Recently I started reading Rework by Jason Fried and David Heinemeier Hasson and if first impressions are anything to go by, this book is going to be great. Amazon describes it as “a different kind of business book – one that explores a new reality”. One of the first (short, sharp) chapters is called “Planning is guessing” and I couldn’t agree more. It starts off with “Unless you’re a fortune-teller, long-term business planning is a fantasy”. The last couple of months have taught me the truth behind this statement and the danger of ignoring it.
Making business decisions based on a guess is an extremely dangerous strategy. This is doubly pertinent in a small business where cash is your life blood. Our company has been guilty of this on a number of occasions and by not reviewing these decisions on a consistent basis, we have found ourselves in a compromised position more than once.
We set a sales forecast in February of 2012 based on our best estimation (guess!) of sales grow in all of our markets. At the same time a budget was created based around this sales forecast, including some fairly aggressive spending on sales and marketing. As the story goes; the year started well with the sales forecast exceeded for the first 8 months, but there was no plan in place if things didn’t go according to script and they didn’t. November hit and so did the handbrake on sales. We were well below forecast and cashflow started becoming tight.
January has been an interesting month so far but on the positive side, this situation has forced us to take a hard look at our business and make some changes that will improve our company moving forward. The lesson we have taken from this situation is to continue guessing in the future, but to constantly reassess those guesses and adapt as things change. The main advantage we (small businesses) have over our behemoth competitors is our ability to be agile. Use this advantage to your benefit not only from a product development perspective, but also to improve your company.
Prioritizing tasks on your ‘to do’ list can often be a daunting job in itself, especially when you are trying to keep a whole lot of different people happy. Previously I have discussed focusing on just 3 tasks at a time in my article Make Prioritizing Work Tasks Simple. Another simple way of prioritizing your ‘to do’ list is to put a deadline date (or time) next to each task.
I re-write my ‘to do’ list for the next day each evening before I leave the office. A day can be a long time when working in a small business, situations can transform quickly and the urgency or relevancy of tasks can change like the wind. This is why I find re-writing my ‘to do’ list each day gives me a chance to reassess each task. On top of marking my most dreaded task to do first thing the next morning (discussed in First Job Of The Day, Hard Job Of The Day), I have recently started jotting a deadline date down for each task. What is the latest date each task has to be done by?
You may have a rolling ‘to do’ list or you may revise it more or less frequently than I do, but regardless of how you manage your tasks, without setting deadlines it is just an intimidating lump of work that has to be done. All it takes is a couple of minutes to set your deadlines and your priorities work themselves out. Next time you feel intimidated by your workload, get rid of that overwhelmed feeling by putting setting deadlines for all your tasks and just get stuck in!
No unfortunately I didn’t get to pick the brain of Neville Isdell, the former CEO of Coca-Cola, but I did read his book Inside Coca-Cola recently. It was pretty good, not great, but definitely interesting to get an insight into the ultimate global brand.
Whenever I read a biography or business related book, my goal is always to find at least one takeaway message. Anything that helps expand my knowledge, opinion or perspective on or about business. From some books I end up with a list but from Neville and Coca-Cola I learnt one key lesson. It is very simple and makes perfect sense but I barely ever hear it discussed when reading or conversing about business.
It essentially stems from Neville’s experience during his early days working for Coca-Cola in Zambia in the 60’s. Back then the distribution networks for Coca-Cola in Africa were rather primitive by today’s standards. Cases of Coca-Cola were paddled up a river by boat to be sold at stalls in villages. It may sound inefficient but it worked and secret as to why is very simple;
“Everyone along the way, from start to finish, makes a profit”.
I know that in real business life, especially as a small business, it is never that simple with everyone along the way always after a bigger piece of the pie. But it’s a great notion to keep in the back of your mind when building a business that will be sustainable in the long term.