No, don't worry this isn't a political blog.....far from it.
But what would you think if a headline similar this was written about your business?
You'd be pretty upset and want to do something about it.
And yet a large number of small business owners in the UK are in the position that they don't or
can't pay themselves anything near what they are worth.
And just as it makes no economic sense to cut disability benefits now (and it definitely makes no social or ethical sense either) it makes no sense either for entrepreneurial business owners – who take most of the risks and work twice the hours of the majority – not to squeeze all the profit they can from their businesses and pay themselve
what they are worth.
And that requires us to make our businesses as profitable as they can possibly be. But too many businesses don’t. And there are three reasons for this (listen out Chancellor you may learn something):
1. They are undercapitalised: you can't run a car with fuel and you can't run a business without cash. There’s plenty of money out there.
It is cheap and plentiful. And if you cannot make a return on it greater than its cost (including paying yourself a decent wage) then you are either in the wrong business or need some help.
2. They don't understand how to market their business properly (or they just aren't doing it): if cash is the lifeblood of a business then marketing is its beating heart. I can almost hear Nigel Botterill talking about the rhythmic acquisition of customers. Without them there is no
business, and without getting new ones you are shrinking. And without having a premium product you are leaving money on the table.
3. They don't know their numbers: if you want to grow a business (or an economy) you must know which are your most profitable products, services and customers, who spends the most and who wants to spend more. You must invest in ideas, innovation and marketing which make a return. You must measure that return. You must understand that it
is not only the numbers on the balance sheet that matter but metrics like customer satisfaction, employee motivation and value to others.
Start your three step plan (and maybe do what you can to help the disadvantaged in your community as well. But if you are reading this you are probably doing that already!)
Noel Guilford
PS I know some of you will tell me that the cheap and plentiful cash is hard to access...I agree, and will be revisiting this subject
soon with my guide to crowdfunding solutions.
PPS You will also need a good tool to plan your profit and forecast your cash flow. We have one of these launching shortly - watch this space!