Managing Your Business

Since my last blog, you may have been busy writing up your business plan and implementing the various operational/office systems, financial and marketing strategies. Congratulations!!
 
As you know your business plan provides you with a clear focus of where your business is now, where it is going, how it will get there and whether it got there.
 
Now it is time to look at how to effectively run your business.
 
Running your own business requires you to be an effective manager as well as an effective provider of services or goods that your business supplies. Generally, managing your business entails implementing the key elements of your business plan – operations/office systems, finances, marketing and monitoring your business.

Let’s take a closer look at each of the elements that contribute to effectively manage your business.

1. Office systems
​Central to your managerial tasks is to have an effective office system which means you can spend more time in your business selling your products than as a manager of a business.
 
Your office system should be designed to capture the information that flows through your business.

​The following questions may help you identify the information you want to capture: 

• How will you know a customer has or hasn’t paid?
• How will you receive your bills? By email, or post?
• How will you know what expenses need to be paid and their due dates?
• Will you have procedures to pay your expenses, such as, you are the only person authorised to pay expenses?
• Will you keep customer records? If so, what details will you keep and how will they be kept – manually or electronically?
• How will inquiries from students be recorded?
• Do you want to maintain regular contact with customers other than when they buy your product? If so, how will you do this?
• How will you follow up on unpaid fees?
• If you employ staff, what records will be kept on employees?

 
Once you have this information you can decide how it will be recorded, communicated and stored.
Will you use a manual or electronic system and purchase specific software? This decision will depend on your financial situation and your individual business needs.

2. Finances
​One of the basics of managing your finances is monitoring your cash flow. This will ensure you have enough money to pay your expenses (including your taxation and superannuation obligations) and provide you with an income.
 
Your business plan (discussed in the last blog) included a projected cash flow. It recorded your expected expenses and your projected income from your business for each month over twelve months.

​Knowing your expected expenses for the year provides you with useful information about how much income you need to earn from your business to break even and to earn an income.
 
By comparing, each month, your actual cash flow with your projected cash flow you can see if your business is tracking financially as planned or needs some fine tuning. Examples of fine tuning may be that you delay employing staff in the short term.

​3. Marketing

Ideally, your business plan set out various marketing strategies. Managing your business will involve putting in place those marketing strategies.  This may mean creating your marketing messages, creating and launching your advertising campaigns.

Managing your marketing strategies also includes working out which strategies work. This can be a matter of trial and error.  Recording details of the performance of each strategy can help you refine your marketing messages and work out which strategies are right for your business. ​

4. Monitoring your business

​When you have been running your business for twelve months it is time to take stock of where your business is heading and review your business plan.
 

​The following questions may be useful in reviewing the progress of your business:

• Are you meeting the objectives you set yourself? How realistic were your original objectives?
• What is your actual cash flow compared to your projected cash flow?
• Are you making a profit?
• How productive is your staff? Do they need further training? Do you need more staff?
• Has the external economic environment changed?
• Have there been changes in the competition?
• Did you carry out all your marketing strategies? Which marketing strategies were the most successful?
• Are your office systems working? Should you upgrade your software?
• What is your projected cash flow for the next twelve months and longer (up to five years)?
• What are your plans for future growth? Are they realistic given your current business performance?

​If in your review you identify parts of your business plan that are not working, then you may have identified parts of your business that need further work.

Many government agencies including the ATO, www.business.gov.au and www.buisness.qld.gov.au provide further information to help you understand how to manage your business. 
 
It may also be useful to obtain professional advice as to whether you are a hobby or a business from a solicitor, an accountant or a business advisor.
 
Why not make a complementary consultation with me today to go through with you how to better manage your business such as:

• work through the options regarding your record keeping,

• help you prepare budgets, cash flows and other financial statements
• review your progress, and
• advise you how to keep your business on track.