Make a resolution to measure and monitor your business waistline.
We have to admit that we enjoyed this holiday season with shameless abandonment. If you enjoyed it as much as many did, you're probably making the same New Year's resolution as we are-to shape up. In fact, now is the time to make the resolution to measure and monitor your waistline. We're not talking about fitting into your favorite pair of pants, but rather about making the resolution to measure and monitor your business waistline.
Through our surveys with firms around the country, we have found that many practice owners focus their energy on working in their businesses instead of working on their businesses. You have spent time, effort and talent to build a business because you love your work, and because you're good at it-not because you enjoy the process of building and managing a business.
Often executives and managers are talented in their field, but lack the time, drive or background to attack the process of business management. It is natural to focus on tasks that you enjoy and that best utilize your talents. As your companies top executive, though, it is essential to step back from doing work in order to measure your firm's waistline periodically-it's financial and business performance-a process we call benchmarking.
Much the same way a dieter monitors his or her waistline, benchmarking helps you understand how your firm is performing, measures performance against your goals, provides ongoing measurements for assessment and allows you to adjust your business practices based on what you learn. It's like getting on the scale every quarter to see how you are doing, so that you can recognize which behaviors support your goals and which ones do not.
Through our surveys with firms around the country, we have found that many practice owners focus their energy on working in their businesses instead of working on their businesses. You have spent time, effort and talent to build a business because you love your work, and because you're good at it-not because you enjoy the process of building and managing a business.
Often executives and managers are talented in their field, but lack the time, drive or background to attack the process of business management. It is natural to focus on tasks that you enjoy and that best utilize your talents. As your companies top executive, though, it is essential to step back from doing work in order to measure your firm's waistline periodically-it's financial and business performance-a process we call benchmarking.
Much the same way a dieter monitors his or her waistline, benchmarking helps you understand how your firm is performing, measures performance against your goals, provides ongoing measurements for assessment and allows you to adjust your business practices based on what you learn. It's like getting on the scale every quarter to see how you are doing, so that you can recognize which behaviors support your goals and which ones do not.
BENCHMARKING BASICS
Reviewing your company financials may seem daunting, but with the right tools, you can have a simple but powerful way to benchmark company performance. Knowledge is power, and knowledge of your company performance will provide you with the power to make informed decisions about your business.
Benchmarking is a business process that helps you make more informed business decisions by providing personalized analysis on your business and financial performance.
Benchmarking is a business process that helps you make more informed business decisions by providing personalized analysis on your business and financial performance.
It helps you to:
Identify key financial and performance metrics. Specific measurements, or key performance metrics, are the performance indicators that gauge your business performance across particular areas.
Measure and analyze performance metrics over time. Monitor key performance metrics on a quarterly basis to identify trends and direct your focus to areas in need of improvement.
Adapt business practices to improve your performance. Armed with sound business intelligence, you have the information you need to adjust your business practices to help you build a more productive and more profitable business.
Think of the process in terms of your everyday interaction with customers. Before you can help a customer, you need to obtain information from them. Similarly, your first step in benchmarking your company is obtaining information. At the most basic level, your financial data should be used to measure performance.
One quick and easy tool that you may employ is the Economic Model. This can be a powerful resource in reviewing your company’s financial health, and its power is in its simplicity. As Einstein put it, "If you can't explain something simply, you don't know enough about it." The same applies to your practice's finances.
Think of the process in terms of your everyday interaction with customers. Before you can help a customer, you need to obtain information from them. Similarly, your first step in benchmarking your company is obtaining information. At the most basic level, your financial data should be used to measure performance.
One quick and easy tool that you may employ is the Economic Model. This can be a powerful resource in reviewing your company’s financial health, and its power is in its simplicity. As Einstein put it, "If you can't explain something simply, you don't know enough about it." The same applies to your practice's finances.
Management Advisor Marketing Advisor Business Communications Custom Website Design
JWB Interest, LLC 2011 All Rights Reserved
No comments:
Post a Comment