Building a successful business doesn’t happen by accident, it takes careful planning and good execution of that plan. In a way, building a successful business is a lot like building a house. Before you even start building a house, you need to get plans drawn up and for a business this means getting the structure right. Do you need to operate as a Sole Trader, through a Company, through a Trust or in Partnership with someone else? You need to look at the Pros and Cons of each structure to see which suits you best. We can help you with the appropriate structure for your business.
Business Plan
You also need to do a business plan at this stage, to help steer your business in the right direction. This does not need to be a weighty document – it just needs to look at where your business is now, where you want it to go and how you are going to get there. Next you need to lay the foundations and get these right first. Once the foundations are strong, you can start to build up your business layer by layer. With a business the foundations will be your Bookkeeping & Accounting System and the other operational systems to get you up and running.
Up and Running
Once the business is up and running you can add the next layer, which is reviewing your financial and business position. Think of this layer as building the framework. This helps you to see how you are going and whether you are meeting the targets you expected when you started up. Here this involves ratio analysis of your Profit & Loss and Balance Sheet, Accounts Receivable Analysis, Accounts Payable Analysis, Costing Analysis and Inventory Review. These will show how your business is performing and highlights areas that need improvement. It would also be a good idea to review marketing strategies at this layer, to make sure that you are growing your customer base.
So now the business is up and running on a solid footing, you can add the next layer of your build. This is where you check your business plan to see where you are and where you want to go. Once you know where you want to go, you can formulate strategies to help you get there. At this stage, you will find that you need to review your business and operational systems. This is because the ones you had for starting up may not be keeping up with your fully-fledged business. You will also need to continue to perform the reviews your financial and business position. These were introduced in the previous frame work layer, so you know where your business is at.
Review and Improve
The final layer is like the roof in our house building analogy. Here we add innovation and continuous improvement into your business. This is to keep your business fresh and up-to-date with what your customers want. This stage is all about making your business stand out from the crowd and keep ahead of the pack. When we say “keep your business fresh” we mean making sure you are utilising current technologies to the fullest. We are living in a customer focused economy now, so you need to make sure that your business is customer focused. Keeping ahead of the pack is where you want to be. And remember, it is the ability of small business to adapt and be flexible that sets your business a part from the bug end of town. So now you have built your business up layer by layer, just like building a house.
And like building a house you are building a successful business, you will need to do regular maintenance. This will make sure that each layer is strong so the lower levels can support the upper ones. This is where continuous improvement comes in – where you regularly review your business to see where improvements can be made. This will help you work smarter, not harder and achieve a good work-life-balance.
By Brenda Morrice CA.