Members of the South West Chamber of Commerce got a big pat on the back at breakfast on Thursday when Matthew Snelleksz reminded us all of the number of things we put on the line to be in business.
“You deserve to work less, go home early, make your families happy and retire wealthy, because you have put everything on the line,” he told the assembled throng in the Loft on Boundary St. “You deserve a reward.”
“The problem is that many small businesses are broken,” he said.
The signs of a broken business are that the owner
- is working long hours,
- does not have enough money,
- cannot take holidays and
- cannot effectively delegate to staff.
He confessed that four years ago he was in that position, not taking the same advice he has given his accountancy clients over the last twenty years.
A life threatening experience in the open ocean off Fiji involving an empty scuba tank, a rope and a missing dive knife, jolted him into awareness and he decided to do something about it.
He not only turned his business around, he recorded the steps in a book called Breaking the Entrepreneurial Struggle, which he awarded to two lucky business operators in the room.
The primary focus of his turnaround strategy is that business owners need to focus on the essential items, instead of getting bogged down in the day to day detail of running a business.
This is a familiar message, think The four hour work week, Do what you love and other self-help business books that focus on getting back to the basics.
The difference is that Snellekz does not offer any magic bullets he simply points to ten logical steps that are the essential ones in fixing a business. “This is written by a small business owner, for small business owners about the reality of small business here in Australia,” he said.
The first three are the clincher. If you can’t get these right, in the right order, then you will never escape the gravitational pull of the Entrepreneurial Struggle.
- Grow sales
- Grow profit
- Grow cashflow
“The order is critical,” he told the chamber. He noted that growing cashflow without fixing profit just increases the speed at which you are losing money. Similarly, trying to cut costs or reduce overheads without increasing sales is a sure way to shrink your business.
He rates talking regularly to your top 20 customers, on site when you can, closing major deals and staying ahead of market trends as key roles for the owner or CEO of a business.
“If it is not critical to the business, delegate, outsource or offshore it. Do not do it yourself, you have a broken business to fix.”
Snelleksz’ emphasis on succession plans and retirement strategies is interesting, and consistent with other breakfast presentations. “If you don’t have milestone’s for getting out, you will keep going past your maximum effectiveness. Every business has a use by date, and if you do not refresh and renew it before then, it will begin to fail.”
There were a number of business consultants in the room, all focused on slightly different versions of the same approach. Struggling businesses have plenty of places to go for advice, but the bottom line is to increase the top line first.