It’s October…three months to go, but it seems like the year just started. How is your business performing? Did you build a plan for this year or are you satisfied just to mark progress against last year? If you are like the majority, just beating last year is your goal.
Unfortunately a surprisingly low number of private businesses create plans and budgets, less than 50% of you. Of those, only a small fraction actually uses them to their competitive advantage. But if you are like most private businesses, you are content to just measure your success by beating last year. Some of you expect to beat last year big, but without a firm number or formal strategy to get you there.
World-class businesses measure success against a plan. Know any? They are all around you. They have highly focused teams, performers in every area of the business, highly motivated to beat the competition and their goals. They don’t wait for the order from you to charge, they helped create the plan and know what it is they need to do. These tips will help you learn how to measure success in business properly.
Another point to consider when you measure against last year, at what point do you make changes or respond to the trend you are seeing? Does your business follow the same trend pattern year after year? Is your customer base steady and consistent? What does your product or service offering look like? Custom one-offs or large one-time projects? Or, is your business steady and have consistent offerings to the same customer base? What about new products? Do you measure success or do those sales get blended in with everything else? At what point do you know when your year is starting to leave the rails, or worse that it already has?
Dynamic Measurement is Important
The point is, measuring success by last year’s results is not very proactive. It is akin to driving as fast as you can, steering through your rearview mirror. With a lot of practice you may be good at it, but it is very hard to do; even harder to thrive and grow a business. Is it hard to be proactive and actually plan? Yes…especially when you haven’t used this world-class tool before. Like anything else including driving through your rearview mirror, it takes work to make it successful. It is actually a very positive culture change. But once you make the change, you will wonder how you ever did it before. Growth will improve. People will become more accountable. And most important, profitability will improve and your job will become a whole lot easier.
Make no mistake, implementing a plan and budget process is a culture change. Call or email Owner’s Edge. We know how to build successful plans and budget process for many types of companies. Our mission is to bring your performance to a level you never dreamed possible.