Business Management 101: Are You Managing Your Company Correctly?
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Going into business for yourself can be a risky venture if you aren’t applying the right practices. There are many things that can go right, and there are many things that can go wrong when running a business for yourself. Here are five things to consider if you wonder whether you are properly managing your company.
Does your financial model ever achieve profitability?
This is perhaps the most important factor. First, do you have a financial model? And second, does it achieve profitability? If not, then you need to seriously consider how to make the business profitable or you might as well shut it down. If you will never have the chance to achieve profitability, you are simply wasting investor money and your own time, as it will never truly have the chance to be self-sustaining.
Do you have a revenue forecast to chart progress against?
Salespeople need goals, and you need benchmarks by which to chart their success. Your forecast is also tied into the financial model. If you aren’t hitting your forecast or at least coming close to it, then you need to reconsider whether what you are selling and how you are selling it is viable. Be sure to closely track your forecast versus your actual bookings and review on a monthly basis.
It is important to have an increasing revenue forecast, & best when actuals meet or exceed your forecast.
Do you have someone who is experienced managing your finances?
Financial management in a business can make or break you. Understanding how to reconcile payroll, account for payables and receivables properly, and generally track the company’s fiscal health is a critically important function in a business. Whether or not you outsource this to an accounting professional or hire someone full time for the job, make sure you have someone who is experienced handling your financial management.
Do you have a growth path within each capability of your business?
Employees need to feel as though there is an opportunity for growth within the organization. Make sure it is clear to each employee what your expectations for success in their role are, what the next level for them to achieve is, and be sure to set up regular reviews for all employees, even if it is only once annually.
Make sure employees feel they have growth opportunities and that expectations are clear.
If you are a business owner, it is worth closely considering each of the questions proposed. If you answered no to any of the questions, perhaps it is worth re-evaluating your approach. It could save you a great deal of time and money in the process of your business ownership!
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