Tuesday, June 21, 2011
Dumpster Day
Beth and I are reading a couple of books on organization for our own benefit and to help our clients. She is reading Organizing for the Creative Person by Dorothy Lehmkuhl and I am reading Getting Things Done by David Allen. Beth has already garnered some great ideas from her book and I was just struck by a great concept in mine: Dumpster Day! David Allen recommends all individuals and businesses instituting an annual Dumpster Day during which all employees come to work in jeans and tennis shoes, set their phones to go to voice mail and sort through all their stored stuff. This involves sorting through all files, file cabinets, in-baskets, drawers, etc. and deciding what is worth keeping and what is no longer relevant. I love the idea-imagine how refreshing it will be to pare down all your stuff. We will institute this at E&S Entrepreneur Advisors, LLC and the Schuldes household. How about you?
Sunday, June 12, 2011
Do you have enough suppliers to keep your business running?
The earthquake and tsunami in Japan are having worldwide economic consequences. Clearly, the Japanese government and some Japanese corporations have revealed inadequate disaster preparedness and risk management programs. This is having impacts on many other countries and businesses as products produced in Japan are becoming hard to procure and the recovery is predicted to take a long time.
While this may not seem relevant to a small business owner in Wisconsin, parallels can be drawn. Every business owner needs to make sure they have an adequate source for all products, materials and supplies. Relying on only one source is dangerous for any size business. Part of any well run business is the regular review of potential suppliers/vendors for both price and quality. Having a backup plan should disaster hit one of your suppliers is vital to keep your own business running smoothly. This can also be true for clients or customers. If your business is too reliant on one customer and that business suffers a setback, can your business survive?
While this may not seem relevant to a small business owner in Wisconsin, parallels can be drawn. Every business owner needs to make sure they have an adequate source for all products, materials and supplies. Relying on only one source is dangerous for any size business. Part of any well run business is the regular review of potential suppliers/vendors for both price and quality. Having a backup plan should disaster hit one of your suppliers is vital to keep your own business running smoothly. This can also be true for clients or customers. If your business is too reliant on one customer and that business suffers a setback, can your business survive?
Tuesday, June 7, 2011
5 Small Changes That Can Improve Your Bottom Line
When we are working with small business owners on improving their profit and cash position, they are often expecting us to identify some big area where improvements are clearly needed. Sometimes that is the case, but more often we will be recommending a number of small changes which add up to the needed improvement. The following are 5 areas where we are often able to make a little change.
1. Sales: Implement one new sales and/or marketing strategy. If your business is dependent upon networking, then attend 1 more networking event each week. If you have employees, ask everyone to attend 1 networking event each month where they are focused on generating leads. If your business is dependent upon sales calls, commit to making 1 more sales calls every day. That may take only 10 minutes per day, but adds up to a total of 20 more sales calls per month.
2. Cost of Goods Sold: Shop for alternate vendors. Evaluate order frequency and quantity for volume discounts. Evaluate the product to see if there is any component that does not add value to the customer and reduce your product cost by removing it.
3. Technology: Spend some time analyzing the costs/benefits of the ever-changing technologies available today. Frequently the ROI is quite high even in the short-run in terms of improved efficiency which can be translated into reduced costs, or better customer service, potentially higher capacity and even improved sales.
4. Other Expenses: Nothing should be sacred in terms of business expenses. Look at each line on your P/L and make sure that every dollar being spent is done with a forethought. Renegotiate rents. Get alternate quotes on insurance. Look to paperless alternatives for record-keeping and billing to reduce office supply costs.
5. Track Performance Metrics: Every business should be tracking non-financial performance metrics in addition to the bottom line. Evaluate each different advertising and customer relations tactic to verify that it is producing results. Track the hours spent on various activities to be sure that you and your employees are focusing efforts on enough of the income-producing or billable activities. Take surveys to be sure that what you are offering really has value to the customer.
A small company may already perceive itself to be running lean, but is still able to make a number of small changes to improve the cash flow and cash position.
1. Sales: Implement one new sales and/or marketing strategy. If your business is dependent upon networking, then attend 1 more networking event each week. If you have employees, ask everyone to attend 1 networking event each month where they are focused on generating leads. If your business is dependent upon sales calls, commit to making 1 more sales calls every day. That may take only 10 minutes per day, but adds up to a total of 20 more sales calls per month.
2. Cost of Goods Sold: Shop for alternate vendors. Evaluate order frequency and quantity for volume discounts. Evaluate the product to see if there is any component that does not add value to the customer and reduce your product cost by removing it.
3. Technology: Spend some time analyzing the costs/benefits of the ever-changing technologies available today. Frequently the ROI is quite high even in the short-run in terms of improved efficiency which can be translated into reduced costs, or better customer service, potentially higher capacity and even improved sales.
4. Other Expenses: Nothing should be sacred in terms of business expenses. Look at each line on your P/L and make sure that every dollar being spent is done with a forethought. Renegotiate rents. Get alternate quotes on insurance. Look to paperless alternatives for record-keeping and billing to reduce office supply costs.
5. Track Performance Metrics: Every business should be tracking non-financial performance metrics in addition to the bottom line. Evaluate each different advertising and customer relations tactic to verify that it is producing results. Track the hours spent on various activities to be sure that you and your employees are focusing efforts on enough of the income-producing or billable activities. Take surveys to be sure that what you are offering really has value to the customer.
A small company may already perceive itself to be running lean, but is still able to make a number of small changes to improve the cash flow and cash position.
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