Business Sense

VSJF Business Sense Series - Next Level Tools for Entrepreneurs and Small Business Owners

Business Sense is a no-fluff source of information that gets right to the heart of what small business owners need: essential tools and informational resources to help their businesses grow.

Next Level Tools for Entrepreneurs & Small Business Owners

Business Sense is a no-fluff source of information that gets right to the heart of what small business owners need: essential tools and informational resources to help their businesses grow. Written by our team of business coaches, this series shares their decades of experience in areas such as financials, operations, sales and marketing, human resources, leadership, and governance. Business Sense is designed to provide entrepreneurs and small business owners in various sectors, including agriculture, forestry, waste management, renewable energy, and environmental technology, with recommendations and practical advice to help their businesses not only survive but thrive.

Our business management coaching and training series, and Business Sense are designed to accelerate the growth of the enterprises we work with and expand the leadership capacity of the entrepreneurs who own and manage these businesses.

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The Vermont Sustainable Jobs Fund provides tailored business management coaching, entrepreneurial support, and training to position Vermont-based entrepreneurs and small business owners in our designated market sectors for growth and long-term success. We partner with state government, private sector businesses and nonprofit organizations to build a thriving economic, social and ecological future for Vermont.

Business Sen$e Resources

Click on the module and sub-module to expand each section, and to access the corresponding pdf resource.

Module 1: Financial Literacy

Building and running a business is no small feat, and understanding business finance shouldn’t be a barrier for achieving success. If you’re like many entrepreneurs, you have a general understanding of income vs. expenses. You know where to look on your financial statements to see how much cash you have in the bank or identify your net income. However, you may not know how to use the financial data you have to elevate your decision making, negotiations and leadership skills. In our Financial Literacy Series, we’ll provide some basic financial education for entrepreneurs and small business owners to help you understand how specific financial statements are like a dashboard for your business and how this critical data and disciplined processes and practices can keep you on track to meet your business goals. Click to access the overview pdf.

1.1 The Importance of Financial Statements

Financial statements are critical as they accurately reflect the business’ performance and financial position. The knowledge the financial statements provide offers past and current performance benchmarks that inform decision-making. Financial statements help a business’ owner(s) and management to make minor adjustments and/or determine the business’ future direction to include expansion, financing, and even marketing by providing data indicating which aspects of company operations deliver the simplest return on investment. By publishing financial statements, management can also communicate with interested outside parties, like stakeholders, investors, journalists and industry analysts about its business accomplishments.

1.2 The Importance of Cash Flow Statements

Cash flow can be an even more important measure of your business’s health and eventual success than your revenue or profit. Why? Because without cash, you can’t pay your bills or your employees. You can’t purchase inventory, you can’t pay rent, and you definitely can’t afford to invest in your business’s future. Most importantly, without a positive inflow of cash, you literally can’t sustain day-today business operations. You need money in the bank to make purchases that keep your business afloat and help you avoid unnecessary debt. Said simply, when you have positive cash flow, you’re making enough money to cover your bills and even reinvest in your business, expanding operations and hiring new employees.

1.3 The Purpose of Business Controls

Business controls are the intelligent processes, procedures, and safeguards that protect your company from uninformed or inappropriate decisions or actions by any team member. As you grow your business, you want your management team as well as your employees to have both the knowledge and the authority to complete tasks without running everything past you. Business controls enable employees to exercise their judgment and use their discretion if you have empowered them with the ground rules, feedback, and systems they need to do their best work. As a specialized subset of your business, business controls and SOPs facilitate and support your employees’ performance, ensure product quality and consistency while eliminating inefficiencies and waste, and reinforce a culture of continuous improvement and growth across your organization.

1.4 The Purpose of Internal Controls

A business establishes internal controls, or financial procedures and processes, as a measure against wrongdoing and as a tool to promote accountability, protect the company’s interests and ensure the integrity of financial data. Strong internal controls can improve operational effectiveness and efficiencies while also ensuring accurate financial reporting during internal or external audits. It’s important to remember that internal controls are unique to every business and designed according to the company’s size and structure. Internal controls not only address risks to the company but also reduce incurrences of unnecessary cost or effort that wastes resources of any type.

1.5 Functional Detail on Different Levels of Enterprise Accounting

A strong finance team that consists of a CFO, controller, accountant and bookkeeper can grow your business in ways you’ve never imagined. Of course, the actual number of employees on the finance team is dependent on the needs and profitability of your business. While you may know the direction you want your business to go in the future, a finance team has the expertise to break that long-term vision down into practical steps with a realistic timeline, and to assist you in developing the systems critical for internal controls, whether inventory, purchasing or process quality. The most important approach to addressing your business’ financial needs is to have self-awareness and transparency to determine if you’re investing appropriately in this crucial part of your business.

Module 2: Business Operations

You may have the best product or service, but if you are unable to deliver, you won’t be successful. If you aim to grow, your operational capabilities need to be on the same pace as your sales growth. At best, operational issues are bumps in the road. At worst, they can derail all your prior efforts, erode customer good will and negatively impact brand reputation. When you implement a well-though tout business structure, you are able to document all the business processes and, at the same time, specify all the roles and responsibilities (or competencies) in your company. This is particularly important to optimizing employee performance when employees are working in multiple locations and/or in hybrid work environments. With the right business structure for your business you can easily foster a more engaged workforce without stifling innovation and position your business to compete successfully in this highly competitive world. Click here to access the overview pdf.

2.1 Systems and Operations – People, Process and Tools (P-P-T) Framework

In all types of business, large and small, the People, Process, and Tools (P-P-T) framework is used to improve the business’ position in the face of market competition and to remain relevant over time. Everything, from leadership to digital transformation, organizational talent, and management practices, needs to be combined for effective development. The concept of PPT or the Golden Triangle works with existing practices to ensure stronger and better business results. People and processes, along with technology, are the key elements for the overall improvement and sustainability of your business. As you build the systems focusing on these three areas, you can expect to see better outcomes in every department. Your aim should be to build agile work forces that are flexible, adaptable, and responsive to the dynamics of your industry and the realities of your environment. Businesses today need an inclusive approach to satisfy their customer’s requirements.

2.2 Metrics and KPIs (Key Performance Indicators)

KPIs and metrics enable a business owner to keep business objectives at the forefront in decision-making and to more fully understand the business’ performance, track results and make course corrections as necessary to ensure long-lasting impact and success. KPIs encourage a culture of accountability and serve as the foundation for employee performance evaluations. A KPI may reveal that a perceived “poor performer” may have some favorable stats and deliver good results. And, poorly performing employees can’t dispute when data-driven and objectively based KPI stats demonstrate the absence of results. As importantly, if the majority of your employees are having difficulty achieving the KPIs that have been set, it may be time to reevaluate your business’ goals to understand why exactly those targets are not being hit. KPIs thus foster an environment of continuous learning, enabling you to set realistic goals for your business growth and how you want to measure its success.

2.3 Operational Management – RASCI Who Does What?

RASCI is a chart (i.e. model or framework) that is used to help identify all the roles and responsibilities of each stakeholder on a project. A RASCI Chart clearly defines who is working on a specific subtask of a project. As an organization grows, or new projects are undertaken by a team of people, the work is often divided. Using a RASCI approach clarifies the individual role of team members on a project and enables the tasks to be done efficiently. RASCI Charts provide clarity around “who does what”, “who can help with this task”, and “who’s responsible for this task” on a wide range of business functions.

Module 3: Business Leadership and Governance

When creating an Advisory Board, two items are of utmost importance.

1.) An advisory board is not a quick fix for problems. Advisory boards work best over a period of time where you create a long term strategy/plan and work to achieve short term goals against the long term strategy/plan.

2.) As the business owner, you must be open to hearing opinions and advice that may be contrary to the way you have always thought or acted.

For both of these reasons, you should choose advisory board members who you respect, have a range of experience and knowledge to complement your own, who ask good questions, and who will tell you the truth. Remember that your advisory board is not a business coach nor do they serve as consultants. Rather your advisory board will help you think of creative ways to optimize your business processes, people, vendors, channels, sales and marketing and identify growth in areas where none were previously seen. With their expertise your goal should be to create or refine a long-term plan that holds you and your team accountable for your stated business goals and Key Performance Indicators (KPIs) or other metrics. Click here to access the overview pdf.

3.1 Succession Planning for Business Evolution

Succession planning is a crucial aspect of running a small business. It involves developing a strategy and identifying and developing the talent to fulfill the critical roles that ensure the continuity of your business when you decide to exit, or the stability of your business in times of crisis. A well thought out succession plan can provide peace of mind and help protect the legacy of the business that you’ve built. Other benefits of succession planning include identifying your most promising future leaders, creating a structure for training and professional development, boosting morale and reducing business exposure or risk.

3.2 Business Advisory Board Agreement

Here is an example of an Advisory Board Agreement to adapt and customize to your business and your specific needs.

3.3 Advisory Board Charter

Here is an example of an Advisory Board Charter. Feel free to customize to your business’ needs and requirements.

Module 4: Human Resources

Effective Human Resources (HR) is essential to the success of a business, regardless of its size. Your human resource practices and policies should align with your company’s values and positively impact your company culture, as well as your bottom line. From improving company morale and developing methods to ensure high performance standards to resolving conflicts among employees and ensuring a company stays within its compensation budget, there are many reasons why HR is important for business success.

Your employees are your most valuable resource—holistically caring for their employment experience, and taking care of their well-being, must be a top priority. Click here to access the overview pdf.

4.1 The Importance of Recruitment: Staffing Your Business

Attracting, hiring, and retaining the right people is key to any organization’s success. Having employees with the right skills, abilities, interests, values, and temperament helps ensure that quality services and products are created and delivered, and makes a positive contribution to the company culture. Done well, a hiring process allows business owners and their leaders (supervisors, shift leads managers) to focus their time on activities that help strengthen and grow the business, and support and develop their employees, instead of addressing problems related to behavior, performance, safety, or quality.

4.2 The Importance of Recruitment: Attracting the Right Candidates

Quality hiring practices take time and money to develop and put in place, and skilled, caring supervisors to consistently follow and help improve. Key activities include preparing job descriptions, creating and managing a process for sourcing, vetting, and selecting candidates through interviews, reference checks, and hiring decisions, and designing and implementing a new employee onboarding process, all in compliance with relevant laws and aligned with your culture. This document outlines strategies, tools, and resources aimed at getting the right people into your organization, and in the right roles.

4.3 The Importance of Recruitment: Effective Hiring Processes

Hiring employees takes time and care to ensure you hire people with the knowledge, skills, and experience needed to perform key functions in your business. While the hiring process for entry-level positions may be fairly quick and simple compared to executive-level roles, both can benefit from a structured process

Module 5: Marketing - Coming Soon

Coming soon in 2023. Check back soon.

Module 6: Sales - Coming Soon

Coming soon in 2023. Check back soon.

Thanks to the generous support of the Vermont Agency of Agriculture, Food and Markets, the Vermont Farm and Forest Viability Program (a program of the Vermont Housing and Conservation Board), and the SBA Community Navigator Pilot Program, we have been able to publish this Business Sense series as another way to help companies stay and grow in Vermont.

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