Taking Stock of Your Performance
At calendar year end many companies take stock of all inventory items. Taking stock of how your company performed against your plan is even more important. Pull out the business plan you completed earlier in the year and make a comparison between what was planned and what actually happened.
Of course, if you never create a business plan, you cannot do this and you should take note of Dave Ramsay’s wise words “A goal without a plan is just a dream”. Stop dreaming, plan and implement.
The easiest way to do this comparison is to develop a spreadsheet or table with the targets from the plan listed. Be as comprehensive as you can be. Obvious items are sales, profitability and cash flow forecasts, customer and staff retention, staff and management development, customer service levels, planned marketing campaigns, planned product development/improvement and competition monitoring and reaction.
If those were not in your plan take this as a good reminder about what should be included when you do your 2016 plan. Now you should enter the actual results and show variances.
When you compare actuals to plan be brutally honest. If your plan had a non-measureable goal like “give great customer service” assess honestly how well or badly you did – ask a few customers, and not only the friendly ones. Define what ‘great service’ meant to you at that time and then measure against that definition. In future rather include measurable goals in your plan. Examples are: Less than 2% returns from customers; fewer than 4 customer complaints per month.
Once you have the variances you should examine each one, and it is not a bad idea to involve appropriate staff while doing this. You need to ask questions like:
Where did we fall short? Why? Was this the result of bad planning, bad execution or unexpected external factors?
If bad planning, what are we doing to improve with the next plan?
If bad execution, what corrective measures are or should be implemented to avoid this in the future? Note that this is a serious issue. Too many businesses underperform and then go into the next year with the same people doing exactly the same things, and expect a different outcome. They join the throngs of businesspeople who complain about how tough things are, but take no action to cope with the circumstances.
If unexpected external events, what could we have done to anticipate them or what plans should we have had to cater for the unexpected? Are these built into the next plan?
Where did we do better than planned? Could we have done even better?
How can we capitalise on these strengths?
Why did we not do planned things (marketing campaigns, training, customer surveys, etc.)?
Were there shortfalls as a result of dependencies? For example, sales were well under expectations so the cash flow suffered and we had to reduce training and marketing.
If so, how could we have avoided this consequence? E.g. reduced marketing further affected sales, so how could we have maintained our marketing plans and still coped with lower sales?
If you can measure it, you can manage it. Take control of your business outcomes by planning well and assessing frankly, then see your business improve.
To support business owners with the important task of business planning, Sanlam gives you free access to the book Your Annual Business Game Plan for Success, which provides an easy and straightforward framework needed to draft a well-crafted game plan that will create the positive change and growth necessary for business success. Go to www.sanlam.co.za/gameplan to download your free copy.
The content in this article was provided by mentor and coach, Ed Hatton – Owner of The Marketing Director. The Marketing Director provides advice and guidance to small / medium businesses in the fields of strategy, marketing and sales and general business consulting
For more information, contact:
Website: http://www.themarketingdirector.co.za/
Tel: 011 894 7618
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