If you’re in the early years of your business, it’s easy to get caught up in the day-to-day management of it, and lose sight of the bigger vision.
But thinking about your long term goals, planning them carefully, and executing them is what will ultimately drive growth in your business.
In order to know what you need to focus on to create this strategic plan, you need to know what’s currently working in your business, and what’s not.
Burying your head in the sand and hoping everything turns out okay is a recipe for disaster — we all know it, yet so many of us still choose to do it!
Analysing your results will be especially helpful if:
- You’re unsure how well your business is currently doing
- You don’t know if you’re making the most of the market opportunities available to you
- You’re not clear on your finances
- Your business is heading in a different direction than you originally planned
- You feel ready to take things to the next level
So, what exactly should you be analysing?
In this post, we’ve rounded up the most important areas to look at within your business.
Check in with your competitors
Do you know who your true competitors are?
Once you’re clear on those, you’ll be able to work out your competitor’s average overall annual growth rate.
You can do this by researching the companies of a similar size to yours, and looking for published statistics and growth data from today. You can use that information to compare with results from when they started out, and then work out their growth rate over any period.
Do this for multiple competitors’ data, so that you can determine an average annual growth rate.
This will help you to see where your business sits on the scale in comparison, and if and where you need to make some changes to boost your growth rate.
Review your financial position
Many businesses will create a solid business plan at the beginning, then file it away and never look at it again.
This lack of planning and management is often the reason why so many businesses fail — especially in their infant years.
Developing and implementing a solid financial system is crucial to the success and growth of your business. If this isn’t your strong suit, you can always pay an expert to assist you with this, leaving you with more time to focus on your strengths.
Locate your original business plan (if you have one) and update it to reflect your current status.
You’ll want to consider:
- Cash flow — All money going in and out of your business, and regular forecasts of what you expect this to look like.
- Working capital — Your current assets minus your current liabilities. Has this figure changed dramatically recently? How does your number compare to the industry norm? What can you do to source more capital if needed?
- Cost base — Always be monitoring your costs and keeping them in check.
- Borrowing — Do you have any loans or lines of credit? Do you need to borrow more to expand your business over the next few years? Is there a cheaper form of finance you could use instead?
- Growth — As your business grows, its needs will change. What plans do you have in place to adapt your financing to accommodate these changes?
- How do your actual results compare to your original projections?
Do you have a clear plan in place that you can implement that will ensure financial growth in your business?
Do you need any outside help to get the plan into action, and take responsibility for it?
Assess your current offerings
Whether your business offers physical products or services (or a mix of both), it’s important to do a separate review of each one so that you can properly analyse them.
By doing this you’ll be able to see how efficiently your business is currently running, the value your customers are getting from you, as well as the costs of any production or service problems you’re facing.
Are your production and service levels meeting your projected levels? If not, what is the cost of those issues to your business? And what improvements can you make to remedy this?
Remember, different problems will all require their own unique solutions. Get to the root cause of each problem, and then begin to address how you can fix it to improve the overall operations of your business.
How efficient are your staff?
Many businesses find it invaluable to create a separate cost and performance analysis for all staff members of the business (or each department).
This helps to assess how effective your staff really are, and what you can do to boost this and drive business growth over time.
Measures such as KPIs, reviews, and appraisals will all help track this, and increase motivation and accountability amongst staff over time. Helping them get clear on what they’re doing well and what they can improve on through development or training, will enable them to keep up with your business as it grows over time, and requirements and responsibilities change.
Is your marketing working for you?
A carefully created and executed marketing plan is key for driving growth in your business.
What results have you achieved so far since you started your marketing efforts?
What has been working really well, and what hasn’t?
You should be meticulously tracking how much you’re spending on each marketing channel, and the gross revenue you’ve made with each of these. Once you know how much profit you’re generating from each one (or if you’re generating one at all), you can then adjust your marketing plan accordingly.
To expand your business, you’ll need to start doubling down on what’s been effective for you, and do less of what hasn’t worked.
Don’t forget to keep on experimenting with new avenues to test the waters — and keep on measuring your results.
How can you drive growth in your business today?
Expansion in your business may not always be something as obvious as a new product or a new location.
Sometimes, it might mean hiring a part-time member of staff to assist with tasks you’re not skilled at or don’t have time to do. Sometimes it might mean looking at what’s not working right now, and fine-tuning the systems you have in place to smooth out those kinks.
The key is to keep on analysing your results so that you stay informed of what’s really going on in your business, allowing you to make the best decisions to drive continual growth year after year.
What’s the first step you can take this week to grow your business?