It has been a great week of client meetings. I think it is very important for everyone to know these nine key points. I hope this is helpful to business owners to help recognize areas in an IT business to keep an eye on.
- Inadequate financial records. Keep track of how much money is on hand and how much is owed in order to understand the financial picture. Maintaining detailed books and an appropriate record of sales and business is necessary. Keep records current and detailed.
- Disregard for or misinterpretation financial records. Improper funding and failure to oversee debtors and creditors are examples of disregard or misinterpretation of records. Keep control of payables and receivables. A business could experience a profitable year and have solid accounts receivable on the books, but be cash poor due to lack of control. Watch the Balance Sheet regularly.
- Failure to control costs. Build an information system that tracks cost embedded in each business function or process to control costs. The system should track actual time expended so that labor costs can be controlled while providing incentives for employees. Having a proper Chart of Accounts (CoA) is important.
- Lack of internal control. Personally take the responsibility to create processes by putting controls in place to prevent inefficient use of resources.
- Poor sales and customer relations. Talk with your customers about their focus and interests. The extra effort to increase customer service and sales will set your company apart from competitors. Not increasing sales or creating a sales engine will not allow any company to grow.
- Insufficient working capital. Although some businesses might be able to survive for a short time with a small amount of capital, eventually the money runs out. Initial development of a business is crucial and should be supported with a financial cushion. Maintain a financial safety net.
- Failure to adequately train and develop employee relations. Create a team work environment that keeps staff motivated and happy. Employee involvement in the business, training and increased education promotes a feeling of ownership.
- Improper strategic planning. Create realistic but precise goals that include deadline, in a formalized strategic and operational business plan. Include employees and consult the business goals on a regular basis. Set the goals using the SMART criteria. Manage by Objective.
- Track key business matrixes. Business owners should have more control over factors that cause businesses to fail. By tracking key business matrixes, businesses can succeed regardless of economic conditions. Integrating business matrixes is a solid investment and should be part of the process as the business continues to grow. Know the IT Industry key metrics for a good performing business.
P.S. whenever you’re ready, here are 3 ways I can help you help grow and scale your IT & MSP business:
- Join our community of ConnectWise users and industry experts here: www.cwboss.com It’s the easiest way to plan ahead for growth, learn helpful tips and join weekly educational workshops.
- Learn how to be the #CWBOSS of your business by joining our weekly workshops here: https://bit.ly/2XmaM6O Every Thursday our CEO & President, Adam Bielanski, hosts a 30 minute workshop around making ConnectWise work for your business
- Work with me and my team privately: If you’d like to work directly with Adam and the team to actually get you out of the weeds and into your flow, schedule a 15 minute Triage call here: https://calendly.com/adambielanski/15min