The Tribune

By Simon Cooper

Res Socius

Owning a business can be like navigating a small yacht through a tropical storm that threatens to snap the masts, or take out the sails. On other days when things are going better, managing a firm effectively can be more a matter of subtle changes of direction as the market shifts. Here are my thoughts on this.

• Take another look at how you’re using your accounting system - Packages like Xero and Quickbooks enable you to analyse key metrics on a daily basis. Are your expenses goal directed, in the sense that they are tracking the reasons you are making sales? If not, adjust them.
• Take a bold step by brainstorming with your staff - Share your thoughts with the people who help you make your money. You’ll not only motivate them, you will also get some great ideas that way. If some things they say do not make sense to you, discuss them. Don’t just wish them away.
• Consider the example that you set – Is your time-keeping defensible? Do you tell your secretary where you are going, and how contactable are you when you get there? Of course, you are the boss, and you have the right to make your own decisions. But how motivated will the crew be when you take days off for leisure every week?

Implement video-conferencing – This should be a democratic decision to avoid limiting the elite to a single person, so make the facility available to everybody instead. On occasions when you have to travel, try combining visits and multi-tasking to save money.

Standardise delivery of your product – Tweaking goods and services for individual customers seldom pays (unless, of course, they bring return business). You have thought carefully enough about what you supply, and you’re good at doing it. Introduce a policy of charging for add-ons at a profit.

• Think profit constantly in everything you do - After all, this is why you are in business, and the thought should be everywhere in your mind. Ditch every offering that the market is moving on from. Beware of rising overheads that sneak in with increasing sales.
• Manage energy costs – The cost of wasting electricity is becoming punitive, especially when capital and maintenance costs for appliances are taken into account. Arrange an energy audit with your utility, and implement what they suggest. While this may not come free, it should certainly increase your take-home income.
• Benchmark your financial model – All industries have guideline financial ratios. These include gross and net profit, and the ratio of specified expenses to sales. Be bold. Listed companies publish their results, and there’s nothing wrong with following examples of what’s already working elsewhere.
• Finally, consider going semi-virtual. Anything that is done on a computer or mobile phone can be done by an employee somewhere other than in the office. This opens up opportunities to move away from fixed employment to a pure commission basis - and to save some, too. Don’t think you can trust employees this way? Chances are you can … otherwise, why are you employing them in the first place …?

NB: Simon Cooper is a founding partner of Res Socius, a firm authorised by the Bahamas Investment Authority to facilitate the sale and purchase of businesses and provide management consultancy services. Contact 376-1256 or visit www.ressocius.com.