Planning with end game in mind
As most of you know by now, when I’m not running the QS biz, I have a national franchise that does building reports across NZ…. (message me if you want to hear any more about that!).
One of the things setting up the franchise has taught me, is how important it is to be able to ‘put your business in a box’.
In the building industry, a lot of guys I meet have never thought about their business in that way. But by going through the exercise with the building inspection business it has made me realise that irrelevant of franchising, there is some serious value in looking at your business like that.
Sharing is caring and all that… so I thought I’d pass on some of the biggest lessons that might help you out the most!
You MUST have processes and procedures and they need to be in written form. I know. Sounds like SUCH A DRAG.
But think about it like this, if you got hit by lightning tomorrow, could someone come along and fill your shoes easily without much down time until you were back on your feet? If the answer is no, then get going with writing how you do things down somewhere that’s easy to find.
This is where investing in great online systems can make life easier…. If you use a proper software or system to run your business (you may use several – we do!) then all you need is someone familiar with the software and the job is done. If you need a referral for some good ones, just shout out.
Know your financials and have great P&Ls….. When you meet with your accountant make sure you are really clear about how the previous year went, and what you want to next financial year to look like.
Clarify your offsite overheads percentage (as you MUST every year) and make sure you know what budgets you have to work with.
How much for marketing?
How much for QSing?
How much for new plant or equipment?
And how much money do you want to have drop out the bottom at the end of the next financial year?
Are you looking to buy a boat or put the kids through school? Create some goals, and make sure you are regularly checking your actuals against your budgets to stay on track, this includes your sales!
This sort of follows on from the previous, but the business needs to be able to show that it can exist if you were to move on. What this means to you is, don’t do things for free.
I’m talking about the functions that you perform on a daily basis, imagine if you had to hire someone to do all of those? Your business needs to show that if someone else were to come along, the business could sustain paying people to do everything you do.
Remember this when you are doing your budgets. I’m not saying you have to race off and hire people, but remember the business needs to make enough money so that if you needed to, you could. Think admin, QSing, marketing….. you get the idea.
The bigger picture
So here’s the big ‘Why’. Why should you bother with all the stuff written above?
It’s called EXIT STRATEGY.
If you’d like a business you could sell to someone else when you decide to retire, rather than just having something you end up winding up then you need to have some of these things in place.
If in doubt, chat to a biz broker. They will reiterate this and more!