Hi, I'm Ruth Badger and I have been running The Ruth Badger Consultancy Limited since 2006 and offering advice and guidance to SMEs. I also appeared on the BBC One show "The Apprentice" and worked for Lord Alan Sugar as his Sales Director of Schools. Running through to July, I'll be teaming up with Towergate Insurance to provide practical and straight talking business advice.
In this article I'd like to about being proactive. Too many businesses I come into contact with are backwards facing, looking back into the past. Of course you can learn from your previous mistakes or successes; however this will not necessarily prepare you for dealing with issues such as cash flow and pipeline sales. Here's my advice
Attitude is key, and if you're an SME owner, or you're in a senior position in any business, this proactive attitude starts with you.
Get on top of your numbers
Make sure you're savvy with the numbers of your business. Furthermore, don't try and skirt around your responsibility to stay on top of this. I left school with an E in GCSE maths but my god I can add up and manage my money! Don't kid yourself with excuses such as "I'm just a tradesman, I don't need to know anything about the figures" for want of a better or stronger word, this is rubbish! If you're providing a product or service at a higher cost than it costs you to produce or carry out that service you is a businessperson! And businesspeople need to have a grasp on the company's numbers in order to assess the company's health.
Be forward facing and set targets
Bad SME's talk about what's gone wrong, a good SME will see it going wrong and put it right. In order to plan for the future, you must look at your business activity. Pipeline sales and cash flow forecasting are key here. Set yourself targets but do not set them without a supporting plan to achieve them. Targets should be clear, realistic and have common sense to how they will be delivered. As I always say, "turnover is vanity, profit is sanity!". It's all well and good pulling in big turnover figures but if you aren't making any money you will find it very hard to earn more and grow your business. Which leads me on to my next point....
Keep an eye on your spending
Managing your cost base is as important as generating leads. You wouldn't believe how many businesses I've worked with who do not have a proper sign off process for business expenditure. Again, you don't need to be a mathematical genius to work out if you're spending more than you're bringing in. You wouldn't do it with your personal money so don't do it with your business! Checking your cash flow is important here. Again, be forward facing with your planning. If you have made sales in January but the cash won't hit your business until March, what have you got coming in until then? If you're spending before that money comes in, what are you going to do if the deal falls through and you lose some or all of that money? It sounds obvious, but remember, the more you spend the more sales you have to make!
Pipe line and cash flow
Your sales are the bread and butter of your business. Whether you're selling low value items by the truck load or high value items to a select few, you need to know where you're revenue is going to come from and crucially - when! Once again, the proactive theme comes into play. If you've got sales out there in the pipeline, get them closed or at least set yourself a target for when they will be closed. As outlined previously, knowing when the cash is going to hit the business is also important. Don't rest on your laurels either, if you're going to close some deals in the near future, what are you going to do to replenish your pipeline and keep a good flow of sales.
Stay close to your sales teams
Your sales team can make or break your business. Proactive management of your sales team is paramount to a regular flow of activity and revenue generation. The big skill here is ensuring the transparency of your sales team. You need to know what they are doing and how their activity is going to generate revenue. Remember, it's always great to have sales in the pipeline but don't just leave them there otherwise they are just "hypothetical sales", convert them into done deals and bring in that cash.
Make time to work on your business not just sit in it
It's simple and perhaps very obvious but take some time to sit down with your sales teams and other key members of the business to get a good idea of where you are and what's coming up. It could be as little as two hours per week but that's all you need to keep your finger on the pulse and have a hand in directing and shaping the business.
Don't just talk about it, do it!
Make sure you are keeping active and keep track of time. Many businesses plan on a 31 day month without factoring in weekends and bank holidays where working time is lost.
Realistically plan what you're going to do and when. I like to write down 5 things each day that I must do. Two of those things are always items that will generate business or open up communication with a customer.
Be honest with yourself and don't bury your head in the sand
It's all too easy to pretend it's not happening or shoulder too much responsibility yourself. Make sure you face up to any problems you may have and share them with those who may be able to help you. If some more hard work is needed to bring your business up to par, make sure the right people are in the know and understand their role in putting it right. As the old saying goes, the first step to solving a problem is admitting you have one! Use those around you such as staff, colleagues or trusted business contacts as a sounding board for your ideas. No one has the answer to everything and it's likely that others will be able to steer you in the right direction.