March 2011 Intermediary A-Musing
Drop the Dead Donkey – Plan, Strategy, Review
You’re born, you live and then you die. Allowing for the bits in between blowing it all apart, a simple narrative many of us can understand. It’s the bits in between that can get as complicated as a chemical equation. Whether choosing what to have for breakfast, how to get a rein on the economy or any of the things that come up as quoted by Underworld; job, family, tv, car, DIY, what to do on Sunday morning, there are pros, cons and perspectives everywhere. And, as soon as one problem goes away another turns up.
Not just in the financial industry do numbers pour out every day with another statistic to make another headline. There are astonishing analytics blogs overflowing with information, great economists blogging their understanding and opinion can be heard from every type of news media available, however, often they don’t immediately relate to some businesses.
When the smaller business person is battling hits from up, down, and all around, inflation is devaluing assets, liabilities aren’t always matched. A business can be caught in a whirlwind, attempting to reduce its debts during traumatised times and trying to weather the storms of the current economy with a resulting bewilderment interpreted as complacency. Treading storm water can only be maintained for so long before becoming exhausted trying to minimise debt as a priority to maximising profit; a challenging U-turn, especially when lenders are risk-averse and have high charges and fees. For any whose foundations have been maximise profits to minimise debt, expecting to maintain and invest in themselves at the same time as protecting employees and themselves, all at a time of being extensively hit from supporting capital stresses, the situation can quickly turn to sink.
We’ve met many businesses who’ve taken a wrong decision at some time or other but that doesn’t, necessarily, make that business bad. We have also, on occasion, come across a business which, with all the will in the world, won’t ever be run efficiently and leaves plenty of room for improvement, which is disheartening for those whose business is desperate to be innovative and seeks out improvement.
Using our mantra, Plan, Strategy, Review – here are 5 ways that micro and small business could be enabled to gain some traction.
- Value: Value your business by valuing how it translates to others – Plan, Strategy, Review
- Prioritise: Life’s constant is that everything changes – Plan, Strategy, Review
- Adapt: Be aware of changes – Plan, Strategy, Review
- Maximise: Potential – Plan, Strategy, Review
- Communicate: With and about the business – Plan, Strategy, Review
A recent story told to us examples how this works, (not how businesses work generally, it should be read with tongue firmly in cheek).
Plan, Strategy, Review – A decision is taken to buy a donkey for £100.
- When it’s delivered the seller apologises that there is some bad news the donkey has `ceased to be`, `its dead’. Plan, Strategy, Review the Value.
- The person asks for their money back and the seller says they can’t make a refund because they’ve spent the money. Plan, Strategy, Review the Priorities.
- The person decides to take the dead donkey and hold a raffle. Plan, Strategy, Review how to Adapt.
- They sell 500 tickets at £2 each, making a profit of £898. Plan, Strategy, Review any Potential.
- £898? Yes, the original £100 repaid, less £2 returned to the winning ticket who complained the donkey was dead. Plan, Strategy, Review effective Communication.
Not so massively complicated……..
(Image and Article credit: Copyright SUF)