Ten Small Business Resolutions for 2006
Steve Websdale from Venture Finance suggests ten New Year's resolutions that will help get your business into shape for 2006
Is your business fit and ready for the challenges of the New Year? In 2005, market conditions proved too much for many companies with the number of compulsory insolvencies in quarter three up by 35.7 per cent compared to the previous year. Take steps now to make sure your business doesn't become a casualty in 2006.
1. Improve your cash flow
In a recent survey carried out by Venture Finance, nearly a third of SME owners cited cash flow management and chasing payment of invoices as the biggest challenge in running a business. However, only three per cent of SMEs said they utilised invoice finance to improve cash flow, indicating that this valuable source of business finance remains largely untapped in the UK.
This year, turn outstanding invoices into an asset and improve cash flow by appointing an invoice finance service.
2. New business
Invigorate new business development by encouraging all members of staff to be involved. From receptionists to the CEO, everyone can play an active role in introducing new clients.
Ask team members to compile a list of their ideal clients then set about targeting them through correspondence, calls and networking.
Offer incentives to reward results, and motivate staff by communicating progress with regular face-to-face or email updates.
3. Get with IT
Stay ahead of competitors by investing in new technology. Although more businesses than ever are reaping the benefits of new technologies, there are still those that have yet to make the most of the digital age.
According to a report from CBI and Department of Trade and Industry, e-business technology can drive up commercial and operational value, delivering benefits to customers and employees.
4. Take cover from bad debt
Experts estimate that between two and 20 per cent of invoices are never paid. For SMEs this can be fatal. Get protection from customers who fail to pay, or worse, become insolvent by signing up for a bad debt protection service. This way, up to 100 per cent of the value can be claimed back.
The service also checks the credit worthiness of customers, allowing businesses to make informed decisions about who to take orders from in the first place.
5. Think big
Take your organisation to the next level by expanding operations, acquiring another company or arranging a management buy-out. Don't be restricted by bank loans. Raising capital against your business assets can fund growth plans quickly and easily. Assets can include invoices, stock, plant, machinery and property. This is a particularly good solution for manufacturers, distributors and service providers.
6. Be innovative
When the going gets tough, don't cut the research and development budget, increase it. Take inspiration from the recent British comedy, Kinky Boots. Based on a true story, the film follows the fortunes of a Northampton shoe manufacturer faced with bankruptcy. The owner thinks creatively and decides to diversify into the alternative footwear market. The move was a success and ensured the company survived and thrived.
The moral of the story is be innovative. There are opportunities out there waiting to be taken.
7. Invest in people power
Skills shortages were the biggest problem facing businesses in the capital last year, according to the London Development Agency. Nurture talent, tackle skills gaps and maximise the potential of your company's most valuable resource by implementing regular staff training.
In a survey carried out by the Chartered Institute of Personnel Development, 94 per cent of workers said they believed training had helped them do a better job.
By providing personal development training, businesses can improve in-house skills, motivate employees and increase staff retention.
8. Cut costs
Businesses incur unnecessary costs every day, from posting non-urgent mail first class to not negotiating with suppliers. Start the year off on the right foot by increasing your cost awareness. Review current supplier agreements and seek reduced rates in return for loyal custom. Provide staff with an incentive to cut unnecessary waste by using some of the savings to fund a company night out.
9. Integrate marketing activity
Raise awareness of the company's products and services by investing in integrated marketing activity. Rather than the occasional piece of direct mail when sales are flagging, or ad hoc advertising and PR for a new product, instigate a coordinated, highly targeted programme.
A recent survey on behalf of The Chartered Institute of Marketing (CIM) reveals that although most UK marketers assert that marketing is a priority in their company's business strategy, securing marketing budget can be a very different matter - particularly in the very largest businesses.
While 49 per cent of firms with a turnover of over £100 million say that marketing is regarded as a "high priority", this figure rises to a substantial 88 per cent among organisations with turnovers under £1 million.
Regular, coordinated marketing will provide a consistent presence amongst target clients and help to create a recognisable brand and ultimately help bring in more business.
Do not forget to communicate plans internally. A company's employees should be its biggest champions. Keeping staff informed of marketing initiatives helps them to understand the company's vision.
10. Go green
Adopting an environmentally friendly approach to business can generate additional benefits. According to a recent report from the Environment Agency, there is strong evidence of higher financial returns, business opportunity, competitive advantage and investor interest for those businesses that are environmental leaders.
This year, make it pay to be green. From simple steps, such as recycling waste paper and using energy efficient light bulbs to balancing emissions and introducing more environmentally friendly management practices.
Make 2006 your best ever!
Just like people, it is easy for companies to become unfit and sluggish. Although there isn't a treadmill for businesses, if the inspiration and renewed vigour generated by New Year is harnessed in the right way, companies can benefit for months and years to come.
Make 2006 a year of success and increased profits by acting on your resolutions today.
