The end of 2016 is coming around fast and naturally SMEs are making their business resolutions for the coming year.
Unlike the usual personal resolutions, such as losing weight and stopping a bad habit, generally bettering themselves, business resolutions comprise more than just an individual’s wishes.
Of course employees are high priority, but so is the financial well-being of a company and its planned growth and profitability.
Here are five real New Year’s Resolutions that SME owners are making for 2017:
1. Get a healthier work life balance
It is easy to get carried away at work, ensuring that everything is done to a high standard, particularly if you are the owner. The issue can arise when one’s work life is dominating one’s home life, leading to stress and resentment amongst both colleagues and family.
One of the biggest New Year’s resolutions mentioned in a recent survey by Liberis was to gain a healthier work life balance in 2017. For some this is easier said than done, deadlines still need to be met and targets need to be reached, but achieving a balance isn’t impossible.
One way to work towards achieving this resolution is by ensuring that home time is exactly that. It would also help, if possible, to resist the temptation to look at your work emails whilst at home. Nothing will be urgent enough that it cannot wait until the next morning/after the weekend and, if it is, they will get in contact a different way.
To do lists and delegating tasks can also be your best friend. Each month write out the tasks that need to be completed for that month and plan your hours, remember that you are part of a team so do not feel the need to take on everything yourself. Using a Google Sheets document can help plan out the work for the month, ensuring that everyone has something to do and it is not falling to one person.
2. Reduce wasted time and plan ahead
Another popular New Year’s Resolution was to reduce wasted time and plan ahead. If you made a list of everything that was done in the office each day and then filtered out the work that was profitable, how much of the left over time would you class as wasted?
Benjamin Franklin said ‘time is money’, a quote that is still very true when it comes to business. Wasted time is money straight out of a company’s pocket which is why it is no surprise that many SME owners are looking to reduce this in 2017.
Planning is essential in business but many companies fail to spend adequate time preparing for upcoming work. Planning ahead is the solution to reducing wasted time: the real resolution therefore is ensuring that sufficient time has been scheduled to properly plan out the work ahead.
A monthly planning meeting for example will let everyone know what they are doing each day and, as a result, the amount of wasted time will be reduced. You could even schedule in weekly catch ups to make sure that everyone is on track: you could also invest in some time tracking software such as Clicktime. Clicktime allows employees to complete an online spreadsheet to list how they have spent their time during the working day, and leave notes to give finer details. This will allow you to see what work is actually being done week on week and, more importantly, where the most amount of time is being spent/wasted.
3. Manage cash flow
The New Year is the perfect opportunity to get your finance resolutions in order, therefore it is not surprising that SME owners are looking to manage their cash flow rather better in 2017.
Cash flow isn’t simply the money coming into the business but is also the money going out. So, to improve the money coming into the business, you could be looking at making payments easier for your customers by introducing online options or PayPal (if you are an e-commerce business) and/or invoicing clients more quickly in the New Year, but if your management of outgoing money is a mess, your cash flow will be too.
It may be that you need some funding to help consolidate some debts. You could look at securing a business loan, however only a small number SMEs are accepted for these traditional bank loans so an application might result in disappointment.
There are alternative finance options available such as crowdfunding, which involves receiving funding from the public for an idea, better suited to B2C companies; or there are alternative small business loans to consider, one example of this is a business cash advance which involves being given a lump sum which is then paid back over a set period using a percentage of monthly card takings. Consolidation of debts allows you to easily plan and manage your cash flow as you know that the existing outgoings will be amalgamated into just one amount.
4. Let go of unprofitable employees
Letting go of employees can be a difficult and awkward task. The aim of every business however is to make money, therefore, if you have employees who are no longer contributing to the profit of the company then your return on investment must be considered. As well as the wage the employee receives there are also numerous overheads connected with their employment which means they are an expenditure so, if they are not putting in anything to the business, then they are considered unprofitable.
Although the task of terminating the contract of an employee isn’t a nice one, these employees will stunt the growth of the company. Instead of firing an employee straight away, you could take to one side those that are unprofitable and put them on a three month (or extended) probationary period, during which they will have targets to meet. Outline the reasons for doing this and the consequences (to the employee) of not meeting the targets. This is the more professional approach, giving staff the chance to improve their performance will be appreciated by them and, if they succeed, it will mean you do not need to start a lengthy and expensive recruitment process. If they don’t meet the targets set, you can let them go and be left with the remaining profitable employees.
5. Collect money owed
Small businesses, collectively, can suffer from the effects of the dreaded invoice chase. With monthly overheads not taking into account the figure in your bank balance, payment of just one late invoice can be the difference between making a profit and making a loss each month.
For this reason, SME owners are aiming to collect (more promptly) money owed to them as part of their plan for 2017. Although it should be straight forward, collecting what is owed for work already done, many business owners can give up on the invoices they have been chasing for a while, leaving them out of pocket.
There is no sure fire way to ensure that people pay on time or even pay at all, once the usual steps have been taken such as writing emails and sending letters, to help businesses achieve their New Year’s resolutions they could take them following additional steps:
- Get a collection agency to write demand letters.
- Offer to settle for less than is due.
- Hire a collection agency.
- Employ a specialist solicitor to act on your behalf and write to the delinquent customer.
- Issue Small Claims Court paperwork or file a lawsuit.
These can be costly ventures so ensure the amount owned is worth the money and hassle to go down any of these routes. Alternatively, you could conduct credit checks of potential clients to ensure they have the revenue to be able to make payments and are not blacklisted.
By Rob Straathof, CEO at Liberis