In recognition of the small-practice physician's dual role as care provider and business owner, PhysBizTech gathered some expert assistance from Bill McBean, a successful automotive retailer who has applied his business concepts and knowledge to ventures in other industries.
Author of the new book The Facts of Business Life: What Every Successful Business Owner Knows That You Don’t, McBean cautions that sometimes the business world pauses to catch its breath in December. “This may or may not be true in your industry or company. But either way, you owe it to yourself, your customers, your employees, and your future to tear yourself away from the daily grind long enough to do some end-of-the-year or early-next-year reflection and forward planning,” he explained.
Typically, small business owners have trouble seeing above the action and the dust it creates. But maintaining a cool and measured perspective on where you are, where you’re headed, and — most important — what you need to do to get there is crucial to next year’s success, according to McBean.
With future planning in mind, McBean shared eight specific things you can do, starting now, to set up your business for success in 2013 and beyond.
1) Hold a 2012 post-mortem. Start by analyzing whether you’ve been an effective leader. A skill every great leader has is the ability to self-analyze.
“Ask yourself: Did your business have a successful year? What did it do well? What could it have done better? Where are the future opportunities that will grow your business? What are the threats to your company’s success, or what is holding your business back?" advised McBean. "These are serious questions that demand serious answers. And once answered, then it’s up to you to define the leadership skills needed to move your business from where it is today to where you want it to be tomorrow."
However, he added a note of caution: "Before you can lead a business forward, you have to define where it is today, evaluate your personal strengths and those of your business, and compare those evaluations to those of your competitors. This self-evaluation is an important part of being a successful leader. Because at the end of the day, if your business is equal to those of your competitors, it’s the owner’s skill that makes the difference between one business being successful, and another being below average.”
2) Do a top-to-bottom walk-through of your systems and procedures. Examine what is working and what isn’t. You may find that a system that once worked well no longer does (because the marketplace has changed, your competitors have changed tactics and strategies, or your customers’ needs have shifted) or that your business has fallen into bad habits that hinder success. In particular, look for inconsistencies in how employees handle tasks, especially those that directly impact customers and those who handle the data you use to make decisions about the business. This allows you to catch problems before they develop into crises.
“It may not be politically correct to say so, but if you’re not controlling your procedures and processes, you don’t really ‘own’ your business,” noted McBean. “You’re just a spectator watching others play with your money. Great procedures and processes need controls, and [those] controls in turn create great results and skilled employees. The key to understanding the importance of processes is to understand the concept that processes operate your business — and employees operate the processes.”
3) Pinpoint your best customers. Give them a heartfelt end-of-the-year thank you. McBean insists that protecting your company’s assets is job one. Those assets are not just monetary — far from it. Customers are some of the most important. (After all, without them, no one gets paid.) What’s more, all customers are not created equal. Some are more profitable than others, and they’re not always who you think they are.
“Once you’ve identified your VIPs, create ways to enrich the relationship and continually create added value for them,” suggested McBean. “Obviously, saying thank you doesn’t hurt, no matter how often they hear it. No one likes to be taken for granted. A call or letter from you will show them that you don’t. It’s amazing the ROI you’ll get from such a simple action.
“The bottom line for all owners is this,” he added. “Both the gross profit and net profit you make is actually your competitor’s opportunity. Just as your opportunity is their customers and the gross profits they generate — they are worth attracting and worth fighting for.”
4) Don’t neglect your other big “asset” -- employees. If possible, meet with each one individually. Even if it’s not a “formal” performance review, a quick end-of-year conversation one-on-one can help you shore up relationships, challenge low performers to do better, and reward and re-recruit your highest performers. (Rewards don’t have to come in the form of a big end-of-year bonus. You might offer an extra couple of days off, a gym membership, or a gift card for a spa treatment as a thank-you for a job well done.)
5) Review your marketing campaign. Ask yourself some specific questions: Are you marketing aggressively enough to attack the market, or are you trying to coast by, letting your competitors stir up the market? Are you targeting the best possible markets and customers? Would the money you’re pouring into ad placement be better spent on direct mail? 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,” McBean pointed out. “Many companies see marketing as an expense but it’s actually an investment and deserves your focused attention. There are two key points often neglected when businesspeople think of marketing. The first key is marketing without measurement is being reckless with your money. Results matter and have to be measured. In other words, create an objective and measure results against it. Secondly, your best market opportunity may in fact be your own customer base.”
6) Meet with your accountant, your attorney and other key advisors. These specialists almost certainly know things you don’t. Their perspective can be extremely valuable to a business owner who's consumed with day-to-day operations (and, as a result, is out of touch with changes in the external business environment). Planning for a future you can’t predict is part of a business owner’s job, and these advisors can help you gather the information needed to get the “lay of the land” and make smart decisions.
“Ask each of them, ‘What are the three most important things I need to know right now?’” suggested McBean. “In fact, you might pose this question in advance of the meeting so they will have time to think about it and won’t just give you an off-the-cuff answer. Then you can factor their feedback into your plans for the upcoming year and beyond."
He added, “Successful businesspeople have a good grasp of business in general. By regularly touching base with important members of your larger network, you are educating yourself on the various aspects of the business world beyond just your industry.”
7) Kick off a cost-cutting, gross-profit-building mission. No one knows what the future holds. But it’s a safe bet it won’t be “smooth sailing.” More likely “choppy waters filled with sharks and the occasional iceberg.” When tough times and financial uncertainty loom, it’s always a good idea to have some cash on hand. And, one of the best ways to create cash is to find added gross profit and at the same time cut some expenses. Ask yourself: What expensive mistakes did we make last year? How can we avoid them next year? And what can we do to build up the cash cushion that might help us get through any market corrections or uncertainty?
“Think about Ford Motor Company," McBean noted. "Years before the 2008/2009 credit crunch, they began to restructure their debt and build up their cash reserves. So when their competitors needed bailouts, they didn’t. That’s what smart planning can do for you.”
8) Set some realistic goals for next year. Then, dial up the “aggression factor” just a little bit more. In other words, aim high. Don’t be lulled into complacency or let the continued talk of doom and gloom handcuff you. You might be okay now, but that doesn’t mean you will be tomorrow and you have to keep pushing the market. Every company has competitors, and if it doesn’t and it’s successful, it soon will. Successful owners know they have to fight not only to win market share but to retain it as well, said McBean.
“If you take your focus off the market, competitors will step in and take what you have worked so hard for," he explained. "It’s just the law of the market place jungle.”
This last point is perhaps the heart and soul of McBean’s philosophy. To succeed and to stay successful, companies must be “on their game” 24/7. And that mindset begins and ends with the business owner.
“Being an owner has its ups and downs, just like most things in life,” observed McBean. “But it can be an immensely rewarding career, especially if you do a yearly check-up and prepare yourself and your business by building on the success of 2012 and prepare yourself and your business for 2013 and beyond.”