the effect it can have on your net worth, look online for ‘who is Ed Mylett?’ and you will see how his work in the world of marketing has transformed him into a successful influencer, businessman, and author.
Meet with your accountant, your attorney, and other key advisors. These specialists almost certainly know things you don’t. If you don’t have these professionals on your team, you really should do. You may be a small business but wearing too many hats can cause problems. You can take a look at the Small business accountant Melbourne has to offer or use an attorney a family friend recommends but either way, these advisors should be on your payroll. Their perspective can be extremely valuable to an entrepreneur who has been chained to his desk all year (and, as a result, is out of touch with changes in the external business environment). Planning for a future you can’t predict is part of a business owner’s job, and these advisors can help you gather the information needed to get the “lay of the land” and make smart decisions.
Ask each of them: “What are the three most important things I need to know right now?” In fact, you might pose this question in advance of the meeting so they will have time to think about it and won’t just give you an off-the-cuff answer. Then you can factor their feedback into your plans for the upcoming year and beyond.
Successful businesspeople have a good grasp of business in general. By regularly touching base with important members of your larger network, you are educating yourself on the various aspects of the business world beyond just your industry.
Kick off a cost-cutting, gross-profit-building mission. No one knows what the future holds. But it’s a safe bet it won’t be “smooth sailing.” More likely “choppy waters filled with sharks and an occasional iceberg.” When tough times and financial uncertainty loom, it’s always a good idea to have some cash on hand. One of the best ways to create cash is to find added gross profit and, at the same time, cut some expenses. That said, I suggest you ask yourself: What expensive mistakes did we make last year? How can we avoid them next year? And what can we do to build up the cash cushion that might help us get through any market corrections or uncertainty?
I’m not recommending knee-jerk reactions like massive layoffs or switching to inferior quality materials. Don’t cut out the wrong things, but do look for smart, well-thought-out ways to save money and start building up your cash cushion. Think about Ford Motor Company. Years before the 2008/2009 credit crunch, they began to restructure their debt and build up their cash reserves. So when their competitors needed bailouts, they didn’t. That’s what smart planning can do for you. We all have heard “cash is king,” and it is, especially when it’s there when you need it.
Set some realistic goals for the new year. Then dial up the “aggression factor” just a little bit more. In other words, aim high. Don’t be lulled into complacency or let the continued talk of doom and gloom handcuff you. You might be okay now, but that doesn’t mean you will be tomorrow, and you have to keep pushing the market. Every company has competitors, and if it doesn’t and it’s successful, it soon will. Successful owners know they have to fight not only to win market share but to retain it as well.
I always say that the marketplace is a war zone. You must develop a warrior mentality and maintain it for as long as you’re at the head of your business. If you take your focus off the market, competitors will step in and take what you have worked so hard for. It’s just the law of the marketplace jungle.
This last point is perhaps the heart and soul of my philosophy. To succeed and to stay successful, companies must be “on their game” 24/7. And that warrior mindset begins and ends with the business owner.
Being an owner has its ups and downs, just like most things in life. But it can be an immensely rewarding career, especially if you do a yearly check-up and prepare yourself and your business by building on the success of 2012 and prepare yourself and your business for 2013 and beyond.
