Focus On The Letters
Want an acronym for success? FOF, which stands for "focus on the fundamentals." Business fundamentals are as old as when shells were currency.
If you focus on the following fundamentals, success will come and play in your backyard.
Financial Statements -
Become an expert at understanding your financial statements. Spend more time with the numbers that are below the sales line on your operating statement. This is essential!
Budgets
Yuck, right? But operating fundamentals work best with a track to run on. Creating budgets won't be hard - sticking to them will be. Get on track!
Cash Management
When business slows down, the first casualty is cash flow, not profits. You must be intimately familiar with your cash picture - don't delegate this!
Inventory
Inventory is a euphemism for cash. Find a way to convert into cash all inventory that isn't turning. If you aren't practicing Just-In-Time inventory management, do it now!
Vendors and Suppliers
If your sales volume is off, so is theirs. Ask them to help you manage inventory, maximize margins, lower freight costs and develop new ways to support and serve your customers. If a vendor isn't part of the solution, get rid of them!
Systems
These are the structured components in your operation, some of which may now be outdated and unproductive. Scrutinize employee schedules, delivery routes, opening hours, (your idea here). Nothing is sacred!
Customers
Categorize them from the most profitable As, to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs, and let the Ds learn the meaning of self-service. You might even have to fire a few customers!
Products
Same song, different verse: A-B-C-D. Stock the fast-turning As, keep many of the Bs handy, but only a few of the Cs. What about the Ds? Never let one spend the night under your roof unless a customer has paid for it!
Add Value
Find out what customers want instead of trying to get them to take what you need to sell. If you don't add value to your customers' operations you won't be successful in the 21st century marketplace.
Employees
Listen to your employees and let them help you find efficiencies and opportunities. Encourage creativity and entrepreneurial thinking. Invest in training. Share your plan and let them help you accomplish it. Cultivate producers and cut the dead wood!
Bankers
Don't be a stranger. Bankers can help you if they're armed with your information - positive or negative. But a banker without information is a scared banker, and no one ever got any help from a scared banker!
By focusing on these fundamentals, you'll significantly increase the possibility for success and have all the shells you need.
Write this on a rock... Focus on the fundamentals and success will come and play in your backyard.
Jim Blasingame is creator and host of the Small Business Advocate Show.
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