Our clients run brilliant businesses that they, and we, are passionate and excited about. However, we can sympathise with the feeling of overwhelm when running a small business and the procrastination that can occur when you eventually find the time to work ON your business rather than just in it.
This becomes more relevant as we near the end of the 2021 financial year and get ready to hit the reset button for the new financial year on 1 July.
In one of our recent webinars, we discussed the top four actions that will enable you to work ON your business effectively and efficiently:
1
Set an annual plan
2
Set an annual budget
3
Set and measure your 4-5 most important Key Performance Indicators (KPIs)
4
Have someone INDEPENDENT hold you ACCOUNTABLE to your plan
We want to take the opportunity to remind you of all these and have expanded on them below, so when you have the time please read on.
Set an Annual Business Plan
A goal without a plan is just a wish.
We firmly believe that whether your business is in its infancy, pivoting and dealing with change, or a mature established business, a business plan is a critical asset to guide you and enable you to communicate your business goals and vision with your team. It should ensure that your business is on course for success.
Your business plan should assist you to:
- Review and set business direction
- Align goals amongst the owners and leaders
- Identify Gross Revenue Targets and Key Performance Indicators
- Establish a robust accountability system
- Identify critical challenges and opportunities in your business and the actions required to resolve or maximise them
- Contain set timeframes and strategies for achieving goals
- Identify what support and resources you will need to achieve your goals
Your business plan should be easy to understand and will act as a guide for you (and your team) to successfully implement your desired changes through a rolling 90-day action plan to address immediate and critical issues. It will ensure your business is on course for success.
Set an Annual Budget
When we set business budgets with clients, we encourage them to reverse the usual layout where everyone thinks about revenue first, and instead put themselves at the top of list.
Deciding what you need to be paid, as well as the profit that you want to achieve on top of your required income is the first most important step. From there we can appropriately consider the usual business overheads, and then your required gross profit and revenue required from the goods and services that you offer to your target market of customers.
We may even push you to set your three-way forecast that considers the balance sheet and cashflow forecast as well. A budget that does not consider the cashflow timings and working capital requirements of your business just simply won’t be as good for anyone running a small business. Cash is still king!
A budget is a plan that comes with numerous benefits:
- Gives you control of the business finances
- Ensures you can fund current commitments and objectives
- Helps you to make financial decisions
- Makes sure you have funding for future projects
- By estimating and targeting revenue and planning your expenditure, you will restrict spending that isn’t part of the plan
- Your business money can be allocated to things that support your strategic objectives and Business Plan
- If well communicated with the Plan, the budget helps everyone understand the priorities of the business
- Enables you to engage your team in reviewing and comparing the budget with actual results to highlight the strengths and weaknesses of the business and provide insight for where more attention and changes are required.
Set and measure your 4-5 most important KPIs
Key performance indicators (KPIs) should be connected to the key drivers of your business and aligned to your business plan. Establishing a set of KPIs limited to those that will make the most powerful difference to your business, and regularly measuring them will enable you and your team to continuously improve.
Key performance indicators are not always financial; they may be quantitative or qualitative, they may be lead or lag,
Your set of KPIs should assist with:
- Increasing efficiency and productivity
- Clarifying performance expectations with your team
- Enable you to manage your team more effectively, and manage by fact
- Gain a better understanding of how your business operates
Any time is the right time to start working on your KPIs. It is easy to put this in your ‘too busy basket’ but investing a little time each week could pay big dividends, improving both your business performance and personal life.
Have someone INDEPENDENT hold you ACCOUNTABLE to your plan
Owning and operating a business is hard work. Long and demanding hours make it easy to get trapped in a tunnel vision state. It is important to take time from the daily operation of your business to gain perspective and clarity. Often, we are not the best person to review and challenge our own performance. Therefore, we recommend that business owners have an external accountability buddy or partner.
Our monthly and quarterly coaching programs provide a regular forum to bounce ideas and make plans. They are targeted at giving you the accountability and support you need to ensure you make the best decisions for you and your business. Together we will develop strategies to improve performance and overcome any challenges you face.
Coaching is not just about increased accountability, profitability and cashflow. It is also about achieving your desired work outcomes to gain the lifestyle you want.
Whether your business needs guidance through a major change, or you simply wish to have regular contact with a trusted coach, we would love to help.
