A step by step way of stopping those month end surprises

Managing the performance of your business is an essential skill and you'll probably be thinking - "yes, I'm doing that already"

But are you?

I'm sure that you have a grasp of the key data - sales, profit, cost, break even point. You do, don't you?

These are very important areas to understand. However, what I mean by performance management goes a little deeper.

I strongly recommend that you take time out of your diary each week or month to review every part of your business and look for ways to improve matters. To do this effectively, you will need to start to pull together some data (facts and figures) about the key areas. I would suggest that these are;

1. Sales activities
- number of sales calls made / sales letters sent
- number of responses received to advertisements/ marketing initiatives
- number of leads
- number of proposals made
- number of sales actually made

2. Financial activities
- average number of days taken for customers to settle their invoices
- average number of days it takes you to pay your suppliers
- number of days to turnover stock
- average cash/ bank balances

3 Staffing
- number of days lost to sickness
- staff turnover rates

4. Customer/ Clients
- number of complaints received
- number of testimonials received

There will be others that are specific to your business, I'm sure. The important thing to remember is to ensure that the data that you collate is relevant to the ongoing success of your business.

So, you have a regular flow of data about the key elements of your business - what do you do now?

Simple - you systematically look at each area and identify ways to improve performance - I'd suggest that you involve your team in coming up with these ideas. This will get them involved and they will take ownership of making the changes happen.

What I find is that significant improvements in performance result very quickly - you'll be amazed, I'm sure. Try it and let me know the outcome.


See also;

Recession proof your business

Managing Your
Performance