Are you that frustrated business owner, running continually in a vicious circle on the hamster wheel?

Are you running the business or is the business running you? 

As you begin to scale up, business owners often fall into the trap of being too involved with the day-to-day operational detail.  The biggest failing you may suffer is the perception you’ll lose control if you’re not involved on the front line.  Most business owners don’t design the ideal business model allowing them to escape from this detail.

Don’t be fooled. Businesses are complex entities, and you are the driver and the leader.  Your team don’t need another colleague, they need a leader. If you continue to be just another colleague, you are depleting your business of it’s one valuable resource – Leadership.

You need to be in the driving seat, evolving the business tools and systems providing the right management information to stay in your comfort zone. This should tell you whether your operations are achieving results, without feeling you’re losing control.

You need to create a self-managing business, design and implement your business DNA, keeping your finger on the pulse of the day-to-day momentum.

Here are three key actions to position your business into a turnkey organisation – freeing up your sacred time to focus on the strategic growth away from the day-to-day tasks.

Delegate

Most owner-managers work long hours.  Research shows they spend too much time meddling in the detail and solving other people’s problems for them. The most important task you should dedicate time for is the future strategy of the business. Yet, the typical owner-manager spends less than 10% of their time on this.  They’re spending too much time in the detail.

The thought of delegating to your staff can be scary. The fear of losing control of the detail shackles you into the operational minutiae that you should leave to your employees.

Delegation is achieved by coaching, transferring your knowledge and experience, whilst allowing your staff the autonomy to bring their own skills and capabilities to the job. You never know, they may be better at it than you, and you shouldn’t feel threatened by that.  Embrace it! Richard Branson couldn’t fly a plane but look where the Virgin empire is now.

Developing effective management systems, monitoring and reporting mechanisms will ensure that you:

• keep your finger on the pulse without having to micromanage
• receive status updates on a daily or weekly basis before things get too far out of control
• be proactive in guiding off-schedule conditions back on track before it has a negative long-term impact.

Delegating frees up time to work on the long-term sustainability and future of your business, trusting your team to get on with the job.

Systems for Smarter Working

When moving through the start-up to the first growth phase, a lot of change can take place in a very short space of time.  This can be daunting for you as the owner, let alone the staff being carried along with you. You need to be flexible and fluid, but you must put systems and processes in place to stay in control of your business.

Providing structure to their working practices helps your employees feel stable in what can be an overwhelming state of constant change.  Delegation is made so much easier if you have mapped the workflows, written the manuals and procedures and set out your expectations clearly.

It’s essential to create systems or frameworks within which people should work.  This can range from a simple daily task list to more sophisticated planning and reporting mechanisms.  Its also imperative to set expectations by defining the indicators their progress and performance will be measured and managed against. Without these, your employees have little or no understanding of what is expected of them, and delegation will create more problems than it resolves.

Share the Knowledge

As businesses grow it’s imperative that the processes or work methods producing the best results are shared across your team.   Whether, for example, that’s the fastest, most efficient, produce the best quality, or most effective use of materials.  I’ve regularly come across businesses where staff are rarely consulted how they got such good results (or poor results) and shared their experiences.

If you don’t encourage this cross-fertilisation, how can you perpetuate the best practice and eliminate the inefficiencies?  The opportunity to have everyone maintaining the highest standards, rather than small pockets of staff achieving optimum level, could be masking your profit potential due to lack of knowledge sharing.

Possibly more of a risk, it’s not unheard of for employees to make information their own.  This becomes a power base, making them ‘indispensable’.  This is risky as the business owner becomes unwittingly dependent on that individual.  Operationally it can create real bottlenecks if no one else in the business can perform that function should that individual call in sick or go on holiday.

More worryingly, when that individual leaves the business, the knowledge and experience they’ve gained leaves with them, and you’re back to the drawing board.  This is the key reason I advocate ‘de-personalising’ the running of the business through systems and processes.  It maintains the ‘company way’ rather than being reliant on a single individual.

Document our Company “Best Way”

By building a library of best practice, creating a training manual, or a point of reference in the event staff are absent, reduces the risk to your business.  You will benefit from a more flexible and engaged team, as they witness their performance improving.  This breaks down the sense of ‘hierarchy’ between employees, which often demotivates the less skilled members of the team.

When everybody understands the best methods to optimise productivity; deliver the best quality product or highest level of customer service as the norm rather than the exception, your bottom-line results will improve.

If you’re continually looking for ways to improve, the best practices and working methods may change.  Simply update the manual accordingly and communicate the changes through a Toolbox Talk or monthly training update session.  The Company ‘Best Way’ should evolve and improve over time, in a culture of continuous improvement.

Fringe Benefits

There are fringe benefits to documenting your processes, systems and procedures. B-Corp, ISO Accreditation or other Quality Certifications require written statements of your business procedures in a transparent and auditable format. Get it right, and you’ll be halfway to achieving that accreditation.

You’ll stand out from the crowd and gain competitive advantage in your quotations, bids or tenders presenting your documented standards. These will clearly communicate the quality of service your clients can consistently expect from you.

And last, but not least, if you decide to sell your company these manuals will add significant value, making your business more attractive to prospective buyers.

Design Your Turnkey Business

To achieve your turnkey business, Alluxi offers the Business DNA Open Course. This is designed specifically for business owners wanting to scale up their organisation, achieve their life goals and financial aspirations.

This is an intensive programme of six workshops delivered over 13 weeks.  Designed for start-up and early years SME business owners needing to get systems, processes and procedures in place.

The course delivers the fundamentals required to be less hands-on with day-to-day operations.  You’ll learn how to free up your time to be strategic and forward-thinking. You will be guided to develop your own unique business ‘genetic code’ model to scale-up your organisation.

This forms your business DNA, allowing you to consistently deliver on time, on budget, with the right resource levels. In turn, you will create happy customers, achieve a decent work-life balance and the financial results you aspire to.

For more information and to register your interest in the next course please contact linda@alluxi.co.uk

Your Next Steps to Greater Productivity

As a first step towards identifying your current business challenges complete the in-depth Alluxi Business Success Scorecard.

Take 15 minutes to respond to the scorecard and get your results within minutes.

Click here to take the Alluxi Business Success Scorecard now

The post TAKE A STEP BACK – Create a Self Managing Business appeared first on Alluxi Consulting.

As we begin to emerge from the Covid lockdown restrictions, you may be thinking about ways to change your business once again.

Will you go back to the office? Will you continue to work from home? Or you may be erring towards a hybrid between the two.

Perhaps you’ve tried new ways of working over the past year that have been very effective. Perhaps you have seen your business in a fresh light.  More likely you’ve been severely stressed by the whole situation, either due to lack of work, or too much as you’ve been trying to keep the business afloat with a skeleton staff, whilst having to furlough employees and save costs.  It’s been a distressing time for every business owner and their employees.

But, as we’re beginning to ease out of lockdown, now is the opportune time to seek out the positives, emerge stronger and more resolute, towards a better, improved future.  It’s an opportunity to shake off the old (bad) habits, and decide what needs further refinement and evolution. Where can you make things more efficient and easier to run? How can you make yourself and your team more productive?

This is your chance to really optimise your operations and ensure the best possible work-life balance going forwards. If you can rethink your systems and processes and get them in place now, it’ll free you up to set aside time to focus on the projects and growth plans that will take your business to the next level.

In the past you may have felt unwilling to delegate or outsource, thinking no-one else can do things as well as you can. Maybe you feel a lack of clarity on which roles would be required in the business and when to recruit or outsource (and how many hours). And how often have you felt that taking a holiday, or time off for health reasons, has been difficult as it causes your business to grind to a halt?

As the world starts spinning again and business begins to pick up the pace, how will you ensure that you don’t just get stuck in the gravitational pull of the day to day operations of your business, finding yourself back at square one?  This could be your perfect opportunity to break that vicious circle, dedicating a solid percentage of your time to focusing on a more strategic orbit to rebuild your business, on stronger, more solid foundations.

Your Sacred Time – spend it wisely!

My previous blog Live to Work or Work to Live explored how to stop and take stock of your current business situation.  Review all the day to day tasks and activities you’re involved in and evaluate how much value they’re contributing to your bottom line.

The proactive and important tasks to prioritise in planning your day or week are those that lead to generating revenue.  If not, they need to be streamlined, automated, delegated or avoided all together.  You need to reduce the amount of your sacred time you’re sacrificing to the reactive, urgent or low value jobs in your schedule.

In this blog I’m going to expand on this theme, but from a slightly different perspective of rethinking, or designing, the job roles that your business may need to recruit or outsource, to let you eliminate them from your To Do list and calendar, all together!  You will free up more time to dedicate to your ideal business design and growth.

Task & Time Tracking – Yes, It’s a Valuable Exercise!

Whether it becomes a permanent system, or just for the sake of getting to grips with what you should or shouldn’t be doing, the first step you HAVE to take is logging the tasks you are working on, and the TIME it’s taking you to complete them.  We all hate it.

Lawyers, Solicitors, and Accountants are renowned for logging work in 6 minutes chunks (that’s 10 slots an hour they have to account for), but despite how petty or detailed this may sound, there’s method in their madness.

Productivity requires output to be measured against input.  That is, how much work you or your team produce, or turnover generated in the time you’re paying someone to do it.  If your qualified accountant is costing your business upwards of £20 an hour, you should ideally be getting some sort of reporting or feedback as to how they’re spending their time because if their output is not billing sufficient turnover to cover this outlay, then it’s costing your business money and eroding your profits.

So if you’re a business owner, either working on your own, or with a small team of employees, you’ve got to understand the nitty gritty detail in order to start designing your escape route out of the detail and into your strategic orbit.

Hours Tracker App – no I’m not on Commission

If you’re not already using a similar technology or your existing software doesn’t have the functionality, one simple solution I’ve been using for the last 6 years is the Hours Tracker App.

I’ve unashamedly included a screen shot of a recent weeks’ log to demonstrate what it gives you (whilst protecting the innocent – there’s no client information visible).  This was during lockdown, so not exactly pumping out 10 hour days.

The app is so easy to set up with different tasks and Client jobs, to monitor the time you spend on their projects or services.  The set up would be completely dependent on the key activities for each job role you’re needing to track.  Once it’s set up though, it’s a simple case of tapping the screen to log in or out.  If you set up location finder it will even log you in and out automatically if you go to visit a supplier or client’s premises, so you don’t have to worry about logging time when you’re out on the road.

You can add activities and times manually.  I sometimes spend 5 or 10 minutes at the end of the day adding bits and pieces that I may have forgotten to log at the time.  The minute by minute detail isn’t too critical, it’s the bigger picture of how much time you’re spending on specific clients jobs or your key, goal achieving, PROACTIVE tasks that’s important to monitor.

At the end of each period, whether you want to see it weekly or monthly, regular reports can be emailed to your inbox with a complete summary.  It’s also extremely powerful to look back at how much time you’ve spent on the things that you probably shouldn’t be doing.  The most common time thieves distracting you from the proactive, high value work that’ll generate revenue are emails, business administration (paperwork, filing etc), accounts and bookkeeping, order processing and invoicing.

The time logs will give you a reality check as to where you may be spending a disproportionate amount of your valuable time on low value work.  In turn this will sensitise you to scheduling and planning your time better to focus on the proactive, valuable stuff that’s going to make you money.

But the question still remains as to how to get this reactive work completed so you can get into strategic orbit.   The main advantage to collecting this information, even if it’s just over a month or two, is that you’ll have the foundations of determining what job roles you may need to bring onboard, or what to outsource to make better use of your own time.

Recognising the Threshold Point

And this brings us neatly to the beginnings of designing your Business DNA processes and structure. The time logs serve to identify whether the amount of time you’re spending on the low value administrative tasks have reached the threshold point of undermining your value to the business.  Using the information of the tasks needing to be done, how much time you roughly spend on them, you can establish what resource to buy in to free yourself up.  It may prove a bit of a wakeup call when the stats show you the reality.

The most obvious starting point for most SME business owners, is administrative support.  Flexibility is key in finding a suitable candidate that can offer a range of skills including the paperwork, data and bookkeeping, invoicing, order processing – essentially, the back office admin that is essential to keep the work pushing through and the cash flow buoyant but can be delegated to a cheaper resource than yourself.  You don’t have to fall into the trap of perceiving every job has to be a full-time permanent position.  If you have measured the time required for all the tasks you want to bundle into creating a specific job role, that same detail will highlight whether this is 1 day a week or even just a couple of days a month, and you can calculate the salary and advertise the job accordingly.

The important point here is that with the information you gain from logging task and time you are gathering valuable intelligence to build your business in a controlled and efficient way, to enable you to step away from the day-to-day minutiae and find time to work on strategic projects.

Define Your ‘Company Way’

The second major benefit of documenting and tracking the time spent on tasks is taking the opportunity to draft a step by step procedures of HOW you want the work to be completed.  Where do you want the data storing, how do you want documents filed, what are the time frames you need things done by to avoid backlogs building up, or to achieve your client service delivery expectations etc.

This lays down the foundations of your future business processes, procedures and policies designed to ensure standards and quality of service will be adopted by new staff members.    Getting these things documented in writing (such as a Company Handbook), makes onboarding new employees quicker and stress free.  They will have a crib sheet guiding them through how to do the job, so you know it’ll be done to your preferred best practice, defining the “company way”, and avoiding you paying for a new recruit to reinvent the wheel.

Don’t think this has to stifle creativity.  If the team feel there are better and more productive ways of doing something, then they should be encouraged, and a forum created, for ideas to be nurtured.  The processes or procedures manuals can be updated and improved on as the jobs evolve and the business grows.  Without procedures, individual employees tend to muddle their own way through, which may not be the most efficient, best quality and is not easy for someone else to pick up if they are on holiday, off sick, or leave the company.  Those businesses that don’t develop their processes and procedures are invariably the ones receiving countless customer complaints, have a burnt-out frustrated team, and a business owner who spends their life fire-fighting.

Don’t fall into that trap.  For a few weeks or months of putting in time and energy to apply yourself to designing how your business is going to operate, building the right job roles to deliver that model, and positioning yourself to manage and lead rather than do, you will reap the rewards.  Find your Escape Velocity and you can reach your strategic orbit the business needs you in, to deliver the long-term goals, achieve your financial aspirations, and the work life balance you deserve.

YOUR NEXT STEPS TO GREATER PRODUCTIVITY

 Alluxi is here to offer you support through these times of change, bringing a facts and figures approach to evolve your business and realise your goals.

As a first step towards identifying your current business challenges and evaluating where your future opportunities exist within your business, we invite you to complete the in-depth Alluxi Business Success Scorecard delving into the 10 key critical success areas.

Take 15 minutes to respond to the scorecard and get your results within minutes.  You’ll have the opportunity to book a follow-up Productivity to Profit Breakthrough Session to find out how you can implement rapid and measurable improvements.

Click here to take the Alluxi Business Success Scorecard now

The post ESCAPE VELOCITY – Reaching your Strategic Orbit appeared first on Alluxi Consulting.

How to step off the hamster wheel and lead from a more strategic orbit 

Have you emerged from the dark end of 2020 with a grim determination to absolutely get your business back on track into 2021, but after just the first 3 weeks feel like you’re drowning in the everyday problems again? 

Have the first few weeks of January dragged you straight back into the gravitational pull of firefighting and reacting to the day to day issues, that prevent you from working on those profit generating projects you’d set your heart on accomplishing? 

You are not alone. Every Business Owner I work with suffers this constant battle of finding time to work ON your business.  Dedicating enough time to developing the wider strategic, marketing and operating efficiency ideas requires days or even weeks of focus and concentration. Getting the projects mapped out and implemented requires strong leadership and getting the team onboard with you. 

But if you are continually involved with, or doing the work of the sales team, office administration, bookkeeping and accounts etc, you have little chance of finding time to dedicate to the bigger business picture, and you’ll end up on the hamster wheel going nowhere. 

Prioritising & Planning

Most managers are aware of the principles of prioritising. My previous blog “Live to Work or Work to Live” described how to find a positive work life balance between home and office. This has become even more poignant during the last 12 months as remote working has become the norm, adding pressure to the already blurred lines of working time. During the second lockdown of 2020, 22% of remote workers were finding it hard to create the necessary boundaries to keep work separate from home life with the associated mental health issues this brought with it. 

Defining your proactive and reactive tasks and how to prioritise between the important and urgent activities, are fundamental to start making more money for your business. Very few business owners however, can extract themselves from the vicious circle they find themselves in and avoid being sucked into the detail. The second issue is having the know-how to apply these principles to your own circumstances. 

The Wrong Objectives 

Before you can determine which activities you should be scheduling as priority, you must have a clear business plan setting out your overall objectives. Without these it’s difficult to find the pathway to achieving them. The objectives have to be SMART, and not necessarily focused on the finances. Turnover is Vanity, Profit is Sanity. 

A frequent mistake many business owners make is believing that the higher the turnover, the more profitable the business will be. This is a fallacy. If the systems and processes are set up effectively, and the information is available to review their continued efficiency, then greater profits can often be achieved through doing less. 

This is the fundamental principle of productivity, but requires you to dedicate a good percentage of your time (and I recommend at least 20%), in a strategic orbit above the day to day minutiae of your business. I refer to this as the “Sacred” time, and yes, it’s often the first item in the calendar to be cast aside when the going gets tough, as it requires escaping from the detail for a period of time. 

Creating Sacred Time 

The key to being proactive is scheduling in Sacred Time to analyse your business information and KPIs. These should be developed from the business objectives mentioned above. The information provided through the business management systems should give you a clear picture of what’s working and what’s not. You can then identify and implement actionable changes in the business to continually improve. If this is repeated on a regular basis, then the business gradually becomes more profitable. 

It’s this part of managing the business that many owners find difficult to schedule time to do, but I can provide you with a solution. Alluxi offers occasional productivity taster workshops, and this month I’m running a session specifically designed to work through the steps of how to free up more time in your working life to work on the projects that will make your business more profitable. 

The post FREE UP TIME TO MAKE MORE MONEY FOR YOUR BUSINESS appeared first on Alluxi Consulting.

As we reach the end of this turbulent year – it is a good time to reflect – what has worked well and what would you like to improve in 2021?

We’re all heading into the Christmas festivities hoping to relax a little, even if we can’t get to our favourite entertainment venues. To make sure you AND your team can switch off completely from the emails, social media and other work distractions take time out before Christmas, get a date in the diary with the whole team, and create an environment conducive to reflect on the trials and tribulations of 2020.   What’s worked, what hasn’t and how you can launch into the New Year with a refreshed outlook and renewed energy and drive. 

With all the changes and challenges presented by the pandemic you and your team may be feeling relieved to have made it to this point.  The new norms of working from home were abruptly thrown at us in March, leaving business owners scrambling into action to “pivot” their operating models, get staff up and running from whatever space was available to them in their homes – with technology issues that invariably arise when moving desks, let alone moving to a virtual office environment, adding to the stress and pressure for the employees too.

As a business owner you’re possibly taking stock of the financial fallout this may have inflicted on your operating reserves or debt situation.  This may be weighing heavily on your shoulders, leaving you worrying how long it’s going to take to get your finances back to pre-Covid conditions.  

My initial advice to business owners, when the first lockdown was imposed, provided solutions to normalise your staff’s new working conditions. The focus was to optimize efficiencies under extremely difficult conditions. Fundamentally they’re all relevant management tools worth introducing whether working remotely or not.  

A. Reassure the team, or at least be honest

Setting up regular communications and opportunities to review progress frequently, including keeping your staff updated with the facts

B. Getting priorities in order 

Focus on the critical marketing and revenue generating activities, making your processes leaner (I’ll refer back to this later in the blog).  

C. Find a common task management tool

This achieves a standardised tool, and maximise synchronized communications across the team, reducing the background “noise” of managing multiple chats.

D. Establish a Daily Routine

A clearly communicated routine will give everyone a clear focus, and sense of purpose which, if reviewed regularly, should improve their connectivity, productivity and motivation.

E. Encouraging regular breaks 

Even when working from home, make sure the team take regular breaks away from their computer screens to rest the eyes, and refresh the mind.

F. Consider parental responsibilities

Parents working at home may really appreciate some flexibility and redistribution of the work load and activities, as many employees battled with home learning with young children. 

Check out the Six Lockdown Survival Guidelines for SME’s to read more about applying these in your own business.

BOOSTING EMPLOYEE PERFORMANCE WITH GREATER ENGAGEMENT

Since that first lockdown, the real impact of working from home manifesting in both positives and negatives has changed the working landscape irrevocably.  Since the country went back into a second national lockdown and many businesses returned to (or continued with) remote working  you may have really begun to feel the longer term impacts, and the more intangible costs to your business, which I discussed in some depth in The Covid Productivity Tax.  The longer term effects on team morale really took its toll resulting in  low staff engagement.

So as we near the end of this rather traumatic year, I’d like to offer some further reflections from the Alluxi toolbox, with a roundup of what to focus on in your own year-end review.  Eliminate the negative, consolidate and embed the positive in new behaviours – and with your team, create your blueprint for success into 2021.

From a tactical perspective, in leading staff through the seismic changes they’ve had to endure, my blog series the Top 5 Lockdown challenges & How to turn them into opportunities presented a suite of survey tools you can use to overcome the key challenges many business leaders have battled with employee engagement.

The Alluxi Working from Home & Winning Analysis

– designed to understand how your team is adapting to working from home and what, if any, adjustments are needed to help employees stay connected and productive

The Alluxi Leadership Perception Gap Evaluation

– to bridge the differences between leaders and employers perceptions of their leaders effectiveness

The Alluxi Emerging Stronger Analysis

– to consolidate and reap the benefits from any new opportunities, innovations and processes the team has developed, to make the organisation more effective

The Alluxi Kickstarting Innovation Analysis

– to engage your employees in a new and positive way, creating a structure and framework for advancing the ideas that power future growth.  

To really get the juices flowing when reflecting on opportunities to improve, it’s imperative your team are tuned into your business objectives. Make sure they all have a full understanding of how their role contributes to your business goals. Make sure they’re fully committed AND motivated, to work as a team.

If they’re not engaged, your culture becomes fragmented and dysfunctional, costing you time and money.  As an Engagement Multiplier Partner, Alluxi can give you access to a powerful suite of surveys. I can provide in-depth analysis and direction, to pinpoint where there may be dis-engagement in your business, and bring solutions to rectify it.

The first benchmark assessment survey is completely free, easy to set up and provides an in-depth report to build future initiatives to re-engage your team.  Staff engagement is the first step in moving forward for success.

POWERING UP PRODUCTIVITY: BACK TO BASICS

Undoubtedly your operating models would have been thrown into disarray with staff relocating to home working, and business owners having to re-design the pieces of the jigsaw ensuring the customer experience, quality of work and internal standards were not compromised.

You might feel like you’re still limping along in a very fragile & precarious state, not really sure what horrors are bubbling under the surface, having had no time to really stress-test the robustness of your “new norms”.

To power up your productivity, I strongly recommend getting your team round the virtual table, and get back to basics – reviewing the processes, work flows and procedures in the business.  The principles of LEAN provide a perfect framework to guide you through this review, and are described in detail in my series of blogs Get Lean After Lockdown.

PAUSE FOR THOUGHT

On a personal level, on reflection of the experiences many of my clients have been through this year, I have come through the pandemic with some renewed perspectives.  I feel this experience has made many business owners recognise that operating reserves is critical to mitigate against the unforeseeable.  Just because interest rates are low, doesn’t mean it’s not worth keeping at least 3-6 months of operating costs tucked away for these world calamities.    Alluxi’s year end was literally within a week of the first lockdown, and we had to take the hard decision to leave a good percentage of the previous year’s hard earned profits in the business, to ensure we could meet our financial commitments.  

I have taken the opportunity, whilst I’ve been rather more time rich than I would have liked, to take a fundamental look at the Alluxi product offerings, and marketing approach.  This has resulted in evolving my services into exciting new packages, bringing greater value to my clients, that I’ll be launching next year.  I’ll also be offering a series of taster workshops starting in January 2021.  So for Alluxi, I’m relieved to say, there is very much a silver lining beginning to shine behind the dark clouds of 2020. 

The post HOW HAVE YOUR TEAM PERFORMED UNDER PRESSURE THIS YEAR? appeared first on Alluxi Consulting.

Who Knew! Data Analytics gets Interesting!

This short blog is probably the closest thing you can get to anti-marketing, and doing myself out of future work, but after attending a brilliant networking & learning evening at the Kent Business School (KBS) in Canterbury last month, I felt it only fair to make business owners aware of the funded resources and opportunities available to them, to grow their productivity & efficiencies.

Knowledge Transfer Partnerships is a government sponsored UK-wide programme helping businesses to improve their competitiveness and productivity through better use of knowledge, technology and skills that reside within the UK academic knowledge base. KBS have been involved in this programme for a while and, last week, dedicated one of their Business Soundbites sessions to showcase recent projects their business students have been involved with.

These included a complete data analysis and re-modelling of the Eurostar terminal in Paris to determine how passenger queues could be reduced and managed on a day to day basis; a global ethical risk assessment of small developing farming communities supplying fruits to its retailer in the UK; and a bit closer to home, an award winning data analysis and remodelling of a steel manufacturer here in Kent, which resulted in some serious financial savings from productivity improvements through process flow, improved logistics and transportation of raw and finished materials, and other initiatives that should make any Business Owner’s mouths water.

The depth of analyses and recommended solutions were powerful, and despite being part of the students learning path, provided huge value and benefits to the partner businesses they were assigned to. A wholly synergistic and rewarding relationship on both sides. The passion and enthusiasm from the students presenting their cases was tangible.

Our academic business institutions in the UK are striving to ensure the student experiences are all-encompassing, based on practical research that makes a real difference to absorbing and understanding how theory can be applied in the real world.  The KTP initiative is a perfect example of how to harness young innovative knowledge and get their talents into our industries at the earliest opportunity.  

I would recommend to any Business Owner who has a specific growth project in mind, or productivity issue they want to overcome, to check out the Knowledge Transfer Partnership opportunities.  

If you’d like more information as to how the KTP can help in your business contact Kent Business School.

YOUR NEXT STEPS TO GREATER PRODUCTIVITY

The post A BIG SHOUT OUT for Knowledge Transfer Partnerships! appeared first on Alluxi Consulting.

As a productivity expert, I was entertained by the Bank of England’s “Lessons on a Plate” entitled The Great Productivity Puzzle, which loosely touches on why the UK is losing its competitive edge against our G7 counterparts (and other nations including Japan and the USA).

As a business owner striving to build a successful and profitable company, do you really understand what productivity is, why it matters, and how your business needs to be measuring it?

I’ve worked extensively with SME owners in the UK, and see two key weaknesses inherent in the majority of organisations. Addressing them is paramount in growing productivity.

1. The business doesn’t provide adequate management systems to objectively manage its financial goals and objectives
2. The business lacks the correct Key Performance Indicators (KPI’s), so doesn’t (and cannot) measure or manage productivity

This three part series of Painful Truths explores the impact this has on businesses.

We’ll start on the ‘Why’!

Why productivity matters

The Great Productivity Puzzle summarises “With strong productivity growth, businesses are able to produce more output with fewer hours of work”.

What a revelation! Produce more stuff, deliver more services, pay less salary and wages, (or pay the same amount for more turnover), and put more £’s on the profit line. Wouldn’t every ambitious business owner this wish of their business? So why has British productivity nose-dived since 2008? In fact, productivity has grown by less than 1% in the last 9 years. We’re not getting any richer!

If you’re not measuring and managing your productivity, you probably find you have to pay more in wages to produce higher volumes, adding more cost, thereby reducing your profitability. And with the National Living Wage forecast to increase to £9 per hour by 2020, added to the cost of Auto-Enrolment Pension contributions, it’s not going to get any easier.

How do I grow my business productivity?

Ambitious business leaders want to know, on a regular basis, how their valuable resources are being managed, and how they’re performing, without getting into too much detail. Business leaders have higher strategic responsibilities to focus on, and don’t want to be stepping on the toes of their highly paid management team.

With a robust Management Control System (MCS) in place you’ll have access to the right information to determine whether your business is on track to achieve your financial goals and business objectives. A meaningful, systematized and user-friendly MCS is critical to optimising the productivity of your existing resources, without throwing more people (and money) at perceived problems.

Take care of the KPI’s and the £’s look after themselves

If your business doesn’t have a structured MCS then it’s unlikely your Key Performance Indicator’s (KPI’s) are working adequately for you, if they exist at all. In order to manage your business down the hierarchy, it’s necessary to check specific parameters at regular intervals, and avoid micro-managing. KPI’s provide these specific measures. These are non-financial indicators, which help you manage your operations before the financial results are available to you.

Whether you’re a sole trader, a micro business with a small team or you have a large work force; you have to know your numbers. Your KPI’s enable you to objectively monitor and manage the trends to ensure your valuable resources are consistently working to a standard that will keep you above your breakeven point, and make your business profitable. Profitability leads to sustainability, ensuring job security for your employees too, so it’s a win-win for everyone.

Setting standards of work also appears to be a thing of the past.  Employers don’t seem to give their employees any understanding of what is expected of them, in return for their days pay.  But that’s another story, which we’ll explore in part two of these Painful Truths.

In summary, to get your productivity kick started on an upward trend, make sure your Management Control Systems are designed with relevant and measurable indicators, use them consistently on a regular basis to analyse, review and continually improve your operations.  Your financial results will bear the fruits of your management diligence.

The post THE GREAT BRITISH PRODUCTIVITY SWINDLE – 3 Painful Truths – No 1. The Business appeared first on Alluxi Consulting.

If you’ve just got used to the concept of the National Living Wage, introduced in April 2016, and managed to absorb the impact that’s had on your business costs, don’t forget it’s that time of year again when the National Minimum Wage increases are also set to rise. 

This second increase in six months affects the employees in your business from apprentices and workers up to 24 years old.  As October comes back round again, Employers need to start preparing for the next increase in the National Minimum Wage (NMW).  Currently paying £6.70 per hour for the 21 – 24 year olds, the NMW will rise 3.7% to £6.95 per hour from the 1^st October 2016 – only 25p per hour less than the National Living Wage.

This is a double whammy of salary hikes this year, and if you’ve not already budgeted for the next round, I would strongly advise planning and reviewing the impact this will have on your cost base, and taking measures to mitigate those costs to minimize the effect on your bottom line. My previous article The Living Wage Doesn’t have to Cost your Business a Penny gives you some pointers how to preserve your profitability.

This twice yearly increase can be a burden on your payroll administration, but the “good news” is that from 2017 both the National Living Wage and National Minimum Wage increases will both come into effect in April each year, rather than having to make adjustments twice a year.

With all the controversy surrounding the national living wage or minimum wage, and the considerable fines that companies can expect to pay if found to be breaching these legal pay requirements, it’s worth planning well ahead and ensure you’re compliant.  These fines can reach up to the maximum of £20,000 PER WORKER.  However, employers who fail to pay will be banned from being a company director for up to 15 years – so it’s worth getting it right.

Here’s a simple four step checklist to prepare with:

1. Confirm the correct rate of pay (including the National Living Wage)
2. Check which staff are eligible for which rates based on their age at the 1st October 2016
3. Update your payroll before the 1^st October 2016
4. Communicate the pay changes, preferably in writing, to your employees well in advance

The post MORE WAGE INCREASES ON THE HORIZON – Is Your Business Prepared? appeared first on Alluxi Consulting.

Productivity means higher output using your current resources, or achieving the same level of sales with less resource.

If a manager is not given the tools to do the job then they rely on gut feel and perception of performance levels.  If they don’t have access to frequent and comparative key performance indicators to see how they’re doing against where they want to be, then significant performance improvement is unlikely.

People will always improve slightly by just knowing the job and repeating it often enough, but what happens for example when someone leaves, is off sick, or on holiday.  All the knowledge in their head goes with them.

If temporary staff are contracted in, or new starters recruited, there is a long and shallow learning curve during which productivity is low. How long that curve is depends on how the workers are managed.  Left to their own devices, it’s unlikely they will reach desirable levels of output.

It is well evidenced and documented that when a structure or framework is put in place to focus workers into behaving in the required way, output improves significantly.  A system can be as simple as a daily diary, documenting tasks against progress and allowing an employee or team to see how they did. It can become as sophisticated as a meaningful Balanced Scorecard for the Senior Managers, rolling down into daily and weekly key performance indicators for middle and junior managers.  It MUST include a Forecast, Plan, a point of Monitor and Control, a Report and – most importantly of all, at the heart of every good management system – a Review meeting where opportunities for improvement are identified, documented and actioned.  This is how the continuous improvement culture is nurtured.

The post 20 WAYS TO BE MORE PRODUCTIVE – Robust Management Control Systems appeared first on Alluxi Consulting.

The essential guide to Starting Up & Growing your Business

Barrier 7 – Managing the Money

As a Business Owner are you confident that your company is on solid foundations financially?  We all read about how the lack of financial strategy and poor control leads to the downfall of many small businesses, but how well are we really managing our budgets?

My previous article The Wrong Objectives highlighted that Turnover is Vanity, Profit is Sanity, and Cash is Reality; yet 50% of small firms have no financial budgeting process or sufficient controls to ensure a secure level of liquidity.  In this final article of my series Conquering Barriers to Business Growth, we focus on Managing the Money to ensure your business flourishes.

Financial Fundamentals

To avoid problems all together there are a few basics you must set up right from the start, to give you the tools and information you need to keep on the straight and narrow.

1. Start Up Costs

Your business plan should outline what your start up costs will be.  If you’re selling a product you’ll need to plan how much stock to have sitting on the shelf as you grow your sales.  It’s a fine balance between not running out, but being flexible enough to start using the profit margins yielded from your first sales to plough back into producing more stock, and still having some reserve to operate with.

Providing a service may have less start up costs, but will still have operating costs and have to be advertised and marketed so don’t be complacent when it comes to forecasting your expenditure against your likely income.

Set up a simple spreadsheet showing your expected sales income in the first year – and be realistic or even use worse case scenario – against the costs of sales in the same time period, to visualize exactly how your cash flow will look.  Make sure you know where the cash may start to run out and adapt your forecast accordingly by reducing unnecessary cost before you get into a crisis.

2. Business Banking

Apart from talking with your Business Bank Manager to determine how much they can help you in your start up phase, make sure you get the best business account you can, at the lowest possible cost.  I got 18 months free banking with mine, but check what the costs revert to once you’re out of that period.  The charges normally relate to the number of transactions you likely to have in both deposits and withdrawals etc.

Your business bank account should provide a reasonable overdraft facility, which is good for the day-to-day expenses and frees up cash flow, but is a very expensive way to fund longer term financing.

Most importantly, the success of your business could depend on the relationship you have with your bank, so it’s important to manage the account properly, staying in credit and sticking to the terms and conditions you’ve agreed to.

3. Record Keeping

Yes, this is the dreaded A for Admin!  We all hate it and don’t think it’s important.  Legally, however, there are certain records you must keep, and at the very least you’re going to have to keep basic financial information for tax and VAT returns.

To avoid running into problems you’ll need to be disciplined and put a regular date in your diary, even if its just half an hour a week to keep on top of this – get your system in place, no matter how simple and STICK TO IT!  Here’s a quick outline of which records to keep, where and when.

4.  Profit Margin

This isn’t just something your accountant produces at the end of your financial year, but should be the driving force that you manage your business on.  Again, a simple spreadsheet will suffice showing your business transactions of sales turnover or income, and deducting your expenditure so you can see the “bottom line” figure even if it’s not exact.  Keeping your finger on the profitability pulse is the only way to avoid hitting a growth barrier.

Avoid a Cash Crisis 

Running out of cash is the most common reason why businesses fail in their start up or early growth phases.  One key piece of advice is not to wait until you’re desperate to seek funds.  In the early months or years it’s much easier to raise money when your business is showing positive growth and a healthy cash flow that will encourage investors, rather than wait until you’re in real problems to seek financing, when people will be put off investing in a failing business.

Funding

The Government and Local Authorities have been actively providing subsidies and grants to start up businesses for over a decade now, so check out the options that are available to you.  George Osborne closed the Business Growth Service in his last mini-budget, but there is a new initiative of local Growth Hubs.  The Growth Hubs have been formed as “one stop shops” to assist you through the minefield of information that previously put a lot of small business owners off trying to source funding.  Their mission is to do all the research for you; trawling, searching and consolidating possible options, so you can save time and be pointed directly towards any grants, funding or subsidies that might fit your needs.

This ends the series in Conquering Barriers to Business Growth.  I hope it has proven useful to those of you following the weekly articles, and even if you only apply some of the techniques and suggestions provided over the last 7 weeks, you should see your business bloom – just in time for Spring!!

Next Week

The National Living Wage will be introduced on the 1^st April 2016.  Is your business ready, and have you crunched the numbers to see how this will affect your bottom line?  Some thought provoking insight into the impact the National Living Wage could have on your business, and what to think about to prepare the way, and reduce the consequences on your profits.

The post BARRIERS TO BUSINESS GROWTH 7 – Managing the Money appeared first on Alluxi Consulting.

The essential guide to Starting Up & Growing your Business

Barrier 2 – Planning – The Key to Success

 “Companies don’t fail because they grow.

They fail because they don’t plan their growth.” 

Philip Orsini

Can you, hand on heart, produce your WRITTEN business plan or forecast for your next financial or calendar year?  Your route map of how your business will develop and grow over the next 12 months?  If current statistics are anything to go by, 25% of start-up entrepreneurs don’t think through and document their business plan and strategy.  Little wonder then, that so many small businesses don’t make it through their first year or two.

The Journey

Lets expand on the opportunity you may be missing out on through lack of planning.  Using the example of making the journey from London to John O’Groats – a distant point on the map – you probably want to take the fastest, most economical route and mode of transport possible.  To do this, most of us consult our Sat Nav’s for distances and driving times (approximately 12 hours and 685 miles) and start reviewing the options of best strategy to get from A to B.

You ponder and consider the convenience of driving, or the less stressful idea of taking the train or plane.  You compare the costs of a couple of tanks of fuel versus public transport fares.  You’d factor in having to stop at the motorway service stations along the way to feed and water everyone over 12 hours (or the cost of a hotel stop over to break the journey up) versus sad looking Train sandwiches or the cold bench in a deserted airport.  And after much deliberation you’d take an informed decision.

The Opportunity

What you probably wouldn’t do is just set off in your car, with no previous research, drive in a zig-zag motion hoping the North Star will appear on the horizon, in the hope of finally hitting your destination through random guesswork, having travelled triple the distance and in double the time needed.

Yes, you reach your destination, but at what price – time, energy, stress, fuel, wear and tear on your vehicle, as well as your frazzled nerves.  The opportunity was there to do the journey in 12 hours, via 685 miles, and a lot less cost had you just planned the route.

And so it is for business.  Strategic plans are your road map to growth, containing measurable objectives, which can be broken down into small manageable chunks of annual or even monthly strategies and a detailed action plan.  If you start to deviate, if you’re keeping tabs on where you are against the plan, you can make regular small adjustments to stay on track.

The Detail 

So what should a good business plan look like.  You only have to google “business plan template” to access a myriad of free forms, tips and guidelines so you don’t have to reinvent the wheel.  If your business plan doesn’t answer the key question of “why will your business succeed when so many others fail?” then you need to look more closely at detail.  Here are the key elements to get you started.

1. Executive Summary & Your Pitch

Think Dragons Den here.  All those times you’ve sat screaming at the TV screen because the prospects don’t know how to pitch their business. Work on your summary, business aims, and a high level financial summary.

2. Expertise and Training

Why do you want to run your own business, what’s your experience and skills you bring to the business.  What training would you (or your employees) need to fulfill the business needs.

3. Your Product or Service

What are you going to sell, the variety and mix of your offerings, how you will introduce them to the market, production costs, legal requirements (food industry for example is highly regulated).

4. Your Customers

Can you describe a typical customer or define your target market.  Outline where they’re based, what prompts them to buy your products, do you  have existing customers you can further promote to.

5. Market Research

Market research can be done from your desk (internet), but don’t forget your existing clients for field research, or even gathering groups of people in your target market for focus group.  Plan these in and remember the cost implications.

6. Marketing Strategy

Define what you are going to do, why you choose the marketing method you decide on (eg. advertising in magazines, online websites, awareness campaigns) and how much this will cost.  Marketing can be the biggest cost when starting up and growing a small business.

7. Your Competitors

Have you looked at what your competitors do, where they are, how big they are. Draw up a SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) comparing their products and service offerings, pricing, quality etc with your own.  How could you attract their clients to choose you over them?

8. Operating Model

Your business plan needs to detail your production methods or service delivery modus operandi.  Map out the steps in your process from first point of sale to receiving your clients payments – suppliers, equipment, premises, phones, internet, vehicles – are all operational and logistical considerations.  Don’t forget to cost for management and staff – you can’t do it all on your own.

9. Cost & Pricing Strategy

This is where many start up and small businesses make fundamental errors. You have to calculate the unit cost of your product, or service provision.  Then factor in the overheads – those other costs you can’t run the business without (like the roof over your head, and your salary) to ensure your planned profit margin adds in sufficient mark up on the unit cost to ensure a viable business.

10. Financial Forecast

This is where you bring all your plans together to show the financial reality of your proposals.  The Sales and Cost Forecast is the most obvious, but also plan your own personal survival budget.  A cashflow forecast determines at what point you can afford to invest in certain areas, maybe new equipment, better packaging, more staff etc, and a cost table of each of your products will clarify how you arrived at the cost per unit, what was included and how you worked it out.

11. Plan B (for Back-up)

Not many businesses think of this, but spend some time considering your short and long term plans, and what your Plan B is if things don’t work out exactly how you hoped they would.  Build in some contingencies, and think through the potential risks and ways to mitigate against them.

This may appear an onerous task but remember it’s short term pain for long term gain.  Going back to the statistics, rest assured that owner-managed businesses with business plans perform much better than those that don’t, and show superior growth in both sales and profit.  Good luck!!

Next Week

Barrier 3 – how the Wrong Objectives can rapidly cause a business to decline

Further reading

If you’d like to read more about this topic I recommend the following article.

Poor Planning Could cost UK businesses dearly this year – Small Business News

The post BARRIERS TO BUSINESS GROWTH 2 – Planning, The Key to Success appeared first on Alluxi Consulting.

The essential guide to Starting Up & Growing your Business 

Barrier 1 – You! The Owner

If you’ve recently started your own business, or only been trading for a couple of years, you may be feeling the stresses and strains as the reality of what’s involved hits home.

Every new entrepreneur has high aspirations to make a better life for themselves, but beyond the honeymoon period of setting up the new business, the real work of building clients, raising awareness, and juggling all the balls in the air is a daunting challenge.

Most start-ups don’t survive beyond three years.  To make sure you’re not one of these, let’s take a look at how YOU!, the business owner, can break through the barriers to achieve success.

If, like me, you’ve spent many years as an employee, we have to make a major mindset shift.  Stop thinking like an employee, and start behaving like an Entrepreneur.

Employees are focused in one area of a business, deal with the day to day operational detail, have a specific job description, and a contract of employment neatly setting our their working hours, holidays and rates of pay.

Entrepreneurs don’t have that luxury.  We start off working 24/7/365, with very little return – we could earn more serving burgers.  This is to be expected initially, but you can’t keep it up for the rest of your life.

This mindset shift will make the difference between building a successful business, or heading to a meltdown.  But I’m no psychologist, so let’s stick to the hard facts as to how you, the owner, can metamorphose from employee to Entrepreneur.

Experience – develop your support network

Your experience in your product or service initially drives the business.  Your first clients are your friends, family and other connections you make as the word spreads from this handful of initial contacts.

You know these people; they’re all supporting you in your new venture and will surround you with positivity.  The bubble will burst, however, and you can’t wing it like this forever.  The business will become more complex and you’ll need to strengthen your experience.

Building and widening your support network is vital.  Unlike the work place, you won’t have a manager or colleague to turn to with a problem, or to ask how to approach a particular issue.  Finding key people of influence, other successful business owners, possibly a mentor, accountability group or mastermind board, are all valuable forms of support you should actively seek out.

I don’t recommend partners, spouses or best friends either.  Yes, your nearest and dearest will be holding the fort whilst you dedicate yourself to the business; like picking up the kids, getting the dinner on the table, possibly a shoulder to cry on, or to raise a glass with when you have the occasional success to celebrate.  But I strongly recommend keeping the business and home life & relationships separate.

Research and read as much as you can about how to make a business successful and try to make one or two behavior changes from the suggestions and methods you read about.  By taking things one small step at a time, you’ll gradually build on your experience and your business will benefit.

Knowledge – you can only wear so many hats!

As you go from strength to strength, it will seem there is always more to deal with.  The number of hats you wear will grow as you take on the various functions from worker, operator, bookkeeper, purchaser, customer support, planner, HR Manager, Strategist, Marketer, IT expert etc.  Has your coat rack run out of pegs yet?

Don’t be fooled.  Businesses are complex entities and you are the driver and the leader. Identify where your knowledge gaps are and seek out training and information. 

Don’t be afraid to recognize your limitations either – normally in time management rather than not having the know-how.

The most common problem initially, amongst new business owners I’ve met networking, is having to make sure inbound calls are answered during office hours, when they can’t be available because they’re meeting clients, or simply trying to get the work done.

If you need a part time PA, a call answering service, or someone to make your appointments for example, then out-source it as a first step. You don’t have to recruit a full time role if you only require a few hours a week.  There are many people out there offering their services on a self-employed basis, working Mum’s willing to offer part time hours during the school day etc.  We’ve seen a much more flexible workforce evolve away from the old 9 to 5 mentality.

You can save time and money using online resources such as ACAS who have a wealth of template libraries for things like contracts of employment, staff handbooks, standard letters to guide you through the maze of employment law.  Let someone else add the expertise and tailor these generic versions to the specific needs of your business.

The same applies to book keeping and accounting.  You can find local firms or self employed accountants charging reasonable rates for a couple of hours of work a week.  It may feel like your costs continually accrue as you grow, but you won’t be wasting hours at year-end frantically trying to get your receipts in order, and updating the spreadsheets from the last 12 months.

The time you pay others to do the low value, back office, administrative stuff, will be more than paid back by the additional sales you can develop from not missing that all important call from a new client, instead of stuck in front of a computer working out your expenses.

Meddling & Misspent Time – Learn to Delegate

Most owner-managers work long hours.  But does successful growth demand working harder, or smarter?  Research has shown that owner-managers spend too much time meddling in the detail and solving other people’s problems for them.

The most important task you should be dedicating your sacred time to,  is developing the DNA and future strategy of the business.  Yet the typical owner-manager spends less than 10% of their time on this.

The thought of delegating to your staff can be scary.  The fear of losing control of the detail is the key factor that normally keeps you meddling in the operational minutaie that you should be confident to leave to your employees.

Delegation can be achieved by coaching your staff, transferring your knowledge and experience, whilst allowing them the autonomy to bring their own skills and capabilities to the job.  You never know, they may be better at it than you – and you shouldn’t feel threatened by that – you have to embrace it.  Richard Branson couldn’t fly a plane, but look where Virgin Airlines are now.

Developing effective monitoring systems, controls and reporting procedures will ensure that you keep your finger on the pulse, are aware of the status of the business, and be proactive in steering off schedule conditions back on track before it has a negative impact on your productivity and profitability.

Delegating will begin to free up your time, allow your employees to get on with the job in hand, whilst you get out there and work on the long-term sustainability and future of your business.

Self Confidence

Lastly, there will inevitably be emotionally good days and bad days, highs and lows.  Find a mechanism that works for you to stay motivated and maintain your self-confidence.  Sometimes you have to stand back.  Instead of worrying about all the things you’ve got to do, get those out of your head and onto the To-Do list, take a deep breath and recognise what you have accomplished.

At the end of each day, take a few minutes to reflect on what you HAVE achieved, the TAH DAH! list of what you DID do, rather than worrying about what you didn’t get round to – and keep telling yourself “What a great job I’m doing”.

Next week I’ll be looking at the all-important task of Planning.  Your business can be everything you want it to be and more – if you plan for it.  It’s a proven fact that those with a business plan perform better than those that don’t.

Further reading

If you’d like to read more about this topic I recommend the following websites and articles:

From Hamsters Wheel to Cocktails Around The Pool – Barnaby Wynter, January 2016

Entrepreneur – 12 Steps To Go From Employee to Entrepreneur

Federation of Small Businesses

The post BARRIERS TO BUSINESS GROWTH 1 – You! The Owner appeared first on Alluxi Consulting.

The essential guide to Starting Up & Growing your Business

Happy New Year to everyone, and here’s wishing your 2016 will be a high growth and highly profitable year.  By now you should have your annual forecasts and growth plans charted to manage your business success and reach for the stars.

If, however, your new year’s resolutions have not yet galvanised you into action, then my next series of blogs will help you take steps to ensure your business will Soar to new heights rather than Sink into oblivion!

The 5 Stages Of Business Growth

New businesses, especially those who have been trading only one or two years, have to smash through quite a few barriers, either real or perceived.  It’s easy to wing it initially, but as it grows and becomes more complex that won’t work for long.

Stage 1 – Start-Up

The start-up phase is definitely challenging, but exciting, as the new entrepreneur feels freedom for the first time, especially if you’ve been made redundant or left your job to “become your own boss”.

Entering the market can seem fairly easy for the uninitiated, or those who just have the sheer gut determination to break into the business world.  The first few months seem encouraging, although frantic setting things up, networking building a client base, getting a website, organising stock, premises – whatever is needed to run your business.

However, maintaining sufficient cash flow and turnover to invest back into the business, to get through the first barrier – is the initial stumbling block for most micro and start-up businesses.

Stage 2 – Growth

If you get over that first hurdle, you can experience a healthy growth curve.  The good times seem to roll with incremental annual growth, and your business starts to show some payback.  Pickings may be rich but a false sense of security can cause cracks to appear.

Where you have been comfortable actually doing, or providing whatever product or service your business is good at, it soon becomes apparent that as a business owner you need skills and knowledge in other areas of running a business for this to be sustainable in the long term.

Recruiting staff, maintaining the marketing plans, keeping the purse strings in check whilst still trying to get product out the door – all start to cause frustration, anxiety and stress, leading to disillusionment.  This isn’t going to be as easy as you initially envisaged. New skills are needed, and definitely more resource.

This is where you hit the second barrier and have to reposition your own role from Working in the business, to Managing the business.  Two very different things!  And this is where the business growth starts to sort out the wheat from the chaff – those who are still in “employee” mode to those who have a real Entrepreneurial spirit, and prepared to step out of their comfort zone.

If you do your research, disengage yourself from the day to day by employing people with the right skills to do that for you, you can then move the business to the next phase.

Stage 3 – Advanced Growth

Congratulations – this is where you can feel proud of yourself.  You’ve gained and applied the skills to manage the business.  Step back and reap the rewards, but keep your finger on the pulse, and your eye on the ball.  You can now focus your efforts on developing your staff, further building client and supplier relationships and working on the future strategies of the business to ensure its sustainability and profitability.

Stage 4 – Plateau

It may be a conscious decision, or life cycles (eg. retirement planning) may dictate the business reaching a plateau in its growth plans.  This can be a positive experience in allowing a younger business to consolidate its position.  Take stock and enjoy a period of plain sailing, but don’t get complacent.  Keeping in touch with your markets, the industry in which you specialize and ensuring employees, clients and suppliers are nurtured is a must to avoid entering Decline.

Stage 5 – Decline

This may be a conscious decision for some business owners looking to retire, or exit a business altogether.  However, the business will decline if not properly structured and invested in.  Key clients, suppliers and staff will start to leave and the business will eventually close.

Hitting Brick Walls

If you recognize yourself or your business position above, and feel that you’re hitting these brick walls, but not sure how to overcome them, then read on.  Over the next seven weeks I will be addressing the key reasons why companies start to fail.  I’ll be providing guidance and support as to how you can avoid the most common pitfalls and barriers that could prevent your business success.

Barrier 1 – You, The Owner

Your experience, knowledge and self confidence will be the key to your success. Does successful growth demand working harder or smarter? A typical owner-manager spends only 10% of their time on building the business.  Meddling and misspent time can be the key cause of business failure

Barrier 2 – Planning – The Key To Success

Your business can be everything you want it to be and more – if you plan for it. It’s a proven fact that those with a business plan perform better than those that don’t.

Barrier 3  – The Wrong Ojectives

Growing turnover often comes at the expense of profits. Rapid sales growth with low margins is not a healthy approach.  Greater profit can be gained with less work and fewer problems by focusing on carefully thought out objectives.

Barrier 4 – Muddled Marketing

Too many small businesses diversify too early and haven’t researched their markets well enough. Focusing on core products or services will achieve better results, and allow a learning curve to better understand your customers’ needs.

Barrier 5 – Information Chaos

Good information equals good decisions. Information chaos halts growth.  Getting your systems and processes right, from the start, is critical to managing a steady growth plan.

Barrier 6 – People & Change

You cannot grow your business without the help of other people. Continuing to run things as a small business as you get bigger doesn’t work.  Change management is key.

Barrier 7 – Money

Lack of financial strategy and poor control leads to a downfall. We’ve all heard that Cash is King, yet 50% of small firms have no financial budgeting process or sufficient controls to ensure a secure level of liquidity.

Next week we’ll start with You, The Owner, and what you need to be aware of as you grow your business, in terms of your own self-development, and pitfalls to avoid.

FURTHER READING

From Hamsters Wheel to Cocktails Around The Pool – Barnaby Wynter, January 2016

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