These five tips can help your company think outside the box.
Face it, as a small-business owner you're swamped. You're concerned about customers, about employees, about what your competitors are doing. If you're dealing with a cash-flow issue in the morning, chances are you'll be grappling with something wholly different, such as your online presence, by nightfall.
The constant barrage of concerns often means you fall back on the same old way of doing things and then you run the risk of letting your business stagnate.
There’s no time like early in the year to step back and look at your company with a fresh eye. As you’re planning for 2016, consider these five ways to bust business-as-usual.
- Take off the rose-colored glasses. We all want to put the best spin on our efforts, but your company will fare better if you evaluate it honestly and stay open to contrary points of view. For instance, are your products or services priced correctly? "It's hard for many individual small-business owners to be objective about what they're offering. They get defensive if you say their product is too expensive or has some annoying features," said Eric Tyson, who co-authored “Small Business for Dummies” with Jim Schell. If you shrug off that defensive attitude, you can try to improve your company by surveying customers and seeking expert opinions from inside or outside your business.
- Set reasonable goals. Almost by definition, entrepreneurs have to dream big. That ambition is good, but setting outlandish goals to double or triple revenue this year may only discourage your team when their striving falls short, said Brad Farris, owner of the Chicago-based small-business consulting firm Anchor Advisors. On the other hand, it’s just as misguided to be so pessimistic that you figure your business will be lucky to match last year's results. Farris makes an analogy with his clients about "Goals and Goldilocks." Sometimes the porridge is too hot, sometimes it's too cold, but to really taste success they need to settle on goals that are “just right.”
- Hire effectively. It’s understandable that you’re anxious to expand your staff or impatient about filling a vacant position. But many small business owners settle too quickly on inferior candidates. Hiring effectively "is a lot harder than people think," said Tyson, the "Dummies" co-author. Filling the right slot with the right hire can enhance productivity while reducing drag from poor morale and avoiding the costly, time-consuming process of recruiting and training when an underperforming employee leaves or is fired. Online services, such as ZipRecruiter, can do the initial screening and rating of applicants and help you hire right the first time, said Kamy Eliassi, owner of Los Angeles-based small business consulting firm Global View Consulting.
- Reevaluate your credit needs. As your business grows, the financing you put in place early on may no longer be appropriate or it may not be serving you well. With enhanced revenue, you may be able to qualify for a larger line of credit or a lower interest rate, for instance. Or you may have plans for this year that will require specialty financing, perhaps for an equipment purchase or a global expansion. Meet with an expert who can evaluate your business as a whole and recommend the best lending package for your company. “We believe it is very important to have a relationship with a banker you trust,” said Aaron Dyer, division field sales manager for City National Bank. “It’s not just about getting any loan – it’s about getting the right loan.”
- Be active in cyberspace. Tyson makes the point that Yelp and other online review sites can make or break small businesses, so it’s imperative for business owners to keep tabs on those sites. If the reviews on your company are erroneous, or if they point out a situation where a customer has been mistreated, take action. "You don't want to go crazy over it. You can't nitpick or micro-manage every word said about your company,” Tyson said. “But you can reach out to the customer and say, 'I had no idea. What can I do for you?' Try to remedy the situation."
City National, as a matter of policy, does not give tax, accounting, regulatory or legal advice. The effectiveness of the strategies presented in this document will depend on the unique characteristics of your situation and on a number of complex factors. Rules in the areas of law, tax and accounting are subject to change and open to varying interpretations. The strategies presented in this document were not intended to be used, and cannot be used for the purpose of avoiding any tax penalties that may be imposed. The strategies were not written to support the promotion or marketing to another person of any transaction or matter addressed. Before implementation, you should consult with your other advisors on the tax, accounting and legal implications of the proposed strategies based on your particular circumstances.