A solid foundation is key Many business owners know their craft, however running a business is far more involved than just serving customers. There are commonalities in running any type of business, and I have identified 6 key pillars that every business needs to manage to build a solid foundation to which a business can grow - Finance and liquidity – do you know your numbers? As a business owner this in an integral part of your business. After all you started a business to earn an income. Hence, being across all the revenue and costs in your business is key towards creating a financially viable business. Key financial documents are budgets, sales forecasts, cash flow and profit and loss statements. These are key tools to assist you in running your business. There is a reason they say cash is king! It is one thing to sell a product, but how fast the customer pays for that product and you have money in the bank is integral to the smooth financial operation of the business. A cash flow statement is important to forecast how much money you will have in the bank at a certain time to pay staff and your suppliers. Essentially, the staff don’t care if you have sold $20k on items when you don’t have the money to pay them their wages. Know your customer – its one thing to come up with an idea or open an outlet that sells a product or service, but who is looking to buy it? Selling is usually solving someone’s pain/problem. Hence, who is your customer and why would they buy your product/service? What problem are you solving for them? Knowing who your customer is allows you to market directly to them outlining how your product/service will assist them. Digital Presence – Online communication may be instrumental in the growth. Its not just about having a social media page but also a plan which clearly articulates what you will be posting and what your message is and how you attract engagement from your audience the all important ‘like’ . If you don’t know what your message is it will just be magnified on your socials. Where do your customers consume their social media? Do you have a website for your business? How is it used? You need to remember that your website is your 24/7 sales person, giving an insight into what type of business you are and capability. Workforce –how many staff will you need? What will they do and how many hours will they work? What will you pay them? Is there automation that can help you to take away some repetitive tasks allowing your staff to concentrate on the high value tasks? Many staff are looking for a cultural fit in the workplace. What culture and work place environment are you looking to create? Operational costs and Supply chain – as with Finance and Liquidity, do you know your numbers? What does it cost to open your doors each week and trade? What are your cost of goods? Can your supplier scale up and supply more product if required at short notice? When was the last time you asked for a better price? What are your cost of goods in relation to your turnover? . Review of all costs to identify ways to deliver your business more cheaply. Forecasts and Planning – my favourite one but you need to think about it. There is an old saying – fail to plan, plan to fail. Forecasting and planning is very important in a business as it allows you to set goals and takes a little of the unknown away. However, tools such as budgets are only numbers on a page without some commentary, the HOW and WHY. Ie if write that you are going to generate revenue of $20k in February, there needs to be some HOW and WHY you will generate that revenue.

Post by Nicholas Kalogeropoulos on Mentoro

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