Nine “Resolutions” for Creating the Best Odds for Success in 2014
At the beginning of a new year, many business owners find comfort in performing a post-mortem of the year gone by. Entrepreneur and author Bill McBean explains why it is much more productive to look ahead at what needs to be done in the year to come.
Hoboken, NJ (January 2014)—The confetti has fallen, the ball has dropped, and the champagne has been popped—2013 is officially over, and 2014 is underway. For many business owners, that means doing a post-mortem on their businesses by looking back at what went right and what went wrong in the year gone by. Business owner and author Bill McBean says the reason for doing a 2013 post-mortem is simple—it supplies an owner with current facts about their business and the market so they can use the information as they look forward and plan for 2014. He offers his advice on what you can do, starting now, to create success for your business this year.
“When you run a business, there are always some certainties as you look into the future,” says McBean, author of The Facts of Business Life: What Every Successful Business Owner Knows That You Don’t (Wiley, October 2012, ISBN: 978-1-1180949-6-9, $24.95, www.FactsOfBusinessLife.com). “In 2014, you know your best competitors will work to become better. You know your customers will demand more. You know you’ll have to work smarter and harder every day to improve your bottom line. You know that, as with any year, it’s important that you learn about any new taxation and new regulations that may add expenses and affect the way you operate your business. And of course, you face the usual headaches and worries that come with the day-to-day business of running a business.”
McBean’s new book, The Facts of Business Life, provides a great guide for any business owner to use year after year. As the title suggests, the book lays out seven of the most critical facts, which McBean considers foundational truths, for successful business owners to use to their advantage every day.
“Often, entrepreneurs don’t make the best planners,” says McBean. “We are action-oriented people. But by taking a long hard look at a few critical pieces and putting a plan in place right now, you can have a much more prosperous year.”
McBean suggests breaking down your 2014 planning into what you need to do internally—with processes, employees, yourself, etc.—and what you need to do externally—with customers, marketing campaigns, and so on. Below he provides a few tips:
Evaluate your leadership
Entrepreneurs tend to be ready, fire, aim kinds of people. But the truth is, if you don’t improve your leadership skills, there is little chance your business can improve. Being a great leader begins with a self-analysis of your leadership ability. Next, you have to look carefully at what’s working for your business and what isn’t. Start with a post-mortem of 2013. Did you supply the business with what it needed to be successful—things like the right equipment, your focus and time, required capital, assigning responsibility and expectations, and so on? Did you have the right people in the right chairs? Are employees being paid based on what you want them to accomplish and expect from them? Did you let any bad habits slide that need to be addressed? Then, look ahead: What should you do differently this year?
“Look at the leaders in your business,” says McBean. “Are they all on the same page with you? Are you sure? Are they well trained, and do they know what success looks like? Do they get the expected results? Your answers may lead you to make tough choices. For example, just because Cynthia has been head of the customer service department for 10 years, doesn’t mean she should remain in that position, especially if the job has changed due to market conditions and Cynthia isn’t able to keep up.
“Without effective leadership, your employees have no idea what is important, what to manage, or what success and failure look like,” he adds. “In order to have effective employees, your business first has to have effective leadership, and this starts with the owner.”
Do a top-to-bottom walk-through of your systems and procedures
In essence, systems and procedures (processes) actually operate your business, though a lot of owners misunderstand this simple concept. Examine which processes are working, which need to be improved, and which processes are outdated and exist only because “it’s the way it’s always been done.” For example, your inventory has to change with the market, as do your pricing policies. Inventory and pricing parameters change because what sold well a year or two ago may have little demand today, and your competitors’ pricing changes constantly and so must yours. Your systems and procedures must be able to keep up with these rapid changes. Or maybe your business has fallen into bad habits—for example, overlooking employees who don’t perform as expected, or are continually negative and affect other employees’ attitudes. In particular, look for inconsistencies in how employees handle tasks, especially those that directly impact customers and those that affect the data you use to make decisions about the business. These two important areas usually get overlooked.
“It may not be politically correct to say so, but if you’re not controlling your procedures and processes, you don’t really ‘own’ your business,” notes McBean. “You’re just a spectator watching others play with your money. Great procedures and processes need controls, and these controls in turn create great results and skilled employees. In 2014, rededicate your business to upholding important processes, and your understanding that processes operate your business—and employees operate the processes.”
Kick off a cost-cutting, gross-profit-building mission
This is a powerful weapon for an owner. Look for ways to increase gross profit and cut costs as they have a dramatic positive effect on profits and cash flow. For example, look for easy “to bolt on” gross profit opportunities, and get creative when looking at your costs.
“Don’t assume that you know how much things are costing you, or that your employees are reacting to new sales opportunities,” notes McBean. “Take a good look at your books. And know that sometimes you don’t have to make cuts; you simply need to renegotiate vendor contracts. For example, maybe you can save money on shipping by renegotiating rates with your shipping company. Or get a discount in purchase for early payment. Ask yourself: What expensive mistakes did we make last year? How can we avoid them this year? And what can we do to increase bottom line profits and increase cash flow?
“I’m not recommending knee-jerk reactions like massive layoffs or switching to inferior-quality materials,” he clarifies. “Don’t cut out the wrong things, but do look for smart, well-thought-out ways to save money and start building up your cash cushion and profits. We all have heard ‘Cash is king’ and it is, especially when it’s there when you need it.”
In this economy, you need employees who care about your business as much as you do. And that’s what you get with engaged employees. “Engaged employees are energized,” says McBean. “They handle problems on their own and actively look for ways to improve the business.
“So how do you get engaged employees? Show them you care. Sometimes it’s as simple as saying ‘thank you’ for a job well done either verbally, with a handwritten note, or with a handshake with $20 attached. Or you might allow them to take a paid afternoon off and give them movie passes. One thing that worked well for me in my businesses is supporting the activities my employees’ kids were involved in. Also, make sure your employees have what they need to stay engaged. For example, eliminate the frustrations in their job, make sure they have the latest safety equipment, and train employees to know how to handle emergencies or workplace accidents. It’s these simple things that all add up to developing an engaged staff—who want to work for you and are proud to do so.”
Set some realistic, specific goals for the year ahead
Then, dial up the “aggression factor” just a little bit more. In other words, aim high but be specific. If your goals aren’t measurable, you won’t be able to gauge your progress and eventually you’ll stop pursuing them. Setting realistic goals, putting a plan in place, and routinely checking in with employees to gauge their progress—because what gets measured gets done!—is the best way to be successful.
“And don’t be lulled into complacency or let the continued talk of doom and gloom handcuff you,” says McBean. “Successful owners know they have to fight not only to win market share but to retain it as well. You have to constantly be setting and reaching goals to keep your business moving forward. If you take your focus off of improving your business, competitors will step in and take what you have worked so hard for. It’s just the law of the marketplace jungle.”
Boost your product/service offerings
The products and services you offer are the core of your business. “Think about what you can do to squeeze out another product or service offering with what you already have in place,” suggests McBean. “For example, if you own an auto parts store, there is no law saying you can’t sell fast moving or maintenance parts for the marine industry, especially if you’re located on a lake resort. People need what they need, when they need it. Make it easy for your customers to get what they want. And don’t ignore the power of impulse purchases or convenience items, even if they are not matched up with your core products. Always be looking to make new and better offerings to your customers. Doing so provides added value for your customer and for you. A true win-win.”
Revamp your marketing campaign
Think about who your customers are. Are you marketing to them in a way that makes sense? For example, if your customers are mostly elderly, email marketing might not be the best way to reach them. Or if they’re younger, advertising on a classical music station might not make sense. Would the money you’re pouring into ad placement be better spent on direct mail? Does a huge social media campaign really make sense for your company, or are you tweeting fruitlessly into cyberspace just because everyone else is doing it?
“It takes marketing to bring customers in and it takes marketing to keep them,” points out McBean. “Many companies see marketing as an expense, but it’s actually an investment and deserves your focused attention. And remember, your attention should be focused on what products are selling, where your customers go for information, who purchases your products, who are the easiest customers to attract, and which products bring the most gross profit.”
Find new ways to impress loyal customers
In business, few things are as important as your customer base. That’s why it’s essential that you find ways to protect yours by developing very loyal customers. Of course, the first step is offering great products and services and delivering those products and services via a very helpful, engaged staff.
“To go a step further, consider what would keep customers continually coming to your business,” says McBean. “Remember, habits are hard to break. The more customers come to your business, the stronger relationship they create with it and your employees, and the more comfortable they feel. Find the answers to this and you’ll quickly find your sales and profits are increasing regardless of the market. You can’t ignore the market and what your competitors are doing to keep their customers, but the prize goes to the owners who become more creative and don’t offer just the expected.
“Heck, it can even be as simple as posting a sign by your cash register asking customers to go to your website to register for monthly or weekly prizes, or to sign up at the point of sale—everyone likes to win something! This is where the term ‘think outside the box’ really applies because the only limit is your imagination.”
Get knowledgeable about economic/tax changes and how they’ll affect you
The slow-to-recover economy and the fiscal cliff debacle have taught us the importance of staying one step ahead when it comes to the economy and how it’s going to affect your business. “Be proactive and seek out a trusted financial advisor,” says McBean. “Ask him or her what upcoming tax changes will mean for your business. He or she will be able to point you in the right direction and uncover ways to save when it comes time to file your taxes. Or, ask your banker about your overall market, which industries are showing strength, and which are struggling. This can give you a look into the future on what products may have increased demand and which ones may lag.”
“There’s no reason 2014 can’t be the best year yet for your business,” says McBean. “But in order for that to happen, you have to look ahead. You have to think about where you need to improve this year and what challenges might pop up to slow your progress. By taking the time right now to plan for the year ahead, you’re making big opportunities possible for your business.”
About the Author:
Mr. McBean began his career with General Motors of Canada Limited in 1976. After holding several management positions with GM, in 1981 he accepted a position with the Bank of Nova Scotia (ScotiaBank) as manager of a sizeable commercial lending portfolio. Two years later, however, GM approached him about opening a new automobile dealership in Yorkton, Saskatchewan, and, along with ScotiaBank, offered to lend him the required capital. Accepting the offer, Bill began his first business as a “start-up” the following year, beginning with ten employees. Visit www.FactsOfBusinessLife.com