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How you can discover the best place to make a start at budgeting worksheets

By on July 5, 2011 in Budgeting Worksheets

Do your eyes glaze over when it comes to the numbers of your business?

Do you become quickly disengaged if someone talks to you about preparing budgeting worksheets?

If you have never done anything like this before then I suggest you start with the basics and then you can move on to the more complex parts of budgeting worksheets.

So as a business owner, when you think about the future of your business, what is the most important number to you?

Is it income or sales? Most likely it is something to do with inflow of money because an important part of a business is making money so that you can grow and keep the business alive while doing it.

So this is the most important part of your budget which is not what many people think of when they think of budgeting.

When I use the word budget with most people the first thing that pops into their head is, “What am I going to have to deny myself? What will I not be able to have because I’m on a budget!”

Most people associate a budget with cutting or controlling expenses rather than stretching towards higher and better income!

So the first place to start with budgeting worksheets is to look at your proposed income. I find that most business owners are more positive when it comes to increasing income than decreasing expenses. Is this true for you?

Approaching any task with a negative frame of mind will only bring a negativity to the whole task and likely you will never want to complete it because who wants to focus on a negative!!

If budgeting is another way of working out what you CAN’T have instead of what you CAN have then it will be an overall negative experience.

As the business owner you will affect the atmosphere around any task that is done by your business and it is so important when thinking about the future to be positive.

So the first step in developing budgeting worksheets is to focus on income and the positive side of building and developing your customers.

What’s your experience on this?

Discover why you should avoid a detailed expense template

By on June 30, 2011 in Expense Template

In your business have you been guilty of getting stuck in the detail and not being able to get a helicopter view and see things from the right perspective?

Can you get lost in the woods and forget to climb a tree and see where you’re going?

Remember you’re not alone in this. Many business owners get so caught up in the day to day management that they never have a strategic view of the future direction of their business.

As a result they surge from one cash flow crisis to another and wonder why they never seem to get ahead.

With that in mind, do you think you should concern yourself with an extremely detailed expense template?

Do you think it might be possible to get lost in the ‘bowels’ of your organisation and forget why you’re down there?

Is it possible that you’re working really hard on something that has lost its relevance to the overall direction of your business?

Most business owners spend their time on customer interaction and leave the administration side of their business to other people.

As a result the direction and context of their administration comes from other people and it is up to the business owner to bring the right direction and context to this aspect of their business.

Do you think that any one in your business can work without some overall direction and input from the business owner?

Would you allow someone to do the marketing in your business and never refer back to you for direction?

Unfortunately this is the case around administration and the reporting of expenses in many small businesses.

The administration is completely taken care of by people who do not have a feel for the overall direction of the business and therefore the context from which they would prepare a detailed expense template may be incorrect.

So as the business owner you must keep an overall business perspective to everything that you do and provide that context and oversight to all aspects of your business.

Do you have any experiences on this you would like to share?

The 3 greatest errors to overcome so you have a most profitable business

By on June 28, 2011 in Most Profitable Business

How can you be sure that your business is making the right profit AND that the profit in the books is correct?

Most business owners take a quick glance at their profit and loss account and if the number is positive they get back to running the operations assuming that all is well.

But to have a most profitable business over the long haul you must ensure the following three errors are not evident in your books.

Error 1:
Paying yourself a drawing from the profits and not a wage.

Many business owners fail to pay themselves a wage for tax and cash flow reasons. They only take enough drawings from the profit to keep them alive.

So why is this an error? Isn’t this good tax planning?

The answer is NO because by failing to pay yourself a wage, you’re building the wrong cost base in your business and failing to engage your customers at prices which allow you to make a wage AND a sustainable profit

Error 2:
Failing to account for Inventory.

This normally results from your book keeper coding all your creditors invoices straight to Cost of Sales in the profit and loss account.

This means your sales and costs may end up in different periods with your profits rising and falling haphazardly depending on the timing of sales and costs.

Unless you are able to match these correctly you will have no idea whether your profit is real and sustainable.

Error 3:
Failing to account correctly for Depreciation.

Many small business owners never put depreciation through their books and use depreciation as a method of reducing their profit so they don’t pay as much tax.

So what’s wrong with that?

It means that you never recover this amount from your customer and when machinery wears out you have no money to replace it because you forgot to get the customer to pay for the machinery that their products and services were produced from.

Are these errors which have been in your books?

3 tips for getting maximum benefit from small business coaching

By on June 23, 2011 in Small Business Coaching

Many business owners fail to get the most out of small business coaching because they doubt themselves and think that they’re paying a coach to do everything for them or that the coach has all the answers to their problems.

Remember that although many coaches have vast experience the person who should know the most about your business is YOU. With this in mind below are three tips which will really help you get more benefit from your investment in small business coaching.

TIP 1
Make sure you do work yourself between coaching sessions.

As a small business coach I see a vast number of different business owners and the ones who manage to get the most benefit from me make sure they ‘road test’ everything that we talk about in our sessions.

The coach is not a baby sitter on the one hand nor the CEO of your company on the other. You are the business owner and must do the work between sessions to extract and implement the learning into your business.

TIP 2
Have a list of topics that you want answers to.

When a business owner comes to a session with specific questions about their business I know we’re dealing with relevant issues for them. It usually means that they are thinking about the sessions and applying the knowledge to their situation.

Often in our sessions we will change the whole direction of a session to address the most pressing issues in a business because that’s where the questions always come from.

TIP 3
Don’t get caught in generalised concepts and fixed systems.

I personally like it when a business owner interrupts the session with questions about how the knowledge applies to their individual business.

There are some really great coaching systems which apply generalised business principles. Whilst these are great in theory, my experience is that the specific and unique information really helps the business owner.

If you want generalised information there are many educational facilities that can give you this. One on One coaching must address your specific needs to give you the value from your investment.

What’s your experience with small business coaching?

2 golden rules for preventing difficult employees finding their way into your business

By on June 21, 2011 in Difficult Employees

How can you be sure that you’re not taking on difficult employees who will bring ‘heart ache’ into your business?

It all starts with employing people and making sure that you’re getting what you think you’re getting. So as part of the hiring process we suggest you follow these two golden rules.

Golden Rule #1
Develop a process for testing the specific skills required in the job.

Many business owners in their haste to fill a gap do not go through a rigorous process for hiring employees.

Think about the specific requirements and develop a series of tests that will ensure the person can actually DO them rather than talking about it.

A client of ours has developed a maths test which all employees must pass as part of the interview and since implementing this has had relatively no issues with hiring for the competencies of that particular job.

Make sure you get potential employees to perform some actual work not just go through a spoken interview.

Golden Rule #2
Develop a process for testing the behavioural skills for the job.

There is a uniqueness about every employee in your business. The last thing you would intentionally do is hire someone into a position where they would continually struggle!

Although you may think that many people are alike, getting the best out of your employees and matching that uniqueness and skills to the job will ensure you maximise the benefit of employees to your business.

Unfortunately many business owners don’t test for this as part of their interview process and then about three months later are confronted by the “real” employee rather than the “interview” employee.

There are many different tools you can use such as DISC and Myers Briggs but the particular one we use is called Business DNA.

Using tools like these can make sure you have an objective measure of the behavioural strengths and struggles before an employee starts in your business.

What’s your experience in hiring employees?