Bogged down by book balancing? Miffed by missed meetings with suppliers? In a quandary over quarterly projections?
For many small and mid-sized business (SMB) operators, the intricacies of running their company gets in the way of doing what they do best.
If you’re feeling straight-jacketed by the conventions of business operations perhaps it’s high time you discover your own business-style, according to Carissa Reiniger, founder and president of Silver Lining Ltd., an SMB development firm based in Toronto.
Of course activities such as income tax filing, preparing deeds and contracts, cash flow management and accounting need to follow established legal procedures, but for many areas of business management a degree of creativity can help, Reiniger said.
She said one of the biggest mistakes many budding entrepreneurs make is thinking they will be spending time doing only what they love and earning money for it.
“When I started out, for instance, my big mistake was to think only about the money I would be making. It never occurred to me to consider managing the money.”
Numerous surveys indicate nearly 99 per cent of start-up owners consider figuring out cash flow as their “greatest challenge,” Reiniger noted.
An Ontario-based business adviser says this is one key reasons why startups fail. It’s because “owners fail to plan their accounting and cash flow,” says Peggy Crawford, certified management accountant and principal of Renewed Business Strategies (RBS), an accounting consultancy firm in Orillia, Ont.
“Making an accounting and bookkeeping plan should be part of the business from day one, not when them money starts coming or when the tax man is knocking at your door,” she said.
Cash flow is just one of the many factors a business owner needs to keep track. But while course teaching debit and credit may abound, start-up owners are pretty much on their own when it comes to issues such as keeping meetings, focusing on quarterly targets, or reaffirming goals.
This, Reiniger says, is where your personal touch can come in handy.
Meetings and Tasks
Business people may have their BlackBerries and now their iPhones, but Reiniger swears by her I Will Book. It’s a hard bound lined notebook that contains things she intends to do and people she’s suppose to meet.
“I have my BlackBerry, but because I am a type A, obsessive compulsive person, I need to write down almost every detail of my plans,” Reiniger said.
The book is colour-coded too. Each entry is underlined with a colour to indicate its status. When the event is done, Reiniger crosses the entry out. When items need special attention she “folds the corresponding page” to alert her of this.
Did I mention she writes on her notebook from back to front? For taking notes during meetings, Reiniger prefers to start at the back of the notebook. “I find there’s more room in the back pages.”
Reiniger says the I Will Book is not for everyone, but it works great for her. It helps her accomplish what she says she intends to do. “For some people, things sink in if they have to write it down. You can’t do that on a handheld.”
Take a break from business…to think about business
Step back, relax and take some time off from your, clear your mind. Reiniger says this is one of the best ways to assess one’s operations without the complications and delays of a staff meeting.
She recommends setting aside an hour each week for sitting alone in a room without any interruptions to go over the business calendar. Find out what needs to be done, to be altered or dropped. Determine what’s working and what’s not.
“In one year you would have put in about 60 hours into business planning. It can do wonders for any business, but you’ll be surprised how many people don’t do it”.
Find a sounding board
Large enterprises normally hold quarterly meetings among senior staff to determine where the business is at and where it’s going. Successful SMBs do the same thing, but sometimes a small business owner also needs to use someone trustworthy as a sounding board to determine if the company is moving in the right direction.
Every quarter, Reiniger, corners a relative or a friend and asks them to sit down with her as she pours out to them a review of business events and plans.
It looks weird, Reiniger admits.
“It doesn’t matter if they know anything about my business or not of if they understand a word I am saying. The exercise is for me.”
Having someone to tell her plans and projections to allows Reiniger to crystallize her thoughts and make them clearer in her own mind.
If your subjects talk back or give you advice, remember you don’t need to follow them. But the feedback they provide may also serve as interesting “what ifs” or alternative scenarios.
Break up your goals into quarters
You’ll find it easier to monitor and follow through with business plans if you whittle them down to bite-sized components.
Reiniger recommends breaking up business goals into quarters. Set an objective for each quarter. The objectives should eventually lead to your company achieving its goal for the year.
“By dividing the objectives, a company becomes more nimble in that objectives can easily be revisited or altered to meet the business need.”
Business owners can also find more time to concentrate on productive work by using automated tools to handle tasks such as accounting and bookkeeping, according to Crawford of RBS.
SMB operators, she said, have three options:
- Do-it-yourself – Invest in one of the many software-based or online small business accounting tools sold in the market or available for free download or as hosted online services.
- Hire a bookkeeping and accounting service provider.
- And speak to an accounting professional.
“Whether you’re going the DIY route or looking to hire a service provider, make sure you speak to an accounting professional,” she said.
Such a professional, Crawford said, could advise you on accounting and taxation issues affecting your business and can advise you on tax advantages and savings as well as penalties that you can avoid.
A good accounting system will have the following:
- Process to record sales and purchases
- Process for tracking cash flow – receipts, bank deposits, vendor payments, loan transactions and more
- Financial reporting capability – for reporting data to banks, government agencies and yourself
- Some sort of data analysis feature (one that will help you determine things such as: which products are selling best and when, whic campaigns are working and which aren’t