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Spring clean your business in December

Remember what your grandmother used to do after a long winter? She called it “Spring Cleaning.” The house was opened up to get the winter staleness out and everything got cleaned out, scrubbed up and aired out.

Let’s do the same thing for our businesses, but let’s do it in December. December Cleaning will give you the maximum opportunity to start 2013 with as little 2012 baggage as possible. Here are a few ideas to get you started.

Throw stuff away: Even if you’re not a pack rat, you’ve accumulated stuff you don’t use anymore. If you can’t sell it, give it away or throw it away, because it’s in your way.

Ditch the digital: Unused computers and other machines may have some value. Call a tech recycler and convert it into cash. Even if you donate it or throw it away, it’s out of your way.

Retool the team: The only thing worse than firing someone is letting an unproductive employee hold your team’s performance hostage for another year. You owe productive people the most effective organization possible, which often means you have to let the unproductive ones pursue their careers elsewhere.

Clean out customers: Reevaluate the profitability of customers and put them into four groups, from the most profitable As to the least profitable Ds. Worship the As, cater to the Bs, encourage the Cs and teach the Ds about self-service. When the cost of a customer’s expectations exceeds their profitability with you, they should be allowed to join your unproductive employees – elsewhere.

Scrub inventory: As with customers, take a new look at inventory by identifying the most profitable As to the least profitable Ds. Stock all the As, a few of the Bs and maybe a couple of Cs, but never let a D spend one night under your roof unless it’s paid for. Remember, profitable inventory management means just-in-time, not just-in-case.

Sanitize accounts receivable: Take the hit and write off uncollectable A/R now, so you can start January with a clean list. A/R write-offs are tax deductions this year, but become gravy if you collect them next year.

Each new year deserves to have the maximum opportunity to be successful, which means it shouldn’t be saddled with the baggage of last year’s obsolescence and bad decisions. By taking these steps you’ll be proving to yourself – and your banker – that you have the discipline to make critical decisions for which successful managers are known.

Smart managers spring clean their businesses in December.

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