June 26, 2019

Business Management Simplified - From Startup to Setup

Carl Young

Carl Young
Former CFO ,Consultant, Business Coach, Trainer/CYoungConsulting LLC

Share This Post

A Simplified Guide for Startup Entrepreneurs & Non-Financial Professionals

Starting a business is a daunting task.  Most enter the process with little or no business experience.  They do possess a deep passion for a particular product or service but are lacking in the basics of getting the business going and positioning it for significant growth and success. 

These are some basics that will bridge this divide in business expertise and the desire to succeed. This article outlines some simple tools & techniques that will get you started on the journey to business success. I call these practices business management simplified to frame the contents and renders them ideally suited for non-financial professionals. 

 The essential takeaways are:

  • Understanding Business Financial Planning and the Business Plan
  • Conquer the Cornerstones of Business building & success:
    • Customers- Provide superior solutions
    • Costs-Control all aspects
    • Cash-Manage carefully
  • Master Business Finances

 Understanding Business Planning and the Business Plan

  • Think of business planning the same as taking a family vacation. You plan first then you budget funds required to accomplish the plan, First efforts are to determine where you plan to go and the activities and events you want to pursue at the destination.  Once determined you consider resources.  If resources are not enough to do all the things desired, you must adjust your vacation to fit funds available.  The same is true in business, plan first and then budget
  • Business Financial Planning  is as simple as looking at three interrelated components
    • Revenue-Expected from providing products and/or services
    • Expenses-Cost incurred to produce products and/or services
    • Surplus=Revenue-Expenses
    • For Example:
      • Revenue $10,000
      • (-)Expenses $8,000
      • (=)Surplus $2,000
    • One component cannot be changed without impacting another
    • This simple model is the basis for detailed budgeting of activities & events
  • The Business Plan consists of:
    • Summary-Your passionate overview
    • Overview of Company-What company is all about
    • Products & Services Offered
    • Marketing Plan-How you will interact with customers
    • Operating & Administrative Structure-LLC Partnership etc.
    • Financial Plan-Three year projection of Revenue, Expenses, Surplus derived from the Business Plan
    • Appendices-Resumes & References
  • The highlighted sections, Summary and Financial Plan are the main points of focus and the items that will be carefully scrutinized by prospective stakeholders.

 

Conquer the Three Cornerstones of Business Foundation & Success

  • Customer Service
    • It’s the Process-
      • 95% of product/service delivery is process. The remaining 5% is the actual product/service delivery
      • Providers focus on product and Customers focus on Process
      • Think like your Customers and focus on Process
    • o Seek Customers not Shoppers
      • Customers return over and over and recommend others. Consider their lifetime value
      • Shoppers are usually onetime only and do not recommend others
    • o Customer Focus Rules:
      • Find customer needs
      • Fit products & services to fill needs
      • Fill beyond customer expectations
      • Focus on long term relationships
    • Cost Controls
      • o Cost Categories & Points of Control
        • Personnel & Related Costs-Control at point of hire
        • Pre-determined/Allocated Costs-Control at start of event/activity
        • Controllable Costs-Control in real time
      • o 15% of all cost can be reduced without business impact
      • o All costs are controllable
      • o Focus on point of control as outlined above
    • Cash Management
      • Control carefully
      • Manage wisely
      • Consider cash impact in all decisions
      • Spend only when needed
      • Success is the ability to meet obligations when due
      • Maintain short cash to cash cycle (cash recoupment)

 Master Business Finances

  • Business & Personal Finances
    • o You are your business but your business is not you!
    • o Separate business from personal finances
    • o Pay expenses for a general business account
    • o Use a business credit card to track & manage expenses
    • o Pay yourself a salary if affordable
    • o Pay yourself yearend bonus based on success & profits

  Setting Fees-A Simplified Model

    • o Desired Annual Income $50,000
    • o Work hours per year 261
    • o Projected Daily Income $192
    • o Overhead per day ($5,000/Mon $230
    • o Daily Salary & Overhead $422
    • o Hourly rate @ 8 hours $52.75
    • o Add Profit @ 10% $5.27
    • o Computed Hourly Rate $58.02
    • o Test market adjust & change as needed

 

Feel free to contact me or request an interview via my Advisory Cloud Profile

Share This Post