As 2016 is quickly approaching, you may find yourself reflecting on the trajectory of your business. Maybe yours is right on track. If so, great! Unfortunately, many businesses are stuck in a rut. If you are unhappy with the current state of your business, look at this five-point checklist for some ideas for getting it out of that rut and pointed in the right direction.
What do your financials look like?
Unless you are an accountant, you probably don’t love spending quality time with your financials. We strongly recommend you do it anyway. Pour yourself a beverage (not too strong), shut the door, and dig in for an hour. Look for patterns and trends. See if the numbers move the way you would expect them to given how the year actually went. Take notes of any things that don’t make sense, one or two things that look like good news, and one or two things that you would like to improve upon. Then, try to explain them to someone. Maybe your spouse, a friend or even your dog. This little exercise will force your brain to process the information a little more carefully. By the time you are done you should have a hand full of data-driven action items that can be used to improve your business.
Get an outside pair of eyes to look at your business.
A lot of small business owners we talk with eat, sleep and breathe their business. They are intimately involved in the day-to-day operations of the company. For obvious reasons, owners are usually the most vested person on staff, taking on huge swaths of responsibility.This produces a large amount of value for the business, but everyone is familiar with the expression, “he can’t see the forest for the trees”. And it’s true, an unbiased observer can almost always identify “obvious” inefficiencies or opportunities that go completely unnoticed by the person working most closely with a situation. Invite a trusted friend to shadow you for the day (preferably that friend who tells you when there is spinach in your teeth). Encourage them to ask you questions about what they see. Pay attention to those questions, there may be opportunities hidden within them.
Identify and question your ‘sacred cows’
This popular idiom goes back centuries and spans several languages. As Wikipedia says, a “sacred cow is a figure of speech for something considered immune from question or criticism, especially unreasonably so.” Every organization has them, and they’re not all bad. Some may even be tied to the company’s mission or vision, but most are just getting in the way. Identify your organization’s “sacred cows”, question whether they are critical to your mission or are keeping you from it, and clear them out of your way.
Narrow your focus
As companies progress through time, they tend to broaden their scope. That is because, as opportunities come up, good business people take advantage of them. Many are familiar with a massive manufacturer that began to offer financing to its customers and created its own bank. Or more simply, imagine an ice cream shop that starts selling baked goods in order to stay open through the winter. Sometimes those new opportunities are very profitable, but they do shift finite resources away from the company’s primary product or service. We encourage entrepreneurs to assess their product and service offerings, identify their “secret sauce”, and consider spinning off or winding down anything that does not directly support or strengthen their brand.
It’s nearly impossible to be aware you are out of a rut without setting goals. The key is to set realistic and measurable goals so that a year from now you can analyze the impact of the changes you have made. Spend a day or two with your management team or a trusted advisor and clarify your vision for the company. Set a handful of specific goals that will bring that vision closer into being and identify the action steps required to achieve those goals. Finally, make someone responsible for managing or completing those action steps by a certain date. By this time next year, you will be in a better position to make even more decisions to better your company.