Archive - 2015

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Does my small business really need a Board?
So you manage your family business, but do you govern it?
Get Your SWOT Worksheet!
What’s your competition?
Are you stapled to one spot?

Does my small business really need a Board?

Last week I wrote about establishing a governance framework in a family business. If you missed it, look here.

Just to refresh ourselves, the difference between governance and management is that governance is about strategic direction, overall policies, establishing a vision and mission, whereas management is about caring for the operations of the business, the “how’s” of running the business to meet strategic direction and policy.

The decisions correctly made in governance are about the really big things in the business that will affect the long term future of the business.

Appropriately these governance decisions are made by a Board of Directors while the CEO and other managers look after operational management.

In a small business, whether a single owner-manager business, or one with a number of family or unrelated partners, both governance and management decisions are often made by the same people wearing different hats, and more often than not, the decisions are made smoothly and efficiently.

So, why would you need to put a Board in place?

I believe a number of issues make the establishment of a good Board beneficial to your business, at the right time. Read More

So you manage your family business, but do you govern it?

I’m going to talk about “governance” in this and next week’s posts.

What is “governance”?

Governance and Management are two different things. Managing is what you think it is, where you manage the operations of your business, manage the finances, manage the staff ensuring they are given responsibilities and rewards, manage purchases and sales and quality of product and service. Managing is what gets things done in the business, in the most efficient and productive way, providing the results you want.

Governance on the other hand is about the oversight of the business, not the operations. Governance is about strategically setting the business’ direction, goals, limitation and borders. The best example of the difference I can give you is a practical example of when the business’ founder “gives up the reins.

Imagine the family business where the founder, perhaps the Parent started the business years ago. Typically he or she started on their own, doing everything from sales to purchasing and inventory. In that simple start-up he or she managed the business and the staff of one as well as set direction and decided what the business should and should not do overall. The Parent decided what markets and products they got into and what they would not and why; they started hiring staff and worked out what type of people they would hire and how they should be treated; and, in time, they worked out what were the “right things to do” in the business.

Then, as they expanded the business they brought in family members, sons and daughters, to help in the business. These offspring worked in the business to learn the ropes (even if they might have gone to university or college to learn new and more professional techniques). Eventually, sons and daughters took up management positions, they managed the sales team; or looked after the finances and investments; they hired, fired and fired and trained and rewarded staff; they looked after inventory and production and service.

Then one day the Parent decided to take their hands off the day to day business, while still being involved. The eldest daughter was appointed in charge of the business – they might have given her the title of CEO or MD or General manager, or just “Boss”.

At this point the governance of the business and the management of the business diverged. The Parent represents “governance” while the children are “managers”.

And the difference?

Can you imagine what would happen if eldest daughter decided to hire cheap labour against the business values of quality staff and quality rewards? Or decided to buy cheaper materials from overseas when the business had always worked on supporting local quality suppliers? Or how about if she decided to branch out from selling hand-crafted toys to cheap plastic toys? Read More

Get Your SWOT Worksheet!

In any planning exercise, you will need to understand where you are starting your plan from.

Just as you need to know where you are starting from to get to the end of any journey.

This identifies what you have to do to go from “here” to “there”. It’s no good setting up great goals and a fantastic vision of your journey’s end, if you start from the wrong place. In order to build, say, a great website presence for your business as a goal, you need to be clear about what your current website represents in terms of strengths and weaknesses so that you can change it from the present to “great”.

In order to get a good picture of where your business is right now, the best exercise is called a SWOT Analysis. Read More

What’s your competition?

If you are in business, you have to face competition.

There is no avoiding it. Your competition is the barrier to your growth.

It may not be a significant barrier, perhaps your competition is weak and doesn’t take too many of your potential customers away. Or it might be a big barrier and you have to compete every day for that new customer or to keep your existing customer.

Either way, I bet you are fighting your competition the wrong way.

Yup, I said it – it’s more than likely that what you are doing to win against the competition isn’t helping much!

Why? Because when most of us think about competing, we think about being better than them. If you were an athlete you’d try to be stronger or faster. In business, you try to be cheaper, or give a better service, or send out a more attractive message in your advertising.

All that we are trained to do is to beef up what we do.

However competition is not about a better product or better advertising. Competition is about who or what is influencing your customer. Read More

Are you stapled to one spot?

Status quo is the enemy of business growth. In order to grow your business, you need to innovate and improve continuously.

However sometimes, you can get stapled into one spot or stuck in a rut.

Whether you are stuck because of some outside influence like the economy, or let’s face it, sometimes because of an internal influence like you get tired, you do need to recognise when you are in that predicament and shake it off.

If you want to grow your business you need to continuously improve your processes, you need to find new niches that you can service, you need to update your products and services to meet the current day’s needs. Innovation isn’t all about inventing Back To The Future’s hoverboard. Innovation is about improving the current product, service or process just by a fraction so that you are always moving forward; until all these small improvements end up as the hoverboard.

When you are stuck in a rut, I have a great Three Step Process to Innovate. Read More

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