Having worked as a consultant with different construction
businesses, I have seen the same mistakes made over and over
again by owners and managers. Here is a sampling:
Business plan – Owners and managers are so busy doing today’s
work and putting out today’s fires that they don’t take the time to
create a business plan. Yet, a business plan is a lot like a compass
– it keeps you and your business heading in the right direction. When you are thrown off
course, a business plan gets you back on track.
Marketing plan – A good marketing plan is an extension of your business plan. It helps
you determine which customers are your best prospects, then attract and retain profitable
customers. You can set goals, define competitive strategies and determine which
marketing channels will work best for your products or services.
Sales plan – Many company executives think they don’t need a sales plan because their
goal is to sell everything to every customer. This sounds simple but doesn’t result in
good customers who pay their bills in a timely manner. A sale is not complete until the
business has collected in full. Employees responsible for sales should have daily, weekly
and monthly goals to direct their efforts. A sales plan gives them direction.
Systems – Too often companies don’t systemize what they do repetitively. This is the
secret to successful franchise operations. These operations train people in exactly what to
say and do. In your business, you have activities that are repetitively done. Yet each
employee does a job differently resulting in various outcomes. Document the systems
used in your business and train your workers to follow these procedures. Train, retrain,
and remind your employees to ensure they implement the processes.
Employees – All business owners agree that loyal and dedicated employees are an
important part of the company’s success. At the same time, employee costs are
increasing, profit is shrinking and employees want a secure future with a pay raise sooner
than later. Owners need to be creative to keep good employees excited, engaged and
productive. Profit in business is harder to earn with low morale and poor productivity.
Cash is king! – Cash is what keeps your business alive and well. Businesses that get
confused about sales on credit and collecting the cash to pay wages and overhead will
have difficulty keeping the business in business. Businesses need to have cash.
Others make it look easy – Too often we look at a neighbor, competitor or business
associate and think, “they have it made.” Their business seems to operate without them
and everything they touch turns to gold. During my 30-year tenure as a CPA, I have seen
instances of this, but most often the owners who do it simply and effectively have
studied, developed systems, delegated, and employed time and talent to make their
businesses successful. It wasn’t an accident. It didn’t happen overnight, and because of
their efficient planning, they deserve the benefits they reap.
Track and understand the numbers – As a business owner, your primary goal is to
make profit. If in building and developing your business you get so involved with
finding customers, or selling and delivering your product, you may lose track of the
numbers. Beware! If you don’t track the numbers, how can you improve? The numbers
can be as complex as reviewing your entire financial statement to only tracking a few key
numbers that make a difference – cash, sales, wages, and accounts receivable. One of the
keys to success is to track and understand the numbers.
Technology – There is an amazing amount of technology available. Unfortunately, many
do not take full advantage of the technology they already own. Look at your equipment
and computer programs and learn to use your technology. Find training, share best
practices and create uniform templates and procedures.
No mentor – We all need a hero, mentor or advisor to inspire us and keep us looking for
innovative ways to improve our companies. This must be someone who will actively
listen and redirect you when you are off course. Some business owners need several
mentors – industry specific or with understanding of specific issues. Find mentors who
will challenge your performance.
Competitor with an advantage – Everyone has a competitor who typically is one step
ahead of your company. Critically compare that business with yours. It’s easy to assume
they don’t know their costs or aren’t making money, or maybe they truly have a
competitive advantage. You won’t know unless you do a critical analysis.
Ineffective meetings – Business executives often complain about company meetings that
waste energy, time and money. To make meetings worthwhile, keep notes on individual
assignments. At the start of the next meeting, ask for an update of those items. By
adding responsibility and accountability to each meeting, you will achieve amazing
results.
The Lone Ranger – The television show played well in the 50s and 60s. But Lone
Rangers are typically not successful in today’s competitive environment. You have to
learn to delegate the work and decision-making. Even a fairly big business can appear
successful, but when only the founder can turn a project around, your attempts to build a
great team need cultivation.
Every business has challenges getting these issues resolved. Start now by assessing each
of these areas. Want a scorecard to see how you measure up? Call or e-mail me and I
will get you a copy of a scorecard to help you grade your business. You can reach me at
(801) 364-4949 or email jleverich@leverich.com. Begin now on your plans to improve.
