There are two parts to being in business, doing the work and managing the business. Most people in business spend way too much time doing and not nearly enough time managing.
Nirvana for an entrepreneur is when all they do is manage the business.This is when the business owner evolves into a Managing Director or Chief Executive Officer. However most SMEs simply are not big enough to sustain a full time person running the business. If this is your position then you must take time to stop doing the business and spend some time managing the business.
In my experience the best way to do this is to have a regular board meeting. Most businesses have monthly board meetings and probably miss one or two a year, so end up with about ten. Two monthly might be better for you, but I feel the minimum is quarterly meetings.
I also suggest you appoint either your accountant or someone else that you respect to act as your chairperson. This will give you the discipline to devote the correct amount of time and energy in managing your business. You may also want to include someone from your team and if possible another independent director with expertise in an area that you are weak.
The next thing you need to do is have some regular reporting. The Management Report in Xero is perfect for this and covers off all the key financial data. If you have a strategic plan that you have converted into a budget the Management Report in Xero can compare your actual results to the budget. This is an excellent level of reporting. It is likely that you will have some key factors that seriously affect your business that are nonfinancial and I suggest you look at the best way to collect that data and put it in a report, even better if it is being compared to a target.
Your board report needs to be published to your board members at least two days before the board meeting, to allow enough time for people to read and consider the contents, especially if the report includes items that require opinion from the board members. Board meetings are a great time to ask questions and consider different opinions.
Once you have your board report built you need to hold your board meeting. I currently sit on four boards, two of which I am the Chairman. The agenda I like to follow is:
- Minutes from previous meeting
- Action items from previous meeting
- CEO report
a. Next 3 months
b. Sales & Marketing
- Specific Growth Plan
a. Top of mind for the CEO
b. Next hires
- Annual discussion topic
- General Business
- Time, date and location of the next board meeting
Board meetings normally run for one to two hours, but can sometimes be longer. You need to be careful that the time taken to build the report(s) for the board is not too onerous, or you will start to get sick of the process. Quite often in the case of board reporting less is more.
You will note in my Agenda above I have “Annual discussion topic” and I think that needs further explanation. Once a year I like to build an annual plan for the board meeting and come up with 6-8 topics that we need to consider and spend 20-30 minutes devoted to that topic at each meeting. Quite often these will come from the strategic plan. They quite often include big ideas, what-ifs, risk reviews, or reviews of certain elements of the business, like the marketing strategy for example.
I hope you agree that managing your business is as important as doing your business. True entrepreneurs can do both really well. Running board meetings may seem old fashioned to some, but they work really well. How important do you see management is in respect to entrepreneurship and how do you execute this in your business?