Is Your Business Out of Control?

How do you run a business? What do you do? What do you look at? How do you know when it's running well and not?How do you run a business? What do you do? What do you look at? How do you know when it's running well and not? What are the indicators? In management speak: the KPI's?

There are dozens, if not hundreds, of ways to gauge how a business is doing. The question is: which are the few that really matter? What are the true vital signs of a healthy business? And how do you measure them?

This blog marks the start of  a series based on our 2015 Open Day workshop "Better Business". If you'd like to find out the answers, why not follow me? Over the next 5 weeks all will be made clear.

Heart rate

So how are you? Well? Got a cold? Fit? Overweight? Something else? Because a business is just the same. It can be fighting fit. It can be out of shape. It can catch a cold. And it can look well, but actually be sick. All can seem OK, but underneath there's a condition. Something that means there's illness coming.

The question is: how do you tell? If you were a ‘business doctor', what would be the ‘pulse' you looked for? And how would you check it?

Blood pressure

We started the Open Day session "Better Business" with a question: "How's business?" And we got all sorts of replies from "pretty good" through to "tough". But, being honest, we weren't actually interested what was said – we asked so we could follow up with: "What makes you say that?" We wanted to know the signs – the evidence – people use. We were interested in the vital signs they looked for.

The first three answers shouted were "PROFIT!" Others, like "new customers", "cash-flow" and "job satisfaction" got mentioned. They're not daft answers - like we said before there are loads of ways to measure how things are. But the point is this: hands-down, our experience shows money's the prevalent measure of performance. Well of course it is! Obvious isn't it? ...is it?

Body temperature

Why are you in business? Why? What's the purpose of it all? You're doing it for something so cough-up, what is it?

Maybe it's a hobby you can make a living off. Maybe you're out to build a chain of ‘offices' around your part of the country. Maybe you're out to get rich. Maybe it's something else. None of these is any better than the other. What's right is what's right for you. Genuinely, it is.

But, make no mistake; business – that is a commercial enterprise that endures – does have a purpose. No matter how big or small you are now or want to be, there's something you must do. And it's the same for all of you! Do you know what it is? Follow this blog and find out.

Respiratory rate

Your Bank statement - you know, that ‘report' that comes through every month, the one that shows everything paid in and out – and the balance of the account at the end of the period. Useful isn't it? Tells you how things are going. How well you're doing. Gives you confidence next month will be good too.

Really useful. "Key management information" if you're into management-speak. The stuff to run a business on. Job done.

So why are we talking about it here? What's the problem? What's the fuss? Follow this blog and find out.

Nutrition

It's satisfying when someone phones you and says something like: "My friend recommended you." Really great isn't it? Word-of-mouth – brilliant. It's also great having a business where there's a lot of "regulars". It's Wednesday, it must be Mr Smith! You get what we mean.

But here's a thing. Yes, both these things are good – no question. But do they tell you how well you're doing? Do they actually give you that insight? Or do they just tell you what's happening? Are they just signs of activity? You may think this is just playing with words. We can assure you it isn't. The key is you understand what we're on about and why. To find out, follow this series.

Better Business

Time and again we see businesses running themselves off bank statements. Growing themselves off the back of word-of-mouth. Businesses owners believing because that's how they've done things it must be right. That everything's OK and always will be.

But when we say this isn't how to run a business - that they're basically out-of-control - well, eyes glaze over and it goes quiet. Sorry, but that's what we see. As a trade only distributor we want – we need – you to be successful: we have no business without you. So our advice isn't given just because it's what we would say. It's because it it's real.

To make it crystal clear why we say what we do we staged "Better Business". We put on a special session to spell out the risks and dangers of running your business like this and the quickest, easiest ways of getting it right. This blog series goes through what we said. Over the next few weeks look out for the following titles:

1. Out of Control? (this blog)
2. Run Your Business the Text Book Way
3. No Customers, No Business
4. Money, Money, Money
5. Plan, Organise, Motivate and...

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ShopTalk is a unique Business Advice service for small independent IT businesses. The advice it gives is unique and there's nothing like it anywhere else. If you'd like more blogs like this, then either follow me or, to get email updates subscribe.