- Mind your cash flow.
Cash is king! Always know where every precious cent you earn goes. Watch your capital purchases. Will the item purchased generate enough cash flow to pay for itself? If yes, how long will that take? If the answers to said questions do not make “wise business sense” postpone the purchase.
- Follow a clear budget.
Budgets help maintain a clear path. This is true for your personal and business finances, both income and expenses. Many CEOs are not in touch with their budgets or have let them go. Be sure to evaluate and keep trach of both income and expenses on your budget. The excuse that you “don’t have the time” is complete nonsense. Make the time, this is important.
- Complete regular business and financial audits
Audits are important beyond just basic financial audits. Review your bank records, insurance policies, loans, contracts, utility services, and all other overhead costs. This may be time consuming but it only needs to be completed on a quarterly or annual basis and can directly affect your cash flow. Making sure you are receiving the best prices on the things your business needs every day to operate can directly affect your bottom line.
- Allowing inexperienced family members run key divisions of a growing business.
Growing a business is exciting. Many people will want to jump in and “help”. Great Aunt Marge may even put her two cents in. Telling you that cousin Albert is out of work and it’s a waste to see his 4 hard years and music theory degree go to waste. However, what place does he have helping grow your manufacturing company? Yes, it is great to be the family hero and give a guy a job but make sure he is qualified to work in the position. Maybe another less influential position can be found within the company to help Cousin Albert out while he looks for something in his field. Don’t get stuck in the “but he’s family” trap.
- Take the time to build a competent management team in times of growth.
Growth should be slow and steady. You’re building something you want to be prosperous in the long term, hopefully. Be mindful in hiring key individuals that can help you in this process. When funds are tight investigate the idea of developing an internship program to get things started. It will provide a fresh new perspective and give you insight into what the future generation can bring to your business. Many times interns can work their way into a management position and have been already groomed into your company philosophies at much lower salaries.