Smart planning will help overcome trio of business challenges

The contracting economy continues to vex many small business owners. With increasing costs from fuel to health care, daily operations are reflecting these costs and affecting people, processes and strategies.

A new report by Robert Half International presented three major concerns of chief financial officers (CFOs). Given so many small business owners wear multiple hats including financial officer, the survey of 1,400 CFOs in companies with more than 20 employees has value for any mid-size to small business owners as well as independent sales representatives.

No. 1 - Healthcare Costs

Research revealed that from 1999 to 2009 health insurance premiums increased four times the rate of inflation at 119 percent while inflation was at 29 percent and wages at 34 percent. The pending health care reform suggests that many firms will be dropping health care coverage and employees will see their health care premiums continue to rise. Also, the regulations accompanying the healthcare reform will have the greatest impact on the organization, according to 62 percent of the respondents. The next greatest issue is IFRS (International Financial Reporting Standards) at 7 percent impact.

No. 2 - Controlling Spending While Improving Profitability

During uncertain economic times with sales remaining at the current status quo to actually declining, cutting costs is a prudent financial strategy. Other cost reduction strategies include flexible staffing. Other surveys include process improvement such as “Lean Strategies” along with business sustainability plans as ways to cut costs and increase profitability.

No. 3 - Workforce Morale and Motivation

As the baby boomers continue to retire along with research from other firms specific to workforce engagement and morale, the inability to retain the current workforce is only going to reduce already shrinking profits. The CFOs in the Robert Half survey suggested these three workforce perk strategies for retention and attraction:

1. Training and education – 29 percent

2. Flexible hours or telecommuting – 24 percent

3. Mentoring programs – 24 percent

The Future

Economic uncertainty is still very much evident from this survey and many others. According to 81 percent of the respondents, uncertainty makes it more difficult to be a leader in today’s business environment than just five years ago. Thirty-one percent of the CFOs believed the current business environment is significantly more challenging while 50 percent stated it was somewhat more challenging.

After reading this survey and my discernment from other ongoing employment, economic and productivity information, I belief the top future challenge will be twofold for those organizations that can weather these uncertain economic times:

1. Continuing forward predetermined progress

2. Sustaining growth (sustainability)

This challenge only reaffirms the necessity of a well-researched strategic plan that is based upon known facts through a comprehensive diagnostic. For profitability no longer is generated from one bottom line, but rather from three:

1. People

2. Systems

3. Environment

When these three functionalities of business are aligned, then sustainable business results can be achieved. Now is the time for forward thinking leaders and organizations to begin this alignment so they can go beyond being survivors of the present and become “thrivers” of the future.

Click here for more information to help your sales career.