How healthy is your business?
POSTED ON: Monday, September 19th, 2016
Pro-actions has a well-developed view of the key elements of running a business based on our long experience of helping 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 company owner, the business is an extension of you. Your dreams and 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 your organisation goals and strategy so that they will meet your personal goals. For example, if your goal is to build a company, 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? Is marketing support is required? What resources do you need to put into place?
Profit & Cash
Profit and cash are key yet many company owners seem to abdicate the management of one or both to an accountant. 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 your accounts to understand what is happening in the business and to avoid unpleasant surprises.
Systems & Team
The heart of any organisation is it’s 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 organisation 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 company owner is wearing so many hats. Some of them ill fitting. And 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 company 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 organisation’s 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 assessment tool that can be completed in under 10 minutes. It 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