How to Reach Your Business Vision
When you have created your vision for your business and the plan to get there, it is essential that you ensure your business is headed in the right direction.
- Whatever your overall vision, you will need to track your progress. The most direct way is to monitor the FINANCIAL PERFORMANCE of your business. If your vision is a supportive environment for a growing number of employees, your business needs to perform well enough to provide them with security and other benefits that will improve their performance. If you want to sell your business by the time you are 45 and sail off into the sunset, your business figures need to present a healthy prospect for your buyer.
When you created your business plan, you may have introduced new business processes. You will only know if your changes have been effective if you COMPARE PERFORMANCE BEFORE AND AFTER.
How do you MEASURE this? Your measures need to relate directly to the changes you made. For example, if you introduced a new DEBTOR MANAGEMENT system, you can compare your Average Debtor Days before and after implementing your new system.
The formula for calculating average debtor days over a year is:
Average Debtor Days = (Average Accounts Receivable/Annual Credit Sales) x 365 days
For shorter periods, calculate your Average Accounts Receivable (add the receivable amounts at the beginning and end of the period, then divide by the result by 2) and use your credit sales for e.g. three months following introduction of the new processes (after allowing some time for them to take effect), and multiply by 90 days.
Perform this calculation for the same period last year to get your measure of success.
If you have a new system for PAYING YOUR BILLS, you can calculate your Creditors Payment Period in a similar way:
Creditors Payment Period = Trade creditors / credit purchases x Number of days
Your previous method of managing your trade creditors may not allow for this. If so, you can be sure that having a system in place is a far better place to be.
A CASHFLOW CALCULATOR may show the direct effects of your changes on cash availability in your business. AAA Consulting provides a cashflow calculator and other business management resources for your use.
You can also compare other metrics like sales, cash flow, or non-current liabilities (as relevant) with a previous period to see if you are on track to achieve your stated goals.
It is likely that you won’t see significant changes in a short period. These checks should be used to ensure that you are heading in the right direction.
- Use SOCIAL LISTENING to monitor progress on NON-FINANCIAL GOALS such as EMPLOYEE/CUSTOMER SATISFACTION. Even if you use a customer feedback program, more people will share their experiences with you on their social media networks. Social listening tools, like most digital tools, offer free plans that give you a taste of how they work, but expect to pay for one that meets all your social listening needs.
Alternatively, seek professional assistance to organise an employee or customer satisfaction survey. Your business advisor can also help you interpret the results and put in place any modifications required – all with complete confidentiality.
- You can observe changes in WORKPLACE SAFETY through the results of safety audit and number of incident reports. If you have not previously used safety audits or incident reporting, having these in place will raise AWARENESS of safety amongst your employees. This may in itself have a positive effect on safety.
Over time, you should see reductions in sick leave due to workplace incidents, which will increase productivity, and a reduced workers’ compensation insurance premium. You might also use your social listening tool to gauge your employees’ perceptions of safety and wellbeing at work. Promoting MENTAL HEALTH and supporting workers with mental health problems, regardless of the cause, creates a healthier and more productive workplace.
- If your goals emphasise ENVIRONMENTAL SUSTAINABILITY, you can evaluate your environmental performance using relevant indicators. These may include:
|Materials||· Volume of materials used |
· Percentage of recycled materials
|Energy||· Direct and indirect energy consumption by primary energy source |
· Energy saved due to conservation
· Use of renewable-energy-based products
· Steps taken to reduce indirect energy consumption.
|Water||· Total water use |
· Percentage of volume of water recycled and reused.
|Biodiversity||· Size and location of land owned near protected areas of high biodiversity |
· Strategies for managing impacts on biodiversity
|Emissions, effluents and waste||· Direct and indirect greenhouse gas emissions |
· Initiatives to reduce them
· Emissions of ozone-depleting substances, total volume of spills.
|Transport||The environmental impacts of: |
· transporting goods and materials used for the organisation’s operations
· transporting the members of the workplace.
The team at AAA Consulting can assist you with performance tools, financial performance, cashflow monitoring as well as employee and customer surveys. Contact us CLICK HERE.