General Business Practices
Part 1 of a 3 part series
Warning Signs: PROFITABLITY/EXPENSE CONTROL
- Falling profits (before owner’s compensation).
- Rising expenses.
- Cost of goods sold.
- Operating expenses.
- Decreased gross margin
- Significant adverse deviations from budget.
- Significant increase in a particular line item’s cost.
Steps to Improve: PROVIDING BUSINESS LEADERSHIP
- Apply common sense; you can’t be successful if you don’t have it.
- Understand fully the long range and short range implications.
- Don’t be a total absentee owner – it doesn’t work.
- Be a hands-on manager.
- Delegate what you don’t know or do well; then facilitate, applying common sense.
- Always delegate authority with responsibility, but set the limits clearly.
- Brain-pick your key management team.
- Choose as managers positive, bright, caring people who communicate well.
- Stamp out negative attitudes throughout the organization.
- Don’t hire or retain people with negative attitudes.
- Be obsessed with quality, but as the customer sees quality.
- Listen to your intuition, but back intuition with facts.
- Write and circulate a simple business plan that discusses the key strategies.
- Seek the opinions of others on your plans.
- It’s easy to say crazy things, but it’s hard to write them, and even harder to explain them logically to others.
- Encourage all employees to make suggestions for improvement.
- Use outside expert advice to close the knowledge gap in critical areas.
- Form your own “kitchen cabinet” of business advisors.