“I have an idea I’d like to share with you. I’ve been thinking of ways to grow my company because it is more valuable than one that’s not growing. Well, I am considering two options. Option 1 offers a new service to my existing clients, or option 2, which is expanding into new locations. I’m leaning towards option 2 – a new location. What do you think? Think that’s a good idea?” As I tell all my clients who ask me this question, the idea might be just fine, but you need to decide if it is feasible – for you at this time. These are the core elements of any feasibility study: What does success look like? Can you validate that there is a market for it? Does this solve a real need? Can you resource it? Is the payoff worth it? Can you be competitive in this space?…
The Beginning. The End. The In-Between. Get a pen and paper. Ready? As quickly as you can, without thinking, jot down everything that ENDED in 2018. What was over? What did you give up on? What did you just plain STOP doing? What habits did you break? Make another list. This time jot down everything you STARTED in 2018. What began? What new habits did you adopt? What decisions did you make? What relationships started Which list makes you happiest? Why? We are HUMAN BEINGS. We are forever in the process of becoming the being we were meant to be. We are getting closer and closer to fulfilling our life’s purpose. As one year comes to an end, reflect on the achievements, however big or small they may seem. Dedicate some time to creating a list of 10 or more positive, affirmative statements that you are becoming in 2019. We…
Every now and then, managing cash flow poses a challenge. Sometimes these challenges are temporary and seasonal and other times they are persistent. Whether the cash crunch is a result of personal decisions (such as wedding, baby, personal purchases, investments) or for business purposes (such as buying a business, investing in capital, weathering a downturn in operations or financing growth) planning for a cash crunch is an important part of risk mitigation. In my conversations with business owners, there is a constant struggle to understand the ideal use of debt to run their business. Operations The main source of cash into a business is through operations. This is the act of selling your goods and services for cash or collecting accounts receivable. This cash from operations is needed to fund the business – pay suppliers, employee wages, taxes and return a profit to the business owner. It is not always possible to 100%…
I failed my first accounting midterm yet went on to make the Dean’s list and achieved academic awards, graduating as top graduate from one of Canada’s premiere MBA programs. How did I achieve those results? By believing that I could effect my dismal result through hard work: effort. My experiences impacted my beliefs My beliefs impacted my actions My actions contributed to my results My early school experiences led me to believe that I was “gifted” and had natural academic talent that didn’t require me to put much effort into my studies. Because I held these beliefs, I didn’t study effectively and failed the exam. I’m sure I wallowed in self pity for a few days, blaming the instructor for writing a bad test and likely second guessed whether I had what it took to complete the program. If I had a fixed mindset, this experience would very likely have…
It’s hard to ignore the news reporting an economic downturn in Alberta with some economists even using the “R” word (Recession). Couple the general economic woes with an increasing cost structure (taxes, minimum wage, insurance, etc.) and it may feel as if you’re pushing that string up an insurmountable hill. Fear not, here’s a few tips to help you ferret out those profits that may be hiding in plain sight: in operating costs, customer service or purchasing processes, hiring practices or unproductive assets. This post wraps up the series on Strategies to Improve your Profitability Part 1 and Part 2. Operating Costs There are many items that are included in “operating costs”: facility costs, general & administrative & selling expenses are often significant categories. Some suggestion to release profits: Check into membership and association discounts Trim back on phone, internet, power, wages, general office expenses Ask employees to analyze expenses…
In Strategies to Improve your Profitability – Part 1, I described how important it is for business owners to understand their financials and the actions / decisions behind the numbers. Now that you have completed an analysis and identified a “problem expense”, you may be wondering, “What now?” A key to the effectiveness of your cost-cutting action is the worth of the various expenditures. An expenditure may be “worth” more or less than the $ value. To determine the worth of an expenditure, you have to consider the productivity or benefit to your business of this expenditure. Can it be reduced without a corresponding decrease in revenues or profits? Can it be switched to a lower cost alternative? For example, if you cut your employee development budget without expecting a corresponding decrease in performance – either immediately or in the future, you may be sacrificing short-term profits for longer term…
Yesterday, October 1, 2015, minimum wage in Alberta increased by $1.00/hour from $10.20 to $11.20. Saskatchewan & Manitoba are following suit. In this series of posts, I’ll share ideas, tips and strategies for business owners. You pick the ones that will add value to your business. Consult with your business coach to help you select impactful activities. Know your financials! Before you can really narrow down on the strategies you will implement in your business to improve profitability, you need to understand the impact of all your decisions on your profitability. Business owners are laser-focused on the impact of staffing decisions, but solutions may involve a combination of decisions including capital investment, supplier management and / or labour. Locating reducible expenses Your focal point should be in locating expenses that can be cut. Therefore, the information should be as current as possible. A P&L statement (aka Income Statement) reports to…