No-one. How is your performance measured then? By the performance of your business. If you don’t measure this, no-one else will. It’s all up to you.

 

A review of your business will identify any areas which are working really well, and any which may require you to take action. As we’ve seen from recent corporate examples such as HIH and One-Tel, being informed about the real health of your business is critical.

 

If your business is robust, and healthy, you can be assured that you’re doing the right things and performing very well.

 

What are your ultimate goals for your business? Sell out? Franchise? Establish licensees? Take it to an IPO? Bring in other partners? Whatever your goal, the business must be healthy. You will gain more enjoyment from it, more profit, and have more fun working on it. After all, isn’t that why we’re all in business?

 

 

What are some of the questions to consider before you assess the overall performance or health of your business?

       What is it worth without you in it?

       How well does it function without you there?

       What is it worth today?

       What would you like it to be worth at some point in the future (short, medium or long term)?

       How long do you plan to run it day to day?

       Do you plan to sell it one day?

       Have you maximised its value?

       How can you make the business run better without you needing to be there all the time?

 

These questions are the starting point. Then you need to look into your business and make assessments on what needs to be done to get you to your future goals. Changes may be needed, extra attention may be required in some areas, or it may be running perfectly well as it is. There is only one way to assess how healthy your business is. 

 

 

This is where a health check comes in. You need to uncover the real status of operations and performance in all key areas:

       Finance

       Sales

       Marketing and promotion

       People

       Products and services

       Customers

       Processes and systems/Production

       Planning and goal setting

 

 

 

For each area, draw up a form with a simple checklist (Table A), rating each area as ‘poor’, ‘satisfactory’, ‘needs work’ or ‘good’. Using the above example, record your rating for each aspect which has been defined for the sales area. You should be able to see the most frequently scored rating, and make an overall assessment of the sales area.

 

In conjunction with this assessment process, it is always a very valuable exercise to survey your staff/customers/suppliers as appropriate. They ARE your business and you need to know how you are performing, from their perspective. It isn’t necessary to conduct these surveys too often, but they are a useful benchmarking tool to use from time to time.

 

When you’ve been through all of the broad functions of the business (such as sales, finance, etc.), give each area an overall rating. Again, draw up a simple chart with performance rating across the top, the operational area along the left axis (sales, finance, people, etc.), and tick your ratings in the right columns (Table B).

 

If an area were generally in pretty good shape, and scored mostly ‘Good’ ratings, but one or two aspects rated a lower score such as ‘Poor’ or ‘Satisfactory’, it would be worth your while to address those under-performing areas now, before they affect all the good parts of the business or area that are working well. As they say, “Prevention is better than cure.”

 

 

 

 

You’ll then be able to see at a glance what the overall health of your business is, and take the appropriate course of action:

       No action required (big tick for your performance, or maybe you haven’t been completely honest in your evaluation…)

       Identify priority areas which require attention

       Decide what action needs to be taken

       Implement improvements

       Review progress in 1, 3, 6, 12 months time as appropriate

 

The outcome of this process will tell you: 

B    The strategy required – which will focus you

B    What you then have to do – which will improve your operations

B    What you need to measure in the follow up review – with results as the outcome

B    It will have measured your performance as the manager of the business

B    Finally, if you are under-performing in any areas of your business, it will help you to make changes which result in improved performance next time around

 

 

The most important indicators that you must constantly watch and attend to are:

B    Cashflow and available funds

B    Sales, and plenty in the pipeline

B    Overheads kept low – don’t let them creep up

B    Know where you’re going (have a plan)

B    Put systems and procedures in place as you go (so you can delegate as the business grows).

 

 

Jenny Stilwell is the creator of BOSSMENTOR® Business, a FREE ezine for professional, lifestyle oriented business owners wanting to confidently increase the value of their service business, ultimately spending less time in it. You’ll get proven strategies, tips and resources designed to help you achieve success. To receive your free e-book information, and sign up for how-to articles on creating and managing business growth, visit www.bossgroup.com.au