Effective Small Business Administration - Vital for Your Businesses Survival....
Perfecting effective small business administration is vital to keep your business alive during thin trading times and, growing safely when times are good. The business has to be tightly run, with emphasis on cash flow control. Many business people do not realise that positive cash flow can be more important when a business is growing and they only look at the way they operate when things get critical. A growing business needs working capital to meet the demands of the market in terms of materials, labour and consumables. This eats cash and the business can rapidly run out of funds. This is known as 'overtrading'. All this means that effective small business administration centred on controlling the cash in the business is a pr-requisite for any business owner if their business is going to survive. What some see as 'paper work' and 'house keeping' is simply essential effective small business administration. Part of the challenge of making a success of the business. Develop and adopt sound practices for controlling the cash in your business and you will succeed in the long run. When sales are slow, you must be hard nosed with people trying to sell you luxuries. Firm but polite. When business is booming, you are more receptive and it is difficult to change the 'mindset'. When business is down, skip the entertaining and concentrate on the basics. Take great care to control and if necessary reduce costs. Only spend on what is essential to take the business forward. Be clear on your cash flow policy. If you need help, consult a specialist who can help tighten controls. While you may think you cannot afford it, be sure that you don't 'short change' yourself on professional services. This particularly applies during a time of emergency. Almost regardless of the costs involved, it pays to seek out the advice of experienced specialist professionals, particularly if you are contemplating something outside the scope of your present experience. I have had the mis-fortune of losing a business which I believe we would have saved if we had used an independent specialist adviser. At the time I had great pride in the effectiveness of our business abilities and controls. Pride on my part contributed to this loss. It's easy with hindsight. Even if you are a one man/woman business that same objectivity is vital. Don't let vanity or arrogance influence you and strive at all times to be objective, pro-active and effective in your small business administration efforts. To improve cash flow there are some house keeping rules which will help. Keep a tight grip on your debtors. Talk to customers who owe you money, don't let them take extended credit. You'll find that many will be understanding of your plight and want to help. As you develop your small business administration procedures you'll find customers get to know they can't take extended credit. Maintain a courteous attitude, don't be hesitant, or too much of a 'nice guy' when it comes to collecting money. Something else that's a very good business practice but which few business owners do is to keep the bank manager informed. A good bank manager can be of great help and has access to many support services which may be appropriate, particularly when the business is growing. Join your industry's local and national trade associations. Most of these have a wealth of information available on everything from details on your competitors to average industry sales figures, new products, services, and trends. Whenever you can, take advantage of whatever free business advice is available. Many government departments and local Chambers of Trade plus the banks offer Small Business Administration Advisory Services, publish many excellent booklets, check-lists and brochures on a large variety of business issues. Commercial organisations, accountants etc., hold seminars, often without charge. This can be the case during recessions as it is way for them to solicit for new business. You may gain a lot from attendance and hone your networking skills while you are there. Be aware of what your competitors are doing and at all times strive to make sure you practice good money management. Develop management back-up. If, for any reason, you are not available to run your business you will need that back-up to keep on top of critical issues. In order to survive with a small business, regardless of the economic climate, it is essential to surround yourself with smart people, inside and outside the business. Develop your own skills and management expertise so that your business will survive and you can be justly proud of your small business administration. Tip The most frequent cause of business failure is 'overtrading' Remember your key task is cash flow control.
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