Top 3 End of the Year Questions for Business Owners
Posted by Michael Beauchemin on Fri, Dec 28, 2012 @ 09:59 AM
The end of the year is upon and us and as we close out the year, here are three important planning questions a business owner should reflect on:
- Why did I get into business?
- What are my goals for the upcoming year?
- What processes, systems, and changes do I need to make for the upcoming year that will move me toward my long term goal?
Why Did I Get Into Business?
Most people do not get into business to create another job for themselves but rather have a vision of an end-game and what the business will lead to. For most owners, developing and growing a business is meant to be a vehicle to reach a destination or goal. What is your end-game? Is it to?
- Grow the business to a certain level and then sell it to retire.
- Pass it on to your children.
- Develop and retaining key personnel in place so the business can continue to operate and generate income without your presence.
These are just a few questions that will help clarify the purpose of your business. Whatever your goals and vision of the business are or what you want it to provide for you and your family, make sure it is clearly defined.
What Are My Goals for the Upcoming Year?
During the course of the year business owners are caught up in the day to day activities and loose track of what they are trying to accomplish, It is easy to loose focus on the yearly and long term goals of the business. The end of the year is a good time to reassess and reset your goals for the upcoming year.
- How many new customers do you want to have?
- By how much do you want to increase sales, margins, net income, etc.?
- Are there operational goals you want to achieve, such as a decrease in delivery time, an increase in yield, increased throughput, etc.?
- What are the customer satisfaction and improved customer service goals?
When developing your plan consider these questions:
- What resources will I need to achieve my goals for the business (increased personnel, outsourcing, or off-loading of work, additional capital, etc.)?
- Do I or my employees need to acquire additional skills, education, tools, etc.?
- Are there processes and systems that can be improved?
Share the goals with your employees and tie-in rewards for employees when key metrics are met. For example if Sally and her team are responsible for customer service and you have customers calling in repeatedly about the same issue that could have been resolved by the customer service rep with one call set a goal to reduce those repeat calls and reward your employees for meeting the goals and metrics set.
Work with your customer service reps to determine why the issues are not being resolved on the first call. Setup a plan to address the root cause. Based on the input from team members determine and provide the tools resources, training required to address the issue.
Finally, tie rewards to achieving measurable metrics. Put up charts and share information with your team members on how they are doing relative to the goals and metrics established.
The goals can be broken down to annual, monthly, weekly, daily or even shift goals. Have some smaller incentives and rewards for meeting the daily, weekly, monthly or quarterly goals and a larger incentive for meeting the annual goal. In this way you can involve all your employees to work towards a common goal and recognize and reward them for achieving the goals set.
What processes and systems are needed to help me realize my goals for the upcoming year and to meet the long term objectives of my business?
Most business owners are wrapped in their daily tasks and spend time working in their business rather than working their business. Michael Gerber, author of E Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It, highlights a common problem of why most businesses fail – business owners think like a technician and not a business owner. They have a skill to do something, i.e., a mechanic, electrician, healthcare provider, etc., are good at what they do, and focus on what they are good at doing.
Here is an excerpt from Michael Gerber’s book in regards to this subject:
“In the throes of your Entrepreneurial Seizure you fell victim to the most disastrous assumption anyone can make about going into business.
It is an assumption made by all technicians who go into business for themselves, one that charts the course of a business-from Grand Opening to liquidation-the moment it is made.
That fatal assumption: If you understand the technical work of a business, you understand a business that does technical work.
And the reason it is fatal is that it just isn’t true.
In fact it’s the root cause of most small business failures!
The technical work of a business and a business that does technical work are two totally different things!
But the technician who starts the business fails to see this.”
Michael Gerber goes on to discuss the importance of moving away from being the technician of your business. He promotes developing a comprehensive system, as a franchise would, for every part of your business.
By clearly developing written procedures, policies systems and training manuals for every part of your business, it frees you from being master and doer of all jobs. It allows you to oversee the execution of your business stratgey and more effectively manage and monitor the growth of your business.
For you to be an effective business owner in today’s current business environment you have to work and think smarter, manage resources effectively and understand what you want from the business. It i critical to setup effective and robust systems and procedures for the business to operate and function without you present. Otherwise, you are creating a more demanding job with a harder boss than you ever had previously.