Running a Business

Running a Business

My last blog was about becoming an entrepreneur. Two things occurred right after it was posted precipitating this blog. A friend sent me his response of what an entrepreneur should do first [which I posted as a comment] and a reader called me to ask for help in getting his act together in the business he started over 20 years ago.

Many businesses without professional management end up settling in at a level that becomes a comfort zone. The direction, enthusiasm, excitement, leadership, hands-on control, seeking help of advisors, strategic plan and vision wanes and the daily grind, cash tightness, continuous helter-skelter problem solving takes over and the feelings of getting deeper in a hole start to overwhelm. The good news is that there are only two things that are needed to get started to set things right. 1) Recognition of the need to fix it; and 2) the resolve to fix it. Once that is done, you can commence acting to reverse the malaise. Here is a plan to consider:

• The owner needs to fire himself (or herself) and hire a replacement
• The replacement will take over the work the owner was doing – the owner was primarily doing the work he was always doing before he started the business – being a carpenter, designer, manufacturer, salesperson, cook or whatever his occupation was
• The job description of the replacement is simple – whatever the boss was doing
• The owner now needs to hire himself as the CEO/Chairman and start his new job running the business
• If, perchance, he, i.e. you, is not able to run it, then someone else needs to be hired, but let’s hire him for starters and give him a chance – the only cost is the salary to the replacement
• If he doesn’t work out, then we go to Plan B which we will not deal with now. Call me in a few months to assess the situation; but to help him out, I am including a few things below that he can do to ease himself into his new position. I am now addressing the owner directly
• You and your key staff should separately draw up an organization chart of what you and they each think the present situation is and a second one with what you and they would like it to be. See my blog posted Jan 22, 2015 on how to use it
• Work with your key staff to do a SWOT analysis. See my Blog Nov 13, 2013
• Next is a number thing – have your bookkeeper generate a profit and loss statement for the last three years with each month shown in adjacent columns. I know QuickBooks® can handle this easily – if you have a different system you might have to play around with it, but it should not be a chore. When you have it, look across the 36 columns for each major category – sales, purchases, payroll, rent, and 2 or 3 other larger items – and see if there are any trends, or variances or a couple of months that stick out as not making sense, and see if you understand what is going on – financially – with your business. There has to be at least one surprise or revelation. Track it down. Tip – if your bookkeeper cannot help you with this, you have a serious problem in that area
• You also need to learn to manage – that requires reading books, articles or blogs or taking some courses or attending a session or two at a trade show. Whatever you do, it took you years to learn for trade or profession at college or vocational school and through experience. Well, your new role also will take similar effort – there is no pill to take that will instantly provide you with what you need to know. Some suggested books are Power Bites by me, The E-Myth Revisited by Michael E. Gerber, The Goal by Eliyahu M. Goldratt and Jeff Cox, and Who Killed Change? by Ken Blanchard et al. There are others but these are a great start – and they are all not too long
• If you already primarily spend your time managing and continually feel bogged down, you should consider hiring an administrative assistant. See my blogs on Apr 28, 2015 and Feb 21, 2013

Get to work and make it happen!
If you have any questions, I am available for your questions at [email protected] or by filling out the form below.