February 2012

Looking backwards and moving forward - Part 2

So how did you get on? What did go well? What would you have liked to go better?

Last month I suggested that the answers to the questions above might fall into three categories: people, activity and finance. Let us now look at these in more detail.

People:

1.       Relationships: no, I don't mean marital relationships (I remember that the result of my employers writing out to my customers telling them that I would now be called their "relationship manager." was more than one letter asking whether I could help deal with so-and-so!).

Sometimes when a relationship at work is not going well the only thing to do you is to take some time out and try and mend it – perhaps over a coffee away from the office. Often, we may find that the other person also wishes to have a better relationship, but has been unwilling to make the first move.

2.      Communication: getting this wrong can provide a permanent headache! Sometimes there will be a misunderstanding simply because we have not agreed point by point what is to happen and put this in writing.

Doing this and obtaining a written acknowledgement can avoid misunderstandings and it isn't always necessary to have a full legal contract. But, and this is a big but, if the matter is important to you then a legal contract may well be the best form of insurance you can take out.

3.       Performance: in the large corporate world Performance Management goes with the territory and asking for a quotation from an HR specialist to set up a performance management system can result in a number with far too many noughts. This does not mean that we should avoid managing performance- far from it. What it does mean is that we need to operate a simple form of diary ensuring that we review performance at sensible intervals depending on what is happening.

For a new employee or consultant there should first of all be some form of induction. This needs to provide the new player with enough information and guidance to start them off safely.

Looking at performance on a week to week basis for the first month might be sensible and monthly for say the first three months. If at this point performance is satisfactory then a further review at six months and 12 months and annually thereafter may be all that is needed.

On the other hand, where performance falls short of what is required this must be brought to the attention of the person concerned without delay. Naturally, we should do this in a polite manner and discreetly – so that others are not aware of the conversation. If someone is made aware of why their performance falls short, then they have an opportunity to do something about it.

Clearly we need to make sure that this happens. If it looks like it isn't that is the time to speak to your HR consultant and possibly your solicitor since further action must be taken in accordance with good custom and practice and statute.

Activity:

1.       Marketing – one definition of this is that it is like a necklace on which each bead represents a different activity all of which together make up marketing. Be that as it may, what every business needs to do is to manage the messages that it sends out both internally and externally and in different media.

Marketing, of course, can take many forms. Some people will think of this in terms for example of printed literature, others in terms of a website and perhaps e-mail marketing. Yet more will also include social media and reputation management.

It is interesting to note that many people are now more interested in the conversations on an owners forum then they are in the material put out by the manufacturers.

If you want more help here they let us know and we can arrange for one of our marketing specialists to be in touch.

2.       Sales – a key activity for everyone and not just someone whose title includes the word sales. In a previous life I used to chat with the engineers who has been on site solving people’s problems with their technology.

They would often come back with tales of a customer’s gratitude but the easiest thing to have done at that time would be to have asked for a recommendation to someone else to whom we might have provided similar help!

3.       Operations – a former colleague once asked me how they would fit into the new shape of our organisation, which had been busy recruiting numbers of sales and technical people.

My reply was that operations was the glue that held this together and the means of making sure that what needed to be done was done. It may be boring on occasions but if the delivery van won't start or the appropriate equipment or parts do not arrive on time or the invoices are not raised or are incorrect, then trouble will follow!

As a former operations manager with Barclays I always had the metaphorical oil can at the ready to "oil the works."

4.       Research and Development – in Germany, 80% of those businesses eligible for an R&D tax credit claim it. In the UK only about 20% do. In some cases it is simply a lack of understanding about what constitutes research.

However, in most cases accountants will have knowledge of this field and be able to advise. If not SatNav4Busienss has links to specialists in this area who will provide an initial indication at no cost.

Finance:

1.       Absolute performance – the numbers! In my days as a banker I found myself having to explain these to some of my customers who understood how their businesses operated but were blinded by the figures handed to them by their accountant.

Most people, however, will understand whether or not their business has made a profit or a loss.

2.       Performance against budget – this of course assumes that a budget has been set, that those responsible for managing all the component parts of the business understand the numbers that they are expected to contribute.

This may be, for example, keeping over time hours worked within a budgeted number. It might be the sales team targeted to achieve a certain gross margin on sales as well as revenue.

Measurement throughout the trading period is important. It is no good getting to the end of the year and then discovering a horrible result!

3.       Cash flow – sometimes people forget that it is businesses which will run out of cash that go bust, not simply those which do not make a profit. Cash is King!

This means that many different people within the business may need to cooperate to ensure that what goes out to customers is what they were expecting, that it is of the appropriate quality and that details of the transaction are passed to whoever raises the invoices so that this can be done quickly and with accuracy.

Otherwise it is difficult to ensure that the customer pays on time! No one wants their salaries to be late but late payments by debtors can prove a major problem.

If you can get people to pay through the banking system (using telephone or Internet banking) then this will provide cleared funds on the same day that payment is made from their account. This is far better than waiting for a cheque which is said to be "in the post".

4.   Funding requirement – this may be zero or it 

      may be megabucks! The point is that the

      conscientious business owner needs to work
      this out to ensure that the business has
      access to sufficient funding to allow the
      business to work properly.

Sometimes, of course, this may prove difficult for a variety of reasons and then the answer may be to look at the way that cash is used within the business and to try and reduce this.

An example might be buying in a product or service for resale rather than producing its in-house. This is not always a popular option, but it can mean an improvement in costs and cash flow. It is also typically a means of being able to increase production more rapidly if one obtains a large and lucrative contract.

It is appropriate to consider how different requirements should be funded and there is a free download on our website at: www.satnav4Business.com entitled Need to finance.

5.       Return on investment – think of this in terms of net profit before tax as a percentage of the capital account or shareholders equity in the business. Another way of course is to consider whether the living earned from running the business is proportionate to the effort put into doing so. Here it is perhaps also appropriate to mention that a venture capitalist will normally be looking for a rate of return in excess of 30% and be looking to double their money in three years.

Finally, it is generally true that no one person can do everything that may need to be down to achieve success in their own business. It needs to be a team effort and that team in most cases has to include people who are not employed within the business. So, one of the challenges is to find those people who can help you to achieve success at whatever stage you are in your business journey!

If you have any questions, want to talk through your ideas, get a second opinion regarding your borrowing proposal or business plan, or want some help in looking at any of the above issues

Please call satnav4business on 0845 468 1 468,

email success@satnav4business.com or
complete the contact form at
www.satnav4busienss.com .

As ever we provide an initial meeting (virtual or face to face depending on timing etc) of an hour for newsletter readers- thirty minutes for everyone else.

We hope to see or hear from you soon and always welcome feedback on this newsletter, our website and content in our online shop.

Jeremy, Jerry and Steve

Wherever You Are On Your Business Journey Satnav4business Can Help You To Arrive At Your Chosen Destination!

From Free Downloads. Fact Sheets, Guides, Reviews And Online Support To Workshops And In Depth Face To Face Bespoke Solutions. The Choice Is YOURS... 

Dates for the Diary

Surrey Chambers East Surrey Business Breakfast Club at Epsom Racecourse

Tuesday 7^th February 08.00-09.30

The Royal Box, Epsom Downs Racecourse, Epsom KT18 5LQ. Come and join in at these regular informal breakfasts.

There are no speakers, they are designed to give you a regular opportunity to meet and discuss local issues and widen your own network of customers, suppliers, neighbours and competitors.

It’s a great way to start the day, meet new people and get well fed into the bargain. 

Members £14, Non Members £22 Book at www.surrey-chambers.co.uk

Kingston Chamber Networking Breakfast

Thursday 9^th February 08.00-09.30

Fratelli’s, 57 Park Road, Kingston Hill KT2 6DB

Antonio and his team will be serving a hot, Italian-style breakfast (with vegetarian option) in this wonderful delicatessen near Kingston Hill.

Meet new contacts and network in pleasant surroundings.

With the business card draw you could win the opportunity to talk about your business – so bring plenty of cards.

Cost Members £20, Non Members £30.00 Book at: www.kingstonchamber.co.uk

Surrey Chambers East Surrey Business Breakfast Club

Thursday 9th February 2012 08.00-09.30 Hartsfield Manor (De Vere Venues), Sandy Lane, Betchworth RH3 7AA.

Come and join us at these regular informal breakfasts at this Victorian Mansion. There are no speakers, they are designed to you a regular opportunity to meet and discuss local issues.

Book at: www.surrey-chambers Cost Members £14 +VAT, Non Members £20+ VAT

Surrey Chambers Elmbridge Business Breakfast Club

Thursday 16th February 08.00-09.30 at the Hilton Hotel, Seven Hills Road, Cobham KT11 1EW

For details see Epsom and Betchworth events above. Book at: www.Surrey-Chambers.co.uk Cost Members £14 + VAT, non-members £20 + VAT

Surrey IoD Reigate PubHub

Thursday 16^th February 18.00-20.00

The previous informal get togethers in Guildford, Dorking and Reigate have been most successful and the idea is to offer a monthly opportunity for informal networking across the branch catchment area.

Come and unwind after work and enjoy a relaxing drink at the Black Horse West Street, Reigate RH2 9JZ Free event, cash bar, no need to book, everyone welcome.

Surrey IoD Finance and Strategy Forum

Friday 17^th February 7.00-9.00         

With the change in catchment area to the whole of Surrey this has a new venue located in the centre of the patch in Leatherhead at Federation House, Highbury Drive, Leatherhead KT22 7UY.

This is the new HQ and Conference & Training Centre of the Police Federation and trains people from around the world.

Leatherhead is easily accessed from the M25, A3 & A24 and by train from Croydon, Dorking, Epsom, Guildford and Sutton with trains running into London Victoria and Waterloo.

This forum is for anyone who has an interest in the financial or commercial aspects of business and not just finance professionals.

It is intended to be a good meeting of minds, much generous sharing of information, astute discussion of topics raised by participants and opportunities to enlarge your own network but without any big “sell” spoiling really good conversations.

Members £10+VAT and non members £20+VAT this includes a full cooked breakfast.
Book on 02380 266548 (members can also book at www.iod.com )

Surrey IOD 8.59 Breakfast Club

Friday 24th February 07.00 for 07.20 08.59 at Guildford Cathedral Refectory Guildford Surrey GU2 7UP

The purpose of these breakfasts is to enable people to shape and lead their business or businesses better in all respects not only through their role as chief salesperson.

Put another way, these breakfast events exist and are structured to help people to work on their business not in their business. 

At each session work is undertaken together round small tables were just five people to tackle a very specific task relevant to building and leading an organisation well in a way that fits in the future.

Book at www.IOD.com Cost members £15 plus VAT, non-members £25 plus VAT

Surrey IoD Bank of England Inflation Briefing

Tuesday28^th February 7.30-9.30  The Farnham Maltings, Bridge Square, Farnham, GU9 7QR

Followed by a taste of the Finance and Strategy Forum 9.45 – 10.45East of England

This will particularly appeal to our professional service members; however, we see these as essential business intelligence for all business owners and directors. 

The morning will begin with a breakfast buffet followed by a presentation from Chris Piper, Agent for Central Southern Agency. 

There will be plenty of opportunity for members to ask questions and for you to air your comments and concerns on the current economic situation. 

This should prove to be a very informative briefing where you will also have the opportunity to network with other professionals. 

This will be followed by a taster session for the Finance and Strategy Forum.

This is for anyone who has an interest in the financial or commercial aspects of business and not just finance professionals.

It is intended to be a good meeting of minds, much generous sharing of information, astute discussion of topics raised by participants and opportunities to enlarge your own network but without any big “sell” spoiling really good conversations.

Cost£15 plus VAT for members and non members the first includes a full cooked breakfast.

Book on 02380 266548 (members can also book at www.iod.com )