In our last installment of the 8 reasons why we discussed two of the most immediate issues holding back your small business cash flow & owner-dependent model. I strongly suggest reading that previous blog before jumping into this one.
Today we will introduce the next two business roadblocks, your supportive relationships and lack of efficiency.
- Cash Flow
- Dependent Model
- Supporting Relationships (Trust)
- Lack of curiosity
- Vision with a plan
- A mirror
These might not seem that important, and out of the eight on this list, they can make a lasting impact. We will discuss them today because prioritizing them can create the structure to move your business faster.
Supporting Relationships (Trust)
What is the first thing that comes up when you think about supporting relationships? I bet it is some combination of a spouse, a best friend, spiritual leader, doctor, etc. These relationships allow us as individuals to reach our highest potential, and thus you need to build a similar network for your business.
What does this network look like? It looks like many supporting businesses, from lawyers & accountants to your strategic joint venture partners. Many business relationships will be needed for your business to reach its greatest potential. Today, we will talk about two categories: the business that keeps you safe from the government and the business that keeps you focused on achieving your goals.
Keep you safe from the government:
Business Accountant (CPA); there is a significant difference between an accountant and a business accountant. A general accountant can do your annual tax filing, but a good business accountant does your tax filing, plus evaluates your business for risk potential, and evaluates your business to provide strategic suggestions. When you select accountants, look for those that offer additional services. Plus, make sure to ask about monthly financial reviews and what they will provide.
Business Attorney: You need two types of attorneys (sometimes they can be the same person). The first is your preventative attorney; they can help you develop the best way to incorporate, write contracts, provide HR guidance, etc. The second one is a litigator; you will need this attorney for the inevitable time something goes wrong, and you need to handle a suit. This is why you need to ask questions about their core services. Here are a couple of suggestions to get you started:
What is your experience with my particular legal issue?
What are the potential consequences of this legal action?
Who all is on your legal team?
Are you willing to refer me to other small business lawyers as needed?
Business Insurance: The final business to keep you safe will be your business insurance partner. Now there are many options out there, but the best guidance I can provide is that you should be reviewing this provider every six months to continue to make decisions that are best for your business and provide you with the right amount of coverage.
Keep you focused on your vision:
Business Coach: Everyone needs a coach. Listen to this carefully after you get develop your safety team. Your immediate next step is to find a coach. A coach is an objective person who can point out your flaws, help you to develop new skills, and it is in their best interest to help you reach your goals. When it comes to selecting a coach, it is essential to consider a few things:
What stage is my company in?
How honest am I about my flaws?
What is the biggest change I need to make to reach my goals?
You will notice that none of these questions are about the coach. This on purpose, many business owners fail to look at themselves first. Remember, growth is change; if you want to grow your business, you will have to make personal change, and the coach is the best person to help you do that.
CFP’s: Working with a good Certified Financial Planner can have several benefits, but most importantly, they should help you to get the best financial result out of the profit your business makes. In addition, they can provide many services from insurance to investment.
- The Networkers: The community connecter is the final relationship that is an absolute must. This person has been around for so long that they know all the players. This the person that all they need to say is “hey, you should talk with …” and that person responds with, of course.
The earlier a business puts in practice to reduce waste and inefficiency, the sooner they can scale. This is because a good efficiency plan allows your business to grow lean and while investing back into your business versus taking the best guess approach.
Now there are seven areas of lean waste:
- Delay: Waiting for any essential part of your process
- Replication: repeated tasks or information capture in your process
- Processing: simply too little attention or too much attention to a specific task
- Motion: This physical time it takes to walk across a room to get a document or disorganized inventory which is hard to look up a product.
- Under communication: the most extensive form is lack of systematic understanding. How are you confirming that your people know what to do?
- Errors: mistakes that are made multiple times and have not been improved in the process
- Under-utilized talent: Make sure you’re using your people correctly and checking to ensure it is still optimal.
- Opportunity Lost: This is the magic of your process; this is where your people have the guide rails to be flexible and help create the customer experience.
Now you will see that reducing waste and improving efficiency comes down to process. Do you have a process?
Most small businesses operate without clear SOP’s (Standard Operating Procedures). These procedures should be the top priority of any business going from start-up to growth. However, the sooner you can create your SOP based on the eight areas above, the sooner your business can scale.
We covered a lot today, and I am sure you have a ton to think about. As always are coaches are standing by to assist you. If you want to discuss anything in these articles or if Fractional COO is suitable for your business, click here.
Next week we will discuss the two more reasons your business is not growing. But, remember, the best time to make a change was yesterday, so you better start today.