Many small to medium business owners often rely on their gut feel and the general vibe of the team to determine business performance. The risk is that sometimes significant issues take time to appear.
As with most health related illnesses, they do not occur in a short timeframe they build over a period of time. So what do most people do, they go in and have regular checks, that involve tests which measure specific levels or rates to know how their body is performing.
Businesses are the same. To know how a business is performing you need to conduct some tests (reports), measure some rates (performance) in order to get the real picture of how your business is actually going. Just feeling the pulse of the business without the data can put your business at risk.
So what can you do?
Here are 3 monthly checks that every business should perform;
- Sales – review the value of your revenue by the individual, this could be a sales person, a service provider or an automated service like an online service. Be sure to compare against the previous period, the same period the previous year or sometimes comparing the average value of a transaction.
- Activity – analyse the volume of activity that is being undertaken by the team and again compare this against history and others in the team. Reduced activity can be an early warning sign of reduced revenue
- Expense – understanding your expenditure, planned and unexpected is important. Spending can run away quickly and the best way to manage this is to review it regularly. Expenditure in staff salaries compared to their return should be part of this review as well, ensuring that team members generating revenue are providing a sufficient return for their remuneration.
For assistance in developing reports and gaining visibility of your business pulse, contact Barooze today.