Attention: You are now leaving a Wintrust Community Bank website.
Read articles about finances, saving and community news.
Access all the commercial banking resources your business needs to succeed.
by David Kiger
April 10, 2018
by David Kiger
April 10, 2018
Spring is a season of change: warmer temperatures, blooming flowers, and more outdoor activities. The concept of spring cleaning — tackling important projects to freshen up a home — can also apply to small businesses.
Entrepreneurs can engage in their own version, by taking the time to examine how the business is doing and see where improvements can be made.
Here are several areas that could be worth exploring.
Revisit the business plan
Since spring cleaning is (or should be) an annual effort, it can help for a small business owner to reflect on where things began. A business plan is a major part of an entrepreneurial effort’s creation. Even if the plan now seems out of date, there is value in seeing how the business has evolved, what is working and what isn’t.
A Forbes story by business solutions company Newtek says that small business owners often think “that just because their company is changed and adapted as necessary, their original business plan isn’t useful anymore.”
“In reality, you should just spend some time revisiting it once a year and updating it to keep pace with the rest of your company,” the story states. “Going back to the basic foundation you built your small business on will always be beneficial.”
Think from a customer’s perspective
This can be an interesting exercise for a small business owner, especially one who may not be front and center on an everyday basis. How to better improve the customer experience? Become a customer again. In a story for GoDaddy, Tom Rankin writes to “turn yourself into your own customer for a day.”
“Most of us are so used to looking at our businesses from behind the cash register that we’ve forgotten how things feel for our customers,” he says. “Regardless of your industry, map out your typical customer journey and actually take that trip yourself. Walk through the process of purchasing an item or signing up for a new subscription. You’ll inevitably find areas of potential friction or uncertainty that could damage sales and cost you money.”
Technology has made all of our jobs simpler in one way or another. Web applications that aim to save time or make work processes more efficient are plentiful. It’s smart to assess how these apps are affecting the business. As Alyssa Gregory puts it in a story for The Balance, “ … for every one productivity-enhancing app you use, I bet there is another one that is just not the right fit, but you keep using it because you’ve been using it for so long and you’re used to it.”
“This is why it is so important to — at least once a year — take stock of the apps and tools you are using in your small business and decide if they still meet your needs,” Gregory writes. “This is also a great time to consider if you have some gaps and find the right tools to fill them.”
Among the areas Gregory recommends digging into are tools that deal with managing contacts, accounting, expense tracking, social media and project management.
If a small business has yet to invest in some form of data protection, a spring-cleaning effort is a good time to start. Writing for USA Today, Steve Strauss notes that nearly two-thirds of cyber attacks target small businesses. He includes these sobering statistics from UPS Capital:
“Small businesses store not only their own critical data and information but also customer records (including possibly credit card, social security, and/or other numbers), vendor information, customer lists, passwords, and much, much more,” Strauss writes. “It is a lot to lose, should you ever lose it.”
Strauss’ recommendations are to get cybersecurity software on all computers and mobile devices, and to have backup systems in place: ”… Should the worst ever occur and you are attacked, you will have a remote system backup protecting you and allowing you to recover and not be one of the 60 percent to go out of business because of a cyber attack.”
It’s easy to get lost in the day-to-day details and stresses. As part of a spring evaluation, small business owners would do well to consider how their efforts are matching up to their ultimate goals. Newtek’s Forbes story includes the idea that a business owner’s expectations, ambitions or perceptions may have changed.
“It’s totally okay for your goals to change — but you have to be aware of that,” the story states. “If you determine that the overarching aspirations are the same, check in on your progress towards achieving them. What could you be doing more of? Are you gearing as many parts of your day — and your business practices — into moving in that direction, into feeding those goals?”
Financial analysis is a constant need in business. Cash flow is a crucial part of survival, so a deeper assessment may be warranted. In a story for Entrepreneur, Lisa Stevens of Wells Fargo writes, “As spring can be a great time for growth, take action to ensure you are both profitable and maintaining a healthy cash flow.”
“One best practice is to check your business cash flow every week,” she explains. “You may be profitable, but the profits may be stuck in accounts receivable. Focus on the timing of income and expenses to identify potential gaps and plan ahead to determine how much cash you’ll need to cover potential challenges.”
Stevens also suggests considering a business line of credit to “bridge any gaps” in cash flow.
“For instance,” she says, “when taxes are due, you may want to use a line of credit to help keep your cash flow constant and cover ongoing expenses, while paying down your tax debts.”
The inner workings of a small business may be ripe for improvements. An area that could be wise to target is the efficiency of meetings and the time and effort that they require by the owner, managers, and staff. The overall objective of a meeting is a good place to start. In a story for Forbes, Neal Hartman of the MIT Sloan School of Management advises making the objective clear to all involved.
“A meeting must have a specific and defined purpose,” he says. “Before you send that calendar invite, ask yourself: What do I seek to accomplish? Are you alerting people to a change in management or a shift in strategy? Are you seeking input from others on a problem facing the company? Are you looking to arrive at a decision on a particular matter? Standing meetings with vague purposes, such as ‘status updates,’ are rarely a good use of time.”