We work with lots of different sized businesses and charities in Scotland. Sometimes on one-off projects, many on a longer term basis. When we first meet a new client we are always keen to know how they are getting on against their targets. Quite often though targets haven’t been set, which can make their working life very difficult, here's why...
Things Can Be Better Than You Thought!
Sitting down with a new customer and talking about their business we often find that things are better than the owners thought actually they were. However, quite often some of the daily issues and teething problems overtake the big picture and taint the view of overall progress.
Set Goals and Targets
Set yourself a profit goal. The figure that represents the total value, once the operational costs and costs of sale have been taken off. Look at what you have done historically, and then set a realistic, but stretching target. If you’re just starting up then this is difficult, especially as you will probably be putting so much money into set-up costs, maybe then you should set a different set of targets, with a target date that you plan to turn a profit.
Understand Trends & Seasonal Flows
Once you’ve set your target then you’ll know how you are doing, ideally breaking it down into quarters, allowing you to better track seasonal flows and to delve deeper into your trading to see what’s working and more importantly what's not.
Lose The Bad Bits
Working with companies it can often become quickly apparent as to what is good, or bad business for them. Good business is profitable, easy to administer etc. bad business often comes with lots of hassle and not a great financial return. Sometimes owners feel compelled to provide every service that their customers ask for, although in reality though these can be a drain on the business and its resources. Once you've identified the bad bits it might be time to lose them!
Once you have the profit target that you are aiming for you can set a series of KPI's (Key Performance Indicators) to determine the success of different elements of the business operation that will help you on your journey to deliver the profit total. These might include the number of enquiries that you need to generate, based on an average order value, taking into account your conversion rate from enquiry to order. Once you know those numbers you can start to think about how you increase them i.e. getting more enquiries, converting more enquiries to orders and increasing the value of each order.
One last thought. When you achieve your challenging, but realistic profit targets make sure you take time to celebrate your success. Enjoy the moment before setting yourself greater challenges!
Can We Help You?
We can help you with a process of developing strategies and targets, as well as assistance in delivering them. If you want to find out more call Paul Saunders on 01360 661029.