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Steve Strauss

The B Word

Posted by Steve Strauss Aug 5, 2016

I have a question for you: Would you ever get in your car, put a blindfold on, and drive away?

 

Well, of course not.

 

With a blindfold on, you would never know if you were headed in the right direction. You would be unable to see if a red warning light popped up on the dash. You wouldn’t even know if you had enough gas to get where you are headed; you would be completely lostSteve-Strauss--in-article-Medium.png.

 

The reason I bring this up is because this is exactly what happens to small business owners who run their businesses without a budget. Doing so is akin to driving with blinders on. Are you headed in the right direction? Who knows? Do you have enough cash flow to get you there? Maybe. Is there a warning sign of which you should be aware? Hope not. If you don’t have a budget, you just won’t really know – until you crash.

 

Oh, I get it. You don’t want to create a budget. Join the club. People start their own business for all sorts of reasons – epiphanies, freedom, passion, boredom, bosses – you name it. But I think it’s fairly safe to say that one reason is not because they love budgeting (unless of course you are an accountant).

 

Click here to read more articles from small business expert Steve Strauss

 

The fact is, there are two parts to any small business: what you love to do (the designer is great at web design, the jeweler makes stunning jewelry) and then everything else (the legalities, budgeting, marketing, and so on.)

 

Unfortunately, the “everything else” is crucial. The jeweler cannot just make rings. Those other parts must be mastered because they are what allow him to do that thing that he loves to do. Without marketing, he won’t have any customers. Without incorporating, he opens himself up to personal liability. And without budgeting, he can run out of money.

 

For many small business owners, the financial part of the business is not their strong suit, yet it’s almost more important than the more glamorous parts of running a business. Getting a loan, forecasting cash flow, having enough money set aside for quarterly taxes are the mundane tasks that are critical to the success of a small business.

 

This begs the question, is there some way to make these less glamorous parts of running a business easier? You bet.

 

Part of the problem is nomenclature; for many people, the word “budget” has negative connotations. A budget is a strict set of restrictive rules and guidelines that dictate certain actions and forbid others. It is a constricting, unforgiving formula.

 

No wonder people don’t like budgets.

 

And that is why I would like to suggest that instead of the word “budget,” you try using the word “plan” instead, because really, that is all that a budget is. It is your plan for how you can best use your money. Instead of thinking of a budget as a restrictive covenant, the better choice is to think of it as a permissive plan.

 

Would you like to spend more money on pay-per-click ads this year? Great, then do so. Look at your plan, decide how much you want to spend on pay-per-click, and then decide how to pay for it. If that means less for independent contractors this year, then so be it. You decide what your priorities are.

 

So go ahead, take the blindfold off. It’s OK. It is your plan after all.

 

About Steve Strauss

Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest,The Small Business Bible, now out in a completely updated third edition. You can listen to his weekly podcast, Small Business Success, visit his new website TheSelfEmployed, and follow him on Twitter. © Steven D. Strauss.

You can read more articles from Steve Strauss by clicking here

 

Bank of America, N.A. engages with Steve Strauss to provide informational materials for your discussion or review purposes only. Steve Strauss is a registered trademark, used pursuant to license. The third parties within articles are used under license from Steve Strauss. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.  ©2016 Bank of America Corporation

MultipleLocations_Body.jpgBy Erin O'Donnell.

 

When your small business expands beyond its original location, consistency and communication are key to continued success. We spoke with Los Angeles-based management consultant Ray McKenzie, founder of Red Beach Advisors, about the best practices for managing a small business with multiple locations.

 

Duplicate success

McKenzie says the first thing a business needs to do before it expands is to determine what already works, and make that the template. In addition, small business owners must be clear on their company culture so that they can duplicate it easily. "They need to make sure that whatever location they branch out to or build, it needs to be exactly like the one they've been successful with so far," McKenzie says. "Use the formula that works. Have a concrete mission, values, and culture."

 

Use consistent systems and processes

And, make sure those processes work for the remote locations. If you have a cabinet full of physical customer files, how will your satellite managers access them? If your business is not already using a digital system for filing, orders, invoices, and the like, it's time to adopt new technology. Then, train all employees to use them the same way. McKenzie says to make sure all managers are reporting on the same metrics at the same intervals. That way, you as the owner or founder can get an overview of the company quickly and make intelligent comparisons about performance.

 

MultipleLocations_PQ.jpgBe present

High touch is critical in the beginning. When your new locations launch, McKenzie says it's important for owners or founders to spend at least three days in person with the new manager and staff. While getting everyone up to speed on your systems and processes, you are also infusing them with your energy and culture, he adds. Going forward, small business owners must be prepared to spend more time with satellite locations than at headquarters. If that gives you pause, it could be a red flag. "You don't ever want to expand if you don't have the home office running smoothly," McKenzie says.

 

Standardize reporting

Plan a weekly one-on-one meeting with each location manager, McKenzie recommends, to assess performance. Then have a meeting or call with all site managers at least once a week. This will give you a chance to give each location individual attention and allow them to discuss common concerns as a group. Be sure to give them clear guidelines on the types of information you want to know: sales reports, client growth or loss, progress on goals and projections, staff issues, customer feedback, and so on. And make sure all managers follow the same standards for their reports. Cloud CRM services such as Salesforce or Domo, or even QuickBooks, can help streamline this, McKenzie suggests.

 

Remain accessible and supportive

Hire managers you can trust with the day-to-day details and resist any urge to micromanage. But make sure they have direct access to you as the business owner whenever they need it, and communicate this clearly. "You can pass along energy from headquarters to the satellite offices," McKenzie says. "They're on remote islands, and you want to close that gap as much as possible." In addition, be clear with your home office staff that the new locations need their full support, and encourage your new staff to ask for help when they need it. "Everyone needs to understand that, for us all to be successful, we have to do whatever we can to help the satellite grow as much as possible."

 

With consistent practices, clear expectations, and robust communication, your new locations will be well prepared to carry on your brand and grow your business.

 

Bank of America, N.A. engages with Touchpoint Media Inc. to provide informational materials for your discussion or review purposes only. Touchpoint Media Inc. is a registered trademark, used pursuant to license. The third parties within articles are used under license from Touchpoint Media Inc. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice.

 

Bank of America, N.A. Member FDIC.  ©2016 Bank of America Corporation

 

 

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