I’m yet to meet a business leader who claims to have too much time on their hands. However, being busy isn’t necessarily being productive.
Investing time where it delivers the biggest returns is key to success in business, money and life. Avoid these classic mistakes by investing your time where it counts the most.
Mistake No 1: Neglecting the customer
With so many demands on your time, it can be easy to forget those who are ultimately paying for it all: your customers.
Soaring living costs make this an especially dangerous time to do so, as consumers increasingly shop around for cheaper alternatives and better value.
Look after customers by:
- Rewarding loyalty. Thank them with discounts or bonuses on their next purchase.
- Being flexible. Customers experiencing hardship may need more flexible payment terms. You keep money coming in, and they will remember which businesses did and didn’t support them in their time of need.
- Not gouging: Price-gouging prioritizes short-term profits over long-term relationships.
- Being honest: Explain the reasons for necessary price increases, product shortages and so on.
- Passing on savings: Pass on rather than pocket savings from easing supply bottlenecks and internal efficiencies.
Mistake No 2: Not expecting the unexpected
What’s the most common response to any kind of disaster? “I never thought it could happen to me.”
Disasters happen – natural, financial, medical, operational, reputational and more. Don’t stick your head in the sand. Ensure you have workable plans in place covering:
- Risk mitigation: Operational resilience, training and preparation
- Disaster response: Emergency plans, leadership, staff welfare and business continuity
- Contingency planning: Back-ups and up-to-date insurances
- Recovery: Rebuilding costs, revenue protection and staff and customer retention
The goal is to minimize disruption and downtime when a disaster strikes and position the business to bounce back quickly.
Mistake No 3: Poor cost visibility
Knowing where every dollar goes is a critical part of business management, but never more so than in the current climate of high inflation and rising interest rates.
Yet businesses large and small keep getting caught out. Just look at how many building companies have collapsed recently, as ballooning costs outweigh revenues. Or the number of corporations facing millions in back pay after so-called wage theft went unnoticed for years.
Ensure your systems provide a holistic view of your expenditures. Review those systems, and your costs, regularly.
“Investing time where it delivers the biggest returns is key to success.”
Compile all expenses, large and small. That includes having employees log their expenses, petty cash reserves and outgoings, social media spending – the lot. Doing so will help identify your actual cost base and the various applications, software and systems used for processing them.
Compare them to previous quarters or years. Which costs are up? By how much? What gaps have you identified?
Then find ways to cut expenditures that prioritize efficiencies over sacrifices. For example, streamlined accounting means avoiding late fees. Request discounts from suppliers for early payment. Refinancing or switching utility providers can deliver cheaper rates and sign-on bonuses. Scrutinizing subscriptions often identifies waste and duplications.
Mistake No 4: Messy taxes
Poor tax management is a great way to bleed money, though time-poor CEOs may not even realize they are doing so, or only realize once it’s too late.
Late fees and penalties, unclaimed or underclaimed deductions, plus unrealized tax benefits and incentives are all common examples.
Good record keeping goes a long way to giving visibility over due dates and eligible deductions.
Pay particular attention to things that often get overlooked like depreciation, work-from-home expenses (all those late nights bashing away on the laptop), super contributions, professional memberships, subscriptions, financial advice expenses and business expansion grants.
Mistake No 5: Ignoring self-care
How many times have you sacrificed something for yourself because you don’t have time? Meals, exercise, medical check-ups, appointments, hobbies, the list goes on.
Many company leaders believe the business comes first. In doing so, they may be doing more harm than good, and not just to themselves.
“Your business, finances and family are all counting on you to be present.”
How does the business cope if you suddenly have a heart attack or urgently need mental health leave? Do your personal finances – loans, investments, taxes – receive as much attention as the company’s finances? Is your family provided for if you die? When did you last have some downtime to recharge?
Your business, finances and family are all counting on you to be present, make good decisions and deliver positive outcomes, all of which can only happen if you stay in tip-top shape.
Helen Baker is a licensed Australian financial adviser and author of the new book, On Your Own Two Feet: The Essential Guide to Financial Independence for all Women (Ventura Press, $32.99). Proceeds from book sales are donated to charities supporting disadvantaged women and children. Find out more at www.onyourowntwofeet.com.au.