By Sunil Srivastava
For most small & medium business owners and their management team, it’s often a challenge to take the time to stand back from the daily business operations and be able to take stock of their performance and long-term strategic issues. It is however imperative that they review their progress and understand how to get the best out of their business & implement the steps necessary to make them profitable & prosperous.
What makes a business tick?

 Businesses that understand ‘what makes them tick’ are the ones that are most successful and profitable. They also do not develop complicated development strategies. They understand that the best strategies are usually the simplest as they are easier to communicate, understand and implement.

The simpler and easier it is for everybody to understand what delivers profit, the easier it is for them to align and support the strategy. The ability to identify and crystallize the most important performance metrics is a simple & effective way of communicating strategy. It also ensures that everyone is focused on a simple model that drives profit in a consistent & repeatable way. These businesses know the main business drivers and use the most important success metrics to monitor their performance against these drivers, and they use this information to ensure they have:
  • winning products or services that people want to buy and will continue to want to buy
  • clear objectives simply set out and communicated to all staff to motivate them
  • a dedication towards continual improvement
  • effective management information and financial control
  • efficient services and distribution
  • dedicated management with the right information & business responsibilities
  • Compliant with regulations and minimum disruption to routine.

Business Ownership & Organization Checklist

Selecting the right business structure is a very important decision for a business owner as it affects personal liabilities, taxation and levels of control in the business. The wrong business & financial structure can act as a constraint on the development of your business and cause problems. Hence
having the right information should enable you to determine the right structure for your business.

Businesses can be Sole Proprietorship, General Partnership, Limited Liability Company, Limited Liability Partnership, C Corp, S Corp, etc. Make sure you talk to an Attorney / CPA to determine the right fit for you.

Use this checklist to determine if the business structure is right for you.

Management & Governance Checklist

 A Business owner has to understand the value in their proposition to customers, including the tangible and intangible benefits their products or services provide.

Businesses must establish and manage the process for setting vision, mission, strategy and direction in order to achieve superior performance. These then need to be translated into plans, projects and actions throughout the organization.

Use of this checklist will help you understand the  importance of clarity of vision, mission and values in a business’s offering.

Are You Creating Value through Your Business?

 Your business has to add value. Make sure your selling price covers all your costs of production and promotion. You cannot sell below cost for very long without going bankrupt. Remember also that working more closely with your customers and suppliers can bring competitive advantage. Understanding the value drivers in your business is essential for maximizing your company’s
potential.

Use this checklist to look at the factors that can improve or destroy value for your business.

Are You Proactively & Effectively Managing Innovation?

Innovation is all about continuously moving ‘up the value chain’ and adding value in each and every product and service. Successful businesses understand the importance of innovation and incorporate processes into every aspect of their operation to innovate continuously. Innovation is essential for business survival in today’s highly competitive markets where it is increasingly difficult to differentiate between products and services.

This checklist covers the areas that you should consider to ensure your company manages innovation effectively.

Do you know your Business’s Financial Health?

A mix of daily earnings, equity, long-term/short term borrowing, creditors and lines of credit funds a business. It is important that the right balance is struck between these. Each has a cost and you have to be sure that you understand it and are able to pay it.

Understanding your financial position is an important step in evaluating the health of your business. Cash is the life-blood of any organization and must be closely managed to ensure the business can survive and grow effectively. Understanding the basic concepts of cash flow will help you plan for any unforeseen eventualities that may occur.

This checklist will help you analyze the financial health of your business and help you calculate the financial ratios that you need to know. 

Do you know your Business’s Physical Health?

You have invested in physical assets such as machinery and equipment. It is essential that you get the most from your investment, but you must also keep an eye on replacement. Technological change is rapid. You should not allow your processes to become non-competitive. Effective asset management helps to improve productivity and performance and reduce costs. This checklist covers the areas that you should consider to optimize your company’s use of assets.

This checklist will help you analyze the physical health of your business.

Do you know your Market Dynamics?

Information about your market and your competitors will enable you to plan your business
strategy and your business structure better. While it may be difficult to build up a complete picture, you should seek to obtain as much information as you can from your customers, trade bodies, suppliers, competitors and the media. Getting a good understanding of how your market is expected to develop is essential if your business is to make the most of its opportunities and remain competitive.

This checklist looks at the competitive dynamics in your market.

Do you continually improve your business?

Quantity without quality could ruin your longer-term market prospects. Quality is a measure of your ability to meet the needs of your customers in a more cost-effective way than your competitors. Be careful to avoid ‘over quality’. Your products and services need only meet your customers’ needs and what they are prepared to pay, not exceed them.

Best value requires businesses to ensure continuous improvement in their performance,
and to demonstrate a commitment to sustainable development.

This checklist looks at the factors affecting quality in your business to examine where there may be opportunities for improvement.

 Is your Team Optimized for Success?

Management is all about achieving success through people. Manage them properly and enable  them to maximize their own contributions to the success of the business. Good people management is at the heart of achieving a successful, high performance business. 

This checklist looks at the key criteria for achieving success through people.

Are you ready for Growth?

Consider whether you want or need to grow. If you decide to grow then do so in a manner that the business can sustain. Appraise the time it takes for you to bring a new project on stream. Match the market with all the resources necessary to achieve your objective. As markets mature, companies need to find new sources of growth. Businesses that are not growing through new product and service introduction are likely to be in decline, as their existing sales portfolio inevitably matures.

This checklist examines the key drivers for growth and managing growth.

Are you in compliance with Rules and Regulations?

Don’t let regulations put you off. An integrated approach to information will mean that many of the demands of the tax man and others can be met from the same information source that enables you to run your business better. It is important that you comply with statutory and other regulatory obligations. Non-compliance  is costly and could put you out of business.

This checklist covers the key areas of compliance that businesses need to be aware of.

 Epilogue

 In summation, the on-going economic downturn means that now, more than ever, small companies need to take a good look at the fundamentals of their businesses, and understand how they can improve performance, strip out any unnecessary costs and focus on the right strategy to survive and take their businesses forward.

When times are tough, knowing exactly what you are facing and being realistic about what needs to change will put your business in better shape to respond quickly to further changes in the market (be they positive or negative) as they occur. Using these checklists will place you in a better position to understand areas of weakness in your business and your potential exposure to the downturn. However, the key thing is prioritizing which areas require immediate attention
and identifying appropriate actions to deal with them.

Suggested actions you could take:
     
  1. Improve your decision making – With all the information & insight you have gathered, value creation & creating a competitive advantage should drive all your business decisions.
  2. Seek fresh perspectives: Business owners and managers are often so close to the action that they lose objectivity. It might help to talk to a trusted professional such as your CPA, Accountant or mentor.
  3. Evaluate your Strategy: Now that you have access to more current and relevant data, evaluate your strategy and see if it aligns with your mission, vision and core values.




 
 
For most Small & Medium Business (SMB) owners and their management team, it’s often a challenge to take the time to stand back from the daily business operations and be able to take stock of their performance and long-term strategic issues. It is however imperative that they review their progress and understand how to get the best out of their business & implement the steps necessary to make them profitable & prosperous. This is especially true if  there have been recent changes to their business, their market or the economic environment that they operate in. SMBs often fail because owners are unaware of the many aspects that can prevent their business from growing and being successful as the business is organized around the owner’s specific area of expertise, such as marketing, accounting or production and they are not able to see the big picture.

In the first part of this article, I am going to discuss the importance of a business audit, the importance of understanding your business, how & why to develop a business plan and the role of performance metrics. In the second part I will be sharing a number of checklists which will help you analyze your business and benchmark performance standards for the future and also suggest possible next steps.
HOW TO USE THIS AUDIT

If you want to get the maximum benefit from this audit, please make sure that you read through all the material and honestly answer all the questions, with an  “Yes” answer indicating no problem and a “No” answer indicating a problem in that area.

This audit is more than a simple audit about management or finances. It provides an overview of the core aspects of your business including its soul i.e. Vision, Mission & Values. Apart from that, the type of organization you are, value proposition, innovation capability, physical assets, marketing, advertising & public relations, financial planning, human resources, growth plans and  governance & compliance are also covered. Once the audit is complete, you must & analyze each section of the audit to develop an action and next steps.

A healthy & successful business is well rounded and all the core areas are well balanced. The audit will help the business owner/manager identify the areas that need to be worked on and regular audit will help the business become more adaptive, efficient & prosperous.

The Prologue

Now, more than ever, businesses need to make sure that they are: 
·     Headed in the right direction
·    Competing in the right markets, with the right products and/or services
·    Optimizing their market situation - performing better than the competition
·    Using the right mix of assets, skills, finance, infrastructure and relationships that enables them   maximum value to their customers
·   Minimizing the costs that do not add value to their business or customers
·  Aware of external environmental changes and are building the capability to respond quickly to new opportunities or threats
·  Measuring their performance continuously so that they are always aware of their current performance and the successes or failures of their strategic initiatives.

 
 
Being able to leverage social media for success in business may seem daunting if the goal or path is not clear. Hence,  below is a roadmap that can guide you towards achieving social media success. In the weeks to come I will be posting resources that will be educational & provide more guidance. 
Social Media Roadmap
File Size: 129 kb
File Type: pdf
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A comprehensive and well designed marketing plan is critical for the success of any business. Following up on my earlier post, below are some resources and links for Part 1: Overview Of Strategy.

PART 1: OVERVIEW OF STRATEGY

A.   MISSION: (A business’s Mission Statement is a constant reminder to its employees of why the business exists and what its founders envisioned when they put their efforts, reputation, experience & fortune at risk to breathe life into their dreams. A business that has lost sight of its Mission Statement has started its slippery slope to failure.  
For help: How to Write Your Mission Statement; Top 10 Company Mission Statements; 5 Tips for a Useful Mission Statement) 

 



B.   VISION: A vision statement for a business focuses on what they intend to be. It is simply a description of the “what,” meaning, what the business intends to become. 
For help: Best Examples of a Vision Statement; Corporate Vision Statements; DEFINING YOUR COMPANY'S VISION)

 

C.    VALUES: A value statement is an expression of a company's or individual's core beliefs. 

For help: What Is a Value Statement?; Make Your Values Mean Something; Develop Your Value Statements for Your Strategic Framework)



Overview Of Strategy
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A marketing plan should not be something you put together at the last minute as an afterthought. After having worked with numerous small businesses and Managers, I have realized that in the larger scheme of things from a small business owner's perspective, while marketing is an important part of success, it is not often high on the to-do list. Allocating funds for rest, utilities, labor, day to day operations, often takes precedence over marketing. Most SMB owners don't know enough to develop a good marketing plan. So, even if they want to do it right, they may not have the requisite expertise to do it in the way that it will have any positive impact on their bottom line. 
Developing an effective marketing plan does not happen by accident. A lot of thought and effort goes into it. An effective marketing plan has to be comprehensive, integrated with the day to day operations and takes a 360 perspective of the business. It is also important to remember that any marketing plan is a living document, something which will need to be adjusted based on the changing market scenario. 
Below, are, what I believe the key components of an effective marketing plan. It is also available in PDF form for you to download and develop it.

MARKETING PLAN TEMPLATE


PART 1: OVERVIEW OF STRATEGY
  • MISSION
  • VISION
  • VALUES

PART 2: GOALS & TARGETS
  • MARKETING GOALS
  • RESEARCH
  • BRANDING
  • NICHE MARKETS
  • SALES TARGETS

PART 3: MARKET ANALYSIS
  • TARGET MARKETS
  • DEMOGRAPHICS
  • COMPETITION
  • MARKET TRENDS
  • P.E.S.T. ANALYSIS
  • S.W.O.T. ANALYSIS

PART 4: MARKETING STRATEGY
  • PRODUCT DESIGN
  • PRICING STRATEGY
  • CATALOGS
  • ADVERTISING
  • PUBLICITY
  • ONLINE MARKETING
  • PROMOTIONS
  • TRADE SHOWS
  • SALES TEAMS

PART 5: MARKETING BUDGET
  • ASSUMPTIONS 
  • PROJECTIONS

Over the coming weeks, I will elaborate and provide links to resources for some of the sub-headings so that you can get more help in developing a comprehensive, living & effective marketing plan. Please do contact me if you need any kind of help customizing the given marketing plan to your specific needs.
Marketing Plan Template
File Size: 290 kb
File Type: pdf
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