With the festive season approaching, some businesses will be welcoming the break, but for many SMEs it will be a chaotic time. Nevertheless, all businesses would benefit from some wise reflection and introspection in this peaceful holiday.
“In the lead-up to Christmas, it is important owners and managers review their fundamental business practices to improve their company’s prospects for growth and continuing profits in the New Year,” suggested Greg Charlwood, managing director of Bibby Financial Services.
With that in mind, here are Charlwood’s 12 business tips for SMEs preparing for 2012.
1. Look for a partridge in a pear tree
The common wisdom is that a ‘bird in the hand’ is better. Certainly when you’re just starting out or wanting to develop your business further, it is wise to be realistic about what you can achieve and know your strengths. At the same time, always challenge certainty, especially your own. Ask what is missing and search for improvement. Challenge your comfort zone and go for those ‘birds in the bush’.
2. Don’t be a turtle (dove)
Don’t hide in your shell. Instead take a fresh look at your business offering and operating area. Even a slight change may dramatically boost your bottom line. Don’t shrink from enlisting professional advice to look into your business.
3. Watch out for those French (and Greek and Italian) hens
The current Eurozone debt crisis highlights the need for credit checks of customers. Credit checking will help you avoid nasty surprises further down the line, and ensures a smoother business relationship overall. Keep an eye on customers’ payment trends and spot potential problems before they become major issues.
4. Calling all birds
Ensure you make frequent customer contact, delivering great service and rewarding loyalty a priority. Regular communication, strong service and rewards are all-year-round gifts, which your customers will return in kind.
5. Golden rings rule—cash is king
Cashflow is the lifeblood of a business and often the first casualty in difficult times. SMEs should develop realistic cashflow budgets and ensure they get paid in a timely manner. Effective accounts receivable collection frees up cash and can reduce reliance on credit. Consider cashflow finance options to manage fluctuations in working capital.
6. Make sure your geese are laying
All businesses need a nest egg. From a larger than expected tax bill to a quiet patch, it’s important to ensure you have the funds available for the unexpected. Key to this is a regular review of your financial arrangements to ensure they are in tune with ongoing needs. Knowing where you stand by keeping timely financial information and accounts records is crucial, as well as maintaining critical documents and making sure they are delivered on a set date every month.
7. Take time to go swimming with your swans
It’s essential to take time out from work if only to tackle any pressing issues with a clearer perspective. As well as enjoying time with family and friends, many owners and managers have their best ideas when they are out of the office. And when in the office they should continually invest in efficient systems, software and products to work smarter, not harder.
8. Milk your maids
Review your suppliers and ensure you are getting the best deals from them. Shop around—take advantage of any special deals on offer and negotiate longer credit terms. But also keep in mind the importance of strong and enduring supplier relationships.
9. Form great relationships with your dancing ladies
Strong relationships with mentors, financiers, bankers, suppliers, clients and partners significantly help a business. These relationships will endure and assist a business in good times and in bad.
10. Be a leaping lord
Successful owners and managers inspire. They are optimistic and enthusiastic and ensure employees are just as inspired to succeed in their roles. As a business grows it’s important to include your employees in your vision to build a loyal and motivated team behind you, keeping your business focused and strong.
11. Be the piper piping
Owners and managers should take full responsibility for their decisions. Right or wrong, the buck stops with the leader. Prepare for the post-Christmas cashflow slow down and get as much of your receivables collected before Christmas so you are ready when sales become slower and debt turn lengthens after the Christmas period.
12. Bang your own drum
Don’t be shy to tell the market what you do best and remain visible. Communicate your company’s point of difference (cheaper, greater choice, locally-based, innovative, etc). Remind existing customers why they work with you and let potential customers know about your business and how you can help them.