Change? It may be time.

“But we’ve always done it this way”. I have heard that phrase so many times when I analysis my clients’ procedures. We are all guilty and all do it in some part of our lives. We can’t help it. We are creatures of habit.

But when it comes to your business we have to be aware of that trap because we are so busy. I know it is easier to do something the way you know how than stop for a minute and really determine if it is the fastest, most efficient way. But does this help your business grow?

When is the last time you went over your processes to determine if you are being as effective as possible? Several times a company will outgrow the original process, but never make the changes because “it’s always been done this way”. In the end this costs the business big bucks. Image taking a task that usually takes 4 hours and restructuring it into 2 hours. Image taking a process and streamlining so only 2 people handle the paperwork instead of 5. The change may be a little rough, but it is temporary. The end result is worth it. You will save not only money, but time. And we all could use more time.

Do you know what your "nut" is?

I’m talking about your business overhead, not walnuts, pecans or peanuts. So many owners think they know by adding it up in their heads rather than looking at the Profit & Loss report. That’s like balancing your checking account mentally instead of recording your activity in the register that’s included with your checkbook. We all are guilty of the “virtual checkbook” at some point or another. But what happens is that you inevitably forget about a check or transaction you did and your bank balance is wrong. Same goes for your business. The figure in your head is off.

Knowing your monthly business expenses is very important. How do you know your break even point if you don’t know what your total expenses are?

Take the time to sit down with your bookkeeper and review the Profit & Loss report of your company. This will show you what your total expenses are per month. You can take a quarterly, bi-annual or annual average, depending on the nature of your business, to determine your monthly expenses.

If you are in the service industry this is the minimum number you should generate in sales per month. You will have made enough to pay the bills and make payroll, but that’s it.

If you sell products make sure you keep in mind that you need to take in account the cost of the product in addition to your monthly expenses.

Is all this making your head hurt and causing confusion? Join the club. Nine out of ten business owners have an idea of this information, but it’s usually not complete. By determining what your “nut” is you can begin to build a foundation for your business that isn’t made of toothpicks. You will be able to make adjustments for your business mid month instead of three months later.

Don’t be intimidated or overwhelmed to review your Profit & Loss. If you don’t know how to interpret the information rely on your bookkeeper or CPA. If they can’t explain to you in a way that you can grasp the information then get a new bookkeeper or CPA. These professionals should assist you in understanding the numbers, not talk over your head.

Let's Talk about the Recession

It's here and it's real. Don't let the media determine your mindset. Decide, today, that you want to grow your business. Decide that you aren't going to let the economy take you down. If your company needs to "zig" when you have always "zagged," make the change. Do what you need to do to keep your doors open, your employees employed and your company thriving. It is realistic to make this happen. Just think outside the box. Brainstorm with employees, friends or family. Hire a business coach if you can afford it. It might be that you can't afford not to hire one because of what a good coach can do for you (personal experience talking here). Also look over your Profit & Loss statements provided by your bookkeeper for areas of opportunity.

You can face the recession, make adjustments and survive and/or thrive. Or become a statistic. It's your decision. I vote for punching the recession right between the eyes and knocking it on its keister.