Archives#seasonedpro Archives — C. Lynn Northrup, CPA, CPIM
I provide my small business clients with a road map to success by helping them solve problems. Having said that, here is what I think are the three biggest problems:
- Business Planning
- Financial Management
- Managing Business Processes
Based on my experience these are the areas where all businesses have issues. However, smaller businesses struggle more with them because they lack the necessary resources and expertise.
All businesses plan at some level but do a poor job of it. They fail to do it in the depth that’s required and don’t address the strategic elements needed for success. Planning takes patience and time to carefully pull together all the necessary components. Leaving out strategic and competitive analysis combined with strategic thinking is a recipe for failure.
All businesses, especially small business, should get help to coach them through the planning process. They could gain the benefit of skilled expertise and objective insight that will increase their sales and profits. Well conceived strategies make the difference between failure and success.
Financial management is another problem area. Accounting and finance is like a foreign language to most small business owners and yet it is one of the most critical components of building a successful business. Cash management and good performance measurement are often neglected or done poorly. Business owners should consider having a financial pro assist them in monitoring this data on a monthly basis.
Monthly diagnostic analysis is affordable using cloud-based tools and is money well spent. My approach is to track trends against goals for all the key financial indicators. This is a simple straightforward approach that most small business people can grasp. This process will take less than an hour each month and is a critical step to help keep the business on track toward achieving its goals.
Every business has processes that can be improved. Process improvement gets neglected because of the tendency to get caught up in day to day details. Objective assessments can quickly identify processes and areas for improvement. A skilled business coach can zoom in on problem areas overlooked by business owners who are too close to the action. Just having the support of an advisor can significantly improve profitability.
Narrowing small business problems down to the top three was a good challenge for me. It got me thinking about the multiplicity of problems facing small business. I think that addressing these top three will develop solutions for 80 percent of all small business problems.
This focusing process emphasized my conclusion that small business owners should seek help in dealing with these three problem areas. They need to overcome the resistance to spending money on a coach or a financial pro since it represents an investment in their successful business future.