The last few weeks of the year are the ideal time to look back over the previous business year to assess what worked, and to look forward to the challenges and opportunities that come with the New Year.

Analyse

You have a year’s worth of data so prepare a short statement of achievements, lessons learned and how you can leverage what you have learned to fuel expansion in 2012

It’s natural to protect “your” initiatives, ideas and positions BUT, as you analyse performance metrics for 2011, be honest with yourself. It’s hard but it’s essential to admit setbacks and learn from them. Numbers don’t lie.

Organise a holiday celebration.

The end-of-year party is a terrific morale booster, especially when you use the occasion to praise loudly. (Leave the quiet criticism for January. It’s a party.)

If you are a manager, this is an opportunity to praise the performance of specific individuals and to hand out special “bonuses” like gift cards and other thank-you incentives.

Something I recommend: invite clients to the holiday celebration. Again, this builds good will and creates a “personal” bond within a business context. Get to know your clients on a face-to-face level over holiday cheer. And, if you want to maximise the impact, be sure to invite partners.

The mighty News Corp came crashing down faster than lightning speed after the scandal was made public. It resulted in shameful closure of the once popular newspaper News of the World and ruined the credibility of news publications across the UK, perhaps further still.

Journos are at best a mildly trusted bunch of professionals. They are not exactly the most favoured of all people in the eyes of the masses. Sadly, it appears that a bunch of scheming and corrupt journalists used unsavoury methods to get a story.

Senior executives at News Corp apparently never saw it coming, despite previous police and internal inquiries…

How to Avoid a Murdoch-ian Disaster in Your Business

You don’t have to have an empire the size of News Corp. A disaster like the phone hacking scandal can strike anyone at any time. Unless you come prepared.

If you employ people in your business; whether that is in-house or by means of outsourcing certain business tasks, you must practice absolute transparency to avoid potential lawsuits.

Here are ways to do this in style.

• Create a mission statement and make it the foundation of doing business
• Have everyone sing to the same tune, try and simplify your business to make it understandable by all staff; what is your primary objective; how will clients be handled; who is responsible for XYZ; how will you handle complaints, etc.
• Prepare a MO (Modus Operandi) is by far the best way to detail your business across all departments: from marketing to sales to client management.

Any rule is useless unless it is somehow controlled and enforced. No one expects you to stand by and hassle your staff 24/7. In fact you want to give them credit for making independent decisions and acting from good judgement.

Having said this, you also want to have measures in place that review the processes on a regular basis.

Transparency Improves Performance

It has been observed by savvy businesses that increased transparency fosters improved performance. When your team knows what strings to pull and how they are more inclined to excel in their day-to-day operations.

The Most Important Part of Being Transparent

I can’t stress enough how important it is to actually have systems in place that monitor your team’s performance and actions. This is where junior and senior management can play their best game.

The secret to playing the game at the top level lies in keeping control of who pulls the strings in your company. Trusting your staff is great, but ultimately keeping control is protecting you, the owner against nuclear disasters like the one News Corps is dealing with right now.

As reported by the website, the disruption of services cost Qantas some $21 million in lost revenue! A massive loss in anyone’s book if you ask me. And while no one would ever expect an ash cloud disruption of the magnitude we just experienced in Australia it is clear that these things do happen – and for that we ought to be covered with the right insurance policy.

Do You Have Sufficient Cover?

How does your business insurance policy stack up against sudden, unexpected disruptions? Do you have ample cover, or have you neglected this side of your business in favour of other, more pressing financial matters?

Don’t Wait Until It’s too Late…

The statistics never lie and the following high percentage of under-insured SMEs in Australia should be enough reasons for you to be concerned.

“The Australian Bureau of Statistics and the Insurance Council of Australia estimate that 67% of small businesses have no business interruption insurance or are underinsured.”
− source CIA Insurance

Thinking that “she” be right” is asking for serious trouble down the road.

GM of Vero Insurance’s SME Products, Rob Walters, tells how approximately “70 per cent of small businesses that are not insured or underinsured and suffer from a financial loss fail within a year.”

Statistics have proven that most SMEs underestimate the serious consequences of a business interruption. Often to the cost of failure.

How to Take Out the Right Cover?

Taking out the right cover is essential to avoid potential misunderstandings when trying to make a claim for something you are not covered for. The best way to do this is by using a qualified insurance broker. They can help you design a comprehensive risk management plan suited to your circumstances and your business.

Brokers have adequate knowledge of policies that are not known or available to the general public. A broker can custom-design a cost-effective policy cover for you and your business.

Don’t delay getting adequate cover for your business, because failing to do so can cost you and your family your livelihood. To learn more about business insurance and the various types available download this SME Insurance Whitepaper for free.

It may seem a simple concept, and it is, but don’t underestimate the journey that it takes to strike gold. Listening to customers and learning from them can pay big dividends.

As we saw with today’s announcements, Apple is renowned for thinking outside the square and developing products that are not traditional. A big part of their success comes from listening to their customers and responding to market demands.

Initially when Apple launched the iPhone they believed that so-called web applications were the way to go. After the launch, it became evident from the large number of developers writing applications in native iPhone code, that this is what their customers wanted. So Apple changed their mindset and allowed developers to write native apps. In fact, they saw an even bigger opportunity and opened the Apple App Store.

By September 2008, three months after the introduction of the App Store, users had downloaded 100 million native apps. There have since been a number of versions of the iPhone driven by consumer demand, and apps have made it a goldmine for Apple.

Apple has shown that you can make mistakes, but if you learn from them and constantly work at being relevant to your customers there can be a pot of gold at the end of the rainbow.

Are you listening to your customers?

Whatever went down behind closed doors is not a good advert to build trust between the public and the law. Or for that matter, the public and the Government.

People want answers and they want the truth.

But, if we have learned anything from this latest saga, it’s that an ‘open’ decision making policy might not be the best thing for your business. Why? Let’s discuss some of the more obvious (and not so obvious points).

What is Open Decision Making?

The basis of open decision making is simple:

• The first step is to collect input from a large number of people
• Step two is to facilitate agreement between all parties
• The third step is the announcement of the decision

In short, ODM is a group decision.

Many business owners believe this strategy to be counter-productive and to a large extent I have to agree, and you might want to consider a few points before you employ an open decision making policy in your company.

# 1 – Too Many Cooks Can Spoil the Broth

In business sometimes less is more. When you have to wait for a collective decision within a group, time and money can quickly become an issue. Whenever opinions divide – and they always do in a group environment, things take a longer to finalise. If you own a small business this reason alone could make or break your survival.

# 2 – Authority Could be Tarnished

People generally want and need leadership. Even if they think otherwise. Most people will talk around in circles if given the chance. If you employ an open decision making policy in your business it could easily invite trouble. If you do, make sure you establish clear boundaries and rules as to how the policy will be executed.

# 3 – Reconsideration Requests

Once the group makes a decision you should never reconsider, unless important new information becomes available. Despite your best intentions you might be pressured to reconsider because someone didn’t agree. People are funny that way: they sometimes say one thing and do another.

Unless you can impose strict guidelines and stick by them you should ask for opinions when warranted – but ultimately make the decision yourself.

What do you think?

A good example is Insurance Brokers.

It costs about $300 a year to send out a renewal, handle the paperwork, manage claims and answer phone queries. So you would think that dumping anyone who generates less than $500 would be a no brainer – right.

Wrong. Most brokers hate to part with clients.

There are solutions such as direct links to underwriters and claims services but the lesson is to work out which product lines or parts of your business generate the most profit and focus your energy there.

Although there are many important aspects to running a business I’ve concluded that cash flow is the lifeline of every successful business. Without adequate positive cash flow, even the busiest business can find itself in bankruptcy.

Cash flow is nothing more than the money coming into your business and then going out of it again. If you have more money coming in than is going out, you’re in positive cash flow. However, if you have more money going out (to pay for stock, administration or salaries) than you have coming in, you have negative cash flow.

Far too many business owners are lenient on their debtors, even though they struggle to find enough cash to pay their everyday expenses. Others offer payment terms that often extend to 30 days from the invoice date. This could potentially mean your business is going without that vital cash flow for up to two months from the date of the original sale.

While there might be plenty of sales recorded for that month, how many of those debtors actually pay their invoices on time?

Consider what happens if your creditors demand payment on a seven-day basis. If your own accounts receivable aren’t due to be paid for another 30 days, your business is going to be short when it comes time to pay your own expenses.

So my message to clients is: tighten up on accounts receivable policies and invoice payable deadlines. It will improve your cash flow enormously.

Happy New Year

If you run a small business, do yourself a favour and jump on the worldwide phenomena of outsourcing.

Let’s take my example. I had permanent employees, a permanent office location, desks, photocopiers, parking spaces and so on. Every single one of these essential business features cost my business money, and a lot of it!

One day I decided I wanted a change. I realised that most of my business needs could be serviced by outsourcing. No more rent, holiday pay for employees, new chairs, desks or even photocopying paper. A little research and I discovered Elance.com, Guru.com, Freelance.com and several other outsourcing sites.

You post your ‘job’ with minimum and maximum payment parameters. The providers then ‘bid’ for you job, and based on their information and payment request you make your decision.

At present, I have a virtual secretary, team of computer experts, graphic designers and writers who are paid for the exact work that they do. Each provider takes care of their own business costs – connection to the Internet, time, electricity and all I am required to pay is the amount agreed on job completion.

Hint:

1. If possible hire locally. It’s difficult to connect to different time zones and cultural understandings, particularly when hiring writers.
2. And check references, especially for big jobs. I like to phone referees. If a potential provider can’t provide a referee then I’m not going to waste my time hiring them

Employees at Disneyland describe the working conditions as being ‘brutal’ and say that management is solely motivated by profit alone. The overall ranking for the “happiest place on Earth” was billed 41st in the career survey. Disneyland is an employer of more than 100,000 people around the world.

Google topped the list as being the most desirable place to work, while the Army made it to the number 11 position. It seems that the military offers plenty of opportunity for employees to achieve job satisfaction and happiness in their roles. The challenges of serving the country are obviously balanced by a feeling of having a meaningful impact on the world. Employees also made it clear that they enjoyed a high level of camaraderie with other staff members. They are also given plenty of opportunity to increase skills and continue further learning.

Considering that Google topped the list for being the best place to work in the US, Microsoft only ranked at 39. The management at Google has long made it clear that a happy work environment makes for happy employees. When workers are content, they’re often far more productive. They also tend to have more loyalty to the company and show a reluctance to risk their position.

How do you rate?

For some entrepreneurs, such as Aimee Marks, the path to success has been through a university course. Despite getting the idea for her biodegradable tampon company, T.O.M Organic, at school, Marks decided a university course would develop her product and company in a more thorough manner with a secure network of mentors to support her.

“The course taught me the fundamentals of launching and growing a business, and helped me avoid mistakes,” she says. “But ultimately entrepreneurship is about passion. If you are not really driven by an idea, no course will turn you into an entrepreneur.”
And many would agree, there are countless stories of successful entrepreneurs who have turned a unique idea into a thriving business through personal dedication, without the benefit of a university course.

One such team are nephew and uncle, Sean Condon and Tom O’Dowd, who are cashing in on the current Power Band craze. Thought to improve balance, strength and stability, the band has no medical foundation but many are convinced of its bohemian effects providing an annual turnover of more than a million dollars.

Condon basically fell across the band during a paddleboard lesson in Bali, the instructor telling him of its benefits. Recognising potential he convinced his uncle to join him in buying the Australasian importing rights.

As with many entrepreneurs, Condon and O’Dowd treat their business as a job and work hard to promote the band. A carpenter by trade, O’Dowd does not profess to understand the reasons behind the power of the band but saw the potential and ran with it.

Perhaps the answer is that it depends on the entrepreneur.