A few months back I wrote about how many people start the new year with a set of new goals, or resolutions. By the end of March many of these goals are a dim and distant memory.
The reason for this is that January is often not a very positive time of year. With its dark days and long nights, contrasting with the gaiety surrounding Christmas, January can also be the darkest month of the year physiologically. Not the time to create new plans and start to change your outlook.
Three months on it’s a completely different story.
The clocks have just changed so we have longer evenings. The sun is shining, the buds are appearing and the world seems fresh and new.
What a fab time to be thinking about the future.
In my opinion creative juices flow better when we have the opportunity to get out of our offices and enjoy the sunshine. We are more positive and open to opportunity. We are less likely to dismiss ideas out of hand or procrastinate.
Others must be thinking this too as over the last month or so four owners have come to me for assistance in putting together plans for their businesses. One is for a completely new business, but the other three are established businesses looking for a change in direction.
So if you need to change your business plan or set goals for yourself and your business, NOW IS THE TIME TO DO IT!
As business owners we need our businesses to make money.
In my opinion an established business which does not pay its owner(s) a decent wage is really a hobby. So given that we need our businesses to make money it follows that we need to be sufficiently au fe with business finances to understand if our business is running our finances, or whether we our running our business finances.
Unfortunately, a large numbers of business owners are not financially savvy enough.
If you would like to see if you are one of these, try answering the questions below:
- Do you have a clear financial plan?
- Do you know if your business is currently profitable?
- At this point do you know how much money is in your bank and what money you can expect in and out of your bank account over the next month?
- Do you know what customers/products/services are profitable?
- Do you have a robust invoicing and debt collection system so clients pay you in a reasonable time (do you know what reasonable is?)?
- Are you always able to pay your suppliers on time?
- Can you always pay your salary/dividend/drawings?
- Do you know how much you have to sell, and at what price, to provide the lifestyle you want?
If the answer to two or more of these questions is “no” you are probably not as financially savvy as you need to be to run your business effectively.
However, help is at hand and there are ways you can help yourself.
- If you have an accountant/bookkeeper ask them questions about your financial position and what you could do to improve it
- Talk to your business friends who seem to be financially sorted and ask them what they do
- There are volumes of business books out there that can help you understand the basics
- Take time to properly plan
- You may want to go on a finance for non-financial managers course to learn the basics in a workshop setting.
Finally, I have written a series of FREE financial and business guides which you can download from my website http://www.fionabevanfinancialmanagement.co.uk/guides.php
You can download as many or as few of the guides as you like without registering so please do take advantage of them.
Over the last month or so I have been asked to help 4 business owners with planning for their business success.
One of these is a brand new business startup, whilst the other 3 are business owners who are planning to change their business model or want to expand.
As I am used to doing one off business planning for 2-3 businesses a year, this increase in interest has got me thinking. Are more people starting, or expanding their businesses; are more business owners accepting the need to have a proper plan; or am I just more effective at getting my message out there?
My suspicion is that it is a bit of all three. However, I am particularly interested in why, in a recession, more people are thinking of starting, or expanding their businesses, when all the newspapers are trying to convince us that the economy is in meltdown. Surely now is the time to hunker down and protect what we have?
Well not necessarily. It is often when times are good that we are most resistant to change. When we are in our comfy safe jobs, earning comfy salaries, we are at our least creative. Why plan for an exciting future when you are bumbling along quite happily as you are?
It is when our comfy lives are threatened, or ripped apart, that we are most likely to explore new avenues. We have less to lose and more to gain.
So if you have been toying with a new idea or want to breakout on your own perhaps now is YOUR time.
But please remember to have a proper plan. Make an informed choice about whether to jump or not and make sure yours is not one of the many small businesses who fail.