Your personal vision
There are many business articles and blogs that analyse why personal relationships in business are beneficial. What I want to touch on is a little deeper being the importance of a personal vision for a SME business owner and how that relates to their business vision.
Many businesses have a business plan that includes operational strategies that underpin the culture, structure and vision of the business. What is usually lacking is the business owner’s personal vision which should be supported by the business. The personal vision sits right at the tip of the Business Triangle.
The business must provide the business owner with:
- The lifestyle that they want
- Enough time to enjoy it
- The cash to afford it
- A valuable, saleable business asset
- An outlet to develop the business owners skills
If the business owner is clear on what they want to get out of life they can more effectively manage their business by aligning a business vision that is supportive through strategy and operational execution. An example from my experiences working with SME business owners is the pain point of not enough personal time to have a life (which is quite common). They didn’t have a personal vision and hadn’t associated that Business is Personal – meaning the business is there to support their personal vision. Once a clear personal vision had been set we could work on the areas of the business that needed to change to support that personal vision.
The business is not the driver with the business owner being the vehicle to drive the business to the business vision…it is the other way around.
The simplest way to prepare a personal vision is to do some critical thinking about you and what you want to get out of your life. Focus on the following areas:
Summarise your critical thinking and prepare a one page document, dated 5 years from now, in the 1st person, that illustrates how you are living your life with reference to the above 8 areas (only mention the most relevant and impactful areas). Sign it off as a commitment, review it routinely and note where you have chosen to edit your path.
The next stage is to review your business vision, culture, structure and operational strategies to ensure that they align and support your personal vision.
This is a guide to increase your income (profits) that you get out of your business. As a business owner the more profit the business makes there is more potential for you to increase your personal income.
The Available Growth in profit in your business comes from the income that is available to you NOW, from money that is already circulating in your Business. It just requires optimisation.
The following are the eight key drivers where there is significant growth available in every Business:
- Pricing – most businesses are under-priced, however are not sure how to increase them without losing customers. The most common mistake is not covering all the costs associated with the delivery of goods and/or services. Prices need to be set high enough to cover costs and make a profit.
- Cost Reduction – actively managing your cost of goods and overheads requires discipline, creativity and a willingness to work hard with your suppliers to maximise performance.
- Productivity – involves optimising the productivity levels of your staff. Most businesses have more productive capacity than they need, therefore with setting output targets/KPIs staff will be motivated to achieve more and get closer to maximising their productivity to the business.
- Staffing Levels – this involves determining whether the business has too many or too little staff for your businesses current demand. Many businesses go through highs and lows of demand and during the highs usually employ more staff which are costing them during the lows. There are many strategies to optimise matching staffing levels to demand.
- Debtors – this is a delicate area for most businesses and needs to be actively managed, especially your trading terms. Essentially businesses need to stick to their trading terms; have a debtor recovery procedure that they can call on; intimately know their Aged Debtor report; and most important of all is to maintain open lines of communication.
- Stock Control – if your business has stock it needs to be turned over as fast as possible because if there is too much cash tied up in stock, finished goods or work in progress it will stifle your cashflow.
- Sales and Marketing – every business needs to actively manage and encourage customers to buy from US not THEM. This will start with establishing your point of difference that resonates with your customers and your value proposition. This can be communicated in a variety of sales collateral and marketing activities.
- Business Growth – every business can be scaled up and this scale will be determined by what you ultimately want out of your business. A growth plan is the best place to start as it will identify the goal, the strategy to achieve the goal and the tasks required for implementation in the short and longer term. It forms the basis of your long term strategy to beat your competitors.
Within each of the eight key drivers there are many strategies you can implement to improve the performance of your business and achieve success.
What key driver is the most significant in your business that you would like to optimise for your business success?
Most business owners I talk to say:
- It’s much harder than they anticipated being in business
- They are always busy and often stressed
- They feel quite alone and isolated, they don’t really have anyone they can turn to for help
- They feel like they have a good business, but need some new ideas and help to take it to the next level
“Business is Personal”
Many Business Owners are great at their trade, however they often have difficulty in actually running their business in a way that maximises profits while still achieving a good work-life balance. Every business needs to be steered towards achieving the long term goals of the Business Owner and their Family. Without the right assistance many businesses will fail causing extreme hardship for all involved.
“Most Business Owners are interested to know how to have a Business that can give them a better personal income…“
A business consultant has the ability to unlock the true potential of their business and provide a positive future for them and their family.
Expert and Enabler
Over the years of helping SME business owners and their businesses I have found a requirement to be a combination of Business Consultant and Business Coach. I like to visualise the relationship of the two with Business Consultant at one end of the spectrum and Business Coach at the other spectrum.
Expert – changes a business
At the start of the relationship there is a requirement for credibility (i.e. an expert – pure business consultant) through the development of business plans and strategies; financial analysis; and short term quick wins for the business owner.
Enabler – changes a life
As the relationship develops to the point of execution of the business strategy and plans there is a requirement for enablement of the business owner and their team (i.e. an enabler – business coach) to ensure they own the tasks for execution; they are accountable for how the tasks are completed; and are responsible for the results.
It is the ability to be both an expert and enabler that ensures a longer term trusting relationship and sees true business value = you helping SME business owners.