business

007 - Focus

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In a world full of distractions, focus is a behaviour that is extremely hard to maintain for many people.

 

Focus is a rare commodity; with a million well-crafted distractions being thrust at you every day; every hour; every second.

 

When we come across someone who is focussed it is noticeable – they have a different presence about them.

 

Inevitably they are successful in one or more aspects of life – be it family, business, sport, or another interest.

 

In terms of your business or job, focus can yield some amazing outcomes – from focus comes change – and the change driven by focus is almost always for the better.

 

If we focus on customer service, we will see how we are currently serving our customers; including any shortcomings; and put changes in place to improve.

 

If we focus on inventory we’ll see that dead or ageing stock that’s weighing down our business, and take actions to improve our stock and cash situation.

 

If we focus on our accounts, particularly the monies owed to us, we’ll inevitably pick up the phone, to collect those outstanding monies, reduce our debtors and minimise bad debts in the future.

 

As we all know (if we think about it and are honest with ourselves), our ability to focus is sabotaged by all sorts of factors, both internal and external.

 

Social media, e-newsletters, email, texts, that person standing in the doorway - all demand our attention and drag us this way or that if we let them.

 

Focus and discipline often go hand in hand.

 

Take 5 minutes to list 3 items you need to get done – be it family; business; or something for you.

 

Pick one item and focus on it today – by tonight you will have either nailed it; put a plan in place to nail it; or realised it’s not an issue. 

 

That sense of progress and achievement will be worth it, as well as the real benefits from having focused and moved forward on the particular item you identified.

Cheers

Garrick

You can reach me at garrick@garrickjackson.com

004 - Don't be afraid to raise your prices

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Pricing is one of the trickier aspects of running a business.

Too high and the phone might not ring; too low and you’re selling yourself short and not maximising your returns.  

It’s affected by the return you need to cover costs and make a decent profit, as well as what the market is willing to pay.

There are many different thoughts on how to set pricing, but if you have a business that allows you to do it  (new or established), experimenting with prices can lead to the best outcome.

I met some business owners recently who were working harder than ever and not making any more profit.

They deliver a service.

Pricing had been increased in the last 12 months, but hadn’t been changed for several years before that.

We had 3 problems:

1.     Expenses incurred by the business had continued to rise (rent, electricity, consumables, wages, etc.)

2.     Customers had grown used to the under-market pricing they had been receiving  (and enjoying!)

3.     The owners were working harder than ever, and had no capacity to make more sales and address the profit-squeeze they were experiencing

I sat there; listening to these business owners who deliver a great service; suggest that maybe it wasn’t worth running the business anymore.

This business had been in operation for a little over 10 years – and now here we were – the owners despondent and disillusioned about those last 10 years - and with no positive future prospects.

So we worked out a strategy around supply and demand as influenced by price.

Demand wasn’t a problem – it was through the roof and causing a high level of stress and anxiety.  We needed to curb this demand slightly whilst getting a better return on the work being done.

So we published a new price-list to become effective in 60 days – we moved all pricing up to the next level, for example, $30 would be come $33; $50 would become $55.

We discussed the concept of adjusting prices to the point where demand just starts to fall away, and then you know you’ve hit the optimum price your market will pay for your product or service.

We published these prices with plenty of notice to allow customers to make an informed decision on whether to come back or not.

A quick check of the market indicated these new prices were still below market rate, so there wasn’t a problem.

We also agreed that pricing would be reviewed more often to ensure things didn’t get out of balance again in the future.

A relatively simple thing when viewed from the outside, but so many business owners are buried so deeply within their businesses, that they can easily overlook things that can make their business so much more successful – and enjoyable - to be a part of.

The owners were happy – I was happy (mainly because I’ll still get to use their service, albeit at a slightly higher price) and we get to tip the scales a little more into balance for everyone involved.

Cheers

Garrick

You can reach me at garrick@garrickjackson.com

003 - Basic disciplines around reviewing your business expenses

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Many would have heard the saying, "cash flow is like oxygen - without it, your business will die".

For nearly all small businesses, this is absolutely correct.

We are excited by the business we want to launch and run, but the reality is you must have both discipline and visibility around what the monies you are spending, and the monies you are making (or planning to make!).

Now this doesn't have to be rocket science, and the financials of many businesses can be monitored using 3 documents - the Profit & Loss Statement (P&L), the Cash flow Statement and the Balance Sheet.

Keep a close eye on these on a monthly basis, and you'll be helping give your business the best chance of success in terms of your financial performance.

I witnessed this approach being used to great effect in a small wholesale business I was involved with.  

Each and every month the accountant would prepare the documents listed above, and the team would review these documents; line by line.

This had two great outcomes:

  1. All staff knew the expenses associated with running the business, and their particular area within it. This approach gave those staff context and visibility on how they could assist managing expenses, whilst maximising returns from the funds spent in their respective areas

  2. There were no nasty surprises the next month (not in terms of expenses anyway!)

As a result all bills, taxes, salaries and other commitments could be paid.

During the monthly review, if the outgoings surpassed the incomings - and there were no other cash reserves available - the outgoings had to be addressed.  

It was often disappointing that a certain expense activity couldn't be pursued that month; but there was also a comfort enjoyed by everyone that the business was managing its financials well.

Whilst you may not have a team (it may be just you, or you and your business partner, husband, wife or accountant) sitting down and going through this exercise, it is still worth the effort.

It takes a little time to set up, but it will inject a discipline into your business that you didn't have previously.

Too many businesses have limited (or no) visibility on their cashflow situation - these are often great businesses with passionate owners - but they are in dangerous waters and vulnerable to suddenly realising the cash in the bank doesn't cover the bills in the in-tray. 

Inject some structure into your business around regularly reviewing your expenses, and you'll see the benefits.

Cheers

Garrick

You can reach me at garrick@garrickjackson.com