Business is all about encountering obstacles and how we deal with them. While these hurdles derail some people, others learn to tackle them with ease. Most obstacles can be completely avoided, but because of unmanaged feelings, habits and habitual mistakes we allow these stumbling blocks to become emotional thieves that steal away our time and energy. So, how do we not let these obstacles get the best of us and focus on our opportunities, thereby letting our business succeed? Here are a few strategies to help:
1. When it comes to people, listen to your gut!
Choosing the right people in business is vital. No matter if its your partner, an employee or a potential client. Usually your internal radar will tell you if a business relationship will work, but many choose to ignore this “gut” feeling because of personal feelings. Surround yourself with people who will counteract your weaknesses not compound them.
2. Know the hazard of emotional pricing!
Know your worth, do not let emotion dictate your prices. When you start to lower your prices as a way to “compete” you will lose in the long run. By lowering your prices you lower your profit margin, and potentially put yourself out of business. Yes, as a new company it can seem like lowering your prices is the only way to win against your competitors, but in actuality you are hurting your industry as a whole and giving clients a skewed view of your worth. Stay educated about your industry and your competitors, find innovative ways to compete and do not be afraid to increase your prices over time.
3. Let go of what doesn’t work!
As business owners, we take pride in our products and services. Unfortunately, we can also find it hard to let go of a product or service that is not working. Often to sustain or achieve success you must abandon things that are not successful. While it can be difficult to find the courage to walk away, if you don’t it can become a major obstacle. The energy you spend trying to make something work, that just isn’t working can be redirected to the right target. By redirecting this energy you can focus in the right direction with a new intensity, thereby allowing yourself to succeed.
4. Make frugality a company value!
It can be easy to spend like a Fortune 500 company when making big sale, but look past the exhilaration of your success and hold on to common sense. Even large companies like Microsoft asks its employees to spend company money cautiously. If Microsoft can do it, so can we.
In the article, For Good Measure: Know How to Take Your Company’s Vital Statistics, the author Crystal Detamore-Rodman recommends routinely analyzing the ratio between assets and liabilities to assess the growth of a company (Rodman, 2007). The profit and loss statement is instrumental in determining which direction the business’s cash is flowing. However, Rodman states the “cash-flow analysis is just a start.” (Rodman, 2007) Offering incentives to the slow paying customers may encourage them to pay quicker (Rodman, 2007). Providing excellent service to the profitable customers and firing the slow paying, non-profitable ones develops a more positive cash flow (Rodman, 2007). If a company has a limited supply of technicians, and an ever-growing customer base, the technicians may not be able to provide the excellent service customers expect. It may be a good idea to determine how many customers one technician can successfully service and limit the technician to that specified amount.
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Questions About Reporting, Business Analytics, or Fixed Assets?
In the article, Pay Me!, the author Randy B. Hecht discusses ways to increase the
efficiency of collections. The ultimate goal is to get the customer to prioritize your company’s bill (Hecht, 2009). In today’s post-recession era, maintaining cash flow is imperative. It is completely normal to have desperation in your voice during collection calls (Hecht, 2009). However, the author suggests not letting emotions trump the
need to be paid (Hecht, 2009). Having had experience with collection calls, I have found kind assertiveness yields the best results in getting invoices paid. If the customer refuses
to pay the debt, then they are not a good customer it would be financially advantageous to cut ties (Hecht, 2009). Nevertheless, the delay in payment may be due to an inefficient billing system or not sending out invoices in a timely manner (Hecht, 2009).
In the article, Mystery Solved: How to Fix Cash-Flow Problems, the author Norm Brodsky discusses the need to understand and practice the ba
sic business knowledge that helps to pinpoint cash flow issues (Brodsky, 2009). He suggests the basics are; accounts receivables, surplus inventory, bad debt, overhead and gross margins (Brodsky, 2009). The author recommends analyzing each customer’s account
to ensure there is room for profit. If a customer is costing money, rather than making the business money, then there needs
to be a renegotiation of price. If the customer fights the renegotiation, it would be better to drop the customer than to go out of business in the near future. If a customer does not make the business money, it just does not make business sense.
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