Readers of my blog and my many postings and threads on the discussion panels know that I am a retired accountant. What most don’t know is that rather than a regular pencil pushing tax return filing accountant I was instead a specialist in startups and turnarounds of small businesses. In my 30+ years of career I wrote business plans and got funding for some 22 startups and managed 10 successful turnarounds from bankruptcy or near to the brink. Although I enjoyed my career a great deal I feel that what I enjoyed the most and feel a great comfort in today Is the fact that I managed to create and/or save many jobs for hard working business owners and their employees. In the economy of today I fear that so much of that has come undone and there is so much to do to help struggling small businesses today and yet I am unable to work any longer at this profession.
With this thought in mind I felt that maybe I could help a little by lending some words of encouragement and advice to those of you that may be struggling to keep your business afloat. The successful turnaround of today’s economy depends on small businesses. America is very dependent on the small business person. Yes large industries can hire hundreds of people at a time but it is the small business that supports the needed ancillary services that big business needs and of course families and individuals rely on day to day. For every 1 job that a large business provides there is a need for 8 to 15 jobs outside of that industry that are within the small business arena. Store clerks, mechanics, health pros, food workers, teachers and the list goes on and on. If these small businesses don’t survive then the chain of need cannot grow and develop the way it should. The product that the big industry makes becomes more expensive to produce because there is no competition in the market for supplies and services downstream. The American economy is built on the principle of “SUPPLY AND DEMAND” and the pricing of any product or service is mandated by the costs of its raw materials and labor.
If you are a struggling small business owner the most important piece of advice I can give is to have control on your business with proper books and records. If the only way you can determine the success or failure of your business comes the day you get to the bank and find that you have nothing left then it is too late to help yourself. You should know your labor cost, which in most businesses is your largest expenditure. You should know your raw materials cost of your manufacturing and what you acquisition costs are for inventory of a retailer. You cannot imagine how many failing businesses I was called in to review for help only to find that the owner had no idea what his costs much less profit or loss was. Worse I found too many owners who had a great set of books prepared by a great bookkeeper or accountant and yet never opened them to see where the problem was. Business failure rarely happens overnight but can be fast once it gets rolling downhill.
Secondly an important control is a budget and goals. You must have a road map to where your business is going otherwise how will you know when it gets there? This road map comes from budgets for month to month control of expenses and set performance or sales goals to have something to strive towards and to use as a barometer of performance. Human nature requires that we all get pats on the back or “atta-boys” along the way so that we can feel good about our accomplishments. These rewards are hard to get from others so we have to learn how to get our hand over our shoulder and pat ourselves. If you know where your business is going and can gauge its progress, or lack thereof, you will know your being successful or what changes to your route needs to be affected.
Last but not least, and this is a hard one to accomplish and sometimes impossible to prove but I am a firm believer in ‘WHAT GOES AROUND…COMES AROUND”. If you do good for people then it will come back to you. Run your business in a moral and ethical way in which you cannot be challenged. Do as much for your employees and your customers as to make you invaluable to them and lastly be good to yourself.
The American economy has been on the ropes. Some believe that they can see a light at the end of the tunnel. I for one believe that it is there and is not a train coming towards us. I believe we have a government that is taking control and making every effort to effect change. Most of all I believe in America and its people and that is the most important thing to all of us. The market is consumer driven. When the people feel confident and start buying cars and durable goods again, when they start spending on non essential services again, when they take their savings out of the mattress and put it back into the banks then we will be back on firm ground again. So if you are running a small struggling business and are finding it hard to make it day to day do something to feel more in control, do something for other people to give them confidence. Keep fighting the good fight and if I can be of more specific help contact me. All I have to offer is words of experience and I ask for nothing in return because even though my days are not as good as they once were and my bank account is practically non-existent I am still paying back for all the good that I have received in life. YOU CAN TOO.
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