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Release the Wolf In Your Business

I was watching a documentary about how the introduction of wolfs at the Yellowstone National Park changed the environmental landscape of the park and the species living in it. I realized that financial controls are the wolves of your business.

Financial controls and record keeping allow you to know your financial situation and provide information on which income sectors are growing or slowing down or expenses that might be out of control or unnecessary. 

In the Yellowstone National Park the absence of wolves resulted in a over population of deer in the park that graced in the same area within the park and caused the destruction of vegetation in that area of the park. 

In the same way the absence of financial information within a company may result in the incorrect allocation of resources to business sectors that are underperforming or saturated.  Accurate and on-time financial information assist you to monitor your actual cash flow and updated records of income and expenses help you to foresee when additional capital may be required or when frivolous expenses need to be reconsidered. 

Directing resources in an informed and planned manner allow you to direct your business to where growth is probable.  In my wolve analogy the hunting of the deer by the wolves resulted in the deer moving to different areas in the park.  This allowed the vegetation to regrow. 

The regrowth engineered the increase of smaller animal and bird species and with that the increase of larger animals like bears and eagles.  For me the large animals are the increase of creative business idees.  Your money makers.  The correct allocation of resources will allow you to grow and think about your business strategy on a regular basis and make your business more attractive to investors.  As an added benefit potential investors will require up to date financial reports and that will be readily available. 

The re-growth of vegetation resulted in a couple of badgers and beavers, which in turn resulted in establishment of dams and river walls that directed flow of water.

Although financial record-keeping is the bane of existence for most small business owners making sure that you have some wolves in your business will go a long way to contribute to a flowing river of money.

I say bring in the wolves.

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Don’t be a Mad Hatter

The HAT analogy to running your business (FB AD)

The difference between a job and owning a business often lie in the variety of “hats” a business owner is required to wear.  As an employee you are normally limited to one hat or maybe two and it is often a “hat” you are skilled in, for example teaching or event management. However as a business owner you need to have a production hat, a financial hat, a human resources hat, a marketing hat, a sales hat, a strategic hat and on top of that SARS expect you to know all their rules and regulations.  

An entrepreneur is a person that is able to focus on the hat that is on their head at the moment and the skill to now when it is time to change hats.

It is important is that you do not neglect a hat.  A business is a holistic entity and all the business functions are equally important. You can not spend all your time on manufacturing and production and neglect financial planning.  Sooner or later cash flow is going to catch up with you.  At the same time it does not help to have budgets and financial controls in place if you are not out there seeing clients.

The Sales Hat 

The most valuable sales tip…. Set your price, make the sale, exceed expectations. 

Why?  Because word of mouth advertising is still the most effective way to grow your business.   A happy customer is your best salesperson.

Word of Mouth marketing impression results in 5x more sales than a paid media impression and people are 90% more likely to trust and buy from a brand recommended by a friend.

But even if you get an easy lead though word of mouth at some point you will need to meet with the potential client.  Here is some tips to help you along.

  • Know your product inside and out.

It’s okay to not understand all the nuts and bolts immediately. Your customers aren’t interested in the super technical aspects of your product. They’re more interested in understanding how the product can make their life easier.  A thorough understanding of the product not only makes you feel more confident but also helps you deliver the value offering to the leads better.

  • Lend them your ear. What are their pain points?

Your prospects have a singular interest – solving their problem. Going on about the magnificence of your product might not be the right way to gain their confidence.

The entire sales process, as it rightly should be, is about your clients finding a solution to their problems. The only way you can position your product as a potential solution is by first understanding the problem they’re trying to solve.

  • Be Prepared for the call

Your prospects are looking for answers, and they expect you to provide them. Being well- prepared for a meeting demonstrates your competency and knowledge.

Pre-call planning helps you obtain the necessary information you need to add value to the conversation. Developing this sales habit will create trust and skyrocket your sales.

  • Can you sell the product to yourself?

Before you start making your sales rounds and meeting customers, have a good conversation with yourself about the product. A firm belief in the product, much like doubt, is almost palpable. If you would buy the product, you’ll be able to make the customers see value in the offering too.

Follow-up, Follow-up, follow-up.

The Production Hat

The production hat is often a favourite of many business owner since it incorporates their technical knowledge and wearing this hat is like coming home at the end of a hard day.

When your business starts growing quickly, you will be forced to improvise to manage increased demand for your products or services. When business build up happens too fast ensure that you adjust your operational processes.

For the wedding planner it is sitting down and helping the couple plan the menu for their big day, for the builder it is getting his hands dirty and for the hairdresser it is cutting and blowing.

It includes purchasing the right products that you can re-sell or use in production of a new product and if you are a service client like a photographer it means coming up with photoproducts that complements your service offering.

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For those of you that manufacture products we have these tips to increase productivity:

Learn the 5S’s — This methodology originated in Japan and can increase your small manufacturing business’ productivity. Spend some time observing your workshop and employees. Where are the lost seconds that add up to lost hours? Make sure you have the fundamentals optimized with the next 5 tips.  

Seiri (Sort) — Remove unused items in an area to make sure employees are not rummaging through stuff to find something. Classify items by frequency of use. More commonly used items should be easier to access and close together.  

Seiton (Straighten, Set) — Everything has a place and is always put back in its place. When your employees need a tool, they know exactly where to find it. If it is not there, they know it is in use, and don’t look for it. Of course, with adequate production planning, there is no need for employees to be fighting over tools. Find hierarchies and systems of storage, e.g. place heavy items lower, and so on.  

Seiso (Shine, Sweep) — Create a clean workshop. Get rid of any dust and dirt. Have a system to regularly remove garbage from your workspaces. Make cleanliness a daily activity and set aside a small amount of time each day to it. Maintain proper lighting, so dust and dirt can be seen. This will promote productivity. You and your employees will have pride in their workplace, which will shine through in your product.  

Seiketsu (Standardize) — Standardize by having a clear, readable, and accessible bill of materials (BOM) / product recipe. Make scheduling and operations clear through visual management. You can get software that uses a visual streamlines “Kanban” board system to make everything crystal clear.  

Shitsuke (Sustain) — Now you have dotted the I’s and crossed the T’s, one more challenge remains. You have to keep all the great habits up. There’s no better time than to make some New Year’s Resolutions to stick to. Set out clear policies and guidelines, and make sure your staff know what your standards are. This is how you cultivate a good company culture with staff that are proud to say they work there. 

Always have something left in the tank — Keep your small manufacturing business’ productivity below 100% capacity, so you can always keep up if you see a sudden spike in demand. 

The Human Resources Hat 

Overcoming human resource challenges takes time, money and effort. But if you manage it properly your employees can be your biggest asset.

Some of the challenges include hiring the right people for the job and to find a productive balance between the cost of a talented person and profitability.  

To attract the right individuals, you need to know the requirements of the job and the organization. But as job roles and expectations keep changing, and organizational culture keeps adapting, this task becomes increasingly difficult.

So, we suggest that you start with how and where you market vacancies. Use the platforms that are most likely to be frequented by your target talent, depending on their skills, industry, and job level.

South Africa is truly a rainbow nation and one of the biggest human resource challenges is managing diverse cultures in a team. While adhering to local policies and procedures, HR must also create a workplace that is comfortable, welcoming, and free of conflict – for everyone.

Cultural awareness programs can help employees recognize the benefits of diversity, like better ideas and innovations, and a wider customer reach. Team building activities are also an effective approach for integrating employees of different cultures and uniting them towards a common business objective.

Health and safety standards are probably one of the more obvious human resource challenges. Not only does labour law govern these concerns, but they’re also of great importance to general employee wellbeing. Because health in the workplace isn’t just about hygiene and safety.

Allow us to offer this handy titbit….  Labour law state that any company that employ even one person register and submit COID returns. 

The complexity of SA Labour Law and the challenges it creates can not be explained in one email and it is probably one of the most difficult hats that the entrepreneur has to wear as it includes SARS regulation, labour law, not to mention managing interpersonal relationships.

If you feel at this stage that you need help with this hat Digi 20 Business Services offer payroll services , COID, UIF and PAYE registration and general HR management sullutions. You can contact us via email at info@digi20 or contact our account manager Elize Damon on her cell number 060 718 8935

The Marketing Hat

The  success of a small business depends on the business owner’s ability to market their products and services effectively. You may have a great product and stellar customer service, but if people don’t know your business exists, you are not going to have any sales.

Having said that marketing is not sales.  Marketing is about having a strategy to get your brand out there and to build trust with your market.  It is about getting your company and products know to the right people at the right time and in the right place. 

Small business owners often make the mistake of putting this HAT right at the back of the closet thinking that they can rely on word of mouth to build their brand.

Word-of-mouth marketing can’t be relied upon as a primary source of marketing for your business. Once the buzz stops, interest and knowledge of your product can come to a complete standstill. Rather, word of mouth works well when it supplements a full-scale marketing effort that tells the complete story of your company through multiple outlets.

Marketing should be planned and structured to ensure that you get value for money and value for the time spent on this.

THE FINANCIAL HAT

The financial HAT is that one that always sit on the desk because simply put it is to big to fit into the closet. 

No matter how passionate and committed you are to your business, you can’t succeed if the money’s not there. If sales are slow, you still need enough cash on hand to pay utilities, vendors and employees. Knowing how much money you can afford to spend helps you to budget.

6 Important reasons to wear your financial HAT regularly in your small business.

1. Lack of financial planning leads to failed business

A lack of financial planning leads to the shortage of cash flow or overestimating your business revenue. Most small businesses have a variegated income source that differs from season-to-season. An effective financial planning takes these monetary alterations into account so that there are no shortages in future.

2. It helps with everyday costs

If you already have a proper financial plan, you can easily analyze the amount that you can afford to spend on everyday extras, for instance, how much money you can give to your employees and various training expenses you can set aside. This’ll help your business to run more smoothly for a long term.

Recommended reading: How to Put in Place Financial Management for Your Startup

3. It helps in focusing future of business

A forward-looking and well-planned financial plan can help you see what monetary expenditures should be made to grow the business in the long term.

4. You won’t be able to access financial support without planning

Banks or other money lenders won’t consider your business viable for any financial assistance if you do not have a sound and strategic financial plan in place, as well as income statement, balance sheet, and cash flow forecast.

5. It can quickly identify a financial downturn

If your business revenue is lower than the forecast, you can focus on sales & marketing to try and improve it. Or, if overhead expenses in your business are coming higher than what is expected, you can take several effective measures to reduce them in stipulated time. By reviewing your financial planning on regular basis, you can address any business issues straight away.

6. It can help you prioritise spending

Ready cash is a crucial aspect for the success of any small businesses. An effective financial planning can help you in identifying the most important expenditures of your business against those that can wait some time until your cash flow is better.

 

What makes the Mad Hatter mad?

 

The origin of the phrase, it’s believed, is that hatters really did go mad. The chemicals used in hat-making included mercurous nitrate, used in curing felt. Prolonged exposure to the mercury vapours caused mercury poisoning.

Before you go mad and dizzy with switching hats all the time you might want to consider Outsourcing.