24 hour survival gude for small business

Document Sample
24 hour survival gude for small business Powered By Docstoc

AUTHOR: GAVIN TONKS DATE: 03/03/2009 DEDICATION: This book is dedicated to those who have chosen the high road and are taking control of their destiny by being an Entrepreneur. The Entrepreneurial road is truly a hard one as you need to develop skills and attitudes coupled with experience to tread where angels fear to go. Some people are blessed with opportunity and an easy road and others like me have not. I have not only seen the weeds on the edge of the road but have detours which took me into oncoming traffic lanes. Life is a lesson so learn it, suffer what life brings and enjoy every moment that nature gives “Do not go gently into that good night” and get up everyday to be what you want to be - Do not take prisoners and let us become the greatest nation in the world with our creativity and determination embracing integrity humility and creativity as our icons like Nelson Mandela have done. To make this book more interesting and explain concepts in more depth we have linked the information to Enterprise Support at where here you will find articles and information including a business plan creator to assist you in developing the array of tools you require that will assist you in being successful. CURRENTLY CONDITIONS ARE TOUGH AND GETTING TOUGHER AND ONLY THE TOUGH WILL SURVIVE! If electricity, interest rates, rising costs, petrol and all the other negatives are driving you to despair in your business then you need this quick survival guide

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 2 of 26

24 HOUR SURVIVAL GUIDE FOR SMALL BUSINESS ISBN Number: Barcode: 6009691421396 Self Published Edition Copyright 2009 Gavin Tonks

Author: Gavin Tonks Date: 03/03/2009 Words approx 8 599

Edition, License Notes This ebook is licensed for your personal enjoyment only. This ebook may not be resold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each person you share it with. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then you should purchase your own copy. Thank you for respecting the hard work of this author.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 3 of 26

Is your business currently a Headache? / Take two of these steps daily and repeat until they become a habit, here is a list of topics you need to consider for the survival game: CHAPTER ONE - INTRODUCTION AND ATTITUDE








24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 4 of 26




24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 5 of 26

CHAPTER ONE - INTRODUCTION AND ATTITUDE INTRODUCTION The following steps are created to assist you in surviving any tough times. These attributes and statements have not only given me strength in really dark hours but have proved to be reliable tools in assisting many small businesses I have mentored over the last twenty five years. ABOVE AND BEFORE ALL ELSE YOU NEED ATTITUDE: FIRST ATTITUDE: Your business is giving you a headache and a fever and you really are fast approaching your wits end then you need to take a step back take a breather and plunge right back in but ensure you are armed with information and the necessary strength to carry things through. You need to really develop positive attitudes and characteristics that will “create” for you strength. Strength to handle situations and make people believe in your ability to deliver and trust in you as a partner and desired business associate. QUOTATION: A wolf is not a selfless beast but an animal that has a focus on survival The wolf can be alone or part of a pack and when it howls you know its distinctive voice and cannot mistake it for anything other than a hunting predator - Gavin Tonks on taking control of your business. There are only sheep and wolves in business. When times are tough wolves are always hungry so “do not become a victim” of your own attitude - Sheep are food or a resource. Not everyone is born a wolf but you can learn to be a wolf, sort of “sheep in wolf’s clothing” until your transformation to wolf is complete. Please understand the wolf and sheep allegories are attributes and people are comfortable in these roles or not – we are dealing with the transition of the not happy people who want more, who because of their current attitude are not succeeding. TRANSLATED: All business is all about a sale and transfer of money there are those people in business that give business and those people that take business. Find out what your business is and do not be ashamed for taking or asking for the business you plan to have it is the nature of business. Learn to be focused on what you “need to get” and what is honestly required for your business – ultimately money in the bank after everyone is paid and all parties are satisfied and eventually a cash resource that belongs to you for your passion commitment and hard work. Taking business is for wolves and giving for sheep. Everyone cannot be wolves and there are very successful sheep companies like Microsoft as an example. You need to confirm your role in the business and the business landscape and the attitude that fits your business in order to create a sound enterprise that will grow.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 6 of 26

NEGATIVES YOU NEED TO MANAGE IN A WOLF TRANSITION.  Do not get that haunted hunted look as you try and do business  Be positive and know what you want and how much you want it for  Now is the best time to really look into your business goals and dreams and plot a path to success and attack these decisions with passion commitment and energy that comes with attitude In business we all face pressures when times are tough so you look for relationships with people who can assist your business and save you money as well as bring in greater and more profitable sales People have their hands full with their own problems and naturally are drawn to other business people who can bring relief to their business or relief from management pressure by being fast efficient and cost effective. Success is exactly a 50/50 chance - by not being a victim and planning, your odds can be stacked a percentage or two in your favor, damn good odds for any entrepreneur. SOLUTIONS TO EMBRACING A WOLF MENTALITY AND ATTITUDE: Further web site learning, tutorials and explanations of business terms and concepts are available at Other topics to research in your path to becoming a peak performing business entrepreneur: WELLNESS AT WORK Entrepreneurship is a complicated mix of emotion ability and desire, it is like saying I want to be in the Olympics, we cannot all be 100m athletes and out of 6 billion people on this planet there really are only a handful of athletes capable of running the distance under a minute and only one is the fastest. But the Jamaicans proved they could compete, made a plan didn’t give up and achieved their goal even made a movie out of it. A requirement for the growth of sustainable business is a sound small business layer. In India and China this layer is usually family owned business handed down from Parent to sibling, there are unfortunately so few such business in South African, that we can say we lack this layer all together having 3% of businesses controlling 97% of the current business turnover. The small business networks in countries like China and India are stable generate millions of US dollars and effectively market their networks and achieve yearly stability for their business. Some have traded for over 120 years as family business, and then in South Africa we want to compete with them in 7 days, from finance, without understanding the principles handed down by generations of entrepreneurs and the stable financial asset bases they have. IF YOU DO NOT SEE LONG TERM FUTURES IN WORKING FOR YOURSELF GET OUT OF THE KITCHEN NOW!
24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 Page 7 of 26

CHAPTER TWO – PERSERVERANCE: GOING THE DISTNACE THE POWER THAT COMES FROM BELIEVING IN YOUR BUSINESS An entrepreneur once told me that they really battled in their business and that they had sold everything and were still battling and always seemed in the tunnel in the darkness never thinking they will ever see the light of day again. They decided the going was just too tough and planned a “cut off day” or exit strategy However the new focus on doing things differently and resolving to go the final distance was the catalyst step that took them to where they wanted to be. They never looked back. They had stopped chasing rainbows, resigned themselves to their business changed their attitude from desperation to compliance and everyone supported them. The moral was you never know when the next step forward is the one that changes your road to a path of success. If they had turned back at that point they would have lost everything and would not have had the successful business they had developed together. As you plot the way forward you will eventually see that success is a planned excursion and even those that appear to have fallen into it head first, have planned it for a long or short time, but their was always planning and thought behind the intention to succeed. You will realize there are no shortcuts, if there were you would already be successful You really have to work hard on the developing work ethics that support your strong business characteristics and developing relationships. Learning never stops and you need to teach yourself strong attributes to overshadow your weak areas or non existent ones like understanding finance. You cannot be an ultimately successful business person without understanding finance. A successful entrepreneur has all the attributes required for success. All successful business people have all the successful attributes learned, stored or bought but they are all there always. Not everyone can produce rabbits out of hats. Many very successful people do it through dogged determination. Find the bone you want and bite down hard - do not let anyone take it away from you. Protect it with everything you have, other people want it too so go the extra mile and give the person you are doing business with confidence that you are the best person for the job. Many people will be offering services cheaper, match offers, business in hand can always be grown, but once, lost, is almost impossible to get back and usually costs more get it back than when you had it in the first place. Make sure you do not come up on the company radar with any negatives and are seen in a positive light that you are a company to do the business with. MORE THAN EVER BE PROFFESIONAL, PASSIONATE COMMITTED AND DELIVER AGAINST ALL ODDS.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 8 of 26

A friend grew a very successful grass business many years ago when no one thought of buying instant lawn. His success, he loved grass got up everyday to do what he loved best and made a serious amount of money, it took a while, but no one realized what a business he had built for himself, by just being around and doing his thing everyday of his life. Once you decide you are in it for the long haul, you will need to make decisions. Expansion is a logical step but may not always be practical or you cannot reach the intended step on your own. Ensure a proper business expansion plan or an absolute understanding of the profit ratios and investment to turnover your business can achieve. Many really good businesses failed because they just did not plan or decided to move forward without even a bad plan. You need to arm yourself with all the attributes of success and ensure they are deployed in your business. My best working environment was a shoe designer for Edworks Border Footwear. The company used to do a R10 million [US$1 million] per annum turnover and manufactured up to 10 000 pairs of shoes a day. They are no longer in existence as they tried to change systems that had developed for hundreds of years as craft, with systems created for manufacturing cars, the company lost millions, had to reinstall everything the way it was and retrenched all the experts and started a huge downward decline that eventually saw them close for ever. The second reason is management had no idea the profitable area of the business was the vulcanized slipper plant that ran profitably for years with no interference. In cost cutting this was the first unit they shut down selling the plant to the MD who is still successfully running the business today. Many businesses would still be trading today if the person who began it actually decided to study what a successful business requires and the attributes needed by the person who runs it. FOR THOSE IN IT FOR THE LONG HAUL THARE ARE MANY STEPS YOU NEED TO IMPLEMENT TO ACHIEVE BIG DREAMS, ENTREPREURS ARE NOT SUCCESFUL SALESPEOPLE SO DO NOT CONFUSE THE TWO, AS ENTREPREURS ARE ON THE RADAR AS PEOPLE WHO DEVELOP BUSINESS OF VALUE. However, entrepreneurship requires careful planning in order to maintain the good shape that the business should be in, for it to move, say into the expansion phase which may be one of the headaches you are experiencing. An expansion plan will outline how you intend to expand the current infrastructure optimally and to evaluate the options and opportunities which you can take advantage of especially increased and more profitable turnover to both fund the expansion and ensure greater sustainability of the business. Any business can stagnate – fail, or loose out on opportunities if continuous improvement is neglected or ignored. Never accept mediocrity and never believe you are doing it the best way without being really sure it is the best way. No business is perfect and each business needs to strive for improvement and a better reputation.
24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 Page 9 of 26

Various plans and reports need to be developed by you in order to improve the reporting of your business situation. There is only one person who will change the business and that is you. If you think that putting a highly paid person into the position then you are going to fail as you have no control of your business. The buck starts and stops with you and the quicker you realize this and work toward being an efficient entrepreneur the quicker your business will succeed and people around you will notice the difference and realize you are the type of person that feels comfortable in charge and that you are the preferred business partner to do business with. A Business Improvement Plan is a plan you create that evaluates aspects of your business to ensure maximum viability and best practice. The plan sets out those activities necessary to bring about continual improvements in your business like reducing costs, effectively managing the working capital, improving productivity and measuring performance. If one wants a business to grow, then a growth plan is the way to map the improvement required for the growth anticipated. An entrepreneur may wish to grow his business and to make optimal use of its current infrastructure and resources. Most trading business has some form of financial problems sooner or later. A business can be carefully guided back to economic viability with quick action stabilizing the cash flow, outlining courses of action; getting the support of suppliers, lenders, employees, shareholders and possibly other entrepreneurs. If your business is having problems get to the core issues quickly. The report may highlight the need to grow, so in order to implement an effective growth strategy, one must realistically assess the present status of the business based on the four factors sales, turnover, market share and profits. This will give you a starting point against which to measure the anticipated growth. Firstly make sure that the business is running efficiently. Then ensure that there is sufficient understanding of the changes that the growth will create and know what must be done to put these controls and systems in place as the growth strategy is implemented. Salary is called a burden as it usually is the most expensive part of the business and to increase these expenses must be done only when there is sufficient turnover to cover them I have too many experiences where business employed everyone and paid them out of start up capital to find out that not only were the staff unable to perform their tasks but that the business collapsed as the salary really became a burden. A business man must first ensure the business is running and turning over profit and then replace his input with a cheaper resource in staff giving him more time to focus on the business of turnover and profit. Discuss your growth plan in detail with your accountant and anyone else who will listen including those it will affect. Consider carefully all advice offered. Growth is a double edged sword and the increased turnover can be a serious burden to your cash flow and cash resources.
24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 Page 10 of 26

My first very successful business created more problems as the growth was so large it absorbed all my cash and capital making it difficult to serve the business needs and then having to expand overdraft facilities and cash flow demands from projects. The profit had to be immediately invested in the next round of business leaving no cash resources for the vat and tax demands It became an ever increasing spiral which the eventual solution was equity but back then there was little chance of equity investment for small business. All growth options have risks and rewards, and should be considered on their merits and on their suitability to your business. When considering diversification, joint ventures, mergers and acquisitions, don’t be tempted to move into a field of which you have little knowledge and or experience. Remember how you started in business in the first place, you started somewhere with attributes that made it able for you to be employed or begin a business where you had knowledge, skills and experience. This rule still applies. Business activity that is in some way related to your current activities is easier to understand than trying something you have no experience without suitable mentors or advisors as in a franchise. For example, the telkom industry is embracing media as they are direct forms of communication. Companies you currently service may require other things in order to streamline their ordering, that is why Walton’s [a stationary company] sells instant coffee as well, growing into business that plugs into an existing business where you are already trading. Answer the following questions in order to help implement your growth strategy:  What additional staff requirements if any will be needed?  Will it be necessary to train staff?  Are your current premises sufficient?  Is the location of your business suitable for the growth?  Are your suppliers able to service your increased demand?  Do you have the necessary IT systems?  Are your staff motivated?  Are you able to finance any growth plans?  Will there be a definite return on investment (ROI)?  Do you have the management skills to manage a larger business? CONCLUSION We have mentioned many factors and reports and things that you need to do to evaluate your business. Do not be lazy at this stage and really do the work. If you think it is hard or for someone else you are not a wolf and I suggest you look for a job that requires your specific set of attributes. While you may also be happy with the current performance of your business, never underestimate your competitors and the power they may have to take away from you market share.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 11 of 26

Prevention is a cure so have a policy and reports detailing planning and updating all the time for the continual growth of your business. In conclusion there is a lot of work to do and if you feel you cannot cope, or need help there are professional people who sell their knowledge in mentoring and coaching. A professional auditing firm in Australia has permanent mentors and coaches who spend time with every employee in the company ensuring the employee exercises his entrepreneurship muscle to the maximum to ensure maximum efficiency and profitability for the company. MENTORSHIP IS YOUR POLICEMAN. COACHING IS GETTING YOU OVER THE FINISH LINE.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 12 of 26

CHAPTER THREE - OPPORTUNITY CAST YOUR NET AROUND Every person is one person away from the person you need to know so by engaging in people around you can fish for opportunity. As players tighten their belts they sometimes throw away smaller business they cannot profitably handle. Look at relationship building to assist or to actually be given this type of business. Forget about profit and look at survival what will bring you through intact and bills paid. Profit is only good for governments when times are tough as most of it goes to tax in any case. How much money do you really need to get through the tough months? Hire instead of buy, or get other business to do the work for you so you do not duplicate or pay for expensive infrastructure and re-invent the wheel. Borrow where you can – service and support from people who also need a bit of extra business instead of setting it all up yourself. You will be surprised at how creative you can be without own resources. In a business I looked after for the bank we were faced with an expenditure of R45 000.00 [US$4 500.00] for three new scales. We came to a deal with a supplier who had three machines with no spare parts so he charged us R450.00 [US$45.00] per month for the three machines and if they break we all agreed to throw them away. Win \ win all around. FURTHER RESOURCES NEEDED? THEN DEVELOP A MARKET PLAN. Any product or service offered is useless unless it is sold and to sell we need to let people know where how and for how much they can buy it for. People already are buying the things they need and are not waiting for you with bated breath to rush out and spend on it. The marketing plan has to incorporate all aspects of the product or service benefits, features and pricing, your competitors’ their markets and strategies including pricing comparisons. Marketing incorporates distribution and whether you have sufficient product to meet demand and product life. Does the cost justify the return? Many questions require many answers to do it right. Juta has some well authored books as extra reference. CONCLUSION People are the key to the success of the business so find out who makes decisions, who decides if you get paid, or not, and when and how. Find people that are as positive as you are and build business relationships - not tea parties or drinking sessions but measure your success with banked business. Business cannot be concluded without people “People buy from People” not web sites electronics or some faceless program somewhere. YOUR BUSINESS NETWORK IS THE GREATEST RESOURCE IN ASSISTING YOU TO TRADE.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 13 of 26

CHAPTER FOUR – WEIGH YOUR OPTIONS TAKING LONG HARD LOOKS You need income and you need it now. What can you put on the scales of your business to balance the extreme shortage of cash or business that will immediately adjust the balance and put the business back in harmony? Look for things you can do to bring in income “now” today this moment do not wait. Do you have underutilized resources you can or share with someone else who can trade them for things you can sell or cash? How can you scale down to survive on lower sales and cash income? Smaller inventory, just in time sales purchases on orders and deposit paid? Shorter account terms? Ask and make a list of questions. WHAT DO WE DO WELL? AT WHAT COST? HOW CAN WE SAVE? Do not venture into things you need to invest in for new business. Use what you have to piggy back new business instead. You need to keep your money in the bank - and not spend on anything that does not immediately bring money back in. Pay accounts early so you relieve stress and create a positive business image for your company. If a new direction does not realize a payable invoice or payment within three days do not do it. Everyone looks for a savior in your business, someone you can put all the problems you have in their lap and wave a magic wand throw some stones - someone has blown on and it all goes away. The biggest gift I can give you today is to convince you to do it yourself as this is the only way you will learn. Most of the time getting more money will never resolve the issue of your business as the fundamental understanding of the business and how to trade does not exist. Money is never a solution to business problems - paid orders and gross profit in the bank is. Trade instead of borrowing is the greatest advice you will ever get Many new companies get cash flow management wrong and fail. Managing cash flow dayby-day and month-by-month can be likened to the blood in one’s body going from one organ to another to keep it alive. In the same way, a business has to continually be fed with cash flow. This way, it keeps the business alive and well and its bankers, vendors and creditors happy! Managing cash flow is one of the biggest challenges small business has. This intervention will help a business in this regard. UNDERSTAND THAT SOLUTIONS ARE IN TRADING WITH PEOPLE AND CONTINUED BORROWING IS NEVER AN ANSWER. IF YOU CANNOT GENERATE CASH ON YOUR OWN IT IS VERY SELDOM YOU WILL ACHIEVE IT BY BORROWING.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 14 of 26

CHAPTER FIVE – USE YOUR NETWORK YOU ARE ONE PERSON AWAY FROM ONE PERSON YOU WANT OR NEED TO KNOW This is different to casting your net around as casting is a chance that in throwing the net, you hope that you will find something of value, which does sometimes happen, as apposed to throwing the net in a direction you know will deliver a harvest. We all have networks. Phone them and ask for business. You will be surprised what business you can drum up within a friend or business relationship. Make a plan have a meeting with a couple at a time explain honestly the problems you are experiencing and make a plan to implement the suggestions and proposals you come up with in your brainstorming sessions. Many success stories are related to maturity in your network. As people have more confidence in delivery and your ability to perform they will trust you with more business. CONCLUSION You need to be able to sit in one place and by phoning generate some successful business because you have assembled the right people around you, who are able to assist you in achieving the driving of your business through successful traded orders

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 15 of 26

CHAPTER SIX – DO NOT BE AFRAID TO ASK FOR BUSINESS Asking people for help is not frowned on and the worst that can happen is they say no, they may even refer you to someone who has business for you. Failure is the next step to success and then you loose the fear of failure and with your back against the wall pull out all stops and be the most amazing business person you can be. Never be shy - business people are not shy to ask for business it is what makes us successful. The need and drive for business is a fundamental trait in doing good business. Even drug addicts go to the bottom before they turn the corner. Only your fears which are really dumb stop you from succeeding and asking for help when you need it most. Learning to ask for business is in your strategic plan knowing where when and who to ask Ensuring the information is at hand not going back for quotes doing the business then and there and asking for an order. Having a strategic plan will not guarantee success, but without one, your business has a far greater chance of failure. Your strategic plan will provide a framework on which you will hang all the company’s policies and according to which you will make key decisions that determine the direction and performance of the business. The strategic plan acts as a point of focus for every activity in the business and can serve as a concise explanation of the business and its objectives and activities. If something does not form part of the strategic plan, it should not be undertaken. It is therefore important that the strategic plan is well thought out and developed in consultation with other key players in the business such as all the owners, managers and even certain staff members. They do not have to all participate in the same forum, but should be included in the strategic planning process in order that they all take ownership of the final plan. Everyone in the business will be expected to help fulfill the strategic plan. If they don’t agree with it or don’t feel they had an opportunity to contribute to the plan, they might not be committed to it. Your strategic plan is not intended to help you run the business. That’s the function of an Operational Plan. The strategic plan is a high level, conceptual document which provides the overall vision for the direction you want the business to take. A Strategic Plan even if it is just carried in your head helps to keep you focused on the intentions to trade and do business and is one of the most important tools in the attitude arsenal. Once all have participated in developing the strategic plan, ensure that it discussed with and communicated to all stakeholders on an on-going basis. When you are running a business many people will come to you with offers. I was offered a Vodacom shop free in 1990 as when cell phones first came out people did not see the future they would be. I turned down the offer even though today it would be worth millions and with no I mean zero regrets. I could never see myself explaining cell phones to computer illiterate people everyday of my life. I have staid focused on the way I want to achieve multi million rand success through my innovation and vision and I will eventually have my success as I stick to my principles and position to achieve it in my own way. Business needs your business too.
24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 Page 16 of 26

CHAPTER SEVEN – NEGOTIATING WITH CREDITORS Talk to people, they are part of your business. A recent mentee who was really battling now has R1 million [US$100 000, 00] per month business because he sat down with supplier and entrepreneur at a table and worked out an agreement that was good for everyone I told him his business was not financing stock but reworking it into the products his clients wanted. So now the entrepreneurs buy the raw materials which are delivered to him to process and he does what he does best and is paid for it, without having to finance tons of products he does not use. Know what your business is really and do not try and dabble in funding business that has nothing to do with you. I am often contracting, and people expect me to take a percentage of their business as part of the deal and are surprised when I refuse. I charge the client what my fee is for my hours as that is my business not percentages of other peoples work. When there are complications and issues that require resolving I can be impartial and distance myself from the problem to find the best solution as there is no emotional or other ties to the deal. I do not feel guilty that this “other business fee” is depriving the client of much needed value It however requires great knowledge of my business to ensure I charge the correct fees and that people understand the value of those fees to their project. The profit to my business and sustainability is allowing people to see the value and substance I bring to the table, and the clear savings of costs to the project.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 17 of 26

CHAPTER EIGHT – MEGOTIATING WITH DEBTORS Ask your debtors to settle a bit early. They all know it’s tough. Ask them for 50% of the invoice in the middle of the month and let them hold back 10% for 2 months. You need to survive and do not need profit if your business is properly structured. Work out cash deals for up front specials that no one can say “no” too. Plan to get in enough money to cover costs and survive until you can generate profit before the 25th of the month. This way you can focus on driving much needed business while everyone’s purse strings are open and you are not wasting energy collecting money for past business when you need to be focused on present business. There are only three people who want your profits, your accountant because he was taught too, your bank manger because he knows then he does not need to lend you money if you have your own and the receiver because he needs it. Profit you just pay half to the receiver in any case so concentrate on keeping your business alive. Flat lining business models help you to understand that monthly costs you need to keep the doors closed yes closed without trading. When the doors are open and you trade that is a separate costing and must be linked directly to your service or product. Cost per month or year - absolutely bare essential payments and divide these between how much service or product you can supply. Charge raw materials required to make the product [give this to your entrepreneur at cost, you are not in that business] Add the working costs as a Rand / Dollar value and then packaging and delivery separately. This way you can make decision with suppliers to buy the volumes you require surviving as your products and services will be lean and cost competitive. Never work on percentages when times are tough they are misleading in understanding your business. The butchery point of sale was telling us it was putting on a 25% markup and we were making between 18% gp [should be 20% if things were running smoothly] On costing the business the reality was very different - there was moisture loss, cut loss and bones with no sale value that cost us the same as the rest of the quarter. So in reality we never made more than 10 to 11 % when everything is cut and sold right - a far cry from the wonderful gp% the system showed. Our solution is to sell more - we are dropping prices and increasing supply. People are buying from the cheapest and we worked on a model to be the cheapest and implemented it – the business held its own and grew the business as well. A supply chain agreement was negotiated for product and the business traded more products in three days of one weekend then the total for two weeks previously. Business is about getting it right.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 18 of 26

CHAPTER NINE – CUTTING COSTS Outsource parts of your business to other business that can do the functions cheaper or more efficiently for you, especially if they can do it better. Look around for suppliers with better pricing and ask your suppliers to meet this price. Negotiate with suppliers for minimum basic supply at rates and pay them up front for the products only putting monthly purchases on accounts. Convert all business to cash and use cash as the leverage to cheaper prices. Cash is king [or acb debits on time and as promised] Cutting costs is a number of factors. I have increased salaries so all the staff are happy and can cope with increases in their lives from transport to food; they in turn are protecting their jobs and have volunteered to work longer weekend hours at peak before and after month end trading periods. This was unsolicited and brought about by them as they saw the need to improve turnover cash flow and gp. They ensure property compliance to delivery invoices, are much happier at work which is creating a pleasant working environment. Staff take time off in low trading times and ensure everyone is at work for major trading times. We have increased turnover and have reached previously unheard of daily sales. The place has never been cleaner, machines are working optimally and everyone is being their own responsible person. So by giving people what they need to survive we are achieving all the targets the business needs to cut costs. Business costs have dropped by R200 000.00 [US$20 000.00] per month by staff negotiating with suppliers for better deals, consolidating purchases, ensuring minimum wastage and maximum utilization of resources. Quite an achievement brought about by increasing wages which are usually the first to be cut. The increase in the wages is 10% of the current savings.

24 Hour Survival Guide for Small Business; ISBN number: Barcode: 6009691421372 Author: Gavin Tonks: 12/7/2009 -

Page 19 of 26

CHAPTER TEN – SHARING THE BURDEN BY MAKING PEOPLE RESPONISBLE Everyone in your business chain is responsible for your success. Negotiate with them and speak to them about your challenges. Be honest and upfront. Only work with people who read from the same page as you and ensure your team understands the need for success. Make each person responsible - you cannot manage more than 3 people at a time so delegate and make people take charge. It will relieve the stress and help you to focus on real issues of management and sales. ENTREPRENEUR CARE CHECK LIST   Lead by example. Be the champion of entrepreneur care for your clients, your business and yourself. Never avoid anyone when times are tough. Set the standards for how you want your staff and clients to be treated and then exceed them. Be very responsive to your client’s needs and wants and motivate your staff to follow suit. Train your staff to apply the “Three Ring Rule” - answering the phone within the first three rings. Reply to e-mails promptly or if unable to, apologize for the late response and offer a brief explanation (not excuse) for the late response. Continually emphasize to your staff, that everyone is responsible for client care and orders. Encourage staff to be courteous and friendly, yet professional. Friendliness on its own is not enough. No-one likes phoning a company where everyone is very friendly but no-one knows what’s going on. Under-promise and over-deliver. Avoid making unrealistic promises just to impress clients and then fail to carry out your promises. This is worse than never having made the promises in the first place. Make realistic promises and then work hard to exceed them. Always attempt to build long-term relationships with customers. It is so expensive to get one client for heavens sakes keep them and then improve your relationship to do more business with them. I have clients who have provided millions in business in cycles for over twelve years. Empower your staff to be able to act on behalf of the business in order to solve a client’s problem. So long as you have hired the right people and managed and trained them correctly, there is probably no need for them to refer every complaint to you b