Tuesday, July 29, 2014

Risk management planning for small business owners

What will happen to your business if something happens to you?  Many small business owners don't think about what will happen if they get injured or sick.  Planning for this can insure the survival of the business.

You want to create a notebook or folder or spreadsheet which would allow someone to step in and run your business for you.  Assume you will be unable to communicate with this person so they will need all the information which is in your head!

Start keeping a record of all the task you, the owner, do every day.  Note what you did, how you did it and how often it has to be done.  Have a comprehensive list of all contacts (suppliers, service providers, customers) and their contact information (names, addresses, phone numbers).  Have a comprehensive list of all your logins, user names and passwords.  Make sure this list is locked up or password protected.  Make sure someone knows how to access this list though or it will do you no good!  Make there is a list of all your bank accounts, loan and credit card numbers and other details.

Now that you have the information ready, you have to find someone who will use it.  Consider who would be willing and able to step in for you.  Is there a family member or friend who has the time and skills needed to fill in for you?  Perhaps you will need more than one person to replace you.  Make sure you do some training once that person has agreed to be your backup.  Show him/her the lists and procedures and walk them through your most important tasks.  They need to know how to pay your bills, deposit your money and communicate with your key contacts to let them know what is happening with your business.

Taking the time to develop a back up plan can be the difference between life and death for your small business.

Thursday, July 24, 2014

Ongoing planning

Last week we talked about the importance of planning before you start a business.  This week we will talk about planning on an ongoing basis.

Large corporations have personnel in charge of strategy and planning.  Anyone who has worked for such an entity remembers long range planning sessions or meetings held with consultants to facilitate strategic planning.  Small businesses have different needs and issues, but they still need to have planning as part of their routine.

We meet once a year to review where we are and how we got here and where we want to go.  It is amazing how a business can change during a year without the principals being aware of it!  We review who are customers are, how our processes are working and what areas need improvement.  As a partnership, we talk about our relationship and how that is working.  We have a very detailed operating agreement and as such, we have very times where we have disagreements.  When we do find our approaches to an issue differ, we fall back on the processes in our operating agreement and we have always found a way to compromise.

It is important for any business to understand who their biggest customers are and who they would like to have as customers.  It is also helpful to understand the margins for each type of customer or service or business segment so you can focus on the most profitable areas when you work on the marketing plan.

It is also important to know who the key suppliers or service providers are and to have backups available if needed.  Understanding your supply chain is vital to the survival of any business.

If your business has employees, you will want to have regular performance reviews (at least annual) and to plan for future hiring.  Having job descriptions and required skill sets ready makes it easier and quicker to replace employees if necessary.  Having an understanding of the work/tasks done by the owners of a small business is also important so that work may be delegated to employees as the company grows.

Owners of small businesses are almost always busy, but taking the time to plan and work on your business is vital to the success of your company!