One of the challenges coming out of school is acknowledging there are some things you don't know that you don't know. You might be able to calculate the weighted, average cost of capital in your sleep or theoretically increase an operations throughput 30 percent, but there are some things, besides experience, that graduate school didn't teach you. Here are a few:
If you don't know where you are going, you are sure to get there -- nowhere. Set clear, measurable objectives with time frames and accountability. Share these objectives with the company and explain how each department can help reach these goals.
Labor is not a cost. It's an investment. Always match three things: the person, job expectations and company objectives. Hire the right person for the job, then invest in the position by explaining expectations and how those expectations move the company forward. Regular training with the employee provides consistent communication and an under standing of what is needed," says Glenn Jensen, management consultant and president of Core Management Group in Salt Lake City.
"Never make your company so reliant on a bank that a business decision, a new opportunity or closing a deal hinges on the bank's approval," says Zion's Credit Corporation officer Chris Bauco. "It's paramount to have approvals in place well before consummating business transactions." Also ask your lender how long your loan request will take from approval through documentation. Use their estimate as a best-case scenario to avoid a time crunch.
There's more than one way to skin a cat or finance your business. When financing from banks is unavailable or protracted, longer terms with interest can often be negotiated from suppliers. Although it's not the best of solutions, being proactive with suppliers can work in your favor.
There is no substitute for working with the accounting team to analyze all operating costs and asking the question: How does this purchase help the company or move it toward the company mission and financial objectives? If it doesn't, cut it. There should be no sacred cows. Addressing this question consistently will keep operation expenses under control.
Dana Telford, a Salt Lake City. based global consultant for family-owned businesses, says, "Excelling and winning in a competitive industry takes persistent, disciplined thought. Continuing to think, act, evaluate, think again, act again and re-evaluate will...