How to Improve Your Company 3-Times Faster than Your Competition

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If you run your company like most business owners do, you might take a deep look at your business numbers once every three months. Frankly, that’s not a terrible strategy. You have time to see how things are going and you aren’t spending too much time on the books. At least you’re actually looking at your numbers—which puts you well ahead of many other small business owners.

But, reviewing your key numbers only once a quarter can limit the opportunities you have to evolve your strategy and grow your company.

If your company closes its books quarterly and only looks at results quarterly, you’ll have a hard time adapting and evolving quickly to situations that arise within your business. That’s because you are only stepping back, reviewing your strategy, and course-correcting your business four times a year.

Thankfully, there’s a simple solution to make your company more nimble and agile than your competition.

By simply switching to a monthly financial and strategy review process, you have 12 opportunities per year to evolve and make changes instead of just four. So, if you’re thinking about the number of times you take stock and improve your company, monthly goals provide three times as many chances to improve your company compared to companies that are only looking at their metrics on a quarterly basis.

Of course, there is a bit more work to closing your books more frequently and reviewing your key business numbers, but the payoff of being able to adjust your business strategy and set new goals for yourself and your team is invaluable.

In fact, this is how we do it here at LivePlan. We have a monthly process for everything in the company. We report on everything monthly and everyone has monthly goals. We have 12 times a year to look at our numbers, make changes as needed and optimize our business.

This has been a huge benefit for us. As we learn more about our customers, what they want from our products, which marketing campaigns are working, and which aren’t, we can quickly adjust and make changes.

At the very least, we save money by not wasting time and cash on programs that aren’t working. At best, we’re able to make timely changes to our product and our company that positively impact our customers, and avert problems down the line.

Use monthly management meetings to streamline your process

Here at LivePlan, we use a series of monthly meetings to review our progress and set new goals.

First, we have a senior managers’ meeting where we review our overall financial performance and other key metrics for the business.  We discuss overall strategy and high-level things that are working and not working. Major projects also get a quick review.

Separately, each team within the company meets to review the metrics that are critical for their team. For example, the customer service team reviews how long it took to respond to customer questions. How quickly did they answer the phone? What was the average hold time? How fast are emails responded to? How did customers rank our service?

These team meetings aren’t just about reviewing what happened, they’re about setting goals for the next month. Based on what we’ve learned from the previous month, we set new goals to reach for.

Special meetings, called “retrospectives” are also popular, especially with technical teams. These meetings are all about process improvement. The goal is to review the work that was done in the last month and decide on ways the team can be more efficient. Retrospectives are all about addressing things that went well and figuring out what made those projects go smoothly compared to projects that didn’t go well. Coming out of a retrospective meeting, the team has a series of changes they plan to make to their process in the next month.

This sounds like a lot of meetings, but with focused agendas they don’t have to be time-intensive; give or take an hour each. The benefits you’ll see will far out-weigh the time commitment that goes into these meetings.

What are the key numbers that you should be tracking?

The key numbers that you should be looking at will most likely be specific to your business, but here are a few important numbers that all businesses should be monitoring, plus a few suggestions that will help you figure out the other metrics you might want to track.

  • Sales: Of course, this is pretty obvious. But, make sure you’re not just looking at the overall sales number and instead are drilling down into individual product lines or sales channels. Inside that overall sales number, you might find some big changes for some products. Perhaps one product is way up, and the other is way down. That might make your overall sales number look nice and stable, but it’s hiding a major success and potentially a big problem.
  • Expenses: Again, don’t just focus on the overall expenses. Look at the details to determine if you should be making any changes to your budget.
  • Cash: Probably your most important metric. Without cash, you can’t operate the business. Even if you are profitable, you might be running short on cash, so keeping a close eye on this number is critical.

Here are some suggestions for other numbers you might look at depending on what kind of business you run:

  • Visitors to your website
  • Sales calls you received or made
  • Quotes that you delivered to prospective customers
  • Client meetings you’ve taken
  • New leads
  • Prospecting emails sent

Whatever you choose to measure, make sure you track that number and that it’s a number that tells you how well you are doing in your business. A good rule of thumb is this: Will you change your business strategy if the number you are tracking goes up or down? If you wouldn’t make changes to your business based on the metric you are tracking, then don’t track that metric. Only track key numbers that you will use to make real changes to your business.

Posted in Growth & Metrics