Making your business lean and fit to prosper

Ensuring that your business is operating at the lowest possible cost but has the goods and services that will help it prosper is important at any time.

In today's tough economic climate it's more important than ever to assess if your business is operating as well as it should.

Fred Stewart, professional company doctor and author of Business Wise – A practical guide to success in Business, says that while businesses cannot control the economic winds they can certainly adjust their sails.

Fred has developed a SME survival checklist:

Reassess your break even figure
Add up all your yearly operating expenses such as accounting, legal fees, stationery, vehicles and wages so you can see what level of sales you need to break even.

Ensure your suppliers are competitive
Check you are getting the best deal for the raw materials and services you use. Often it's easy to stay with those you know, but you should test whether they are competitive.

Make sure your credit control systems are tight
Don't give credit until a customer has been approved by a credit checking process and don't let debtors be more than a month overdue without an agreed repayment plan. Remember a sale is not a sale until the money is in the bank.

Establish a preventative maintenance plan
Make sure any tools you use for your business, machinery, vehicles, computer equipment or software are regularly serviced or updated so you avoid expensive repairs and costly downtime.

Improve your cashflow
Reduce your inventory to the minimum working level and plan so you avoid purchases near the end of the month.

Take a birds-eye view of your business
Consider if your business is running as efficiently as it could. Seek suggestions and make sure staff are part of any improvements or changes you implement. If you have your mind set for continuous improvement it's amazing what you can achieve.

Provide great service and increase you marketing activity
Providing good, professional and cheerful customer service goes a long way to ensuring you are successful. And while it's tempting to cut back on marketing activity, remember you need to create demand. If you think you can't sell more, you won't.

Don't be a risk-taker
Do a careful analysis before you make a decision rather than simply reacting under pressure or on instinct. You may still take some risks but ideally they'll be for good and profitable reasons.

Finally, Fred says optimism, honesty and integrity are sought after qualities by managers, staff, colleagues, clients and customers. Support and encourage one another and stay positive because there are still opportunities out there for your business.

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