Tag Archives: business advice

Making Choices & Getting Business Advice

New to owning a business?

You may find the following information valuable, and certainly of interest, even if you’ve already been in business for a number of years.

Every business owner needs advice on occasion.  The key is knowing when to ask for it.

It is said you are never alone if you have a deck of cards.  Start playing solitaire and someone is bound to tell you what to play where.

It is said you are never alone if you have a deck of cards. Start playing solitaire and someone is bound to tell you what to play where.

If you believe you can make your own decisions without counsel, go right ahead.  Even if you do receive a professional’s expert opinion, you can always choose to ignore it and make your own choices.  You own the business, so every decision you have to make is ultimately your responsibility.  You reap the rewards or bear the blame.

One of our clients was looking to raise more capital.  The company was solvent and generating close to $1 million in annual sales.  More funds were needed to complete some upgrades, so the owner was curious about options.  We discussed the ins and outs of venture capital, issuing stock, private equity investors, and traditional financing options for the investment the company was seeking.  We had experience as licensed investment representatives, so we had a grasp of the basics.  We continued the discussions as time moved forward and, eventually, the client was able to get some of his better clients to invest in the company and accomplish their shared objectives.

Was it our professional counsel that turned the tide?  All the client needed was information to make an intelligent decision, and the right choice for the company’s survival.  The client got advice from other sources as well, and used the accumulation of information to choose wisely.

In many cases, the advice is free because of the relationships business owners have with the resources available to them, whether vendors, friends, or business associates.  In other cases, the counsel is part of the overall service the business owner is contracted to receive.  Is one better than the other?  Only the person receiving it and using it to make their business decision can determine that.  There are occasions where the more expensive advice is better than that offered without cost, and the reverse can be true, too.

Back to the issue of knowing when to ask for advice.  Your accountant should be consulted before you ask your banker to extend you a line of credit, so you know what your cash flow looks like for repaying the loan and other reasons.  Your legal counsel should be asked to review legal documents before you sign them, just to protect your assets, if nothing else.  There are other professionals and business associates out there that you can ask for opinions about a variety of topics, from buying company vehicles to advertising campaign strategies and from charitable contributions to lobbying legislators.

If you take the time to get the information you need, you are far more likely to make a better, wiser, and more profitable decision for your business.  The secret:  Knowing where to get the information and being able to interpret that knowledge to gain wisdom.

Team Resource – Your Business Consultant

Business Star 3-13You may be thinking you know everything you need to know to operate your business, so you can get by without a business or marketing consultant.  You probably could, if you truly do know everything you need to know about your business and feel an independent, third party perspective is unnecessary.

Let’s do a little test of your understanding up front:

  • What is your operating profit margin?
  • What systems are in place to avoid employee theft?
  • How many of your customers made repeat purchases in the last year?
  • What kind of impact will the federal health care system have on your business?
  • How current is your unemployment insurance coverage?

These are questions you should be able to answer without much thought, although the larger concern is how well you are able to stay on top of this information and the related implications … and keep all your other tasks under control, too.

Your profit margin is a bellwether of how well you are doing.  Grocery stores operate on a much smaller margin than jewelry stores.  Your accountant can help you figure out your margins if you’re unsure how to calculate cost of goods sold and other variables.

A five here or a twenty that fails to make it into the cash drawer may seem inconsequential in the big picture, but nickels and dimes add up over time.  Tills should balance at the end of shifts, and since cash is a measure of your success, you need controls in place to monitor your capital, even if you trust your employees completely.

Knowing your customers and their buying habits is market research, and it’s customer relations.  You and your staff should be able to greet returning customers by name when they come back to your store.  Their return is an indication you’re doing things the right way … for them.  Or else they’ve got complaints, which means you need to get on top of those and solve them promptly or they could have a negative impact.

The new federal health care regulations and your unemployment compensation insurance are difficult matters to monitor on a consistent basis.  Your insurance agent is trained to stay abreast of changes in laws and can be an asset to your business, managing your risk, saving you money, and covering your assets.

You have employee issues, inventory concerns, sales numbers and projections, customer service situations, payroll, taxes, marketing, production, and whatever else you have to deal with every day.  Oh, yes, how much time do you take for yourself every week?

Your business consultant is a resource that is valuable to your business in many ways, from helping you manage potential threats and viable risks to staying focused on your mission and key objectives and guiding you in growing the business.  If you avoid using a consultant because of the cost factor, demolish that thought process and look at it, instead, in terms of how that expense should manifest itself in double, triple, or even larger growth for your business.  Round out your team with strong, professional advice.  Your consultant should also become an advocate for your business and hold you accountable for prioritizing the work you must do to make the right decisions.