by Steve Burke, Certified Business Advisor at the South Seattle Small Business Development Center
Need a Vacation? Three Things Small Business Owners Should Consider
As summer is in full swing, many small business owners may be ready for a vacation, but feel anxious about leaving their business unattended.
First, determine if you have a hobby business or business of value.
A hobby business is one in which the business is solely dependent upon the owner. The owners of a hobby business typically work much more than 40 hours a week often six or seven days a week and typically can only take a vacation if they close the business down while they are gone.
A business that is not solely reliant on the business owner, called a business of value, has developed business and management systems that can function while the business owner is on vacation. The business owner views him or herself as the manager of the business systems and someone who works on the business rather than in the business.
Three things the business owner who has well-developed business systems should focus on prior to leaving on vacation are:
(1) Develop, inspect, troubleshoot and test the cash
management and cash handling systems.
Cash is your most important asset. 80 percent of all of the
fraud in the state of Washington comes from family, friends
and key employees. Make sure your cash handling systems
are as tight and efficient as they can be.
(2) Train, train, train.
Your employees are your next most important asset. They
need to know how to handle the business. They must be
empowered to handle customer concerns and know how to
deal with the inventory and cash.
(3) For product-based businesses: have a well-developed
inventory management system.
The inventory is the next most critical asset. One of the
biggest causes of failure of a product-based business is the
failure to manage the inventory.
For service-based businesses: have a well-developed
scheduling and accounts receivables system.
Failing to have a schedule – focused toward the customer –
where everyone knows where and when they are supposed to
be is a recipe for chaos. Ensuring your accounts receivables
system functions efficiently is critical. One of the biggest
causes of failure of a service-based business is a failure to
collect all of the money.