Are You Running Your Business? Or Is It Running You?

“It’s Thursday morning at 1:45 a.m. I just finished work…I haven’t even had supper yet…guess it’s too late for supper anyway. I will try and make it to the seminar, but I’m not sure if I will make it. I may get there late.”

This was an actual email sent in by a contractor to our office not long ago. He was scheduled to attend a morning meeting at our offices, but as you can imagine, he didn’t show up. I can look at the bright side and say at least he was considerate enough to email our team, but that is not what this column is about.

Why was he working so late? Probably he had a deadline and the job just had to get done. He made a commitment to his client and he certainly would never let down a client. But why so late? The real reason is that he is not running his business, his business is running him!

I guarantee that the next day he was exhausted and not productive at all. If he was going the next morning, it was slow going. He didn’t see his family or eat dinner. Is this why we get into business? Where is the glory in living this way? Unless he makes a conscious decision to change and get out of this type of work all I can guarantee is more 1:45 a.m. days. To break this absurd cycle we have to systemize our business and all of the processes around our business. It begins with a plan and a question.

What is the real purpose of your business? You may recognize this theme—I speak often about asking this question of ourselves. If you answer, “To make money,” then what is that focused upon? I don’t care what region of the country you are in or what the state of the economy is, what happens inside our own companies is up to us.

Here are 10 simple questions. If you know the answers your business is going in the right direction. If you can’t answer, then you need help.

1. What is your gross margin?

2. What is your asset-to-liability ratio?

3. Do you have a written business plan for the upcoming year complete and ready?

4. What is the real value of the inventory in your company?

5. Have you negotiated the upcoming year’s pricing with your suppliers yet?

6. What is your direct-labor percentage?

7. What is your overhead or administrative percentage?

8. Is the upcoming year’s marketing plan written and ready?

9. Do you have a daily report to track your company’s results?

10. Do you have receivables? If you do are they less than 60 days old?

If you cannot answer these simple questions you may be destined to work until 1:45 a.m. You need help and you need it fast. It may be time to consider the real purpose of your business. Take the time to start getting ready today. Then, hopefully, you won’t be the type of contractor working until the wee hours of the morning. Instead, you’ll have a full action plan that will guide you to a profitable future.