Friday, January 20, 2006

Questions every business owner should ask

Bank of Montreal is one of the smarter banks in using its website to provide useful, easily accessible information for business owners. (It’s not very well structured or promoted, but you can’t have everything.)

Worried perhaps that some of their clients are sleeping at night, BMO offers a long list of questions that entrepreneurs in growing businesses should be asking themselves. It’s also a useful checklist for anyone who sells to small business, to help them better understand their customers’ needs.

Questions for the owner of a growing business
You are in business and making a profit. Orders are coming in and you are considering expanding your product line or adding a new location. Keeping an eye on the fundamentals - cash management, your competition and managing staff and expectations - can help sustain your expansion for the long run.

Questions to Ask Yourself
Do I have the necessary capital to finance my growth?
Am I doing everything I can to keep a healthy balance of work and personal life?
Do I know what the competition is doing?
How will the competition react?
Am I expanding too quickly?
Can I handle the stress of managing a much larger business?
Do I want to grow for growth's sake or because it will be more profitable?

Things to Watch For
Staffing up too quickly
Accounts receivable that are not being collected
Increased inventory costs
Expansion without a solid capital base
Overworked staff
Organization growing out of control
Inefficient Cash flow management

Keys to Survival
Follow your Business Plan
Keep your financial partners informed of any major expansion or change
Expand in areas where you have experience and can make a profit
Listen to your customers and adjust your approach
Delegate more
Have proper control systems in place to manage growth

To find this checklist and more like it, click the link below. Once you're there, go to the right-hand menu and click on “Business Planning Resources.” Take your time – there's lots of good stuff here.

Click here for BMO’s Business Planning Resources

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