Article written by Jannie Rossouw, Head: Sanlam Business Market
We are all looking for the silver bullet to propel our businesses to success and beyond. Advice that works for one business, does not necessarily work for another. The proof lies in the implementation of ideas and advice elements. There is no need to bet the farm, but some effort will quickly show which piloted elements have merit.
In our first article, we focused on the first three elements below (follow this link to the first article). This article will focus on the last two subject matters:
- First Impressions
- Keeping your commitments
- Finding the sweet spot
- Having access to a sounding board, and
- Attentiveness vs ignorance
The intent of the article is to leave you with a list of “easy to implement” guidelines, and questions to ponder on that will enable you to identify a couple of blind spots in your business operations which you will be able to address.
4. Access to a sounding board
For business owners, it is lonely at the top. The questions are (1) where do I go for advice and (2) who can I trust?
Primarily, you have three considerations:
- Request the opinion of a friend who is successful in business.
- Identify a successful business owner in your industry whom you can request to be a mentor for you.
- Set up a “board of advice” – here you can include your bookkeeper/accountant, attorney, banker, financial planner or other like-minded business owners who operate in different business sectors.
The benefits include that you will receive an objective opinion, leveraging the knowledge and experience of another person, be exposed to different points of view and who will take accountability for their advice as these people have your best interest at heart and their integrity to protect.
5. Attentiveness vs ignorance
Are we paying attention to the important things or are we ignorant and only act or re-act when a crisis arises?
We need to mind our business by:
- Having a written business plan inclusive of goals and targets. See www.sanlambusinessplanbook.co.za to download a free copy of a business planning journal.
- Having a written business plan is not good enough. We need to monitor the progress against the set goals and targets. If we are on track it is great, but if there are shortfalls we need to put corrective measures in place, or cancel or replace the goal or target with another one.
- Cash is king in any business. We therefore need to have strict financial controls in place and ensure that the business is financed sufficiently to implement its business plan.
- Pay close attention to key relationships to ensure that lucrative clients are not lured away to the competition.
- Revise all contractual terms to make sure your business is not selling itself short by terms and conditions which only favours the other contracting party. Re-negotiate the terms or even consider cancelling an agreement if you cannot reach a resolution.
We also need to pro-actively manage business continuity. In 2018 Sanlam took the outcomes of 310 completed Financial Fitness Analyses and found the following:
11% of the respondents did not insure their personal assets and 25% had no short-term insurance for their business assets. More than 15% who had short-term insurance in place for themselves or their businesses have never reviewed their cover amounts, or have done so more than two years ago.
72% made no provision to insure the lives of key staff in the event of their untimely death or disability and 21% had no buy-and-sell insurance in place.
Most business owners agree that their most important asset is their employees. How well are you looking after yours?
Here are a couple of frugal employee practices which will stand you in good stead to have them in place:
- Ensure that all employees have a signed employee contract which clarifies their roles and responsibilities and also state your obligations as employer.
- Identify the key performance indicators for every employee and contract with them individually what outputs they need to achieve over a period of time.
- Put a performance management process in place where you have at least two review events per year; say one every six months. This will help you to track the progress each staff member is making towards his or her personal key performance indicator. Remedial interventions can pro-actively be done and inferior performance can be addressed before it becomes a challenge.
- Pay people what they are worth to your business; i.e. a market-related salary and benefit structure. Also consider helping them save for retirement and putting sufficient health care and funeral cover in place.
The Financial Fitness Analyses we received highlighted that 24% of business owners made no retirement provision for themselves and 66% made no provision for retirement for their employees. 16% made no provision for medical cover for themselves and 79% made no provision for medical cover for their employees.
Be diligent and acquire the services of a qualified financial planner to evaluate your unique situation after which a customised solution can be implemented that will meet your needs.
Lastly the focus moves to the wellbeing of you – the business owner. If you are not on your top game, it will impact on your business in due course.
- Mind your personal relationships with your family and loved ones, business partners and employees. If these relationships are out of sync, you will be off-balance and distracted, stealing your focus from the things that are important to you and your business.
- Ensure that you have a balanced life by getting sufficient rest, embarking on recreational activities, looking after your health and exercising regularly.
- Become a continuous learner – it is said that we will be the same people we are a year from now apart from the books we read and the people we met.
Remember, the buck stops with you – you decide!
I trust that this article will help you to answer a couple of critical questions and will lead to pro-active actions that will benefit your business and ultimately lead to your success.
To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straight forward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success.
Go to www.sanlamgameplan.co.za to download your free copy.