Uncomplicated “business building blocks” are the simplest way to strategically build any business better.
For want of a better description of what business owners need to do to get back on track fast and grow even faster, they need a simple and uncomplicated process, that uses a block by block mentality to build a business the right way, unlike what most business owners do now or have done.
Over the last two months, as businesses owners a couple of things have raised their head, that most probably knew, but were scared to acknowledge or talk about.
- Cashflow for most businesses is a problem. As has been identified most businesses have under 21 days in cash reserves and an incredibly high percentage are in fact insolvent. And on top of that:
- Businesses service levels are still poor, and you’d think that that might have been addressed when businesses are trying to hold onto any customer they can at the moment!
- And when cash dries up, so does marketing, it generally stops, and marketing is generally key to new customers. But as we’ve all probably experienced, social media, email usage and posts have gone through the roof and are as high as 50% up on what it was only two months ago. Businesses are spending less than 1% of turnover on marketing, where it was 5% only a few short years ago and the reason predominately behind that is businesses are attempting to make “free” marketing work and it generally doesn’t, because marketing is expensive, if the ROI is low or non-existent!
Th objective shouldn’t be coming out of this slowly getting back on track and performing the way too many businesses “were” operating. There are lessons to be learnt from the last couple of months, but only if you take advantage of those lessons and turn them into better skills.
The key in understanding what needs to be included in a structured format, is simply putting everything that needs to be done into blocks. The building blocks of better business.
- Block 1: Foundation.
- Block 2: Strategy
- Block 3: Skills, abilities and activity
- Block 4: Management.
The challenge that far too many businesses find themselves in, is in just chasing their tails, going round and round, putting out one fire after another and reactively running their business, instead of a proactive, structured process of knowing what needs to be done, what the outcomes should be and by when.
Block 1: Start with the foundation. Know what your business has done, what it could do and what you want it to do. Know the numbers! Planning is critical and the lack of it, is the primary reason 92.3% of businesses don’t make it past three years, but it’s more than just a number on a sheet of paper that probably never gets look at again anyway. Cashflow and cash reserves is possibly the biggest factor that’s hit businesses recently. If everything ceased for whatever reason in your business (the owner had an accident or whatever??) how long could the business survive or keep going on the current cash reserves? Currently on average it’s 21 days, but it needs to be much more. The plan of the business needs to include getting cash flow reserves to at least three months, if not more, if something out of your control happens. But you need to come up with whatever that number is, that gives you security.
I’ll cover the balance of the blocks over the next couple of weeks, or if you’d like to know more, email me at email@example.com
If you’re in business, recently started, still in business and are wanting to get back on track after a couple of months of shutdown or slowdown, then the course of action every business owners needs to take is simple and it’s all about clarity. Know what’s going on, plan cash flow better, identify the strategies and skills needed and manage it all. It’s simple, not doing it is hard!
Mybusinessnow has plenty of resources available on our website at www.mybusinessnow.com.au social media sites, Facebook, LinkedIn and our Utube channel, just search Mybusinessnow.
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