Marketlend Academy: 4 Signs Your Small Business Needs to Course Correct Now
So your launch was a success, and your new business is now at cruising altitude. Celebrate, by all means. But keep an eye out for tendrils of smoke in the vents.
That’s because some problems in a growing business are like a smouldering fire: you’re often unaware until it’s too late. If you know their early warning signs, though, and have plans in place to counteract them, you shouldn’t be taken by surprise. Here are some of those signs and the best countermeasures:
1. You’re starting to pay your bills late
If you’re starting to having trouble paying creditors and employees on time, you might be developing major cash-flow woes. Cash is everything to your small business, and you need to figure out where the problem lies right away.
Ask yourself: Are you billing your clients quickly enough, with timely invoices? Are you checking the credit histories of your big customers instead of just giving them the benefit of the doubt? What about collections procedures for the deadbeats? Do you have those in place?
Cut costs wherever you can. The little expenses add up. Barter with other businesses for services; buy your equipment gently used; install a ‘smart’ thermostat; get a solar water heater; make staff turn off computers at night; employ freelancers for suitable tasks. You can even borrow items from a tool library so you don’t have to buy them.
Check your financial statements religiously. Identify any possible opportunities to boost your income, but don’t even think about trying to grow right now. If you’re having cash flow problems, now’s not the time.
You should be able to pay your bills, your employees, and even yourself–on time.
2. You’re always reacting to emergencies
If you’re starting to respond to business emergencies day in, day out, something’s not right.Things should be running smoothly enough to let you plan and think strategically much of the time, and focus on building your business.
Perhaps you’re trying to have the business do too many things at once; or maybe you’re bad at setting priorities and managing time.
The Eisenhower Matrix
Have you heard of the Eisenhower Matrix? It’s a formula developed by Dwight Eisenhower, the American World War II general, more than 60 years ago that has stood the test of time. Basically, Eisenhower split his workload into urgent tasks (returning a phone call from Winston Churchill, say) ) and important tasks (such as planning for D-Day)). He made sure to schedule time for his important tasks and to delegate the unimportant ones. What he accomplished with this approach is none too shabby: he vanquished Hitler, became president of the U.S. and developed its highway system, among other things. And his formula is still alive today.
Eisenhower didn’t even have the benefit of project management apps, but you do. These can help you and your staff work together efficiently. Eisenhower also knew that having too many meetings in one’s schedule is a bad idea — they suck up lots of time.
Be realistic about your own weaknesses, and consider hiring someone to help set priorities and establish your office systems.
3. The staff you just hired is leaving
Once you’ve invested in training good people, you want them to stick around. If
they’re leaving sooner than you’d like, schedule exit interviews with them to ask why. Then ask yourself what you can do to improve staff retention.
And take a look in the mirror. A good boss fosters enthusiasm, sets clear expectations, gives timely feedback and conveys a sense of mission. Then he or she gives the employees room to get the job done. If they do their jobs well, don’t micromanage.
Let your employees know you value their efforts (or at least, let the good ones know); pay them a decent wage; express an interest in them. They’ll reward you with loyalty.
If these strengths aren’t yours, consider hiring someone else to manage your staff. Outside consultants can also help identify why employees keep heading for the door.
Turnover rates vary by industry, so you might want to call your industry’s trade association, if there is one, to see how your rate compares.
4. You experience a sudden drop in sales
A sudden drop in sales could be just a hiccup, but it could also be a sign of bigger problems, so investigate immediately. Have your competitors beat you to the punch in some way? Is your product or your way of selling it outdated? Do you need to adjust your pricing or your marketing? If you have sales staff, are they hitting their quotas?
Are you targeting the right customers? Is technology revolutionising your industry in some way and changing your customers’ buying habits or methods?
Put yourself in your customer’s shoes and try searching for your product and business online. If you sell online, make sure everything on your website functions smoothly, from landing to checkout.
Check in with your industry’s trade association, if you have one, to find out if the drop you’re experiencing is part of a bigger trend, or perhaps customary at this time of year for reasons you might not have thought of.
Now you have it — four situations, each of which could be a wisp of smoke telling you your engine’s on fire. Ignore them at your peril.