Monthly Archives: July 2016

How do you know if you are doing well or not?

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Many business owners, especially if they are a sole trader, struggle to know whether they are doing well or not.

The reasons for this are as follows:

Firstly, many business owners do not have a plan for their business. This means that, even if they have up to date profitability figures in front of them, they don’t know if the figures are good or bad. It is only by having a robust plan, covering several years and based on your own goals, that you can judge whether your business will meet your goals, or not. A business which does not meet the owners’ goals is not doing well – however much profit it might be making.

Secondly, many business owners do not have up-to-date financial information. This means that even if they know their goals, they have no idea if they are meeting them. Some business owners keep a pretty close eye on sales/turnover but leave the rest to sort itself out. However, sales are just part of the picture. If you don’t control your costs or your cashflow, your business will struggle.

Thirdly, it is vital to know who’s definition of ‘doing well’ is important. For me, the only measure which is meaningful is YOURS. I see business owners struggling to match someone else’s ideal, rather than their own.

Finally, if you don’t know whether or not you are doing well, the chances are you will via to one extreme or the other. You will either believe you are doing far better than you are, or you will believe you are doing far worse. The first delusion will probably mean you come across quite unexpected problems with cash flow. The second will leave you feeling disillusioned and demotivated.

So, do yourself a favour and make sure you have a robust business plan, which you are updating with current financial figures. That way you will know for sure if you are doing well.

Fiona 🙂

Change is coming – like it or not!

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Forecasting

Whether you voted to remain or leave the EU, the fact is that we are all now OUT!

I don’t know about you but I don’t really know what a Britain outside of the EU will look like.

Certainly in the first few months and even the next couple of years, probably much the same as it did before the Referendum.

The pound and stock market plumited on the news but more because the city expected a remain vote. Chances are they will move back upwards – although whether they will reach the pre-Referedum levels remains to be seen.

All I can say is that in the short term our Portugal holiday is suddenly more expensive this summer!

I think it is the unforseen consequenses of Brexit, which will catch people out.

For example, in the meduim term the UK itself may well shrink as a result of the out vote. The SNP has a very good case for saying that, because Scotland voted overwhelmingly to stay in the EU, another Independence Referendum should be held.

After all a main argument for staying in the UK was that Scotland may struggle to become a member of the EU in its own right, but is a member of the EU if it stays in the UK – obviously no longer true.

I suspect there are a large number of multinational companies which chose to base themselves in the UK because we were part of the largest economic body in the world. It will be interesting to see how these companies react to the no vote.

Of local interest – how will the vote affect the French company EDFs plans to invest in Hinkley Point? We will see.

However, as smaller companies these issues are less of a concern than the immediate question of how will our businesses be affected.

And the answer is – none of us knows!

All we can do is to look at our own business and strategic planning and aim to make our companies as robust as we can.

So make sure you spend time reviewing your plan and thinking about how you may need to change it to flourish in the coming period of uncertainty.

Fiona:)