If you have just started in business, or have been in business for some time but still not making sufficient funds to take a decent salary then there are key tasks that you can complete to put you back on the path away from debt and towards business success.
The key tasks are not rocket science, but they can be very effective if combined with a little enthusiasm and focus.
It’s worth remembering the latest figures from the government suggest that more people are becoming self-employed but they are taking 40% less than they would have as an employee. Of course there are benefits to working for yourself, so it’s not all doom and gloom; but you must make a decent living for yourself and your family, or else what is the point?
The top key tasks:
- A significant number of businesses fail because they simply do not keep sufficient company data on the basics such as: competitor activity; turnover; marketing; sales volumes; gross and net profit margins and payment management. The solution is to keep accurate data on all relevant aspects of your business and monitor and review regularly.
- The first warning sign something is going wrong is not being able to pay taxes and if this is the case then revise your business model immediately. Set aside sufficient taxes for corporation tax, VAT and PAYE as revenues come in or monthly at least.
- If you are not taking a decent salary, or you can’t pay taxes when reviewing your business model, check the profit margins with others you may know in the business, or try a search engine like Google. When you are hungry for business the temptation is to drive the price too low so compare with the top 10% not the bottom 10% which is a usual error. What are the top 10% doing that you aren’t? Have you a premium price which offers a perceived added value? Are you getting paid on time? And if not who is managing the payment side of things? You may need to consider Invoice Financing of some kind – try invoice trading if you are smaller.
- If you have no idea where the problem don’t be afraid to pay for experienced help this is the biggest difference between successful companies and failing companies – they buy expertise in. If you can’t afford the expertise then there are some who will offer free advice possibly with government help.
- Don’t be afraid to make a decision. Winston Churchill said that any decision is often better than no decision. However, if your current strategy is not working don’t continue to carry-out the same tasks; clearly you should change your behaviour and focus on your new tasks to turn things around. The internet is a great place to find sector-specific information and knowledge to help you with advice and tips to provide you with fresh ideas for your business.
- One of the most difficult decisions that business owners struggle with is staff costs as they are likely to be your largest overhead. Check staff for productivity, adding value and effectiveness. If they are not generating a revenue or contributing in some way to the profit of the company why are you employing them?
- If your business is over 3-5 years old then remember that your competition will have developed and grown too; customers buying habits may have changed and supplier costs may have gone up. Check your data to see if the business model is tired and needs a complete revamp quite often it is the most obvious that stares you in the face that gets overlooked.