Smooth Sailing in Small Business
Tags: Dashboard   KPI   Accounting   Tips   Reporting   ERP  
8/08/2012 12:00 AM

By Fred Garside

Recently, I have become involved in a bit of a review and planning exercise with my local sailing club. All the directors involved are well meaning, but gee… talk about trying to herd cats! Everyone has a separate opinion about the same thing. Funnily enough, most agree on the general direction of the club and the main areas that need to be improved, however the devil is in the detail. It reminds me of the 'People’s Front of Judea' (for those Monty Python fans) – starts out with the best of intentions, but quickly gets side tracked by others getting lost in the minute. So much so that the exercise becomes ineffectual at best, or frustrating and farcical at worst. Still, it made me laugh.

Luckily, a small business is a bit easier to manage inasmuch as the executive of your company is you and your business partner, if you have one. Like your business, we identified that if we at the club were to get anywhere, we needed strong leadership and/or outside help. My preference is for both, however in the case of the sailing club we settled on outside help.

We were lucky at the club as one of the members is a business coach who arranged a facilitated session to focus our efforts. The key process centred on the high level issues first, and to then set short, medium and longer term goals.

So what did we do (besides have another beer)?

Do some financial navel gazing

First up, we needed to understand the financial situation at the club, how it is trending – we are after hard facts... don't rely on gut feel.

  • Have you got a budget? That's the first thing we were after, and should be the starting point in business as well. Show when the money is coming in and when it is forecast to go out.

  • Departmentalise – we tried to break down the different key areas of the club and concentrate on them, eg. bar, food services, club racing, regattas, clubhouse, communications. In a small business, the areas might be sales, service, support, admin and so on.

We identified key business measurements (KPIs), such as number of members rather than membership income. Also number of boats racing in a series. If both those numbers go up, the 'dollars' look after themselves. Unless your business is a yacht club you may decide on other indicators for your business, such as service hours, billable vs actual hours available. Alternately, as one of my photocopier clients does, track the number of copies billed each month (or your business' key metric) and compare like period year on year: so long as they go up, the company is in good shape.

Quick wins to set-up for longer term success

Next, we looked for some quick, easy wins – some smaller items we can succeed in, in the short term that will build confidence and set us up for tackling the bigger jobs.

  • We realised that building club membership will take time, so in the short term we focused on getting more existing members to use the club’s facilities and get back on the water for racing.

    Short term benefit: More dollars for the club in more bar turnover (yes, we will have another beer thanks) and more boats racing again (remember, a KPI), hence more race fees = $$$.
  • We needed to raise funds to cover maintenance and replacement costs around the club. We could increase beer prices (I voted that one down) or membership fees (makes it harder to keep existing members), or look for sponsorship or advertising dollars for special events or publications.

    Short Term benefit: More dollars for the club to offset repairs and maintenance for club facilities, such as start and committee boat or club tender. Advertising to cover cost of club publications such as blue book, newsletter and website

In the non-sailing business world increasing revenue may mean increasing sales by hiring more staff with a 6-12 month + break even at best and increased fixed wages costs,or in the short term let’s up-sell to existing clients add-on services, or get those billable hours up from the service department, or maybe just increase average sales margins by 1 per cent, or halve your lost or unaccounted for stock.

So what were the lessons learnt?

Firstly, you need to be able to measure the performance of your business easily and instantly. You should have the data at your fingertips, and monitor it regularly. Luckily Jim2 has a number pf tools to analyse this data 'live' as it happens. Through live lists, reports and Jim2 Dashboard you have the ability to set, analyse and measure your business KPI’s.

Secondly, don’t hesitate to get outside help. A business advisor or business coach can provide direction and help you manage the process. Also for existing Jim2 users, it makes sense to have a Happen Business consultant review your Jim2 setup and provide a site review – we can watch how you're using the software, and make sure you're using all the features available and getting the very best out of your investment in Jim2.

Meanwhile, I am back at the sailing club on Monday night to herding cats… beating into a stiff wind and battening down the hatches. Then hopefully 'splicing the mainbrace' with a couple of ales afterward – fair winds and clear skies to all.

About Fred

Fred is a Business Manager at Happen Business and if he had any sense he would sell his boat.

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