Monthly Archives: May 2013

Get the party started!

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I have had an exciting time over the last couple of weeks working through financial plans with three excellent, established businesses that just needed a tweak in direction.

Each of the businesses are run by owners who are very knowledgeable about their business areas and run very good businesses. However, the businesses were just not delivering the income the owners needed.

I find that the reason for this can often be entrenched assumptions about how the financial side of the business should be run.

For example, pricing can often be a problem area. Many businesses will cost their products/services on a cost plus basis. This at least ensures that costs are covered (as long as they are fully aware of all their costs, which should include the owners’ salaries) but takes no account of the market value of the product/service. This leads to undercharging.

Also the method of pricing often has more to do with supplier’s way of working and assessing value, than it does the customer’s. It is important to review pricing structures to ensure that they match the way your customers think about the product/service you are supplying.

Pricing by the hour may be easier for you, but if it is irrelevant to your client how much time a job takes, as long as the job is done properly and within the agreed budget, it is  not terribly relevant. It can often be more relevant to charge for the task done.

Another assumption which catches people out is that services should be billed at the end of the month in which the service is delivered and the money collected 30 days after that.

This assumption has lead many small businesses into liquidation and is JUST NOT TRUE.

Unless you are a bank, you should be giving as little credit to your clients as you can  – certainly there should be a good business case for any credit given and proper credit checking of those clients given time to pay.

By changing the way invoicing and debt collection is done businesses’ liquidity can be improved overnight.

So don’t just continue doing what you have done before if it is not working – have a shake up!

Fiona 🙂

 

It’s a new day!

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It’s always great to meet people who are inspired to start something new in their lives.

In an economic environment which too often seems bogged down in doom and gloom, new businesses display much needed optimism and excitement about the future. Of course, optimism and excitement are not enough to make a business succeed, but they go a long way to helping a business move forward.

My cousin Mark has recently taken over Cafe Revival in Corn Street, Bristol. It was a pretty run down business both in terms of the internal presentation but also in terms of the offering to customers. Over the last three months Mark has worked tirelessly to bring the building to life again and to revamp the tired menu. The finished article is by no means achieved, but the transformation is already startling.

Anyone looking for a great venue for business meetings, or even just to wile away an hour or so between other engagements, will find Cafe Revival a haven – with great coffee and a truely excellent tiffin you really must try!

So what can existing businesses learn from new business owners?

Often, after a number of years struggling to make a business work, business owners become jaded and lose their mojo, so I think they need to re-engage with their enthusiasm for their business.

One way of doing this can be for them to revisit their business plan and remind themselves why they started their business in the first place. What inspired them to take the huge step of becoming their own boss?

I have gone through this process with many business owners and, without exception, by the end of the process the business owner is re-engaged with their business. They are re-motivated, and excited by the changes they are going to make to the way they run their businesses, so the business better meets their expectations.

Or, they realise their original expectations were unrealistic and they were never cut out to be their own boss. This is also a good result because they are able to give themselves permission to move on do something different with their lives.

So, if you are feeling that your business is going nowhere fast, take time out to re-examine your goals and your business’s ability to meet those goals. Challenge yourself to see the world differently and see if you cannot re-energise both yourself and your business.

Fiona 🙂