If Your Business Isn’t Online Yet, It Should Be

More and more small, medium-sized, and even large businesses are getting themselves professional-looking websites and putting their businesses online. There are many reasons why they are doing so, and there are many benefits for you to get a website and get your business online no matter how big or small it is.

1. Prospective Clients Can Find You

84% of searches online are looking for a local business. If you want people to know about your business and you want to see it expand and grow, then it’s absolutely vital to acquire a website.

First of all, if your business isn’t online, it should be, because prospective clients who are searching the Internet for your products or services can find your site and your contact details online. Having a website for your business can also help put you on the map and spread the word about your business products or services. It’s also in your best interest to put your business online, as it will help to expand and enhance your client and customer base and relations as well as increase sales. Remember, having a business website is about selling your products or services online as well as marketing, advertising and promoting your business to existing and prospective customers.

2. People expect it

In addition, it’s generally considered a professional practice to have an online presence. Your current clients, prospective clients, customers, business associates and others will actually expect your business along with other businesses that aspire to succeed to have a professional website. They will likely even be disappointed if you don’t have a website, and think or even tell you that if your business isn’t online, it should be. Having your business on the worldwide web makes it simple and convenient for people to do business with you in general whether you want to promote your business, sell your products or services, provide and exchange information, improve customer service, or build up clientele.

Furthermore, if your business isn’t online, it should be because it makes a great first impression to have a website address and business e-mail on your business cards and stationary. When you pass out your business cards to friends, family, clients and customers, they will often take note of your website address, be impressed, check it out, help spread the word, and in turn help expand your business. However, it’s critical to keep in mind that it’s not enough to merely have a website you need to have a professionally designed website that’s attractive, informative, well organized and easy to access and navigate. If a prospective client or customer with your business card checks out your website and finds a poorly done, confusing, visually unappealing site full of poor content and mistakes, this will usually create a negative first impression which can in turn hurt your business reputation.

3. Your competitors have a website

In addition, competition itself should tell you that if your business isn’t online, it should be. People who own their own businesses know that in order to stay successful, one must strive to rise above the competition. Having your own professional business website can give you that extra edge and make you stand out in a positive light.

If you’re not sure how to go about putting your business online, there are many sources of information to help you set up a website. It doesn’t have to be complicated or extremely expensive, as are the common assumptions. You can search online or in the library for information on how to create and maintain a business website, you can go through a step-by-step tutorial, you can hire a friend or family member who is knowledgeable and skilled in this area who is willing to do it for you, or you can hire a professional web designer.

Why Family Business Owners Need a Job Description

Do you know what one of the most important tools family business owners need to ensure their business is well run? You might think of a board of directors a strong management team or a family employment policy. While these are all good answers, the tool I would like you to consider is an owner job description.

My guess is that many readers are skeptical at this suggestion. This is not the advice you typically hear. Yet in my experience, a sophisticated appreciation of what ownership is (and is not) is such a critical dimension for long-term success in family enterprise that I want to convince you that creating an owner job description should be at the top of your to-do list.

If I were trying to encourage you that having a job description for the CEO or other key positions in your business is important, my task would not be so complicated. The value of job descriptions in a business is widely understood. Job descriptions clarify the hierarchy of authority, establish accountability, ensure key tasks get accomplished and provide a mechanism for evaluating performance.

Imagine that you have created a new position for a vice president of marketing in your business. How could you possibly fill that position without a job description? Potential applicants need to understand what will be expected of them in the job, to whom they will report and how you will evaluate their success in the job. You would also use the job description to determine what skills and experience will be needed to fill the role. And other managers on the team need the job description to understand how this new team-member’s responsibilities will integrate with what they do.

Since convincing you that a job description in your business is probably an easy sell, let’s take an example that may not be as familiar. What if I told you that you have a job description as a homeowner, even though it is unlikely you have put it down in writing? As a homeowner, I would suggest you need to do the following:

• Ensure that your mortgage and property taxes are paid
• Invest in the maintenance of your property to ensure that it is a safe environment for your family
• Protect your property rights (e.g., do not let others infringe on the property)
• Be informed on issues that affect your community (e.g., changes in laws, new building codes, etc.)
• Create a will that determines who will own your property if you pass away
• Maintain records to protect your ownership (title, tax records, etc.)

While you may not think of this list as a job description, these are clearly actions a responsible owner should take to protect his or her investment.

So, what is the job of a business owner? Let’s take a look at the job descriptions we have already considered. In the case of a management job description, the purpose is to clarify lines of authority and ensure that key tasks are accomplished, among other things. In the case of an owner’s job description, these criteria apply as well. An owner job description outlines who is accountable for key responsibilities in the oversight of the family business. Are owners responsible for day-to-day operations of the business? No. But, they are responsible for setting the vision and direction for the business. With respect to lines of authority, owners are responsible for electing directors, who in turn, are responsible for overseeing management.

Similarly, there are parallels between the homeowner job description and the business owner job description. The focus of a homeowner’s job is to ensure his investment is protected. A business owner has a similar motivation to protect his or her investment. So, what are some of the actions you should take as a business owner to protect your investment? First, management is best able to do its job if owners provide clear direction about their desires for the future, as well as their financial expectations of the business.

In setting an ownership vision, questions that need to be answered include:

• How long do we want to own this business?
• What role do we want family to play in management of the business?
• What are the rules for who can own stock in the business and how ownership will transition from current to future owners?
• How much risk are we willing to take on?
• Do we aspire to diversify into different business lines?
• Do we expect to take money out of the business every year?

Beyond these vision questions, owners should also provide guidance on the values they would like the business to embody. Is creativity or entrepreneurialism important? Do we expect management to make a strong commitment to employees? Do we expect the organization to be involved in the local community?

In order to protect your investment, you must also ensure that you have the appropriate governance structure in place to oversee management. Owners must decide how the board of directors will be structured. What role will owners play on the board? What role will management play? Will you incorporate independent directors in the mix? How often will the board meet and what authority will it be given? And, owners have the responsibility for selecting the directors, typically on an annual basis.

Finally, in order to make all of the decisions described above, owners need to be well-educated. They need to understand their industry, the competitive environment and be able to read and evaluate financial statements. They also need to understand the unique aspects of businesses with a family ownership structure.

In summary, if you were to write a job description for yourself as an owner, it would be fairly short:

• Define the vision for the business
• Clarify financial expectation to management
• Articulate values that should be embodied in the business
• Develop a strong governance structure to oversee management performance
• Elect qualified board members
• Understand the business context we operate in

While the list may be fairly short, each of these responsibilities is incredibly important.

Protecting your investment in a home or other assets is something you do without thinking. Shouldn’t you place the same importance on protecting what is likely a much larger investment-your investment in the family business? I hope you will take these suggestions to heart and craft a simple owner’s job description for the owners in your business.

A senior associate of The Family Business Consulting Group, Inc., Jennifer Pendergast specializes in strategic planning, family and business governance, family office structure, and facilitation. Jennifer is an experienced management consultant with an extensive background in the many strategic challenges faced by family firms serving a broad range of clients, ranging from startup to Fortune 500 companies, in both for-profit and non-profit arenas.

If You’re Thinking of Buying or Selling Your Business in the New Year, How is Your Performance Plan?

An area that a lot of businesses don’t spend a lot of time measuring but is very easy, cost effective and critical to do is the key performance areas of the business. These key performance areas or metrics can show whether the business has all the parts working together and in a healthy manner or is in need of a tune up or radical surgery. There are a number of key areas to a Performance Plan so let’s break them down.

The first area to look at is the financial statements of the business. The first and most readily used is the Profit and Loss Statement as it shows the income and expenses of the business with hopefully the income greater than the expenses. Just as important, however, is the Balance Sheet as this document shows the wealth of the business. With an up to date profit and loss statement and balance sheet, a trained business appraiser can then calculate what the owner of the business could expect to get if they decided to sell it on the market.

In addition to the financial statements, the next performance area to measure and manage can be simple business metrics that include the number of incoming calls to the business (and this can be broken down into times of day if call volume is an important metric,) the number of hits to the website, volume of email, volume of faxes and volume of orders placed on-line (if important.) Depending on the business, the total number of orders placed and/or the number of orders placed by each sales person. In simple terms, sales can generally be easily measured. It’s important that the sales team is clear on sales targets and agree how they are to be measured. Sales people are motivated by getting results. Make sure the results are measured accurately, consistently and fairly or sales people will become de-motivated; which is obviously the complete opposite from what you want to do. It’s important to start by building Key Performance Metrics for your business. Don’t be afraid to change and add other metrics as they are normally easy to isolate and therefore count.

Make sure all metrics are counted monthly and as many data points shared with everyone in the business as possible. Celebrate successes and ask the team for suggestions when the performance isn’t acceptable.

The next aspect to a Performance Plan for the business and something not always done is an annual performance review. There are different approaches to this topic; some are personal preference. For example, some businesses tend to link the annual performance review to also a salary review. My preferred strategy is not to link them. My reason for this is that I don’t think they are linked. Compensating someone on performance is important. However, the good performance of one person does not always mean the business can afford to pay as collectively the business may not be performing well enough. The argument goes that incentives should include as many workers as possible so if they are successful so too will the business, but you can have a top performing employee that is bring in the best sales for the business but his demeanor or attitude to co-workers may not be acceptable. Therefore, how do you financially reward a top performer during a meeting and then point out behavior or communication problems. Rewarding people for sales is great however, you will lose any goodwill from acknowledging and rewarding great sales and then bringing up negative issues.

If the performance of each employee is measured with an Annual Performance Review an extension of that is to include feedback from the co-workers at the same level as the employee. This is called a Peer performance review. It can be controversial as someone may choose to denigrate the performance of a co-worker they don’t like. So there are risks. However, it can provide constructive results if managed correctly.

A best practice for a Performance Review is asking an employee that reports to a manager their opinion on the performance of the manager and how the manager could do things better. This is called a Management Review. Once again this approach can have a downside but it can enable a business to grow and be internally stronger if open and honest communication is part of the business culture.

The final item to consider is your performance as the business owner. Not every owner has the time or desire to put such a process in place, but if you want your business to grow and have a healthy business environment I think it’s one of the best means to enhance the success of the business. Depending on the size of the business, the Owner Performance Review can be done by hiring an outside consultant. An alternative suggestion is to do it by anonymous survey but this approach reduces the effectiveness as it restricts the answers that can be given and doesn’t allow an exchange to clarify things.

There is a business axiom that says “If you can’t measure it, you can’t manage it.” The Performance of a business can mean the difference between success and failure. Most businesses do not fail overnight. They decline gradually, with often the decline picking up steam towards the end. A good Performance Plan will provide warnings that if measured and managed will allow corrective action to be taken in time.

Part 11 of this article series, explains the importance of a Disaster Recovery Plan. Most businesses don’t have the time to put this together. That can be a mistake and this article explains why.

Andrew is a 5-time business owner that helps entrepreneurs exit or enter business ownership. His services include helping owners sell and/or buyers purchase an existing business or consult on purchasing a franchise. He also provides certified machinery and equipment appraisals and business valuations.

Andrew currently holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA), the highest credential awarded by the IBBA and the Certified Business Broker (CBB) designation from the California Association of Business Brokers. He also holds a Brokers License with the California Department of Real Estate, is a member of the Sacramento Metro Chamber of Commerce and the Chair of the Sacramento Chapter of the California Association of Business Brokers.