As the year comes to an end, I am always excited by the activity line up of conferences and events that I get to attend or hear about in the media. It is always a giddy feeling to see the Christmas lights come up on major streets in Lagos. However, as a business owner, the year end is a time for evaluation first before celebration. A famous quote from William Thompson is: if you can’t measure it, you can’t improve it. And Peter Drucker the management guru makes a similar statement; if you can measure it, you can’t manage it. Wherever the pendulum swings for you, businesses need to evaluate themselves so that they would have an objective assessment to plan for the New Year.
Here are 5 questions every business owner needs to ask to measure their performance this year:
Did we achieve our business goals? Most businesses set goals or plans of what they want to achieve at the beginning of the year. Sometimes they find themselves adjusting their plans as the year goes on based on various prevailing circumstances like change in government policy, increase in prices of utility and increase in labor costs. Even though these changes happened, it is important to measure actual versus planned to see areas where the business achieved their goals and areas they had to pivot. You also want to find out if you did not achieve your goals because you gave up or lost focus at some point.
Did we retain and grow our customer base? A business exists to serve its customers, so customer retention and growth is an important metrics to measure the performance of a business. You can measure this by looking at your customer database or Customer relations management software to see how you performed with your customers. You would like to know which customers brought you the most revenues and which customers made a significant contribution to your business performance and this might be a good opportunity to reward or appreciate them accordingly.
Did we innovate and/or do something new? Innovation is usually a process of changing or creating more effective processes, products and ideas to increase the chances of business success. Did your business do something differently or create something new this year? If you did, you want to measure how it has impacted your bottom line.
Do we have the right team to go to the next stage? A great company is driven by great people. You vision as a business owner would be hindered or short changed if you don’t have the right people working with you from strategy to execution. Having a great team does not always mean hiring a lot of people, it could mean finding people to partner with or outsource some of your business operations to. The important thing is that you find people who are correctly aligned to your business.
Are we competing well in our industry? In the just concluded WIMBIZ conference, the MD of SLOT advised that we should develop business strategies that would be difficult for competition to copy. I always advise businesses to focus on their own growth plan and not worry so much about competition, however it is also good to keep your eyes open to see what others are doing from a perspective that helps you serve your customers better and meet their needs. So it is good to evaluate how you are doing in your industry space.
Are we building a business that would last for the long term? A business is an entity and at every point, you must assess its going-concern status. A few weeks ago, I wrote about business sustainability (read article here) and share why you should be building a business that is sustainability conscious. Your business structures and systems are factors that would guarantee longevity. Decisions like setting up a board of directors to enhance corporate governance and accountability would contribute to the longevity of the business.
Are we still clear and passionate about our vision? The foundation of every business should be a vision – what the business seeks to achieve within certain duration of time. Your business vision can be upgraded or changed over the years. It is important that the vision is clear and that your team remains motivated and passionate about fulfilling the vision. As the year ends, it is a good time to evaluate your vision and progress to attaining it.
An added bonus from me
As the year ends is an opportunity to support more people and I am doing this by organizing a free training for a ‘limited number’ of business owners who want to get it right as we enter 2016. The training would take place in Lagos. You can see details HERE