Resetting Your Business Goals
“Where does the time go”, say many people! We are now hurtling towards the half way point of this unforgettable year and with nearly everything we were used to in our business and personal lives having been changed in some way, it’s a good time to look back at the goals you may have set yourself for this year, especially your financial ones, as what you were previously measuring may no longer be relevant.
Money flows where attention goes
Given how much economic and financial disruption we are currently going through, it is more important than ever to sit down for a while and look at the way money is flowing through your business. Every single business has been affected in some way by the pandemic, both negatively and positively.
As businesses large and small scrambled to find a way to keep trading through the shutdown period, it meant that business models, client markets and opportunities were being rapidly reshaped in days and hours, rather than weeks and months.
In my experience, not all business owners pay sufficient attention to the day to day cash flow of their business, so my main topic for discussion with all my clients in March was about preparing or revising their short to medium term cash flow forecast – in the current climate this meant 30 to 90 days – and developing the habit of regular reviews, probably weekly to start with or in some cases, daily.
This ensured they were all able to identify the potential gaps in their cash receipts providing them with clarity over the immediate actions necessary to plug the gaps. Claiming cash grants, furloughing staff and applying for government backed loans all played a part in stabilising their businesses enabling them to then focus on running their business.
Tracking key business metrics
Every business is different, but one thing they do have in common is the benefit of having a suite of key business metrics against which performance can be regularly tested. These metrics must be the few critical measures of success for your business and, this may seem obvious, but they must be easily measured. Whilst you can measure any of the hundreds of moving parts in your business, metrics tend to be found in 5 key areas of your business
- Sales & Marketing – the activities you undertake to generate new business
- Customer service and engagement – how well you look after your customers and help create ambassadors for your business
- Quality & Productivity – how well you make and deliver the products and services you sell
- Team Performance – how well your team are performing against their goals
- Financials – the key financial measures which tell you how well the business is performing
All the metrics you have chosen as the most critical for consistent measurement should then be summarised in a Dashboard, this is the business equivalent of the dashboard in your car which provides you with key information in a timely way to keep you heading in the right direction at the right speed.
If you don’t have a systematic way of measuring your business metrics already then now’s a good time to start! Don’t over complicate it to start with by focusing on one or two key measures, getting the feel of it and moving on from there.
Now is also an important time to refresh your business goals, which should be Specific, Measurable, Acheivable, Realistic and Timely. What were SMART goals before March are unlikely to be as SMART now, so revising your goals to meet your new business environment is essential.
Businesses have found that moving their services online has given them the opportunity to serve a much broader range of clients, spread over larger geographical areas. Businesses that assumed their client base was located close to their physical premises, have discovered that with a bit of tweaking, they now have regional, national and international reach.
Equally businesses that looked further afield for their clients, are discovering a whole new market right on their own doorstep – something they had overlooked until now!
Managing their team’s well-being, productivity and engagement has changed significantly with millions of employees having to develop new skills of working from home.
Others have learned that by collaborating with other businesses in complementary market sectors, they can now offer a suite of products that they couldn’t before. This is especially true in the artisan food sector which has embraced online ordering, home deliveries, socially distanced food markets and offering people the chance to order items from other food producers through one convenient portal.
As we begin to come out of shutdown restrictions, attention is beginning to shift from surviving, to growing and thriving. This means that now is a good time to begin to put key metrics in place and ‘measuring the impact of your marketing efforts. Each business will be different, but if you’re not used to regularly measuring your business performance then try these few to start with
- Monthly Cash Headroom – amount of cash available to meet payments when due
- Gross & Net Profit Margins
- Qualified Leads per Month
- Lead to Client Conversion Rate
- Met and Overdue milestones
There’s many more, but the important thing is to spend some time thinking about what the 5 to 10 most important things are for your business, identify how you are going to measure them and set up a system to start measuring and reviewing performance. This may be difficult to start with but stick with it and you’ll develop a business habit which will, in time, have a very positive impact on business performance.
Actions like this will help you to keep on top of what’s important in your business and enable you to make better quality decisions quickly.
Have you reviewed or reset your business goals for the rest of 2020?
What have you changed in your business during the last 3 months?
Do you have and measure regularly your key business metrics?
#smallbusiness #businesscoaching #goalsetting #businessfinance