Ever wondered ‘Where’s the money gone”?

‘Where’s the Money Gone?’ traces the learning of a typical business person named Mike. Mike believed that to be successful he just needed to make a profit.

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The 3 greatest errors to overcome so you have a most profitable business

By on June 28, 2011 in Most Profitable Business

How can you be sure that your business is making the right profit AND that the profit in the books is correct?

Most business owners take a quick glance at their profit and loss account and if the number is positive they get back to running the operations assuming that all is well.

But to have a most profitable business over the long haul you must ensure the following three errors are not evident in your books.

Error 1:
Paying yourself a drawing from the profits and not a wage.

Many business owners fail to pay themselves a wage for tax and cash flow reasons. They only take enough drawings from the profit to keep them alive.

So why is this an error? Isn’t this good tax planning?

The answer is NO because by failing to pay yourself a wage, you’re building the wrong cost base in your business and failing to engage your customers at prices which allow you to make a wage AND a sustainable profit

Error 2:
Failing to account for Inventory.

This normally results from your book keeper coding all your creditors invoices straight to Cost of Sales in the profit and loss account.

This means your sales and costs may end up in different periods with your profits rising and falling haphazardly depending on the timing of sales and costs.

Unless you are able to match these correctly you will have no idea whether your profit is real and sustainable.

Error 3:
Failing to account correctly for Depreciation.

Many small business owners never put depreciation through their books and use depreciation as a method of reducing their profit so they don’t pay as much tax.

So what’s wrong with that?

It means that you never recover this amount from your customer and when machinery wears out you have no money to replace it because you forgot to get the customer to pay for the machinery that their products and services were produced from.

Are these errors which have been in your books?

3 tips for getting maximum benefit from small business coaching

By on June 23, 2011 in Small Business Coaching

Many business owners fail to get the most out of small business coaching because they doubt themselves and think that they’re paying a coach to do everything for them or that the coach has all the answers to their problems.

Remember that although many coaches have vast experience the person who should know the most about your business is YOU. With this in mind below are three tips which will really help you get more benefit from your investment in small business coaching.

TIP 1
Make sure you do work yourself between coaching sessions.

As a small business coach I see a vast number of different business owners and the ones who manage to get the most benefit from me make sure they ‘road test’ everything that we talk about in our sessions.

The coach is not a baby sitter on the one hand nor the CEO of your company on the other. You are the business owner and must do the work between sessions to extract and implement the learning into your business.

TIP 2
Have a list of topics that you want answers to.

When a business owner comes to a session with specific questions about their business I know we’re dealing with relevant issues for them. It usually means that they are thinking about the sessions and applying the knowledge to their situation.

Often in our sessions we will change the whole direction of a session to address the most pressing issues in a business because that’s where the questions always come from.

TIP 3
Don’t get caught in generalised concepts and fixed systems.

I personally like it when a business owner interrupts the session with questions about how the knowledge applies to their individual business.

There are some really great coaching systems which apply generalised business principles. Whilst these are great in theory, my experience is that the specific and unique information really helps the business owner.

If you want generalised information there are many educational facilities that can give you this. One on One coaching must address your specific needs to give you the value from your investment.

What’s your experience with small business coaching?

2 golden rules for preventing difficult employees finding their way into your business

By on June 21, 2011 in Difficult Employees

How can you be sure that you’re not taking on difficult employees who will bring ‘heart ache’ into your business?

It all starts with employing people and making sure that you’re getting what you think you’re getting. So as part of the hiring process we suggest you follow these two golden rules.

Golden Rule #1
Develop a process for testing the specific skills required in the job.

Many business owners in their haste to fill a gap do not go through a rigorous process for hiring employees.

Think about the specific requirements and develop a series of tests that will ensure the person can actually DO them rather than talking about it.

A client of ours has developed a maths test which all employees must pass as part of the interview and since implementing this has had relatively no issues with hiring for the competencies of that particular job.

Make sure you get potential employees to perform some actual work not just go through a spoken interview.

Golden Rule #2
Develop a process for testing the behavioural skills for the job.

There is a uniqueness about every employee in your business. The last thing you would intentionally do is hire someone into a position where they would continually struggle!

Although you may think that many people are alike, getting the best out of your employees and matching that uniqueness and skills to the job will ensure you maximise the benefit of employees to your business.

Unfortunately many business owners don’t test for this as part of their interview process and then about three months later are confronted by the “real” employee rather than the “interview” employee.

There are many different tools you can use such as DISC and Myers Briggs but the particular one we use is called Business DNA.

Using tools like these can make sure you have an objective measure of the behavioural strengths and struggles before an employee starts in your business.

What’s your experience in hiring employees?

How you can improve Business Behaviour

By on June 9, 2011 in Business Behaviour

In Steven Covey’s book, The Speed of Trust, he put forward the thought that TRUST was a hard economic measurement.

The proposition was that when TRUST went up, then SPEED went up and COST went down.

Conversely, when TRUST went down then SPEED went DOWN and COST went up.

From this he was able to conclude that trust is a hard economic indicator. What had previously been thought of as ‘soft and fluffy’ was in fact a hard economic indicator and could be used to assist businesses get better performance.

So do you think that trust has anything to do with business behaviour?

Do you think that the way you behave in your business has anything to do with the performance of your business?

Business behaviour can make all the difference between a business performing reasonably or doing extremely well because the effectiveness of people is often based on how others behave around them.

Let’s take an example:
You’re in a meeting doing some brainstorming with your employees. Everyone seems to be contributing well except for one person who is quiet and seems to be detached from the conversation.

So you ask them:
‘Do you have anything to contribute?’
They reply, ‘Nothing at the moment.’

This frustrates you because you are a very creative and spontaneous person who loves nothing better than to get in a room, push around all the ideas and come to a decision on what to do next. This really energises you so you can’t understand why this person would have nothing to add.

You think, ‘Are they stupid? Or do they not care about what we’re talking about?

You think, ’Maybe they have something better to do.’

This frustrates you even more because there’s nothing more important right now than finding a creative answer to this issue.’

So you ask them again:
‘Do you have anything to contribute?’
Again they reply, ‘Nothing to contribute.’

Now this is too much for you so you say,

‘We’ve been here for half an hour discussing this and after that much time surely you have at least something!’

So what do you think is happening in this situation?

We have two people who process things completely differently and as the boss you need to realise that it is a struggle for the other person to come up with ideas as quickly as you.

It’s easy to think that everyone in the world is basically the same or when they grow up they will be!

It’s easy to think subconsciously that you know how everyone else thinks. But in reality you often think through the lens of your own make up and not the other persons.

The problem you have as a business owner is that not everyone is like you. There are lots of different ways of getting to an answer and depending on a person’s make up they will likely get there differently to you.

The situation I described above happens in various forms in businesses all the time. And when it does, people’s confidence is destroyed. When this happens the energy in the business decreases and the performance goes down along with the level of enjoyment for the business owner.

Do you have any examples you would like to share?

How you can be free from Small Business Coaching

By on June 7, 2011 in Small Business Coaching

As a Business Owner are you :

Trying to become more self sufficient?

Longing for the day when you no longer need to rely on any one and you’re free to run your business without any worries?

Doing the best you can to be self sustaining?

Well…. All of these desires will potentially be taking you away from the benefit and help of small business coaching!

I come across many business owners who are very self reliant. While this is a real strength it can also be a significant impediment to them being able to take on fresh ideas.

It can be a struggle for them to realise that they don’t have the answer personally to every problem that they encounter.

Is it easy for you to be sceptical and questioning rather than welcoming and trusting when it comes to taking advice on your business.

Many times of course this is completely justified because the so called advisor knows less than you do! But when it comes to small business coaching it is difficult to get any real benefit without having an open mind to learning from someone who probably sees the world a little differently to you.

Now let’s jump on the other side of the fence for a moment and think about this issue from the coach’s point of view.

What’s their biggest nightmare? Remember they are in business too and have many of the same hang ups that any business owner would have!

Their biggest hang up is that clients are always trying to get to the point where they don’t need them any more and as a result they try and make themselves critical to the business. A great place for the coach is where the business owner can not do without them

BUT…

This will never satisfy the business owner because they inherently do not want to be reliant on any one. They want to call the shots and be their own boss.

While this is not often verbalised between the coach and the business owner, this clash of needs is often what brings about a low level of satisfaction in small business coaching.

The coach is trying to hang on and control the situation and the business owner is trying to get free and run their own show.

So what should they do?

How could they get better value from each other?

Firstly the coach should realise the aspirations of the business owner and set about trying to help them be self reliant.

What does this look like?

Having a focus on freedom rather than control.

Making sure they focus on what they can do rather than what they can’t do.

Focus on strengths rather than struggles.

What will happen to the business owner?

My experience with business owners is that when they like something and value it, they have no problem coming back for more and more.

The funny thing is that the minute you try and set them free to do their own thing they want to come back and get more of that freedom ‘potion’ because they like it.

It makes them feel good and they can’t get that feeling from anyone else.

Customers can’t give it to them, suppliers can’t give it to them and employees certainly can’t give them that felling of being set free by a coach who is cheering them on to do the very best they can.

What’s your experience of small business coaching?