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Sep 13

10 Tips to getting paid faster

Posted by James Burn on Thursday, September 13, 2018

Steady, reliable cash flow is crucial for the survival of any business – so taking steps to ensure your customers pay promptly should be a key priority.

When your customers consistently pay on time, you’ll avoid the dreaded “feast or famine” cycle. You’ll be able to pay your suppliers and employees on time – and not least of all, yourself.

Implement these ten tips now to start getting paid without delay.

1. Provide payment terms up front

Before you start working with any new customer, always provide your terms in writing. Clearly state your rates, payment due dates, and policies for late payment – including any fees incurred on balances owing.

2. Invoice immediately

If you’re currently preparing your invoices manually, switch over to Xero invoicing with automated billing. You’ll never forget to invoice a customer, and you’ll eliminate errors as you save time. The first time a customer is billed make sure the contact information on your invoice is complete to avoid delays with getting paid.

3. Follow up

Call your customer immediately when a payment is past due. Ask for the status of the invoice and if there’s anything you can do to speed up payment. Sometimes a simple change, like including a purchase order number on the invoice, can speed up getting paid.

4. Reduce terms

Net 30 payment terms are fairly standard in business, but there’s nothing stopping you from asking for payment sooner. Some business owners make payment due at Net 7 or 10; others stipulate payment is due upon receipt of invoice.

5. Reward early payers

Consider offering customers a 2% discount when they pay their invoice within ten days. In this scenario, a $1000 invoice would be reduced to $980 – not a huge loss for you, but an attractive cash-saving incentive for your customers.

6. Charge interest

As part of your terms, specify that if a customers’s payment is past due, a weekly fee of 2% will be added onto the total until funds are received in full.

7. Get paid upfront

Collect a partial deposit – or the entire amount in full – before you provide a product or service to your customers.

8. Go mobile

Forego invoicing altogether by having your customers pay on the spot with mobile debit and/or credit payments.

9. Suspend service

Stop your supply of products or services until you receive payment. With this tactic you’ll avoid the accumulation of an even greater loss with a consistently late or non-paying customer.

10. Stay on top of your debtors

Monitor your debtors on a weekly basis so you can act fast if a customer hasn’t paid on time. An Aged Accounts Receivables report is available in Xero  to help you easily track outstanding invoices.

Final thoughts

Perhaps the most important tip for encouraging prompt payment is excellent communication.

When you follow up on a late invoice, explain why it’s important to receive timely payment in order to run your business effectively. Ask when you can expect payment, and agree on a date.

If the money still isn’t forthcoming, offer to negotiate a payment schedule as a next-to-last option – before you have no choice but contact a collection agency.

 Contact us james@jba.net.nz if you need help implementing any of the above.  What action step will you take?

Sep 04

The power of Cash flows

Posted by James Burn on Tuesday, September 04, 2018

The power of cash flow forecasts

At some point in its lifetime, every small business suffers from cash flow problems. The trick is to think ahead and figure out when these problems are going to arise, so you don't have to unexpectedly postpone a purchase or hurriedly seek out additional finance. This is where cash flow forecasts come in.

To effectively manage your cash flow, all you have to essentially do is use your income and expenses figures to calculate your cash flow figures before they happen. Then you can plan to limit the impact of a cash drought before it arrives, so you can still pay your staff, the tax man and your suppliers.

The importance of cash flow forecasts

Cash flow forecasts are used to predict your business's future financial position for the period ahead, from three months to a year in advance. Your forecast allows you to see what money you expect to be paid into the business and the amount you'll need to pay out. It's a useful tool to help you manage your business more effectively.

If you owned a typical retail shop with high sales over Christmas and Boxing Day, and then the slump after the New Year Sales, your cash flow forecasts would show high income in December and much lower income over the following two months. Your forecasts would also show stock purchased on a 60-day term ahead of the festive Christmas rush in November and December would need to be paid at the end of January and February.

If you racked up record Christmas sales, there might be a strong temptation to splash out and buy that big-ticket item you've been hankering after – but can you really afford it? A quick look at your cash flow forecast will probably tell you that you need to park the thought of a new SUV or [your latest gadget] and reduce your drawings by downgrading your request to Santa for an iPad. Otherwise, you'll have no money left to pay for the stock you sold in December.

If you're more pragmatic and less inclined to impulse spend, your forecast will also be able to tell you if you'll generate enough profit to cover the costs of refurbishing your store or any other major business decision that you planned to do.

Say your forecast sales figures for March and April will be down on previous years, as a result of continued low national economic growth, the global financial turmoil or the arrival of a new competitor in the market. You might need to arrange short-term finance to tide you over or find ways to increase sales to cover your monthly overheads and operating costs.

In summary, your cash flow forecast gives you a future view into your business finances. It helps you identify cash flow problems before they show up and allows you to make informed business decisions.

How to create a cash flow forecast

You can use Xero and  a spreadsheet program such as Excel, or download a cash flow forecast template to calculate your cash flow forecast. Xero will be able to pull up many of the figures you need to put into your forecast directly from your accounts, saving time and effort.

The hardest part of creating a cash flow forecast is working out accurate income and expense figures for the months ahead. Obviously, the more accurate these figures are, the more accurate your forecasts will be (and the business decisions you base on them).

For your forecasts to continue to be of use, you need to update them based on your actual business performance each month. Replace your forecast figures with the actual figures for the month and make adjustments to the next few months' forecast figures if it appears, based on reality, that your projections were either overly optimistic or pessimistic.

Putting your forecasts to use

Apart from giving you a fairly good indication of your likely cash position at any point in time in the year ahead and alerting you to potential cash flow problems (which enables you to act in advance, rather than react), your cash flow forecasts can be used to model your future plans.

Let's say you plan to expand the business, by employing a new staff member. You can put the additional expenses into your forecasts to see if you can afford the new staff member, and then add in the additional income you expect to receive to see the overall effect on your business.

You can run three versions of this forecast: a worst-case, best-case and middle-of-the-road scenario to see how this will affect your business finances. These forecasts will help you decide whether to employ a new staff member or not. If you're uncertain you'll achieve your best-case sales and your middle-of-the-road figures don't look that promising, you might decide to wait a year before you employ another staff member or expand the business.

Alternatively, you might discover it's better to use any surplus cash to pay off debt.

Once you have your forecasts set up, use them to model “what if” questions about your business to help you make the best decisions for your business.

If you are stuck with any of this we are only a phone call away - contact James at james@jba.net.nz or 021 203 5348.

Jul 20

How to avoid 3 common profit mistakes

Posted by James Burn on Friday, July 20, 2018

How to avoid three common profit mistakes


What exactly is profit in a business?

Here’s how to avoid three common profit mistakes that can seriously affect the success of your business.

1. Sales are NOT profit

The biggest beginner mistake is assuming that sales are profit. People new to business can easily confuse sales with profit, but there is a very clear distinction between them. As the saying goes, ‘sales are vanity, profit is sanity’.

Let’s assume sales are going well in your new business. You’re in a happy mood because you have all that profit coming in. Except it may not be profit…

Your profit is actually what is left after ALL your costs have been deducted from sales.

If you haven’t calculated your selling prices correctly, the danger is that your business might seem to be thriving when it is in fact operating at a loss, or at very little profit.

It does happen.

The main point here is: NEVER set a selling price or quote a price for a job until you know ALL the costs involved.

There are two types of business costs. First are the variable costs. These are direct costs of production that vary with sales levels. They include the cost of raw materials or stock, and the direct labor costs of producing the goods or supplying a service.

Second, all businesses have fixed costs, called overheads. However much or little you sell each month, you must pay relatively fixed costs such as rent or mortgage, phones and Internet, power, vehicles, loans and leases, and other office costs. You need to include these costs, or at least a percentage of them, in your pricing.

When you start a business, it’s important to get your pricing and job costing checked by an experienced accountant, because they may well identify costs that you have overlooked.

Only when you know all your costs can you start selling with the confidence that your prices are profitable.

2. Markup is NOT profit margin

Once you have calculated all your costs, you must include the profit margin you need to sustain the business. This leads on to the second profit mistake.

Many business owners assume that if they intend to make, say, a 20% profit, they can simply add 20% on to the cost-price of a product or service. So if the item or service costs them $100, they add on 20%, making the selling price $120. They assume this will give them their desired profit margin of 20%.

Wrong.

Markup is not the same as profit margin. In this case, the owner may assume the business is making a 20% profit, but the profit on the actual sales price is only 16.67%.

You can use this formula to work out profit margin:

Price – Cost
Price x 100

In this example, 120 – 100 is 20, divided by 120 and multiplied by 100 (for a percentage), resulting in an actual profit margin of 16.67%.

So while the owner assumes the business is making 20% on all sales, the selling price is actually giving away 3.3% of the expected profit.

The gap between markup and profit margin keeps widening as required margins get higher. If you want to make a 50% profit margin on an item that costs $100, the correct selling price would have to be $200, since 50% of $200 is $100.

If you had instead simply added a 50% markup to the cost price of $100, the selling price would have been set at $150. Apply the formula above, and the profit margin works out to be only 33.3%. The mistake of using markup to achieve your desired ‘profit margin’ would have meant giving away nearly 17% of profit margin. You can see how dangerous this mistake can be to a business.

The point is to check your profit margins are really what you want them to be. Decide what minimum acceptable profit margin you need to sustain your business, and then get help if necessary from your financial adviser to check that your selling price will actually deliver the required profit margin.

3. Profit is NOT your salary or your personal cash

Many new business owners assume any surplus profit is what they should take out of the business as their salary or personal cash. But profit has other purposes than providing a salary.

Your salary should instead be included as part of business costs, so profit more accurately becomes any surplus money left over after you have taken your salary and paid all other costs (including tax).

All businesses need profit and its purpose is to sustain and grow your business.

Of course it may take some time for a start-up business to reach the break-even point and start making a profit. During this time you may not be able to draw much money from the business. Being thrifty during this period is a common necessity for start-up owners.

But in the medium to long term, you need to aim for a salary that is at least in line with what you could earn elsewhere as an employee – and preferably better. Otherwise, what is the point of all the risk and hard work in starting a business?

You also need to aim to make enough profit to continue growing your business and renewing the assets that help it produce the wealth. As your accountant we can help you work out a sustainable profit level for your business, and this should be reflected in your pricing.

Mar 08

Four of the common financial mistakes Small Business Make

Posted by James Burn on Tuesday, March 08, 2016

Four of the Most Common Financial Mistakes Small Businesses Make

(and how to avoid them)

 

Many small business owners are entrepreneurs who went into business seeking freedom, a better lifestyle, more money or simply because they wanted to run their own show. Financial acumen is rarely high amongst the skills possessed by such people. As such, it is only to be expected that business owners make financial mistakes which can jeopardize their dreams. Here are four of the most common mistakes and how business owners can avoid them.

 

  1. Failing to plan

Few small businesses have a working budget and cash flow forecast which is rolled over on (at least) a quarterly basis. As a result, they make decisions based on guesswork and have no idea whether their business’s actual performance is better or worse than what they expected. A solid budget requires the following information, ideally seasonalised and presented on a month by month basis:

  • Sales – not just a lump sum figure, but broken down by product or service line and calculated as number of sales multiplied by average sale value
  • Variable costs – these are costs that vary with sales and as such, should be driven by your sales forecast
  • Fixed costs – unless there are any significant changes, these can be taken from your most recent financial statements and adjusted for any known or expected increases

Once you have developed a budgeted profit and loss account, you should then create a cash flow forecast. This differs from the profit and loss budget because it is looking at the cash inflows and outflows. As such, it needs to take account of how long your customers take to pay you, how quickly you turn over inventory, how quickly you pay your suppliers, any loan repayments due and any forecasted capital expenditure that will not appear in the budget profit and loss account.

For a thorough budget that could be presented to a bank for the purpose of raising finance, you should also complete a budgeted balance sheet.

 

  1. Financing capital expenditure out of cash flow

As a general rule, and to the extent that it is possible, it is good practice to cash flow the lifetime of a purchase. By that we mean this: if you are buying stock to sell in the short term, then finance it out of your day to day working capital. But if you are buying a large piece of machinery with a ten year life, then you should look to finance it over ten years. Similarly, don’t fall into the trap of many small business owners where you have a good quarter and go out and buy yourself a flash new car – out of cash flow. Unless you are confident (and have evidence to back it up) that your strong sales will continue, you could find yourself in a cash flow bind if you empty the bank account to buy new assets every time you find you have a bit of surplus cash.

Form a strong relationship with a bank manager and keep them up to date with your plans. Often, the banks will be happy to lend when times are good for your business and you should take advantage of that to properly finance any capital expenditure required to expand your business. Similarly, the best time to secure an overdraft is when you don’t need it. The banks will be more willing and able to help you out and then if you hit a rough patch, you have a safety net.

 

  1. Cutting costs rather than driving revenue

When considering how to improve profitability, many business owners resort to hacking at costs. That’s all very well, but there is a finite limit to which expenses can be cut – zero. And then you have no business. On the other hand, the opportunities to grow revenue, assuming you manage your growth within the constraints of your cash flow, are limitless. It comes down to understanding the drivers of revenue, which in most businesses are:

  • Number of customers
  • Number of times those customers buy from you
  • The average sale you make each time a customer buys

Once you understand the drivers, you can put in place strategies to increase each of those critical measures.

Another thing to be aware of when reviewing costs, which, of course, is still a valid strategy, is knowing where to cut. For example, too often businesses cut back on marketing which can often be the last place you should be making cuts. Similarly, a knee jerk reaction to cut back on travel expenses could see an adverse reaction (a recent study conducted by Oxford Economics and commissioned by the US Travel Association found that 57% of businesses surveyed felt that cutting their travel costs during the recession in the US hurt their business.)

 

  1. Running your business from a spreadsheet

Quite possibly the most important to avoid of all of the mistakes listed. In this era of Cloud accounting solutions accurate management information integrated with daily bank feeds is readily available. Not to take advantage of such information is to run the business by the seat of your pants. Yet many small businesses persist in keeping their records on a spreadsheet or worse, in a shoe box!

Talk with us today if you feel that your accounting records are inaccurate, unhelpful or obsolete. In fact, we can help you avoid all four of the key financial outlined in this article, helping to set you up for more profitable days ahead.

Dec 23

Entertainment Expenses

Posted by James Burn on Wednesday, December 23, 2015

We often get asked,  "Are meals and drinks for myself and staff tax deductible?"
Here are some general guidelines on what would be a tax deductible expense and a link to the Inland Revenue information on Entertainment Expenses 
Generally, for the cost of the meal and the drink to be tax deductible, there must be a connection between incurring the expense and helping produce business income.  If the expenditure is incurred for yourself, having  a meal or a drink that would normally be private, than even if the cost is charged to the business account, this would still be private and not tax deductible.  
Here are some examples where the expenditure is 100% tax deductible:
  • Food and drinks are consumed while travelling away on business the expenditure unless the  travel is primarily for entertainment purposes, or the entertainment consumed at a social function.
  • Food and drink where the employee works overtime
  • Food and drink provided as morning or afternoon tea
  • Food and drink at a conference, training or event which lasts for at least 4 hours 
  • Entertainment provided to the public for charitable purposes
Here are some examples where the expenditure is 50% tax deductible:
  • Business lunch with client at restaurant
  • Gifts for clients
  • Friday night drinks for staff at work premises
  • Light working lunches provided to staff at work premises
  • End of year Christmas party for staff
If you are unsure, please contact us





Mar 22

Tax Tips:Areas you can review before 31 March 2015

Posted by James Burn on Saturday, March 22, 2014

Tax Tips: Areas you can review before 31 March 2015 updated

1. Consider pre-paying business expenditure  
 

Some expenses can be prepaid in March and claimed as a tax deduction in the 2015 tax year, regardless of their amount. These include stationery, postage and courier charges, vehicle registration and road user charges, rates, newspaper subscriptions, and even accounting fees!   Other expenses have limits on the extent to which they can be claimed if prepaid. These include rent, consumables (materials used in the manufacture of a product or service), insurance premiums, professional or trade subscriptions, travel, and advertising. The rules around prepayments can be quite complex, so if you’re planning this type of expenditure, please contact me.

2. Stock (excluding livestock) must be valued at the lower of cost or market value. General adjustments for obsolete stock are not acceptable to Inland Revenue.  It’s important to perform a physical stock take at 31 March 2015 and actually dispose of any obsolete lines or alternatively write down to market value after deduction of selling costs (net realisable value).  Clients with an annual sales of less than $1.3m may value their closing stock at the opening stock value, but only where closing stock is less than $10,000.

3.   Write off any bad debts from your debtors balance (people who owe you money)
To claim a deduction for a bad debt you need to physically write the debt off in your debtors record  before 31 March 2015. There should also be evidence that you have taken reasonable steps to recover the debt prior to writing it off.

4.   Employee expenses
Any amounts owing to employees at year end (such as holiday pay, bonuses, long service leave, redundancy payments) can be claimed for tax purposes in the 2015 tax year as long as they are paid within 63 days of 31 March 2015.

5.    Review your  Fixed Asset Schedule
The book value of assets can be written off for tax purposes if the asset is no longer in use by the business, the business has no intention of using that asset in the future and the cost of disposing that asset is expected to be greater than the proceeds from its sale. Actually, it’s simpler than that. Scan your asset schedule from last year’s accounts and you’ll probably notice assets that no longer exist (for example the mobile phone that you dropped on your driveway and drove over it), or simply don’t work

Feb 11

Working in Real Time

Posted by James Burn on Tuesday, February 11, 2014

Facebook celebrated its 10 year birthday last week.  Probably what many people want to know is will Facebook be around after another 10 years?  In business, if you don't keep abreast of trends and changes in your industry you're actually going backwards and could be left behind!

I was recently talking with a gym owner, and he remarked how people are keeping fit is changing.  He noticed that not only were more gyms opening up in his city, but that a number of smaller fitness businesses offering Zumba, Crossfit and Personal training were starting to have an effect on memberships not only in his gym but around the country.  His business needed to review its business model and make changes and he was open to suggestions for improvement to his business.  

Bringing  this closer to home, many business owners have accounting systems that were set up when they first went into business and became a client of XYZ Accountants.  At the time this made perfect sense as their accountant was their first point of contact with sorting their taxes out and balancing annual accounts.  However, the accounting systems they use have not kept up with the pace of change and the information provided by their accountant is out of date or late.  The business owner doesn’t really understand the numbers; the information is  used only for tax purposes, and too late to be of any use.

Technology has advanced, the cost of a new accounting system has decreased, and some accounting systems are easier to learn than others.  You don’t need to be a technical wizard to use the latest accounting system on your computer, mobile phone or tablet.  The information also isn’t stuck on a computer in the back office..  Today you can check who owes you money, what profit you made last month and whether you met your sales target all at the press of a button on your mobile device.

Business owners want clear, up-to-date information to help them make better informed decisions, and not have to wait till the books are done by their accountant.  With some, that might require a 3-4 month wait.

At James Burn & Associates we use the latest technology to provide business solutions for our clients.  We use the world’s easiest accounting system, Xero, in our practice and work alongside our clients to provide solutions to everyday problems.  

The great advantage is that what our clients see on their mobile phones or tablets is what we see.  When we see something in the numbers that doesn’t quite make sense we can have a friendly chat with our client and immediately make changes if necessary rather than finding out about it 6 months later!  We work in Real Time!

Contact us for a free chat to find how we can help.

Dec 15

Spring clean your business

Posted by James Burn on Sunday, December 15, 2013

Spring Clean your business

10 Areas of your business you can review right now to improve it.

Cashflow Management (Working Capital)

1. Review your business stock levels and identify slow moving stock or obsolete stock.  Have a stock clearance sale to convert slow moving stock into cash that can be reinvested into your business. A large inventory level can tie up valuable cash or working capital.  Ideally, stock should be turned over regularly and kept to a minimum to lower the level of cash tied up in stock.  You can measure how many times your stock turnsover using a simple calculation:

Cost of Goods Sold divided by Average Stock. 

Cost of Goods = Opening Stock + Purchases - Closing Stock

Average Stock = (Opening Stock + Closing Stock) divided by 2.

The higher this number is shows your stock is turning over regularly and for a retail business it is a good sign of a healthy business. However, there are some businesses who sell only a few items of stock a year and other financial calculations may be more appropriate for service based businesses, for example Gross Profit as a % of Sales.

2. Review your work in progress (jobs). How long on average does it take to complete a job? Do I have a workflow management system?  

A workflow management system can help you manage your jobs so the work is spread out over the whole year and doesn't all fall due at the same time.  It also enables you to highlight which jobs are on track and which ones are falling behind and require further work.

How long does it take me to bill the customer?  What are the roadblocks or obstacles that prevent me from being able to bill promptly?  A workflow management system can take all of your job information and invoice out of this system straight to the customer.  Talk to James about Workflowmax, a job management system that integrates and works well with Xero. 

3. Review my accounts receivable (people who owe you money). Are any of the unpaid accounts unlikely to be paid?  If the answer is "yes", they need to be written off as bad debts now in your current business year.  Check your payment terms. Is there a "gap" between when you receive money from your customers and when you pay out the money to your employees, suppliers and Inland Revenue.  Download our free tip sheet on payment terms to see how reducing your payment terms can help you get paid sooner and help you reduce the "gap".

Business Goals

4. Review your business goals set this year for your business. For example, you may have a sales goal as a target. What sales target did you set for your business? Has this been achieved?  Why or why not?  What marketing tools or techniques have you used to help develop customers and increase sales to your business?  Are you able to measure the success of your marketing campaign?

Being able to measure your marketing campaigns will help you to target your marketing or advertising budget effectively and lead to campaigns that give you the best bang for buck.  A good exercise is to work out how much sales income a customer will bring over the lifetime of the relationship.

Owner's investment and Capital

5. How much money has been invested by you,  in my business this year? What return have you received from your investment? These questions determine if the money you have invested in the business would be better invested elsewhere or help identify what level of return your business needs to achieve to maintain or grow the business.  We can help you to maximise your business investment or assist you with selling the business.

6. Are my business cash withdrawals (or drawings) more than the business can sustain?  Do you have a personal budget?  If you take out more cash than the business can sustain, it is likely you will starve your business of the cash (or lifeblood) that is needed to help maintain or grow the business.

7. Are my business fixed assets (for example: motor vehicle, computer, plant and equipment) capable of meeting all of my current and future business needs?  Are there some surplus assets that are no longer used by the business that could be sold to return valuable working capital to the business?  When a business has more fixed assets than it needs there is an over investment and this may result in cash being tied up in assets that are not adding value to the business. 

Business Systemisation

8If you were unable to work tomorrow could the business operate without you?  What steps are you taking to enable the business to operate without you? Having a business plan., business operating procedure manuals and trained staff will enable a business to operate without its business owner and allow you time to spend on strategies to boost sales, increase profits and grow your business.

Sales

9. Who are your top ten customers?  What % of sales does this represent?  How can you sell more or repeat business to these customers?  Pareto found that 20% of resources employed produced 80% of the income.  What is the % in your business?

Profitability

10. Review your business expenditure. Are there any business expenses that are not adding value to the business?  Are there any products or services that you offer that actually cost you money?  Using Xero's Dashboard watchlist you can monitor any income or expenditure items to see how they are tracking in relation to a budget.

If you need help with any of the issues I have discussed today please contact me for a free one hour chat to see how we can add value to your business.


Aug 07

A tale of two customer experiences

Posted by James Burn on Wednesday, August 07, 2013



I had two customer experiences today that I  would like to share.

My first one concerned a local professional who I will call Mr X. I wrote to Mr X about two weeks ago to answer a simple request about a client who had decided to approach our business for help.

Two weeks later I was still waiting for an answer. I rang him  and basically was told he was busy. So I left a message asking him to contact me. I was annoyed by the lack of response. 

Please Note: As a footnote he did make email contact today and i am happy to say that I got a satisfactory response.

The second customer experience concerns a local Stihl shop I have been dealing with.  I'll never forget the experience and I highly recommend them. Our lawnmower had died and I was dreading having to replace it.

I did a bit of research and found our local Stihl shop owner Fred very knowledgeable about lawnmowers. We talked about size of lawn v size of engine, getting one that my wife could start easily, mulching v catching. Fred said the mulcher lawnmowers were excellent. Fred also took our old dead lawnmower off our hands and $50 off the purchase price of the new one.

A
fter discussing the options with my wife we settled on a mower that could catch and mulch. My wife was skeptical about the mulching and that our kids would bring the mulched grass back into the house.

Well today I picked up our new lawnmower which came all set up to go with a tank of petrol and oil. The first thing we noticed was the lawnmower powered through the work and took less time to mow the lawns! 

My wife was totally amazed and kept asking me where was all the grass? 
With our old mower we would have had about 3 fadges of grass and this would have cost between $5 and $7 plus the cost of going to the transfer station to dispose.

Which brings me to my point. Being responsive to your customers (or ex customers) is vital to the existence of your business. When your business has no customers you go out of business. 
When you respond to your customers and wow them the result is not only in $$$ in your pocket  but also in hundreds of referrals of excellent customer service and, hey, isn't it nice to give someone a reason to feel good about you!

Aug 01

Dreams Part 3: From walking to running

Posted by James Burn on Thursday, August 01, 2013

Last week I wrote about going from crawling to walking and related it to my daughter Joanna. If you want to read my earlier writings you can find them on my website at www.bizadvice4you.co.nz/blog

Today in Dreams part 3, I talk about going from walking to the running stage and what that means in business and once again I'll use Joanna's experience as an example.  My daughter Joanna became confident about walking and the walking became running especially when she didn't want to miss out being the first to the letterbox to collect the mail.

Joanna's mission in life is the mission we all have: to master any challenge she faces. She does this by becoming confident at anything she puts her mind to.  At an early age she learnt to climb up on a chair and stand high above everything else.

Joanna achieves this by practicing and making mistakes and then applying what the mistakes teach her, and never giving up. She has a support network that enables her to succeed and that is her parents, grand parents, teachers and aunts and uncles.

In business our mission statement could be to deliver excellent service to our customers. This supports the vision of being a world class customer centered business.

One of the objectives might be that we acknowledge and follow up on customer enquiries within a set time period.

But mission statements and objectives are no good unless they are connected to business systems.  The business systems put wings on our dreams.  Business systems are the support network for business that enable a business to crawl, walk and eventually run and fly.  Without any organised business systems in place, the business is likely to fall over, literally and  catastrophically, or become stuck in the crawl stage.

Typically there are at least 4 major systems that keep businesses running: sales, marketing, operations, and finance/admin.

I will look at each of these in the next series on building a successful and profitable business one system at a time.

Thanks for reading