Tough economic times can be especially draining for small businesses owners and at Yellow Brick Road we have a series of questions that we ask our clients when they come to us for advice.
The first thing we want to know is simply, “do you have a business plan?” A business plan is essential because it contains the objectives of your business, how it is structured, your products and services, and your targeted customer base. A business plan is the glue that holds your vision together, so you need to take the time to ensure your plan reflects your goals.
Do you have a good handle on your cash flow?
Many small businesses fail because of lack of focus on money coming in and going out. Make it a priority to collect your debtors on time so you can pay your suppliers accordingly and maintain a good credit rating.
Are you managing your debt effectively?
You may have various sources of debt financing both personally and in your business. Make sure that you are managing your total exposure in the most cost effective manner possible, which can help to ensure the long term success of your business.
Do you know what your business is worth and how you would sell or exit it?
I see many small business owners who work for decades to build large profitable businesses but with no eye on the future and no plan. At least have some idea about your future plans for benefiting financially from your years of hard work.
Do you have a marketing plan?
Many small business owners end up working in the business rather than on the business. A marketing plan is a key element all small businesses should devise because it helps you identify your customers, product, market and competitors. Every small business knows what they are looking to achieve, but many don’t know how to achieve it. A marketing plan will help you establish an appropriate path towards your end goal.
Do you have the right insurance cover for your business?
Disasters happen and it is critical to make sure that your business is adequately covered in all the right categories. Advice from a general insurance broker can identify the key areas in order to mitigate your risk and help you sleep better.
How do you manage your workforce?
A combination of full-time and part-time staff can save you money at times when revenue is down. There are also a number of government grants available that can reduce the cost of your workforce, particularly in the area of unskilled labour. For many businesses, workforce is the largest cost, so you need to make sure you’re using your effectively. In tough economic times, small factors can be the difference between weathering the storm and being swallowed by it. Give your business a basic check and if you’re unsure about how you rate, talk to an expert who can sort you out.
* Mark Bouris is the Executive Chairman of Yellow Brick Road, a financial services company offering home loans, financial planning, accounting & tax and insurance. Email Mark on mark.neos@ybr.com.au with any queries you may have or check www.ybr.com.au for your nearest branch.