The confetti has fallen, the ball has dropped, and the champagne has been popped -- 2013 is officially over, and 2014 is underway. For management in manufacturing and other industries, that means doing a post-mortem on their businesses by looking back at what went right and what went wrong in the year gone by. Business owner and author Bill McBean offers his advice on what you can do, starting now, to create success for your company this year.
Bill McBean's new book, The Facts of Business Life, provides a great guide for any business owner or manager in manufacturing or any other industry. As the title suggests, the book lays out seven of the most critical facts, which McBean considers foundational truths, for successful business owners to use to their advantage every day.
In his book, The Facts of Business Life, author Bill McBean explains why it is much more productive to look ahead at what needs to be done in the year to come.
McBean suggests breaking down your 2014 planning into what you need to do internally -- with processes, employees, yourself, etc. -- and what you need to do externally -- with customers, marketing campaigns, and so on. Below he provides a few tips:
Evaluate your leadership. Being a great leader begins with a self-analysis of your leadership ability. Next, you have to look carefully at what's working for your company and what isn't. Start with a post-mortem of 2013. Did you supply the business with what it needed to be successful -- things like the right equipment, your focus and time, required capital, assigning responsibility and expectations, and so on? Did you have the right people in the right chairs? Are employees being paid based on what you want them to accomplish and expect from them? Did you let any bad habits slide that need to be addressed? Then, look ahead: What should you do differently this year?
"Without effective leadership, your employees have no idea what is important, what to manage, or what success and failure look like," McBean says. "In order to have effective employees, your business first has to have effective leadership, and this starts with the owner."
"In order to have effective employees, your business first has to have effective leadership," says McBean.
Do a top-to-bottom walk-through of your systems and procedures. In essence, systems and procedures (processes) actually operate your business, though many managers misunderstand this simple concept. Examine which processes are working, which need to be improved, and which processes are outdated and exist only because "it's the way it's always been done." Your systems and procedures must be able to keep up with rapid changes. Or maybe your business has fallen into bad habits -- for example, overlooking employees who don't perform as expected, or are continually negative and affect other employees' attitudes. In particular, look for inconsistencies in how employees handle tasks, especially those that directly impact customers and those that affect the data you use to make decisions about the business. These two important areas usually get overlooked.
"Great procedures and processes need controls, and these controls in turn create great results and skilled employees. In 2014, rededicate your company to upholding important processes, and your understanding that processes operate your business -- and employees operate the processes."
Kick off a cost-cutting, gross-profit-building mission. This is a powerful weapon for management. Look for ways to increase gross profit and cut costs as they have a dramatic positive effect on profits and cash flow. For example, look for easy "to bolt on" gross profit opportunities, and get creative when looking at your costs.
"Take a good look at your books. And know that sometimes you don't have to make cuts; you simply need to renegotiate vendor contracts," notes McBean. "For example, maybe you can save money on shipping by renegotiating rates with your shipping company. Or get a discount in purchase for early payment. Ask yourself: What expensive mistakes did we make last year? How can we avoid them this year? And what can we do to increase bottom line profits and increase cash flow?
Applying his business expertise, Bill McBean turned his company around, increased sales revenue fivefold, and raised the employee count from 70 to almost 300.
"I'm not recommending knee-jerk reactions like massive layoffs or switching to inferior-quality materials," he clarifies. "Don't cut out the wrong things, but do look for smart, well-thought-out ways to save money and start building up your cash cushion and profits."
Re-engage employees. In this economy, you need employees who care about your operation as much as you do. And that's what you get with engaged employees. "Engaged employees are energized," says McBean. "They handle problems on their own and actively look for ways to improve the business.
"So how do you get engaged employees? Show them you care. Sometimes it's as simple as saying 'thank you' for a job well done either verbally or with a handwritten note. Or you might allow them to take a paid afternoon off and give them movie passes. One thing that worked well for me in my businesses is supporting the activities my employees' kids were involved in. Also, make sure your employees have what they need to stay engaged. For example, eliminate the frustrations in their job, make sure they have the latest safety equipment, and train employees to know how to handle emergencies or workplace accidents. It's these simple things that all add up to developing an engaged staff -- who want to work for you and are proud to do so."
Set some realistic, specific goals for the year ahead. Then, dial up the "aggression factor" just a little bit more. In other words, aim high but be specific. If your goals aren't measurable, you won't be able to gauge your progress and eventually you'll stop pursuing them. Setting realistic goals, putting a plan in place, and routinely checking in with employees to gauge their progress -- because what gets measured gets done! -- is the best way to be successful.
Steve Forbes and Bill McBean
"And don't be lulled into complacency or let the continued talk of doom and gloom handcuff you," says McBean. "Successful managers know they have to fight not only to win market share but to retain it as well. You have to constantly be setting and reaching goals to keep your business moving forward. If you take your focus off of improving your business, competitors will step in and take what you have worked so hard for. It's just the law of the marketplace jungle."
Boost your product/service offerings. The products and services you offer are the core of your business. "Think about what you can do to squeeze out another product or service offering with what you already have in place," suggests McBean. "Always be looking to make new and better offerings to your customers. Doing so provides added value for your customer and for you. A true win-win."
Revamp your marketing campaign. Think about who your customers are. Are you marketing to them in a way that makes sense? Does a huge social media campaign really make sense for your company, or are you tweeting fruitlessly into cyberspace just because everyone else is doing it?
"It takes marketing to bring customers in and it takes marketing to keep them," points out McBean. "Many companies see marketing as an expense, but it's actually an investment and deserves your focused attention."
"In 2014, you know your best competitors will work to become better. You know your customers will demand more. You know you'll have to work smarter and harder every day to improve your bottom line," says McBean.
Find new ways to impress loyal customers. In business, few things are as important as your customer base. That's why it's essential that you find ways to protect yours by developing very loyal customers. Of course, the first step is offering great products and services and delivering those products and services via a very helpful, engaged staff.
"To go a step further, consider what would keep customers continually coming to your business," says McBean. "Remember, habits are hard to break. The more customers come to your business, the stronger relationship they create with it and your employees, and the more comfortable they feel. Find the answers to this and you'll quickly find your sales and profits are increasing regardless of the market."
Get knowledgeable about economic/tax changes and how they'll affect you. The slow-to-recover economy and the fiscal cliff debacle have taught us the importance of staying one step ahead when it comes to the economy and how it's going to affect your business
"There's no reason 2014 can't be the best year yet for your business," says McBean. "But in order for that to happen, you have to look ahead. You have to think about where you need to improve this year and what challenges might pop up to slow your progress. By taking the time right now to plan for the year ahead, you're making big opportunities possible for your business."
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