It is an unfortunate fact that many businesses do not track their own performance which can sometimes lead to some unpleasant surprises, e.g. the first you know that you are overdrawn is when the bank rings you to tell you or you are shocked by the amount of BAS that you need to pay the ATO.
Good businesses however do measure and manage what is going on using a “balanced scorecard” approach. This is simply setting targets for, and keeping track of, key business performance indicators ideally across the ‘5 Key Areas of Business’:
• Financial Performance
• Customer Service
• Staff and Culture
• Systems and Processes
Those businesses that take this approach stand a much better chance of achieving their objectives than those who don’t. However great businesses go one step further; not only do they measure and manage, they predict. They analyse the information that they have obtained to make business decisions based upon what the data is telling them. For example, if a visible trend of lower monthly sales is apparent they will examine the underlying reason(s) and take appropriate action before finding out too late that they have missed their annual revenue target. Risk analysis falls into this category as well – by taking the time to consider what issues might arise in the future, great businesses put mitigation strategies in place to prevent these from occurring but in the event that they still do, they have given themselves more time to derive better solutions.
Contact us today for a free, no obligation meeting to discuss your business requirements.
Ian Ash, AInstIB
Managing Director, OrgMent Business Solutions