Posted on 19/09/2016, 14:31
Pro-actions has a well-developed view of the key elements of running a business based on our long experience of helping our clients.
Starting very much with the principle “begin with the end in mind”1 we commence from the right and work towards the left. Here’s how it works:
Personal & Business Goals:
As a business owner, the business is an extension of you; your dreams, your vision. You work on it and in it, fret about it, live it and breathe it. But its purpose must always be to serve you – otherwise it will become your master. Unless that business is aligned with your personal goals then there will be a growing mismatch that can result in dissatisfaction or disillusionment. It is therefore vital to think through what you personally want to achieve from having the business.
Once you have done this you can begin to develop business goals and strategy so that they will meet your personal goals. For example, if your goal is to build a business, sell it and retire on the proceeds then your strategy will need to reflect that goal. How much will you need to support you in your post business life? What does the business need to look like in order to generate that value? What are you going to put in place to get there?
Marketing & Sales:
Key to enabling the business strategy are your marketing and sales activities. What is the best way to achieve the business goals? What marketing support is required? What resources do you need to put into place?
Profit & Cash:
Profit and cash are key yet many business owners seem to abdicate the management of one or both to an accountant who does the books annually, whilst using a vague knowledge of the bank balance as an indicator that all is well. Pro-actions advocates a regular cycle of cash flow planning and a monthly discipline of formally reviewing the profit and loss account to understand what is happening in the business and to avoid unpleasant surprises.
Systems & Team
The heart of any business is its operations. Whatever your business, it needs to be have documented processes and clear definitions or roles and responsibilities so that your staff can be trained to operate the business and so that it isn’t dependent on you to operate successfully.
Your team and the systems that support your operations are vital as the business grows. Managing the transition from doing everything yourself to having a team is never easy, but it is made substantially more straightforward by having effective systems and processes. Often the biggest challenge is hiring good people and then delegating responsibility within an environment of accountability. This, of course, leads directly to your personal leadership and time management.
Leadership & Time Management:
We often find that the business owner is wearing so many hats, some of them ill fitting, that they have little time to dedicate to leading their team and working on the business rather than in the business. Spending time working on the business (vision, strategy, planning and review) is vital as without it your business will remain capped by your own capacity.
Finally, there are the key performance indicators (KPIs). Effective business owners understand that they need real time information on the key parts their business and that this can be achieved by designing, collecting and reviewing KPIs. The most effective KPIs are closely tied to the business’ strategic objectives and therefore tell you whether the business is performing in a way that will realise your goals.
Pro-actions has designed a simple and quick business assessment tool that can be completed in under 10 minutes and will give you an insight into the health of your business in each of the areas above. Try the Business Assessment Tool out and find out how healthy your business is!
1 Stephen Covey, 7 Habits of Highly Effective People
In or last article, “Measuring What’s Important” we discussed key performance indicators or KPIs. There are lagging KPIs such as financial measures that tell you what just happened and leading KPIs that indicate what your financials are likely to look like.Read More
Following on from our previous blog in this series, “The Most Important Thing”, the next step is to translate your goals into action. For this, setting your targets and measuring your performance against them is vital to making them happen.Read More
What do you want to achieve in your business? Every owner manager had their reasons for why they started out on that journey – what are yours? And more importantly, are they still valid, are you on track, or are your hopes and desires being frustrated?Read More