Tag Archives: business planning

Time to Tune-up Your Business

spark plug

time to tune up

New year is a good time to take stock of your business. Like your car, business needs periodic tune-ups to make it run smoothly.

Car needs oil change to reduce friction and wear and tear on the engine, new spark plugs for for it to accelerate smoothly, and replacing worn out parts  so that it will not break down on you and leave you stranded. Your business deserves the same care.

 

Here are some quick thoughts on tuning up your business this year:

Streamline Your Processes and Systems (Oil Change)

Every business has systems and processes – in how you handle new and existing customers, how you handle your products and services, manage your people, etc. In a young, growing, organization, these constantly change. Dig deeper into your  systems, talk to your people who use these systems and see if you can change some of the steps or processes to make these more efficient. Identify a few flaws in your system and fix some of the easier ones right away. This will help your company run smoothly.

For example, in our company, to keep track of our inquiries and status of each inquiry, we have switched to a master spreadsheet which tracks new inquiries and their progress. This master spreadsheet as a google doc, accessible to all of the relevant staff members – so everyone sees the same copy, and can make edits. This now allows us to see the progress on each project and makes us more efficient.

Accelerate Your Growth (Change Your Spark Plugs)

When you look at increasing value of your business, nothing beats the bottom line – revenues and profits. Always think of how you can push the business. This could be offering more products or services, improving or upgrading your products or services, gaining more customers by better sales and marketing or a combination of all of these. Or it could be acquiring another company to gain new products or market share.

For example, in our company we are implementing a few changes this year. A simple thing is just making the whole process more efficient – from the time we get the listing to the time we put it to market and the way we approach prospects and follow up with them. And trying to Another thing we have already started doing is offering our customers additional products and services by expanding our marketplace. We have already invested in software that will allow us to offer directory and classified services as well as way to sell their own products or services. Over a period of time, we see this as an important extension of our marketplace.

Make Your Business Sturdier (Replace Worn out Parts)

Just like you don’t want to be stranded somewhere because the car won’t start due to an old battery or broken fan-belt, you certainly do not want to be to have your business suffer due to breakdown in your critical systems or equipment.  Time to examine your critical systems and see if  you need to invest in new equipment, software or hardware and how to ensure that your business will not suffer down-time.

One of the important steps that we have undertaken is to put all of our important documents and data in the cloud. We use ShareFile , Dropox, Mailchimp and Evernote software so that our whole team has access to the important files from anywhere in the world. We also use cloud-based email systems (Google appliance) and use software as a service whenever possible (for example for accounting and tax, ) so that we always have access to these services. We are also going to invest in a smart scanner such as Fujitsu that can digitize and file all your documents and has an ability to take different sizes of papers and scan them very fast.

You can think of what your business needs and upgrade or replace the critical systems that you cannot afford to be without.

Exit Strategy – Right Time to Think About It is Now

exit strategy on door

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction. – John F. Kennedy

They say that every business should be started with an exit strategy in mind. It applies to any kind of business, not just the laboratory businesses.

There may come a day when you may want to retire, or running the lab become very stressful, or your health isn’t what it used to be. Do you have an exit strategy for such a day?

Exit strategy could be having a succession plan – turning over your lab to a family member whom you have been mentoring, or selling the lab to an outside company, or selling within to your employees.

It is never too early or too late to start thinking about your exit strategy. After-all, you never know when you think you will need it. Kind of like a Will or an Insurance Policy. You never know when you will need it.

Real Life Stories

Recently, in the span of a few months, we were unfortunately involved in emergency sale / liquidation of two labs that had to be sold off at a significant discount.

Sometime ago, I received an email from a lab-owner that we should talk. We set up a time to talk and he described his situation, which was really sad. He told me that his young, two-year old lab was doing well, he had found some unique niches, and the business was growing by 25-30% a year and future looked great. He was thinking of hiring more people. And then he got shocking news from his doctor about a terminal disease. But he said he was still feeling good and he had at least some time – perhaps couple of years- to plan for the future.

We tossed around a few options. Since he was feeling well at the time, and the lab was still growing well, it seemed like it might be a good idea for him to take in a minority partner, train him or her, grow the business and when the time came, the partner would buy him out. This way, the business will grow in size and value, the partner would be ready to run it and he would get much better value for his lab. We decided to talk again in a few weeks. Next month I sent him an email and received a shock when I learnt from his wife that he was no more. I can never forget that email and the shock and disbelief that someone whom you spoke to was suddenly no more.

Well, life throws you such curve balls, and in these kinds of cases, there is not much we can do. I must say, that his wife, somewhat involved in the business, was very brave under the circumstances, and was fortunate that the lab did get bought by one of its customers. I still at times think of my conversation with the lab owner and what could have been.

Another incident happened more recently. A lab-owner became too sick to carry on and his business. His business was once spread across continents, with offices in Europe. But it had to be liquidated to salvage whatever little value one could get out of it. I am sure it must have broken his heart to see something that was so dear to his him, and his pride and joy, had to be almost given away – and even then, it was not that easy.

Time to Act is Now

So what can you do starting Today, so that when the time comes, you can hand over the baton to the next captain?

I think the number one thing that every one of the business owners should be thinking about is to increase the valuation of the business. Something you should be thinking about everyday you are at work. But how can you do that?

Well, I will leave that to the another post.

Thank you and so long till later!

yatin