One of the first questions I ask a new client is “Why are you in business?” … I usually get a blank or even wild stare when I’m sitting in their office and the nature of their business is obvious. The point I’m making is what is their aim for being in business; what is their end goal. Is their business a passion, hobby, retirement scheme or a family dynasty? Are they just looking to pay their bills, or do they seek something more?
Once you understand “why” you are in business you can then define the “what”, “how” and “when” to achieve that goal. The journey to the end destination is different for each business.
“Starting with the end in mind” we can now develop a robust business plan, mapping out the journey in bite sized chunks – I usually suggest a rolling 5 year plan, updated at least annually. The end point rarely changes with time, but the landscape on the way is filled with ever changing risks and opportunities that need to be either avoided or seized. You need to keep your eyes wide open as you can’t afford to fall asleep at the wheel!
With your plan in place, you next need to measure your progress along the way; are you on target or do you need to make changes? Setting Key Performance Indicators (KPI) is a great way to regularly assess the important aspects within your business plan. Using the adage of “what gets measured, gets done”, well chosen KPI can ensure you remain on course. KPI can cover a range of critical dimensions tailored to the particulars of your business and end goal, for example:
· Financial: Sales income, profit, cash
· Growth: New clients, repeat clients, referral rates, conversion rates
· People factors: Headcount, staff turnover & absenteeism, training hours, health & safety
· Operational: Order fulfillment, late shipments, lead-times, plant & machinery efficiency, waste and rework costs.
· Quality & Service: Customer complements & complaints, product returns
I recommend reviewing your actual business performance against your KPI targets monthly, or at least quarterly, to ensure you have time to adapt to any emerging trends; both good and bad.
Plan for success. Get in touch if you’d like to chat about your journey.
NCBIZ provides specialist support and coaching to help start-ups and businesses across Christchurch and Canterbury establish a solid foundation, overcome challenges and perform at their best.