It’s easy to focus on the day-to-day running of your business, especially when you have only just started-up. But once your business is established, it is actually time to start planning again. Here’s why you should review the performance of your business and how to get started.
Reviewing your business’ performance
Although you should review your business’ progress regularly, it is particularly useful if you feel uncertain about how it is developing. Are you exploiting market opportunities effectively or do you feel you’re going in a different direction to the one you planned?
Put aside some time to go back to the beginning, assess your performance against the business plan and think about longer-term, more strategic planning.
Assess your core activities
The best way to start your review is by re-evaluating what you actually do – your core activities. These might be events, conferences, catering or your standard service offering, but assess what it is that makes you different from the rest, how you can improve your offering and if you can incorporate any new features to your offering.
It is important to make sure that your hotel is meeting the needs of its customers. If you feel that this may not be happening, you should factor in further market or customer research. Ask yourself which of your products and services are succeeding and which aren’t performing according to your plan.
If you are having problems, where are they coming from? Are there issues with pricing, marketing, or customer service? Think about whether you are reviewing costs frequently and is there a way you could lower them?
There are five areas in particular that you need to look at, from product and performance to finance and HR. Use these five areas to structure your review and better understand how you are progressing.
- Market performance and direction – how well you are performing through your sales results, which markets to aim for next, and how to improve your performance
- Products and services – how long your existing products will meet your customers’ needs and any plans for renewal
- Operational matters – your premises, your methods, technologies used, your processes, IT and quality. Are there any internal issues that are holding your business back?
- Financial matters – how your business is financed, levels of retained profit, the sales income generated and your cashflow
- Organisation and people – your structures, people planning issues, training and development
How efficient are you?
Many new businesses use a short-term, reactive way of working in the early stages. This offers flexibility – but can cost time and money as you move from getting the business going to concentrating on growing and developing it. The best option is to balance your ability to respond rapidly with a clear overall strategy.
Re-examine some of the decisions you made early on like your property commitments, your equipment, staffing schedules and IT systems. Are these where they need to be to make your business efficient and grow to the next level?
Knowing your finances
Businesses often fail because of poor financial management or a lack of planning. Often the business plan that was used to help raise finance is forgotten as time passes and the business stabilises.
When it comes to your business’ success, developing and implementing sound financial and management systems (or paying someone to do it for you) is vital. Once again, updating your original business plan is a good place to start.
When reviewing your finances, you might want to consider the following; your cashflow, levels of working capital, your cost base and debt levels. You can use a cashflow spreadsheet or online tools to help make sure you’re on the right track.
Look around you
Having been in business for some time, you will probably have a clearer understanding of your customers and competitors. With that in mind, you may want to take another look at everything around you to make sure you’re still on track and aware of your business environment. Consider the following:
- Conducting a competitor analysis looking at what they offer and how they communicate with their customers
- Researching your customers and market to see how their requirements have change and what’s new in your industry
Redefine your business goals
Having looked at your business inside and out, use these insights to re-examine your business goals. Are you going in the right direction and are your goals sufficient for your needs?
Develop work plans for your business based on the results of your review, as well as a timetable to make sure your meet your targets.
Furthermore, a simple planning cycle can greatly enhance your ability to make changes in your business routine if necessary. Good planning helps you anticipate problems and adapt to change more easily, so know when your next review is scheduled and keep the date.
When you feel you have covered all five of your business areas, you can start to plan the next phase and build a cohesive strategy to develop your business. There are a variety of growth options for every business – it’s important that you settle on the right one for you.
Also, once you’ve isolated your best route for developing your business, you can really give your chances for success a boost by planning carefully and monitoring your progress against an updated business plan.
Remember, reviews and progress monitoring should be done on a regular basis, so put achievable dates in the diary for the next meeting with your business plan.