Critical Management Issues for Small Business

Today, most CEOs and business owners running a small business are at an inflection point. Whether to accelerate the growth of the business organically, step up and make an acquisition to grow, or to hunker down and make some changes to the business while cutting costs. Here is a fact that has been proven over and over again -Businesses are either growing or they are dying.

Here are 5 critical issues that you need to address now to ensure that your business is growing and making the risk of owning a business worth the risk, liability and opportunity cost of another career altogether.

At CEO Advisor, Inc., we put CEOs and business owners on a methodical track to grow their business to the next level with predictable and increased sales and profits. This is done over an initial 3-month period and is paramount to embracing the changes and disciplined needed to be successful.

The critical issues that must be dealt with on the path to accelerated growth and greater profits are:

Inadequate Funding. Most businesses are undercapitalized from the start, but more so than not, the business is undercapitalized due to the CEO or business owner’s lack of execution. These factors include, a) low gross profit margins due to pricing too low or too high cost of direct labor or materials resulting in no profits, b) lack of sales volume, sales goals and sales management, c) lack of marketing and marketing planning/execution, d) operating expenses are too high, and e) lack of good financial information and a lack of understanding of the financials by the CEO/owner to use them as valued tools.

Lack of Vision and Planning. This is the time of year to create a solid plan and forecast to ensure 2011 is a success. Plowing through the week on thirty tasks is not time well spent if you do not have a plan to execute on and to ensure accelerated growth and profits. If you do not have a monthly financial forecast that represents a) a sales plan and goals, b) gross profit targets, c) operating expense budget and d) net profit goals, then you are not on a path to growing your business to the next level.

Lack of Building Value and an Exit Strategy. If you knew that a large company was going to knock on your door tomorrow to come in and discuss buying your business for an attractive amount of money, would you run your business exactly how you run it today? Most business owners would honestly answer, “No.” This answer means that you are not building value (the greater goal and equalizer why most of you take on some much risk and liability to be a business owner in the first place). By doing certain things and having a clear sight on the end-game, you can both build tremendous value and increase profits. We advise our clients on these matters, and we can advise you on the steps to sell your business at the right time.

Marketing. As a CEO Advisor, I have met with many CEOs, presidents and business owners and a consistent theme is the overall lack of marketing and sales. Marketing is key to representing your business as a trusted company that prospects are aware of, feel good about buying from, that educates and provides consistent communications, and most importantly supports the sales team in generating both leads and customers. Marketing requires research, planning, budgeting, execution and tracking to ensure a return on investment.

Sales and Sales Management. This is the critical aspect of every business and where the game is won or lost. There are many variables to building and managing a successful sales team. We see this as a major inhibitor to successful businesses. With that, we help many business owners prepare for, hire, train, implement and manage salespeople and teams to ensure the growth of the business. Without all of the right steps in managing your sales effort, the probability for success is greatly diminished.

2 Responses to Critical Management Issues for Small Business

  1. Ron Tedwater on November 13, 2010 at 5:35 am

    Great work keep it coming

  2. Ron Tedwater on November 18, 2010 at 12:50 am

    Really nice post,thank you

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