How to Improve Your Business

1. Know your personal values.

What's most important to you personally? When you know your values, you'll better filter new information and opportunities and can rely better on your intuition because you know what you're hearing and how it fits in with you.

2. Get candid input from at least 5 other people who know you well.

While it's nice to get input from experts, it's as valuable to get points of view from colleagues, family members, key employees who know you -- they know your tendencies, your moods, the way you think, your blind spots, your passions. Let them guide you.

3. Have a really big, big picture.

When you know your long term goals, have a vision or have a helicopter view of the current situation or opportunity, you'll be "seeing more" and thus have more information on which to base your decision.

4. Always have a Plan B, Plan C and Plan D ready to go!

You can improve your good judgment by having back up plans, whether you need them or not.

5. Don't put yourself in situations where you are forced to rely too much

on your "good judgment." This one is important. After all, shouldn't you be enough ahead of the curve to have been making good decisions along the way so that having "good judgment" doesn't become critical? Don't confuse good judgment with crisis management.

6. Separate the facts from the interpretation of the facts.

There are very few facts that aren't also coupled with someone's (even your) interpretation of the facts. Either sales are down 20% or they are not. An explanation is just that. There are great explanations, few of which are worth banking your business on. If sales are down, assume they'll stay down until you do something about it.

7. Always include a worst-case scenario -- and make it a really bad scenario.

For a decade or two, Detroit kept factoring in worst-case scenarios, yet they continually came up short because they took incremental actions based on what they wanted to believe would happen, not what was so clearly a long-term trend of foreign-made cars slicing up their market share. Living in denial is always expensive -- yet we all do it. A good way to get out of denial is to assume that sales will drop 50% in the next year (think Volkswagen) and "be ready" for that possibility. Just by including that option and developing options at that level, one will make a better decision about what is more likely to happen.

8. Always look at the downside of every decision you make.

If you're adding a new product, increasing the customer service budget, reducing overhead, permitting use of your name/trademark, entering into a co-venture agreement, make a list of the 10 potentially negative and even deadly consequences of even a no-brainer/excellent change. Everything affects everything today -- and unexpectedly. If you respect this ecological truth you'll realize that every decision affects, in some way, you, your employees, your shareholders, your profitability and your viability.

9. Seek to enhance your reputation first; bottom line second.

I used to base most of my decisions on whether or not my company would make more money. But than I realized that the future of my business came from my current customers, their word-of-mouth and from the press we were beginning to receive from the national media. At that point, it occurred to me that if I'd just invest more money in our reputation and make my decisions based more on reputation than quarterly profitability, I'd be a lot more financially successful --- and more proud of my company, too.

10. Hang out with others who have excellent judgment.

There are so many subtleties about acquiring and developing good judgment that most of the process comes best from friends, colleagues, competitors and staff who already have great judgment. Learn from them, in every conversation.

Why do some Business managers hit the gain goal more frequently than others? They do it because they keep their operation pointed
in this direction - direction of profit earning. They never lose sight of this goal - to complete the year with a profit.

This manual Gives suggestions which should help an owner-manager to zero on profit making. It points out that you must stay
informed, make timely decisions, and take effective action. In effect you need to control the activities of your company instead
of being controlled by them.

Topnotch Functionality in golf, shooting, and fishing requires knowledge, practice, and endurance.

Similarly, in Small businesses, year-end profit arrives to the owner-manager who tries for topnotch performance. You achieve
profit making targets by knowing your operation, by practicing the craft of earning timely, balanced decisions and by controlling
the company's actions.

Adapt the Tips in this manual to your circumstance. They ought to allow you to predict the shots to maintain your company headed
in the right direction - toward profit making.

First Rule of Gain Making: Know Your Business. The Time-honored truth"Knowledge is power" is especially pertinent to the
owner-manager of a small business. To keep your company pointed toward gain you need to keep yourself well informed about it. You
must be aware of how the company is doing before you may improve its operation. You must understand its weak points until you can
correct them. Some of the knowledge you require you pick up from day-to-day personal observation, but records should be your
principal source of advice about gains, expenses, and earnings.

Know Your Gain. The gain and loss statement (or earnings Statement) prepared frequently each month or every quarter from your
accountant is one of the most essential indicators of your company's value and wellbeing. You should be certain that this
announcement contains all the facts you will need for evaluating your profit. This statement must pinpoint each earnings and price
area. By way of example, it should demonstrate the gain and loss for all your products and product lines in addition to the gain
and loss for your entire operation.

It is a good Idea to have your own profit and loss statement prepared that it reveals every single item for the current interval,
for the same period this past year, and for your current year-to-date. For example, a P&L announcement for the month of November
would show expenses and income for the current month, for November this past year, and totals for the eleven months of this
present year. Many businesses publish their annual reports with several previous years therefore stockholders can compare
earnings.

Comparison is The key to using your P&L announcement. If your accountant isn't already furnishing figures which you may compare,
you need to talk about the possibility of getting them supplied.

Financial Ratios from the balance sheet also help you to know whether your gain is what it should be. As an example, the ratio of
net worth (return on investment ratio) reveals what the company earned on the equity capital invested.

Know Your Costs. An owner-manager ought to understand prices in detail. Then, you can compare your price figures as a proportion
of sales (operating ratio). Be sure your costs are itemized so that you can put your fingers on those that appear to be rising or
falling according to your expertise and the price figures of your own industry. When prices are itemized, you are able to spot the
culprit when the overall figure is higher than what you had budgeted. Take advertising costs such as. It's possible to catch the
offender if you break out your advertising expenditures by product lines and from media. Additionally, a thorough check of
question yields from advertisements will help to avoid unsuccessful books.

In knowing your Prices, remember that the formula for profit is: Gain equals Earnings minus Costs.

Know Your Product Markup. Be sure The pricing of your goods provides a markup adequate for the kind of profit you expect to
attain. You have to keep constantly educated on pricing because you have to adjust for rising costs and at precisely the same time
keep costs competitive. Knowledge about your markup also can help you to run close outs with your eyes open. Continuing to
generate a product that just a few clients want is an effective merchandising tool just when you use it on purpose - for instance,
to hold or attract buyers to additional high markup products. Don't be afraid to drop a loser out of online.

Garbage-In, Garbage-Out. An Owner-manager shouldn't fudge the records. The acronym GIGO the computer business uses is accurate
with manually stored records as well as with machine-processed ones. When an owner-manager allows"garbage" to enter the records,
the accounts will contain"garbage." Reports need not be extensive but they must be accurate.

Look For Trends. Try to not look at one month's earnings or Profit picture alone. The characters on your working statements are
meaningful only when you put the image in the ideal frame - which is, take a look at your characters from the context of what has
happened and what is very likely to take place. In that fashion, you grab a downward trend before it gets out of control.

You should also Concern yourself with the figures behind the dollars - for instance, the amount Of units offered or the number of
orders. Insist on cost-per-unit figures. The Fluctuation of the cost-per-unit can be more meaningful than just looking At the
dollar figures alone. Another idea would be to display these comparative Figures on graphs so that important trends can be seen
easily.

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