Three Keys to Small Biz Success
What do cash flow, managing clients and government red tape have in
common? All three are barriers to the success of small businesses as
reported by at least seven in 10 small business owners, according to the
TD Small Business Survey.
What do cash flow, managing clients and government red tape have in common? All three are barriers to the success of small businesses as reported by at least seven in 10 small business owners, according to the TD Small Business Survey.
Other challenges reported by the small business owners surveyed include managing, recruiting and training staff (24 per cent), coping with stress and risk (23 per cent) and financing cash flow (22 per cent).
If this sounds familiar, TD Canada Trust vice-president Alec Morley has a few tips to help your business meet these challenges head on.
|Regularly reviewing key metrics can help you track your business’s health and make better decisions.
KNOW YOUR METRICS
“It’s impossible to analyze every part of your business every day,” Morley says. “Instead, ask yourself, what are those essential measures that determine the health of your company? Whether it’s speed of inventory turnover, utilization rates or total cash in the bank, ensure you have a system in place that provides an easy way to check those numbers in real time.”
Morley advises small business owners to evaluate the most important indicators of their business’s health on an ongoing basis. Without an accurate snapshot of how your business is really doing, it’s hard to make good decisions about staffing, marketing and virtually every other aspect of your business.
KNOW YOUR FINANCIALS
“Put yourself in the shoes of your investors, the bank where you would like a loan, or a potential buyer down the road and make sure you’re at ease with how to read – and explain – your financial statements,” Morley advises.
Many banks employ small business experts that can help owners make sense of their finances and find
solutions to the challenges facing their businesses. Make the most of these services and let the experts help you solve the cash flow, client management and bureaucratic challenges that so many small businesses report struggling with.
KEEP YOUR PLAN ALIVE
“Given the speed of business today and the impact of ever-changing technology, a static business plan that lasts five years may be unrealistic,” says Morley.
Rather than dust off that business plan every five years, he suggests small business owners update their plans a minimum of once a year. “Your business plan should be a living document, updated at least annually with a rolling three-year forecast to make sure your business stays on track,” he advises.
Morley says small businesses, like their larger counterparts, need to develop both short- and long-term
goals. Their owners also need to envision what they want the business to look like in the near future, as well as the distant one.
Despite the hurdles facing small businesses, an overwhelming majority of owners (97 per cent) say owning their business gives them a sense of pride and accomplishment. Almost nine in 10 (87 per cent) are happier being their own boss than working for someone else.
However, more than half of all small business owners say it’s difficult to separate their business life from their personal life (59 per cent) and that they spend too much time managing their day-to-day issues, which keeps them from focusing on long-term growth (55 per cent).
Fifty-four percent believe owning their own business is more stressful than working for someone else.
The survey was conducted between May 13 and June 15, 2010, with 711 small business owners. Small businesses were defined as operations with anywhere from five to 50 employees./ BJ