SMELLIE ON SME's: 10 questions for every business owner

By Pattrick Smellie

Nov. 19 (BusinessDesk) - Wendy Kerr is one of those successful New Zealanders we never hear of. Based in London, her Corporate Crossovers business does amazing work helping businesswomen, particularly, to make the transition from corporate life to entrepreneurial business owner.

Along the way, she's made some interesting discoveries. For a start, she found that the single biggest reason for women to leave corporate life is not the glass ceiling, but to escape toxic corporate environments, made up of too much office politics, unclear direction, confused decision-making, bullying, lip-service to the "values", and a lot of pointless meetings.

So far, so good. A fair few men fit into this category too. The only trouble is that once out in the world of self-employment, 68% of the women Kerr's surveyed find themselves with their noses to the grindstone and earning less than before. They may not regret leaving the safety of corporate life, but that's not the same as saying they're satisfied with the alternative either.

Part of the reason for that is that the plunge once taken isn't always backed up with a plan. If that's the case, Wendy Kerr's inescapable conclusion is that you don't have a business, just "an expensive hobby".

As the traditional Christmas-New Year break approaches, she suggest now is a good time to answer 10 questions she says every business owner should ask. Here they are:

1/ Where am I? If you don't run a basic financial model, then it's time to start. Add all the invoices for the year, all your costs for the year (including a realistic commercial salary for yourself) and get a basic feel for your profitability or, perhaps more grimly, whether you're really losing money. One of the ways business owners lose money without recognising it is by underpaying themselves. That's not to say you should put in your old corporate salary, but don't calculate your profits without any earnings at all.

2/ How does that feel? This is one of Wendy Kerr's most challenging questions. "Whatever the numbers are, let them empower you," she advises. "Write down how you really feel about these numbers." Then move forward, knowing that information is power.

3/ What worked well? Don't leap into new plans without acknowledging what you're already doing that's working. What are 10 things you know have helped either generate new business or improved your profit margins?

4/ Now the flipside: what didn't work? This is important. Every businessperson tries things that don't work out or just don't equate to a decent return on the time involved. The smart ones recognise those things and stop doing them. As Wendy Kerr puts it: "Write down 10 things that you know used up your precious time, energy, and money that didn't help your business grow."

5/ What's your dream? Articulate what you hoped to achieve when you set the business up.

6/ What could you do in 2013 to help achieve that dream? Now you're getting to the nitty gritty - writing down goals for the year ahead that would take you towards the dream being achieved.

7/ What are realistic revenue and profit targets for 2013? What would it take for the business to be worth it, both as a business and as your source of income and employment?

8/ What actions will you take? Having the goals from question 6 isn't enough. You now have to make them actionable. Look again at your answers to 3 and 4. Be willing to face the fact there may be things you knew you should do but didn't have the courage. Wendy Kerr suggests writing each actionable goal down on a Post-It note.

9/ What order will you tackle these goals in? Using the Post-It notes allows you to debate with yourself what order is most likely to work and be successful for your goals.

10/ What about the details? Each goal will require a set of actions and decisions. You need to write those down. In some ways, this can be the hardest part, because it's often less fun. But there's not much point in having done the rest of the process if you don't then work out just how you plan to get it all done.

"Make time to do the tasks, and the plan will magically come to life," says Wendy, who also recommends a well-earned reward once this vital piece of business planning is done.

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