Steps to ensure good business health
Running your own business can be gruelling, but you shouldn’t be doing it all on your own. Creating a healthy business environment, where you trust the people and systems around you is an important part of ensuring long-term success.
Nick Hosking, Tauranga-based Senior Commercial Manager with Kiwibank, looks after a number of successful businesses, including off-and on-road electric utility vehicle manufacturer, UBCO.
After many years of working closely with Kiwi businesses, Nick has a good handle on what it takes to ensure good business health. He shares his top tips here.
1. Don't micro-manage
Your business may be your baby, but you've got to trust the village you create around you to help raise it.
"As the director and leader of your business leave the little details to the staff you trust, this will give you more energy to apply your focus where it needs to be and steer the ship," says Nick.
2. Think big picture
By not getting bogged down in the daily details and processes of running your business, you'll have time to focus on the bigger picture.
Nick suggests standing back and thinking about your top four or five priorities. “These are the things you must get right to be in market and make a profit. It might be pricing, it might be specific skilled staff, it might even be a currency component linked to price fluctuations. Keep it simple, and effective.”
3. Involve your team in your business plan
Make your business plan a living document and get your people engaged in the plan. “Regularly update the plan quarterly or six monthly, and cascade it to your team so that they can see how the organisation is tracking against the shared goals and hold people accountable to it,” says Nick.
4. Build and nurture your relationships
Put yourself out there for your customers and wider network. “Make them feel important,” says Nick. “If this isn’t your strength, then I would suggest finding someone suitable to take ownership of this part of your business. People like doing business with people they like and respect.”
5. Don’t make your business your whole life
Running your own business is relentless, but drowning yourself in work could do more harm than good.
“Most business owners will agree that when you are tired and depleted of energy both physically and mentally, that is when little problems turn into big problems,” says Nick.
Taking a break can be refreshing for both you and your staff. “Take time out, give your staff autonomy and take a break. Trust me on this, more often than not your business will run equally as well if not better,” says Nick. “Staff like a break from the boss being around as well, it’s healthy for all.”
Make sure your staff also take breaks and that they feel appreciated – mark achievements or hard work by shouting lunch or giving an employee who has gone above and beyond the afternoon off. “It doesn’t have to be about monetary value, sometimes the smallest things can have the biggest impact,” says Nick.
6. Ask questions of your advisers
Make sure you surround yourself with the right experts and that you’re getting a good bang for your buck.
“A good accountant and solicitor can add a great deal of intangible value well beyond just finalising a set of end of year accounts,” says Nick.
He often sees people choosing an accountant or adviser based on price or because it’s someone their parents have always used. “Sometimes that is ok, and sometimes not.”
He suggests a more rigorous approach, where you ask questions of your advisory people to make sure they’re a good fit and that you’re getting what you need.
- Have you had any experience in similar industries?
- What areas financially can we improve on?
- How can we improve cashflow?
- Are we managing our debtors and creditors effectively?
- What does our provisional tax liability look like now the company is growing?
- Are our terms of trade relevant to the market?
- Are they actually adding value to my business?