When the seasons change from winter to spring, there is a renewed energy in the air. The excitement and anticipation that had dwindled during the long winter is back.
With the warm spring breeze, everything feels new, fresh and filled with promise. Unfortunately, this feeling won't last forever. Soon, the weather will get warmer and people will start complaining about the heat. Seasonal allergies will hit with a vengeance, and the renewed energy and sense of possibility will start to fade.
Right now is the time to put spring fever to work, grab some of that energy and funnel it into your business. Right now, what didn’t seem possible a month ago feels achievable. Right now, you can do some spring cleaning in your business and make some powerful changes to improve the path you’re on for the spring and the rest of the year.
Not sure where to start? Here are some fresh ideas for spring cleaning your small business to achieve a renewed outlook, an improved plan and reinvigorated motivation.
Business goals are the foundation of any successful business. If you’ve let your business goals lag since you worked on them at the beginning of the year, spring is the perfect time to analyze the progress you’ve made and take a hard look at where you’ve fallen short.
Once your business is established and running well, you may be inclined to let things continue to run as they are. If you’ve dropped the ball with your goals, figure out what you need to do to get back on track. Make sure your business goals can withstand the SMART goal criteria. Now is also the time to schedule one-month, two-month and three-month goal check-ins to keep yourself on track.
It's time to plan again. After the crucial early stages, you should regularly review your progress, identify how you can make the most of the market position you've established and decide where to take your business next. You will need to revisit and update your business plan with your new strategy in mind and make sure you introduce the developments you've noted.
This guide takes you through this essential process, discussing stages you should go through to assess how well your business is performing, highlighting your strengths and areas that could be improved and suggesting the actions you need to take to implement the improvements that you've identified.
- Why it's vital to review the progress of your business
- Assess your core activities
- Assess your business efficiency
- Review your financial position
- Use your review to redefine your business goals
- Models for your strategic analysis
- Breaking down your strategic review
It's easy to focus only on the day-to-day running of your business, especially in the early stages. But once you're up and running, it can pay dividends to think about longer-term and more strategic planning. This is especially true as you take on more staff, create departments within the business, appoint managers or directors and become distanced from the everyday running of the business.
Reviewing your progress will be particularly useful if you feel:
- uncertain about how well the business is performing
- unsure if you're getting the most out of the business or making the most of market opportunities
- your business plan may be out of date, e.g. you haven't updated it since you started trading
- your business is moving in a direction different to the one you had planned
- the business may be becoming unwieldy or unresponsive to market demands
- It is also useful if you have decided that your company is ready to move on to another level.
Setting the direction
A clear business strategy will help to answer any concerns and show practical ways forward.
Questions you might want to ask include:
- What's my direction? To answer this you need to look at where you are now, where you want to go over the next three to five years and how you intend to get there.
- What are my markets - now and in the future? Which markets should I compete in, how will they change and what does the business need in order to be involved in these sectors?
- How do I gain market advantage? How can the business perform better than the competition in my chosen markets?
- What resources do I require to succeed? What skills, assets, finance, relationships, technical competence and facilities do I need to compete? Have these changed since I started?
- What business environment am I competing in? What external factors may affect the business' ability to compete?
- How am I measuring success? Remember, measures of performance may change as your business matures.
ASSESS YOUR CORE ACTIVITIES
A good starting point for your review is to evaluate what you actually do - your core activities, the products that you make, or services that you provide. Ask yourself what makes them successful, how they could be improved and whether you could launch new or complementary products or services.
Key questions about your products or services
It's useful to address these questions:
- How effectively are you matching your goods and services to your customers' needs? If you're not quite sure what those needs are, you could carry out further market or customer analysis.
- Which of your products and services are succeeding? Which aren't performing as planned? Decide which products and services offer both a high percentage of sales and high profit margins.
- What's really behind the problems of a product or service? Consider areas such as pricing, marketing, sales and after-sales service, design, packaging and systems during your review. Look for "quick wins" that give you the breathing space to make more fundamental improvements.
- Are you reviewing costs frequently? Are you keeping a close enough eye on your direct costs, your overheads and your assets? Are there different ways of doing things or new materials you could use that would lower your costs? Consider ways in which you can negotiate better deals with your suppliers.
ASSESS YOUR BUSINESS EFFICIENCY
Many new businesses work in a short-term, reactive way. This offers flexibility - but can cost time and money as you move from getting the business going to concentrating on growing and developing it.
The best option is to balance your ability to respond rapidly with a clear overall strategy. This will help you decide whether the actions you take are appropriate or not.
At this stage you should ask yourself if there are any internal factors holding the business back, and if so, what can you do about them?
Consider the various aspects of your business in turn.
People and skills
- Do you have the right people to achieve your objectives?
- Do they know what is expected of them?
- Do you operate a training and development plan?
- Do you pay as well as the competition?
- Do you suffer from high staff turnover? Are staff motivated and satisfied?
- Do you have the right management team in place for growth?
- Do you have the skills available that you need in areas such as human resources, sales and IT?
- Do your staff need new or improved skills or to be retrained?
Businesses often fail because of poor financial management or a lack of planning. Often the business plan that was used to help raise finance is put on a shelf to gather dust.
When it comes to your business' success, therefore, developing and implementing sound financial and management systems (or paying someone to do it for you) is vital.
Updating your original business plan is a good place to start.
USE YOUR REVIEW TO REDEFINE YOUR BUSINESS GOALS
To remain successful it's vital that you regularly set time aside to ask the following key strategic questions:
- Where is the business now?
- Where is it going?
- How is it going to get there?
At the end of any review process, therefore, it's vital that work plans are prepared to put the new ideas into place and that a timetable is set. Regularly reviewing how the new plan is working and allowing for any teething problems or necessary adjustments is important too. Today's business environment is exceptionally dynamic and it is likely that you will need regular reviews, updates and revisions to your business plan in order to maintain business success.
You may find at this stage in your business' development that you need external skills to help you with the changes you have to make. In this case you might consider:
- employing skilled consultants in areas where you cannot afford to develop inhouse skills
- appointing an experienced non-executive director who can provide a regular, impartial assessment of what you are doing
- using a management consultant to help you identify how you can strengthen or change your management structure to grow the business
BREAKING DOWN YOUR STRATEGIC REVIEW
As owner-manager of your business or as a member of its management team, you should stand back once in a while and review your business' performance.
The areas you need to look at are:
- Your market performance and direction - how well you are performing through your sales results, which markets to aim for next and how to improve your performance.
- Your products and services - how long your existing products will meet your customers' needs and any plans for renewal.
- Operational matters - your premises, your methods, technologies used, your processes, IT and quality. Are there any internal issues that are holding your business back?
- Financial matters - how your business is financed, levels of retained profit, the sales income generated and your cash flow.
- Your organization and your people - your structures, people planning issues, training and development.
The steps above will give you a clear indication of any issues that you need to address quickly in order to maintain your business in its early stages.
If you feel all of the areas above are strong, you can start to plan for the next phase and build a cohesive strategy to develop your business. However, if there are areas that need attention, deal with them now so that you can move forward. There are a variety of growth options for every business - it's important that you settle on the right one for you.
Also, once you've isolated your best route for developing your business, you can boost your chances of success by planning it carefully and monitoring your progress against an updated business plan.