One Sherpa - Business Coaching
  • Home
  • About
  • Business DNA
    • Recruitment
  • The Financial Fence®
    • Strategic Business Coaching
  • Blog
  • Resources
    • Five By Five >
      • The Essence of Strategy
      • The Essence of Profitability
      • The Essence of Marketing
      • The Essence of Funding
      • The Essence of Cash Flow
  • Contact Us

How to avoid disappointment when hiring a Small Business Coach

6/12/2016

0 Comments

 
So, you’ve made the decision to go ahead with small business coaching.  It is incredibly important that you don’t go into the process with ‘rose coloured glasses’.  Remember that your potential coach is also in business and wants to make a good impression. You will likely hear about the other businesses they have worked with and how incredible the experience was for those clients.

You also need to remember that you will be at a point of need, which may leave you vulnerable to making a sub standard decision.  When you’re buying anything, emotion often drives decision making rather than logic.  That’s why disappointment can quickly enter into your world, because it too is an emotion.  Working through a logical decision making process is very important when deciding to hire a Small Business Coach. 

One of the more common reasons for getting a coach is that it is lonely being the business owner.  The truth is that there is only so much you can discuss with your employees, particularly if the issues are with the employees.  You’ll want someone outside the business to discuss these matters with as you work towards a solution.

Disappointment in these circumstances is a result of getting something you weren’t expecting or wanting, or failing to get a desired outcome.  When you’re feeling isolated and wanting encouragement you are also wide open to be taken advantage of.  This may well come in the form of coaching that does not assist in propelling your business forward into a positive and prosperous future.

So, before you appoint a Small Business Coach, you need to have a list of logical, salient reasons for working with them.   The process you go through to bring a coach on board should be as rigorous as appointing a new employee into your business.  You will need to interview them, ensuring that they have a proven track record in assisting in the specific areas that you want help with.  For example: If you have significant cash flow issues, then hiring someone who is focused on people dynamics may not suit you.

Make sure you hire the right Small Business Coach for your business. Ensure they understand the specific issues you’re facing and agree on outcome expectations. You will then be far more likely to avoid disappointment through the coaching process.

Discover how strategic business coaching can work for your business today.

​Contact One Sherpa to find out more!


0 Comments

The Essence of Profitability

3/31/2016

0 Comments

 
Have you ever heard the phrase “running on the smell of an oily rag”? The essence of profitability in a business is effective cost control. Every dollar that goes into the costs of a business is a dollar that isn’t left in the business as profit.
Think about it. If you can maintain your customer service levels and quality on 10% less costs, then all that saving will flow to your bottom line, otherwise known as profit. If you are able to procure stock in trade for lower costs, those savings will flow direct to your bottom line.
The flow of money into your business begins with payments from customers BUT the more that gets consumed with the expenses the less you will have left as profit.
While it can be very nice to have new equipment and fittings in your business, you must remember that your business is not your home. At home you make things as comfortable as possible. In that environment you are a consumer.
In a business, however, you are not in it for comfort and lifestyle. Your prime objective is to generate returns in profits and cash flow, which is why your attitude to cost must be entirely different.
Imagine all the hard work of getting a customer, convincing them that your product or service is what they want, and then finding that you make virtually nothing out of it! Many businesses end up in this position; we call it ‘profitless prosperity’! Making lots of sales, generating lots of activity, but with nothing to show for it at the end of the day. Sales increase but there never seems to be any additional money or profit left over.
This is the reason why cost control is absolutely essential, and a first step to obtaining business financial mastery.
The key to mastering cost control is to understand the nature of the different types of costs (or expenses) in business:
There are basically two types of expenses in a business.
  1. Expenses that vary with the volume of business and are known as VARIABLE.
  2. Expenses that do not vary with the volume of business and are known as FIXED.
 
VARIABLE EXPENSES
Key Definition: Variable expenses are expenses, which vary relative to sales volume, and so their key driver is sales volume.
 
A variable expense example may be the cost of the product that you sell. For instance, if you are selling widgets in your business, then the more that you SELL, the higher the overall cost of the widgets will be that you BUY in order to sell them. You may be able to negotiate a lower cost per unit with higher volume but the total expenditure will vary with the volume.
Variable expenses are less dangerous in your business because they are only incurred when a sale is made. There is revenue directly associated with each variable expense, so in theory, there will always be the income to offset the expense.
 
FIXED EXPENSES
Key Definition: Fixed expenses are expenses that do not vary relative to sales volumes.
 
Fixed expenses occur whether or not you make a sale, and so are NOT driven by volume. A typical example of a fixed expense would be the rent on your business premises. The landlord will expect you to pay the rent whether you have made sales or not. Many landlords do have some understanding of business and may grant a rent-free period to a tenant when they first lease premises. However, there is no direct link between sales and rent.
 
Rent is a fixed expense and does not vary with sales.
 
There are different risks for variable expenses compared with fixed expenses. As a general rule, variable expenses are associated with getting product to customers. Often they form the COST of sales.  As a result it is more risky to run these on “the smell of an oily rag” than fixed expenses, which are generally not associated directly with servicing customers.
 
Whether you sit on a leather executive chair or an old apple box case will have little bearing on your customer’s experience, BUT it WILL have an effect on the profitability of your business.
 
Many opulent expenses are driven by lifestyle or comfort considerations rather than by sound business reasoning.
 
Make yourself a promise that you will leave your lifestyle and comfort requirements at home and bring your business mindset to your business dealings. Making good profits will allow you to have a better lifestyle AFTER making a success of your business and NOT before.
If you are starting in business after being an employee for many years do not expect the same conditions as when you were an employee. You will need to ‘tough it out’ while establishing your business, and if you push too much expense into the business at an early stage it will negatively affect its performance.
 
Doing it a little tougher at the beginning will pay HUGE dividends in the long term and allow your business to be a success.
The biggest mistake to make is trying to look successful before you are successful and acting as though you are. Such pretence can only be sustained as long as you can borrow money BUT it will cripple you in the short term and possibly even be the cause of your business failing in the long term.
 
The essence of profitability is effective cost control, maximising the gap between your income and your expenses.
 
Contact One Sherpa to find out how we can walk with you in your journey towards business success.
 
0 Comments
<<Previous

    Author

    Andee Sellman is the Principal Founder of One Sherpa and a qualified accountant and business coach. Andee has over 30 years experience owning, operating and advising businesses across Australia, New Zealand, the United States and Asia.

    Archives

    June 2016
    March 2016
    January 2016
    November 2015
    October 2015
    September 2015
    August 2015

    Categories

    All

    RSS Feed

Sitemap

Contact Us

Home
About
Business DNA
Recruitment
The Financial Fence®
Strategic Business Coaching
Contact Us
Blog
Resources

Mail :
PO Box 685 Brentford Square, Vic 3131

Terms & Conditions 
Privacy Policy
© 2015 One Sherpa. All Rights Reserved.





Website by Inspired Briefcase