Go Back to Basics to Move Your Company Forward

Sept. 26, 2008 - PRLog -- Owners of small-to-medium sized businesses struggle to cope with the overwhelming workload required to manage and operate their companies.  They may have started the business to market their skills or talent, but soon, the everyday tasks associated with administrative, personnel, and regulatory compliance leave little time for the work they enjoy.  As their enthusiasm wanes, management tasks pile up and the owner slips into reactive mode – always putting the next fire out, never moving the company forward.

To climb out of that rut, the business owner has to regain control of the company’s fundamental purposes and priorities, according to Marketing Director Jodie Shaw of ActionCOACH, a global business coaching company.

“Many business owners forget why they started their companies,” Shaw said.  “The company was created for the benefit of the owner.  However, instead of managing the business to create a comfortable lifestyle and provide job satisfaction, owners become subservient to their companies.  They sacrifice lifestyle and happiness in a misguided effort to grow the company, with the result that both the business and the owner stagnate.”

Her company’s Business Coaches work with clients to re-focus their companies.  For new clients, this usually means going back to basics and re-purposing the fundamental processes that comprise the daily management routine.

“The keys are to set realistic, yet ambitious, goals and to identify the business drivers that will determine whether you attain those goals,” Shaw said.  “And you must measure the progress made on those business drivers.  If you don't test and measure results, how can you really know what is working, and what isn't?”
 
Business Coaches work with small-to-medium sized business to define five to seven Key Performance Metrics (KPMs) that will serve as business drivers – measurements that can be acted upon and that impact the company’s bottom line.  For example, a company’s average sale amount and its number of purchases made per customer are business drivers – they can be acted upon.  Whereas total sales is not a business driver, it is a business result.  

Shaw recommends that clients begin by tracking and trending the company’s financial performances.  Business owners should know how to use an income statement, cash flow statement, and balance sheet.  Second, they should track the key business drivers, such as leads per month, sales conversion rate, etc.  Third, among the KPMs, identify and track ones that increase both productivity and customer satisfaction.  Improving the company’s KPMs become the new priority.

By setting a goal for each KPM and assessing the results each reporting period, owners of small-to-medium sized businesses take control of those results.  And they can optimize the results to provide their desired lifestyle.  Once owners make a habit of managing their companies’ fundamentals proactively, they can manage their lives proactively as well.  


About ActionCOACH

ActionCOACH is the world’s number one business coaching firm, with more than 1,000 offices in 26 countries.  To learn more about business coaching and ActionCOACH, go to actioncoach.com.