In our experience working with owner-managed businesses, we’ve learned a lot about how successful business owners operate, and where they open themselves up to risks.
Gary Staunton, Partner at Haines Watts London, shares our top 5 business management tips, based on the most common challenges facing business owners.
1. Plan for mistakes
This might sound counterintuitive, but you’ve got to ensure you prepare for an element of failure in your business plan. Particularly when you won’t have full control over the execution, as the ultimate plans are often carried out by your team.
Making mistakes is part of the learning process, and your job is to understand where these mistakes could occur and implement processes to reduce them.
Planning is time-consuming but research shows that the most successful business owners spend 20-30% of their time focused on strategic planning.
2. Don’t be afraid of risks
In our recent For Love or Money study, we identified that most business owners have the majority of their finances invested in their company. While this is a sign of commitment, it’s also high risk.
Assessing risk is a daily part of being a business owner, but you need to identify the difference between good and bad risk.
During the startup phase, you are more likely to take risks, which can drive fast growth if those risks pay off. Once your business becomes more established, you can become more risk averse as you have more to lose.
The key is to balance the level of risk with potential pay offs and plan in a way which allows for margins of error without putting your business in jeopardy.
3. Keep people based on merit, not sentiment.
One of the most important aspects of a healthy business is its talent pool and a team is only as strong as its weakest member. If there are employees that simply aren’t performing, whatever the reason may be, it’s crucial to take a critical approach.
Just because someone has been with you for a long time, this doesn’t automatically validate them for a promotion. Key roles must go to the right people who have shown an aptitude for the role and can grow with your company.
Employees that are showing consistent performance dips need to be addressed. It may be that they are no longer in the right role and a re-assignment could be the motivational boost they need.
4. Measure everything
Be very clear about what you are going to measure, when and how often. Regularly reviewing what you are measuring, and why, is key to ensuring that you know exactly how your business is performing.
Create a balance between measuring short-term and long-term goals. For example, measuring monthly income, work-in-progress, and profit and loss are short-term goals, whereas measuring market share, net customer gains and company assets are longer-term metrics.
5. Don’t be a hero, use your team and their unique skill sets.
Having a great team is essential for sustainable growth. Hiring the best skills you can afford to serve your customers should mean you’re able to focus your time on innovating and setting the strategic direction to drive your business forward.
The old adage, ‘You can’t be good at everything’ is key to building a successful business. Stick to what you’re best at and hire the best people to fill any gaps.
It can be difficult to trust people to get the job done to a good standard, especially in the early stages. But done properly, and with the right team, delegation provides accountability and a redistribution of work that can make your life as a business owner a lot simpler.
Haines Watts London are London accountants and businesses advisors, based in Holborn.
Want to know more? Call us on 0207 025 4650 or email email@example.com