The Very Best piece of advice I could ever give to any business

The Very Best piece of advice I could ever give to any business is to make adjustments in your business as conditions change.

• If sales are up, put some more aside for tax and GST (and possibly for some quiet times that may be coming up)
• If sales are down, adjust your costs as much as possible at the time, or your profits are going to plummet!
• Of course, there’s the issue of taking a risk to invest for future growth (on equipment, staff etc), but the timing of that needs to be considered very heavily, if you plan on getting any sleep at night.

But to do that you need to know what is going on! Let me ask you these questions:

• Are sales in your business up or down?
• What parts of your business are in growth and what parts are in decline?
• Is there any “profit squeeze” going on in different parts of your business? (where income is going up but profit in those areas are going down?
• What’s happening in these areas OVER TIME,

I’m asking these questions because they are the key to good business STRATEGY. Answers to these questions help you Set the sails for your business. Everyone knows to cut costs in a declining income area that has no potential for growth and high costs, but not EVERYONE has the hard numbers in front of them to know when this is actually happening.

 To do that though, you need the following:

• some gages or Key Performance Indicators that are specific to your business, so that you can tell when things are going well and when they’re not.
• A budget or “road map” of where you want your business to be (so you can tell when its straying off course)
• Regular reporting – to track your performance against “the plan”