Keeping a Small Business Afloat 25 Years II

Keeping a Small Business Afloat for 25 Years – Part II

Today, I would like to focus on some specific and hopefully helpful ideas to help you keep your businesses afloat for 25 years or more.

1. Stay on top of what is going on in your industry, and incorporate new ideas that you find useful.

I am in a high tech business, and as such, it is absolutely essential that I keep up to date with the latest technological advances, and make a determination as to how these advances can benefit my customers. I work very hard to keep myself informed about new and cheaper computer and printer hardware, new web design ideas and methodologies, and most importantly, advances in computer security.

There are a number of reasons why this approach is essential. First, it provides a valuable service to my customers. If I am up to date on what is relevant to their computer installations, then I am a resource that they can turn to at any time for advice, making me a valuable asset to their business success. Secondly, it provides me an avenue to stay sharp and fresh. Any business can become stale. One of the greatest enemies to the life of a business is the idea that “That’s the way we’ve always done it!” You can easily become stuck, stale and irrelevant to your customers.

2.Pay close attention to what your customers tell you. Listen, listen and then listen some more.

It is common for business owners to presume that they know what is best for their customers. Many large corporations have developed very bad reputations with respect to customer service because they no longer listen. They operate in a vacuum without any firsthand knowledge of what their customers need, want or value. Unfortunately many small businesses fall into the same trap.

Not everything a customer will tell you is something you want to hear. However, these are the most important things out there for you to hear, especially if you hear the same thing from more than one customer. You have to know what they need, what you are doing right, and most importantly, what you are doing wrong, if you want to be the one to meet their needs. And it does not matter what your industry is. Listen, and pay attention!

3.Pay very close attention to your expenses and income. Understand where your revenue is coming from and where it is going.

This is a very crucial aspect of small business ownership. You HAVE TO MANAGE IT, even if it is a one person business, like mine. At the beginning of each year, I create a revenue budget and an expense budget. These are not just spreadsheets that end up collecting dust in some abandoned corner of my hard drive. I compare my actual results to my budgets for both income and expenses every month. If you do not know where your revenue is going to come from, then how can you plan how to market your product or service?

And if you don’t maintain an iron grip on your overhead, it can get away from you faster than you could ever imagine.

Along these lines, as you grow it is essential to put controls in place so that you can continue to understand the financial aspects of your business. Here your greatest ally is a CPA who understands small business. The value of a CPA to your business cannot be overstated.
4.Stay enthusiastic.

Several times over the last 25 years I have fallen into periods of “burnout.” These happen to all small business owners, sometimes as a result of stress, or even boredom. I have been lucky enough to use these as an opportunity to take a hard look at what I was doing. Your customers will respond way better to someone who sounds glad that they have called. Everyone has days when they are cranky, but if your burnout, and associated crankiness last for any length of time, your customers will hear it, and many will be turned off by it.

Make absolutely sure that you maintain outside interests. Running a small business can be an intense and extremely demanding task. It is absolutely essential that you take care of yourself by getting adequate rest, having outside interests, spending time with family and friends. Have a life outside your business. It will keep you fresh.

These are but a few of the many things we can do to keep our small businesses and ourselves afloat.

Matt Cantillon
Go-payroll.com

Keeping a Small Business Afloat for 25 Years

Keeping any business afloat for a quarter century can be a challenge, as we have recently seen with General Motors and Chrysler. Who’d have thought that we would be witnessing the demise of large businesses such as these auto giants, or the investment banks, media companies and airlines we have also lost. These situations illustrate that no business is immune from the effects of an economic downturn. Small businesses are especially susceptible to difficulties during such downturns.

What kind of business perseveres during difficult times? What are the qualities that allow businesses to be successful even in the face of adverse conditions?

My own small business recently celebrated 25 years in business. I develop and market accounting software systems for small businesses. These include payroll, inventory control and other such accounting modules. My average user has been with me 17 years. What has been the major factor in my survival? It is because I pay attention.

I pay attention to my customers’ needs. I pay attention to what things cost me. It is lack of awareness that can sneak up and put you out of business. An unhappy customer lurking out there, feeling ignored and unsupported can be a real horror, especially if that customer makes his or her unhappiness known to others. Runaway overhead costs can put you behind the cash flow eight ball faster than anything else. Failing to collect your accounts receivable can damage your cash flow beyond repair.

It can seem overwhelming to pay attention to all the aspects of a business. The way I have dealt with this issue has been to limit my growth, and to limit the amount of new business I take on each year. This works for me because I am a one-person business. By staying small, I have the capacity to listen to each of my customers, limit the amount of overhead expense, and make sure I collect all my receivables each month.

This strategy cannot work for all small businesses. I have not had to worry much about marketing, as my customer base provides both new projects and sufficient referrals each year to keep things going at a brisk, but not daunting, pace. Many businesses in a variety of industries must market themselves in order to be successful. Many small businesses need growth to survive.

Being a small business owner implies that you have to keep your eye on ALL the balls in the air coming at you. Careful planning can be your greatest asset in dealing with all those balls. You need a yearly plan to help manage your expenses, and you need to monitor it and stick to it. That way you know what is being spent and where. You need a marketing plan in place so you know how you are going to generate new business. You need a customer service plan in place so you can make sure that your customers are cared for in the way you would want to be taken care of. In other words, you can leave nothing to chance.

If you are completely on your own, or if you do not feel expert enough in these areas to design and execute these plans yourself; help is available. The value of a good team of advisors cannot be overstated. A CPA can help you with the financial planning and accounting needed to keep the financial end of your business in shape. A good business attorney can help you in a number of ways, including choosing the best structure for your business (corporation, LLC and so forth). A good business attorney can review leases, advise you about trademarks, and assist you in establishing employment policies. Being careful and attentive in your hiring decisions can bring you skilled and hard working employees who will help your business grow.

In coming articles I will get more specific about several of these areas. Next time we will focus on the financial aspects of your business.

I’d like to close with a story about a fellow who embodies small business success. This man is a realtor. I tell people that when you look up realtor in the dictionary, there is a picture of Jason Boggs. When he is your realtor, he is your advocate. He listens carefully to your needs. He tells you the truth. He acts in your best interest. He does what he says he is going to do. If someone needs the services of a realtor, I always recommend him. As a result of the way he operates, he has been, and continues to be very successful. His value system is at the core of how every business should function.

So there you have it. You have to pay close attention, do what you say you’re going to do, and act in your customers’ best interest. We will discuss how best to do this in future articles.

Matt Cantillon

GO Industries LLC