Where is Your Business Heading?
Where are you now?
If you have any form of Accreditation and follow your guidelines fastidiously, you will notice that you must have a Business & Marketing Plan, and that it requires a Situational Analysis.
In other words, describe "Where are you now"?
Have you recently had a look at “where you are now”? You may have received renewal notices for your various insurances, vehicle registrations, professional memberships, phone and internet contracts and so forth. You would also have bills for amenities, accountants, office supplies, rent, bank fees, interest and an endless list of things that are not direct supplies for your products and services.
Of course, you also need to pay the Government huge sums of money; including, BAS, PAYG, Company Tax, Personal Tax on your drawings and various other taxes and fees.
So, what is your Analysis of the Situation?
Where do you really stand …?
Are All Your Costs Really Necessary?
Most likely you have found that your gross profit from the first 500 or so customers will be passed directly onto parasites hanging on to your business as they suck-out your cash flow like a starving leach.
However, the real injury to your business operation is your ego as you had believed that your business venture was your ticket to financial freedom and corporate notoriety.
Do you really understand everything listed in the accreditation application and compliance documents you flippantly completed, or did you simply tick every section hoping that your office files, full of half finished strategies and plans, will suffice.
Don't feel embarrassed! The best Business and Marketing plans for small business are short, fluid and simple. They may change from day to day. Why would you write a Whistle Blowers Policy, a Human Resource Strategy, or an Office Procedure Manual for a small business with only a few staff? Your time is better spent seeking more customers so that you can pay for your accreditation!
Back to your desk …
Clipped together are a number of accounts for Membership fees. At the top of the pile is your "peak body" membership. It possibly administered the accreditation programme in the past (for a much lower fee) and provided other useful services. How many customers, and how much income, can you attribute to this membership? Do these memberships save you money by performing roles or duties on your behalf? If they do, then pay them. If not, drop them or pressure them to do something for you!
Are you required to undertake regular courses to keep your qualifications up-to-date? If so, there's another 100 or so customers you must turn-over before you begin to make any money for yourself! Add in the cost of your time to undertake the courses and seminars, plus the "opportunity" cost of your time (what you could have achieved if you did not attend the courses and seminars).
Are you ready to throw in the towel?
Do you regret price matching with the "backyarder" down-the-road who thought he was clever by picking up market share by under-cutting your prices?
If you kept your prices at a reasonably high level, you will have sufficient cash in the bank to pay all your bills and you will sleep well tonight. If not, you had better review your Situation Analysis.
It is very obvious that operating a small business in this decade is difficult! The hours are long and the financial returns are poor. The costs are high and everyone seems to make money from your business, except you.
And you are right!
Your options are obvious.
You must wind-up the business, or reduce your costs, or increase your profit margin!
Your ego dictates that you must not let go of years of hard work, building a business that "has potential".
It's time for a change!
Business acumen is the most obvious skill that is lacking in most businesses. Many businesses have grown from a love or talent of the owner in some particular product or service. Few businesses are created by people with a business background who simply want to start a business.
The first step is to learn how to plan your business operation and implement systems that force you to be disciplined and tough on financial management.
Then you need to understand your product in terms of its usefulness to potential customers.
If you have people working for you, you will need to understand how they tick and how to get the best performance from them.
Finally, you need to understand yourself, as an Entrepreneur, so that you drive your business and inject your vision into every aspect of it.
Your business career will never be easy. If it becomes easy, then it is time to sell; as you will have become complaisant.