I just finished and mailed my holiday greeting cards to family and friends. This time of year everyone wishes people well and offers hopes for a healthy and prosperous New Year.
It’s also the time when we begin to really think about what we want in the new year. Those New Year’s resolutions or goals for the future. We think about trying to lose weight, eat healthier, or to accomplish that thing that has escaped us until now.
Running a business means a large part of your life is wrapped up in it. We hope that our business stays healthy and prospers in the New Year with great results and few problems.
How are we going to make it happen?
I’m a big believer in knowing where you are at so that you can figure out where you want to go.
What can we do to set our business up to be healthy and make sure that we are on the right path to succeed next year?
Resolve to Take a Step Back Once in Awhile
If you make a resolution to lose weight without setting a target, you’ll never reach your goal.
Think about it.
If all you do is say I’m going to lose weight, are you done after you’ve lost one pound? You did lose weight, after all.
But does it matter?
Instead it’s more meaningful to know where you’re at first. Let’s say you’re 20 pounds overweight. Your doctor tells you that you’ll be healthier, your knees won’t ache and you won’t be winded when you walk up steps.
Now you have a real goal and you know how to measure it.
The same goes for resolutions in your business. A resolution is really a goal. Setting any goal won’t mean much if you don’t know where you are starting from.
Want to set a goal to increase the speed of your deliveries. Find out what your time to deliver is now.
If you want to set a goal say for profit make sure you know what your profit is now.
Resolve to take time to step back and really review and understand how your business is doing.
Resolve to Make Business Improvements for the Long Haul
In the first episode I did for the Healthy Business Healthy Profits podcast I talked about what makes a healthy business.
A healthy business isn’t really about one thing.
You can have great sales and still be unprofitable. You can be growing like gangbusters but still have miserable employees who are overworked and want to leave. Your business could be adding new customers left and right but have so many problems that you’re constantly late on shipments and making customers think twice before ordering again.
A healthy business to me is one that values employees, customers and the community, not just sales and profits. It’s one that consistently tries to be better at what it does. A healthy business is run by someone that sees value in being good but strives to be even better. It’s one that recognizes that when things aren’t going well and there is a problem, it wants to improve and fix it.
Resolve to Be a Better Business
Take the opportunity at year end to step back and look closely at your business and look for ways to make it even better. Think about all the things that may be holding you back from becoming even more successful.
When you figure out what’s holding you back, understand why it’s holding you back?
Some of the problems you have may go back to bad planning. If cash flow crunches rear their ugly head could it be that you are not managing your cash flow? Getting beat by the competition? As part of your marketing strategy how are you gauging the competition to get ahead of them and set yourself apart?
Some businesses are faced with employee problems. Is yours one of them? People problems can be some of the toughest to solve if you look at people as just bodies to get work done. Finding and hiring good people takes work and nowadays a lot more of it! Keeping them motivated and productive takes even more work. Make sure that your business has the right policies, procedures and processes to hire, develop and retain your employees to improve your business and therefore your results.
Processes might be holding your business back. This is a common problem many businesses face especially if you’ve grown. You find that things that worked when you were smaller don’t work as well when you become a larger business. Inefficiencies will surface as you handle more volume. Your old process relies on those few key people who now hold things up because they’ve got too much on their plate. Manual tasks just won’t work now that you’ve doubled your sales.
Other problems that hold your business back might be due to bad business practices. Business practices drive how things operate in your business especially what is accepted and unacceptable. Often these surround how work gets done, how people are treated and how your business gets results. Recently, some companies are certainly finding out the hard way that not dealing with sexual harassment is a bad business practice!
One area that you may want to improve is your profits or on the financial side of your business. If you’re looking at improving profits it’s more than just selling more products. Look at your costs, margins and pricing too. Make it easier to review your results going forward by establishing benchmarks to measure your performance and create a dashboard to quickly review them each month.
Resolve to Make Reviewing Your Business a Standard Operating Procedure
You can only know where you’re going if you know where you’ve been” – James Burke
It’s a lot easier to lose 20 pounds when you know what you weigh now. It’s also easier to stick to a resolution to improve the health of your business when you know where you’re at and then set goals for what a healthier business looks like a month, quarter or year from now.
When I was in my corporate career, we looked at certain things on a weekly basis, some on a monthly basis and others on a quarterly basis. It was standard operating procedure for us.
It took a little work until it became easy to do- a habit – just like many standard operating procedures. It also gave us great insight into where our business stood against our revenue and profit targets as well as the operational goals that we set.
Reviewing our business regularly helped us take steps to make major improvements to increase sales, lower costs and design more efficiency in our business.
If we wanted to improve gross margins, we had to know what margins were now. To increase our response rates to customer calls, we had to know what our average response time already was. We developed software, so to lower the amount of bugs we had to know what they were and where in the process they occurred. Then we took steps to make improvements.
Our first hard look at our business was a like a SWOT analysis. What are we doing right, where were we stumbling and what opportunities did we have to improve. We dove deep into things like planning, practices, people, process and profit to look for those opportunities. We performed a check-up on our company – a business physical if you will.
Start a new habit in your business next year. Give your business a physical. Review your results and your goals for the upcoming year. Set a plan to measure them throughout the year. Take a look at it each month or quarter to make sure you’re staying on track and take action if things go wrong.
Resolve to build a better healthier business in the New Year!