As we discussed yesterday, it is imperative to identify challenges within your company, in order to establish some best practices for your business model. But, what do you do with those policies once you have identified them?
Execute:
If you simply take stock of the issues you will not see much of an improvement. While knowledge is power, you have to implement that knowledge into real action. Turn your ideas into policies, and formalize them. Make a big deal out of introducing them to your employees and explain the rationale behind them. Best practices are intended to improve your company’s financial bottom line. Ideally, this will translate into a positive outcome for everyone. During the meeting to discuss the new policies make certain to emphasize the constructive nature of the changes. You may also want to put the policies in writing and have them available at the meeting.
Here are some examples of best practices that other businesses have implemented.
Invoice for goods and/or services at the time they are provided.
Set a specific time interval to deal with collections, ideally once a week.
Estimate your income tax obligation monthly, not just quarterly. When payments come due, there won’t be any major surprises.
Provide cross training for employees where practical. That way you won’t have downtime if someone is ill or out for a period of time.
Utilize technology where you can (i.e. set us a merchant account to receive payments).
If possible, have employees who incur billable time use a timer. A few minutes lost here and there can add up, and this can be a big ‘leak’ that needs to be plugged.
Review your pricing structure. Ensure that you are building in enough to cover overhead and still realize enough profit to not only sustain but grow your business.
Run inventory reports regularly. This will allow you to keep close tabs on your inventory and not have any surprises. This may also allow you to shop for the items you need at a lower price rather than having to replace something last minute and potentially having to pay a premium.
This is not a difficult process. You simply need to utilize the publicized practices of the most successful businesses and adapt them to your business situation. Also keep in mind that you can network with other business owners that you know to see how they have approached implementing best practices. If cash flow is hampering some of your best practices, such as maintaining your inventory numbers, then please contact us for a solution.
