Wednesday
Sep032008
Back to school: supplies for business owners
Wednesday, September 3, 2008 at 7:08AM
I made a mistake in our newsletter and did not change the link to this week's article. If you are looking for "Becoming a Student in Your Industry" click here
It's September, Labor Day is over and we're all the way up to "I" with named tropical storms. It must mean school is back in session. My little guy started a couple of weeks ago and one of the first things we had to do was survey the school web site for his list ofsupplies. This month we're going to key in on the back to school theme and this week we will start with supplies for business owners. No matter what business you are in there is a basic toolbox of things you should have. Let's get started.
This year's sales forecast
Number one on the list is your revenue forecast for the year. Without it you won't know whether it's been a good day or a bad one. Business owners who don't forecast their sales are either too lazy to do so or they just don't know how. I hear all the time "you just can't forecast sales in this industry" or "in this market we don't waste time forecasting sales." That's like a football coach refusing to watch game film because the opposing team might change their plays. The exercise of forecasting sales forces you to think critically about your business plans and the outcomes you need to support your plans for the future. A business without a revenue forecast is much like a like a sailor without a map or a compass. If you don't know how to forecast revenues for the next year call me. It's one of the most exciting exercises we perform with business owners.
Last week's financial statements
Number two in your list of critical business owner supplies is last week's financial statements (balance sheet, income statement and statement of cash flows) preferably measured against your forecasted financial statements. Human beings operate on a weekly schedule. This means your customers, vendors, employees and business partners all operate on a weekly time scale and your business should too. If you are going to operate on a weekly basis you must measure on a weekly basis and that means financial statements need to be produced 52 times per year. If you have trouble conceiving just how you can achieve such a feat give us a call. It's easier than you might think.
Your operations manual
A good operations manual contains job descriptions, checklists, diagrams that describe how work gets done, organization charts that detail reporting responsibilities and a whole bunch of other critical pieces of information that help your business operate when you are not there. Building a good operations manual doesn't happen overnight. Step one is to agree upon a central storage system for all of this critical information. Step 2 is to delegate custody of the information and spell out the system for making changes. Step 3 is to get everyone using, editing, and updating the manual on a weekly basis. It can take a year or more to flesh out a good operations manual, but any business can see a big difference and start to realize the benefits of this system in as little as two weeks.
Your to-do list
I highly recommend David Allen's book "Getting Things Done." Every business owner should have a master to-do list where all of the reminders, projects and tasks that flood in on a daily basis can be kept, organized and followed up on. Whether you use Allen's system or something else I believe there are two key ingredients to a useful to-do list system. One, it needs to be portable. PDA's and smartphones are useful for this but I've found a simple little Moleskine notebook is portable, low tech and easily accessible. I carry one with me everywhere. I write down additions to my to-do list as well as meeting notes, article ideas, book chapter notes...anything. When I get back to my laptop I move to-do list items from my notebook to a software program that keeps track of everything for me. Second, your list needs to keep track of the things everyone else owes you. Carlos Ghosn, the CEO of both Nissan and Renault keeps a handwritten list in his jacket pocket of the five or six top priorities for the day AND the things his direct reports still owe him on unfinished projects. Keeping track of delegated tasks is the key to effective management and accountability.
Something to write in
Notice I said something to write "in" not something to write "on". You can find a cocktail napkin, an old receipt, a business card or a post-it note almost anywhere. The problem is that these items usually disappear in the laundry with all of those unmatched socks. This is another reason that I'm a huge fan of Moleskine notebooks. I carry one with me almost all the time. It's on the nightstand, it's in my jacket pocket at client meetings, it goes to church with me, I carry it on vacation. My notebook lasts about three or four months before I need to start a new one and it contains all kinds of things. To-do list items, meeting notes, inspirational quotes, journal entries, notes from books I've read, business ideas, personal goals, prayers....you name it, I've written it in my little notebook. I started doing this just a few years ago and I have seven or eight of these little notebooks filled to the brim. They have bailed me out of tough spots, provided great ideas for clients, helped me work through business ideas, and improved my memory. You should always have something with you to write in. Something you can refer back to later, and most important, something you are not likely to run through the washing machine.
A good book recommendation
I can usually tell a great business owner apart from a mediocre one by asking just a few questions. Two of my favorites are "What are you reading right now?" and "What's the best book you've read in the last year?" The truth is if you're not growing you are dying. If you are not learning you are regressing. If you are not reading you're probably spending way too much time in front of the television. Reading is a marvelous thing. It allows us to explore places, ideas and people on a scale and at a pace unequaled by any other media. People who don't read are limited in their exposure to ideas and experiences just like a pre-schooler who knows only what he is told by others or what he can see for himself.
I am sure there are other things you will find vital to your role as a business owner every day, and I hope you will share your insights with the rest of us. As for me, the single most important thing I carry with me is my faith. It is easy to become cynical when prospects don't follow through, when customers don't pay on time or when things just generally don't go your way. It helps me to remember that my role as a business owner is part of a much broader picture. A picture whose edges extend beyond the routines of business ownership and financial statements. I hope you have found your roles to be similarly eclipsed by something greater than the STUFF by which so much of the world measures success.
It's September, Labor Day is over and we're all the way up to "I" with named tropical storms. It must mean school is back in session. My little guy started a couple of weeks ago and one of the first things we had to do was survey the school web site for his list ofsupplies. This month we're going to key in on the back to school theme and this week we will start with supplies for business owners. No matter what business you are in there is a basic toolbox of things you should have. Let's get started.
This year's sales forecast
Number one on the list is your revenue forecast for the year. Without it you won't know whether it's been a good day or a bad one. Business owners who don't forecast their sales are either too lazy to do so or they just don't know how. I hear all the time "you just can't forecast sales in this industry" or "in this market we don't waste time forecasting sales." That's like a football coach refusing to watch game film because the opposing team might change their plays. The exercise of forecasting sales forces you to think critically about your business plans and the outcomes you need to support your plans for the future. A business without a revenue forecast is much like a like a sailor without a map or a compass. If you don't know how to forecast revenues for the next year call me. It's one of the most exciting exercises we perform with business owners.
Last week's financial statements
Number two in your list of critical business owner supplies is last week's financial statements (balance sheet, income statement and statement of cash flows) preferably measured against your forecasted financial statements. Human beings operate on a weekly schedule. This means your customers, vendors, employees and business partners all operate on a weekly time scale and your business should too. If you are going to operate on a weekly basis you must measure on a weekly basis and that means financial statements need to be produced 52 times per year. If you have trouble conceiving just how you can achieve such a feat give us a call. It's easier than you might think.
Your operations manual
A good operations manual contains job descriptions, checklists, diagrams that describe how work gets done, organization charts that detail reporting responsibilities and a whole bunch of other critical pieces of information that help your business operate when you are not there. Building a good operations manual doesn't happen overnight. Step one is to agree upon a central storage system for all of this critical information. Step 2 is to delegate custody of the information and spell out the system for making changes. Step 3 is to get everyone using, editing, and updating the manual on a weekly basis. It can take a year or more to flesh out a good operations manual, but any business can see a big difference and start to realize the benefits of this system in as little as two weeks.
Your to-do list
I highly recommend David Allen's book "Getting Things Done." Every business owner should have a master to-do list where all of the reminders, projects and tasks that flood in on a daily basis can be kept, organized and followed up on. Whether you use Allen's system or something else I believe there are two key ingredients to a useful to-do list system. One, it needs to be portable. PDA's and smartphones are useful for this but I've found a simple little Moleskine notebook is portable, low tech and easily accessible. I carry one with me everywhere. I write down additions to my to-do list as well as meeting notes, article ideas, book chapter notes...anything. When I get back to my laptop I move to-do list items from my notebook to a software program that keeps track of everything for me. Second, your list needs to keep track of the things everyone else owes you. Carlos Ghosn, the CEO of both Nissan and Renault keeps a handwritten list in his jacket pocket of the five or six top priorities for the day AND the things his direct reports still owe him on unfinished projects. Keeping track of delegated tasks is the key to effective management and accountability.
Something to write in
Notice I said something to write "in" not something to write "on". You can find a cocktail napkin, an old receipt, a business card or a post-it note almost anywhere. The problem is that these items usually disappear in the laundry with all of those unmatched socks. This is another reason that I'm a huge fan of Moleskine notebooks. I carry one with me almost all the time. It's on the nightstand, it's in my jacket pocket at client meetings, it goes to church with me, I carry it on vacation. My notebook lasts about three or four months before I need to start a new one and it contains all kinds of things. To-do list items, meeting notes, inspirational quotes, journal entries, notes from books I've read, business ideas, personal goals, prayers....you name it, I've written it in my little notebook. I started doing this just a few years ago and I have seven or eight of these little notebooks filled to the brim. They have bailed me out of tough spots, provided great ideas for clients, helped me work through business ideas, and improved my memory. You should always have something with you to write in. Something you can refer back to later, and most important, something you are not likely to run through the washing machine.
A good book recommendation
I can usually tell a great business owner apart from a mediocre one by asking just a few questions. Two of my favorites are "What are you reading right now?" and "What's the best book you've read in the last year?" The truth is if you're not growing you are dying. If you are not learning you are regressing. If you are not reading you're probably spending way too much time in front of the television. Reading is a marvelous thing. It allows us to explore places, ideas and people on a scale and at a pace unequaled by any other media. People who don't read are limited in their exposure to ideas and experiences just like a pre-schooler who knows only what he is told by others or what he can see for himself.
I am sure there are other things you will find vital to your role as a business owner every day, and I hope you will share your insights with the rest of us. As for me, the single most important thing I carry with me is my faith. It is easy to become cynical when prospects don't follow through, when customers don't pay on time or when things just generally don't go your way. It helps me to remember that my role as a business owner is part of a much broader picture. A picture whose edges extend beyond the routines of business ownership and financial statements. I hope you have found your roles to be similarly eclipsed by something greater than the STUFF by which so much of the world measures success.
Reader Comments (1)
The small Moleskine notebook is an EXCELLENT idea for something to carry on your person for notetaking. For bigger tasks, I use black & white marbled covered composition books. They measure 9.5 X 7.5 inches. I make it a point to write everyting in the composition book; copies of memos, sticky notes, business cards. etc. get taped into the book. I use a few back pages to make an index. I use the same book for business & personal matters, writing in black ink for business and blue for personal. In a year's time I use about 6 books. These books cost about $1.50 each and can be purchased at any offcie store or wal-Mart. I keep my current compo book in a nice leather cover purchased from Levinger. The compbination of a composition book for my desk/briefcase and a small Moleskine for my pocket works for me. PDAs have their advantages, but they have no soul! Forget to take your charger with you on a trip as I did, and your PDA becomes as useful as a dead mouse. "Write and enjoy twice."