Many business owners struggle to find time to work on their business rather than in it, but spring is the perfect opportunity to set aside the time to re-investigate your business and create new goals and priorities, according to St George Bank’s general manager of business banking Phillip Godkin.
Godkin told StartupSmart founders and small business owners need a broad base of skills and time to make sure they know how they want their business to grow.
“Small business owners are time-poor and can often be a ‘jack-of-all-trades’ for their business, but it’s important to find time to check-in on the health of the business and its ability to grow,” Godkin says.
James Anderson, head of SME-focused initiative St George Business Connect, told StartupSmart start-ups and small businesses can strengthen themselves by updating business plans and mastering cashflow.
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“You should review your business plan at least once a year, but make sure you hold yourself to reviewing it on a monthly basis to work out how you’re tracking towards those big goals,” Anderson says.
He says spring is the perfect opportunity to create or review monthly action items to drive progress.
“One of the pitfalls of business plans is even if they’re fantastic and well thought through, the monthly action items, which are the connections between idea and execution, can be missed,” Anderson says, adding that owners need to take the time to view the business and its potential as a whole.
“Business owners often get caught on one or two particular areas, on that squeaky wheel rather than exploring and investing in the most critical areas, such as generating new ideas for your business, and getting your operations right,” he says.
For businesses with big growth plans, Anderson advises they focus on their channels to market during their business plan review.
“Review your business plan and work out if you’re spending your time, money and energy in the right areas to generate the most income from the right customers. It’s about investing in the right channels to market.”
Businesses can miss opportunities to improve their cashflow by focusing on money coming in, rather than where money is going.
“The biggest cashflow pitfall is not knowing where the cash is going and where it’s getting trapped. Often business owners are generating and focusing on sales, and doing a great job getting new customers or distribution relationships but they haven’t focused on the payment terms for example,” Anderson says.
While younger businesses can be tempted to offer flexible or long payment terms to lure new customers, they need to be aware of the huge impact such terms can have on cashflow.
“Suppliers and customer payment terms need to match or at least be complimentary, and that disconnect needs to be addressed,” Anderson says.
He adds businesses should track where cash leaves their business over three months to identify patterns such as expenses they can seek to minimise or restructure.