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Thursday, January 24, 2008

Balance in business

The Business Development Bank of Canada, which provides some services similar to the U.S. Small Business Administration, provides some basic resources on the web, including this article about Cash Flow Management. I'm not overly sold on relying on these agencies for business/managerial advice and support -- my best advisers have been experienced, successful business people whom I've learned to respect and trust.

It's 6 a.m. and I'm musing on the essence of successful business management. After close to two decades as a publisher (and that means surviving some recessions, most recently an internally generated one), I'm still amazed at the daily excitement, complexity and challenges in keeping it all together.

At this stage, we need to manage creativity and growth with cash flow control. Our systems are pretty good and simple, but this month, for example, I'm noticing the percentage of receivables heading past 30 days is too high -- and it explains the reason we don't have the cash in the bank we should. Now, I need to look at the sales projections, upcoming costs, and available resources and decide how to manage the growth -- especially since we've decided to hire a new employee who starts Feb. 1 (and will of course need to be paid on the regular payday mid-month.)

My mind analyzes: Why are the receivables collecting slower than normal? Could it be a shift in the economy -- the dreaded "R" word? Not likely, at least as far as I can tell in our existing markets.

Probably it is the seasonal shift -- things always slow down in January. Or it could be that our Accounts Payable person (collector) who comes in on Fridays part time, had a couple of weeks off ill and for Christmas break. I know the matter is important and am keeping an eye on things.

This is just one thing to watch: Innovations from our sales team; performance standards, editorial quality and writing, administrative and office systems, product development, community group and client relationships, the website development, and more, all have to be co-ordinated like a symphony orchestra conductor. Of course the whole thing works because we've assembled talented individuals into a team; each with different skills and strengths, but each well above the 'norm' for their area of expertise (and certainly better at what they do than I would ever be.)

Building a successful business is like that --you need to connect many things together to make it work. Most intriguingly, and in part the purpose of this blog, you need to integrate your marketing process throughout the business/client relations cycle. Sure, you can set up systems for canvassing, cold calling, and the like, and many of them work (see this thread describing successful canvassing approaches), but in my opinion, you will achieve the highest results if you think longer-term and in the context of giving rather than irritating your community, as Seth Godin advocates, or patiently building lasting networks within the AEC Sector, as Ford Harding suggests.

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