Business Been Slow? Use the Extra Time to Get Organized, Strengthen Your Company

Some economists think the U.S. is sliding into a recession. That is hard to hear, especially in Michigan, where the economy has been sluggish for years. But a family business expert says bad times can create opportunities business owners don't have when business is booming.

Wayne Rivers (pictured), co-founder and president of the Raleigh, N.C.-based Family Business Institute Inc., says the luxury of extra time – which for a business owner could mean working only 50-60 hours per week rather than 80 – can be put to good use to improve both the business and the lives of those running it.

“The irony is that, while they might be more nervous … than they were before, they actually have more breathing room than they had a couple years ago,” Rivers said.

Now is the time, Rivers says, for business owners to get a handle on their time, evaluate their staffs and get up close and personal with their financial data.

Improving their time management skills should be the number one priority for all small-business owners, Rivers said. Most could get the same amount of work done in 10 to 20 percent fewer hours if they really knew where their time was going, he says.

Rivers said most business owners are doing things – such as making bank deposits and opening the mail – that really should be done by others. The time the company president spends sitting at stop lights would be better spent on sales calls or servicing clients, Rivers said. The result could be a sizable uptick in revenue.

As a way to help business owners get a handle on their time, the Family Business Institute offers a free, downloadable time log to registered users of its Web site, www.familybusinessinstitute.com.

Rivers said slow times also are a good time for business owners to evaluate their staffs. He suggests looking at every employee’s performance and asking yourself: “Would I enthusiastically re-hire this person?”

If the answer is no, Rivers said, then the next question is: “Do I really need this person on my team?"

Rivers said business owners often do not understand how much money bad employees are costing them. He says a client of his recently laid off a handful of workers – and then saw production increase as a result. The reason: The attitude of those employees had been a drain on the morale and productivity of the entire staff.

He adds that such personnel housecleaning should apply to family members, as well as non-family employees.

“Nothing drains morale more than family members who have different rules” than the rest of the staff, Rivers said.

Lastly, Rivers said, business owners should use their “spare” time to dig into the company’s financial statements and really understand what is going on – at a deep level.

“We have been shocked at the poor quality of the financials” at the companies the institute has worked with, Rivers said.

Among the big mistakes business owners make, Rivers said, is failing to track key performance indicators – such as gross margin compared with their industries as a whole – that can tell them how things are really going. In many cases, he said, developing a better understanding of the financials and better reporting of key indicators will involve working with the company’s accountant.

All of these issues can be more complicated when the company is owned and run by family members, Rivers said, because the desire to maintain family harmony can lead relatives to avoid tough issues. But he advises that such avoidance can buy, at best, only a temporary state of tranquility – to the detriment of the both business and family.

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