Keeping a close eye on a business is of major importance to any business, which may seem obvious, but it’s surprising how many business owners have no idea of their month to month performance. All well run enterprises, be they a small Mum and Dad café or a large conglomerate, have their finger on the pulse. With the new Xero accounting system recently becoming popular, it is now even easier to find one’s ‘Key Performance Indicators’.
All business coaching starts with an assessment of the current financial position of a business and then starts a programme to improve each performance category. Bookkeeping is the bain of most business owners lives, especially ‘first timers’. Often a new business owner will decide to do their own bookwork, which will be the first mistake they’ll make. Spending time on bookwork might save them the cost of a bookkeeper, but it is a false economy. Delegating such non productive, mundane necessities is the first lesson for a new owner.
Often, the first timer will try to do everything themselves, not just bookkeeping, because they feel it will reduce their costs. In reality, it restricts the growth of the small enterprise to such an extent that the business quickly reaches its maximum turnover and can’t grow any further, because the owner can’t or won’t move on from the mindset of a ‘one man band’. The only way a business can grow is to employ more people, which involves risk. So many new business owners are very tentative when it comes to taking on more risk, but it is the only way to expand the potential of the business. The French word ‘entrepreneur’, literally means ‘risk taker’. If a business owner doesn’t feel comfortable taking the risk, the business will quietly stagnate and once it starts to stagnate, their competitors will then get the edge on them and then the business starts to rot.
All businesses have to be in a growth phase, continually, otherwise they are heading south. There is no such thing as ‘cruising along’ or ‘coasting along’ in business – its either increasing or decreasing.