Dear Looking backwards and moving forward Many businesses have just reopened after closing down for Christmas and the New Year. On the other hand there will have been plenty of people that we all rely on to provide essential services to us as a businesses or individuals, who will not have had a break. For those who stopped work there will hopefully have been a period of joy, happiness with friends and family, perhaps overindulgence in eating, drinking and being pleasant to other people for what may seem like an inordinately long time. In terms of both our business and personal life, it is a time to take stock. In some businesses with a 31 December year end, this will have been a physical process. For others, it is a point in time when we should look back over the last 12 months, consider what has gone well and what could be done differently or better. Madness is defined as doing the same things in the same way and expecting a different outcome! For each of us what has gone well, what could have been done differently or better will be different things. But they might fall into a small number of categories 1. People:
a) relationships b) communication c) performance 2, Activity: a) marketing b) sales c) operations d) research and development 3. Finance: a) absolute performance b) performance against budget c) cash flow d) funding requirement e) return on investment In each case it will be possible to judge how well or otherwise things have gone and also to decide those areas in which improved performance is desired. For some people it will be enough to have a feel for this but for many it will be necessary to measure. Remember that whatever you measure you can manage! Having decided what needs to improve the big question is always how to achieve this. Just doing the same things in the same way is unlikely to be enough to make any substantial difference. So, there is a need to examine why some aspect of business has not delivered the expected or required result, to measure the improvement desired and to plan how to achieve this. No one in business has all the answers and one of the biggest challenges for the smaller SME or owner managed business is that business owner may have all the technical skills required to produce or deliver the core products or services but continually find that there is a need for skills that they do not possess. In some cases this will be dealt with by bringing in part or full-time employees, especially where the skills are material to the business' core activity. Alternatively processes may be subcontracted out. A typical example in the printing industry might be the finishing of certain products or perhaps specialised production of say gift boxes. However it is seldom practical for a business to employ part or full-time staff to cover all of the non-core activities. Typically businesses will employ the services of an accountant or solicitor on a contractual basis. But it is now possible to access just about any skill required in this way whether it be outsourcing financial management to a part-time finance director, taking on a non-executive director to help provide balance to the management team, or picking up on specialist skills such as HR, health and safety, sales and marketing or administration. Something we have all learned, whether we recognise it or not, is that it can often be more cost effective to use someone skilled in a specialist task than trying to do it oneself. A very typical example of this would be keeping the books and financial records for a business. Often this is done by someone whose real skills lie elsewhere and for whom this task is an unwanted interruption which always gets left until last. A trained bookkeeper however can concentrate on the work that is required, carry it out on a timely basis and potentially deal with credit control, chasing debtors etc in a way which will avoid the potential for a cash flow crisis. This can very easily be demonstrated if we imagine a professional services consultant with say a charge out rate £100 per hour. If they are able to sell the bulk of their available time then it makes no sense to spend hours in dealing with bookkeeping or financial control when a trained contractor may charge £20-£30 per hour. Every additional hour billed to a client would pay for between three and five hours of bookkeeping support! Part of the challenge is looking at doing things differently perhaps starting with what one is actually doing at the moment. A sensible way to approach this is to keep a time log and write down each task undertaken and how it takes. It is surprising how much time can be spent in dealing with interruptions and managing this is perhaps one of the things to look at. For the many people who claim that there is not enough time to do all that is needed a first step is to establish which of the things they currently do could be passed to someone else (if there was a resource available). Often it is easier to break down a complex operation into many smaller tasks which can be carried out by someone with less skill than the person who originally performed the entire operation. An answer here may be to look at the possibility of using a virtual administrator who could help organise and perform a number of non-technical tasks. This might free up sufficient time for example to enable sales to be increased in those situations where the owner is the chief salesperson! Planning how to make changes needs not be a complex task. A list of lists can often be the answer where effectively there is a list for each area under which individual activities are shown with each having some form of timeline attributed to them. Of course it is not just the what that may need changing but also some of the who, the why and the how! If you would like to discuss your thoughts on these topics in respect of your business or chat through your ideas please call SatNav4Business on 0845 468 1 468, email success@SatNav4Business.com or complete the contact form at: www.SatNav4Business.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. Jeremy Webb Seen and Heard Gareth Kane’s Blog "why you shouldn't use daily rates" together with the comments posted provided a brilliant summary on the subject of pricing. Too often people will quote a daily rate which can then be used by a prospect or client as a negotiating point – normally to reduce them! "By quoting a daily rate, you are inviting your clients to meddle in how you run your business. Time is an input, not an output. Clients should only worry about the outputs they get for their money." He continues, "my prospects typically get a proposal like:
Bronze option £5000 (bare minimum project costed at "market rates") Silver option: £10,000 (sensible project, expensive end of the market) Gold option: £15,000 (how the project would run if money was no object) No daily rates, so no one can compare us like for like with other consultants. I want them to be thinking – "which option can we afford?" Not "who's the cheapest?" If someone says "I'll take bronze but can you do it cheaper?" I say "no" if they say "I want silver but it is too expensive unquote, I say "what you want me to take out?" I usually get what I asked for originally. So why if daily rates are such a disaster does everybody continue to use?
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