04 Jun 2015
As a business owner, you’ve probably gotten plenty of advice on how to reach your goals and on the importance of tracking your business’ growth and performance. But, if you aren’t sure what your company’s goals are, working on achieving them or on tracking its growth can be a moot point. The goals you set for your business do depend on what you hope to achieve for the year. You might wish to strengthen your team and to focus on reducing turnover or making the right hiring decision from the start. Or, your goal might be focused on the value and productivity of your company and on ways to raise or increase capital.
Who you hire can have a big impact on the health of your company. If you’ve had to deal with not-so-great employees in the past or employees who quickly find a new position and move on, taking a close look at your recruiting process and making it a goal to improve it can help save your company money and stress over time. You can also set a specific recruitment goal for each quarter or for the year. Your goal might be to hire a team of developers to improve your company’s website or to make it more user-friendly.
Part of your goal to improve recruiting might be to better screen candidates before you offer them a position. In the case of a team of developers, you might have them take a test to see if they really have coding skills and are actually able to do what they say they can do.
Keep Employees Happy
Along with setting a recruitment goal or a goal to improve your hiring process, your company can also benefit from having a goal to improve your current employees’ happiness and job satisfaction. Take a look at your company’s turnover rate. If it is higher than you would like it to be, find out why people are leaving. It could be that your company’s leave policy is less generous than that of similar companies and that employees are moving on because they need something more flexible. It could be that the benefits offered by your business are fewer or less satisfactory than what an employee can get a similar company. Employees might feel that they don’t have much room for growth with your company and might move on to a business that offers upward mobility.
There are a number of ways you can work towards the goal of improving employee satisfaction and happiness. If your team feels separated or cut-off from each other, your goal can be to build more camaraderie in the office by having the occasional happy hour or employee retreat. If people want to work at a company where they are able to grow and move up in their fields and positions, you can make it a goal to sit down with each employee and create a plan for where they want to be at the end of the year or at the end of several years.
Make Your Business Operations More Productive
It remains true that time is money, and increasing productivity at your company can help to increase its value, both to your clients and to your employees. Making your company more productive means that you do get more out of less. There are a few ways to go about boosting productivity. One is to set a target and goal for each meeting or project. No one should wonder why he or she is sitting in a meeting or what the end result of a project is meant to be.
Most likely, your company will need capital to reach any other goals it has or to continue to operate. Examining ways to raise capital and the best resources to tap into to get that capital are essential for the overall success of your business. Your goal can be to try to find a new source of funding during the year or to continue to develop a relationship with an investor or other source of financing.
Before you can work towards achieving your goals, you need to have a clear idea of what those goals are. If you are unsure what the next step to take is or how to clearly delineate your goals, the team at New Direction Capital can help. Contact us today and get started on planning your company’s goals.
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What are some of the things you’d like to achieve this year? Does it include raising capital or keeping employees happy? We’d love to start a conversation so feel free to comment below!
21 May 2015
How well is your business doing? Measuring your business’ performance and success means looking not only looking at how it stands financially, but also taking a close look at how it is doing in a number of other areas, such as customer satisfaction and retention and employee turnover. Knowing where your company stands today allows you to plan for its future, whether you hope to expand the business or increase profits.
Set Goals and Priorities
Before you can measure anything, you want to have an idea of why you are keeping track. Otherwise, you are collecting data that serves no purpose.
Setting goals and determining what your business’ priorities are will give you an idea of what you need to pay attention to. For example, if you’ve been losing clients or customers, and want to reverse that, you will most likely want to take a close look at customer service at your company. If your goal is to increase revenues by a certain percentage, you’ll want to examine the financial state of your business, including what money is coming in and where it is coming from. If having to constantly hire new staff is costing your company a lot of money, your goal might be to reduce turnover by a certain percent.
Use Key Performance Indicators
Once you know what you are aiming for, the next step is to determine the best way to measure. Key performance indicators (KPI) are simply measures that your company can use to see if it is on track when it comes to reaching its goals. The KPIs that are relevant to your company will vary based on what you intend to measure and what your company’s goals are.
For example, if your goals focus on the financial side of your company, the KPIs that matter to you might be the net profit margin, the return on assets, or the return on equity. The net profit margin lets you see how much profit your company brings in compared to its revenue. It’s your net profit divided by revenue.
Your goal might be to increase your company’s net profit margin to a certain percent within five years. Knowing what the margin is for the past few years will give you a sense of whether your company is on track or not, and can give you an idea what needs to be adjusted. You might need to increase revenue, for example, or find a way to decrease your costs or expenses so that your profit goes up, even if your revenue does not.
Performance isn’t based on finances alone, but if certain other areas of your company are floundering, you might start to see an impact on the financial side. For that reason, you might set goals to increase customers or to increase customer retention. Your company’s goal might be double your customer retention rate or to double the number of new customers. In that case, the customer retention rate is a useful KPI to track. To figure it out, you make note of the number of customers you had at the start and end of a period, such as a month or quarter, plus the number of new customers gained during that time.
Subtract the number of new customers from the total number left at the end of the period, then divide the difference by the number you had at the beginning. If you ended the quarter with 500 customers, started with 550, and gained 50, your retention rate is about 82 percent, meaning you lost 100 customers. If your goal is to increase that percentage to 100, you’ll either want to focus on keeping the customers you have or on finding ways to replace the ones who leave.
To know where your business is going, it helps to know where it currently stands and where it has been. At New Direction Capital, our goal is to work with you and help you determine which performance measures will help your company get to the next level and continue to grow.
11 Dec 2014
As the end of the year quickly approaches, one question that might be on your mind is “where is my company headed?” One way to not only figure out the direction your company is going in, but to also guide it in that direction, is to set a series of goals for it. A list of goals helps you compare where your business currently is to where it once was and allows you to make informed decisions about its future. Setting goals is just the first step. The next step is doing what you can to make them a reality.
Create a list of every goal your company hopes to achieve. Include small goals, such as moving into your own office space, and larger goals, such as purchasing another company, on your list. Once you’ve listed every possible goal, rank them in order of importance. For example, if might be more important that your business reach a certain level of profitability in the next quarter than it is to move into a larger office space. Prioritizing your goals lets you know which ones are the most important to focus on first.
Map Your Progress
Ideally, the goals you set for your company will be measurable, meaning that you will be able to see how it is progressing on them. Once you have a high priority goal or two, the next step is to break it down into steps and keep track of how you progress with each step.
If your goal is to raise your company’s profits by 5 percent by the end of the quarter, think about what you will need to do to get to that point. You might want to bring in one new client a week for six weeks, for example. Plan out ways to get those new clients. It can mean attending networking events weekly, asking current clients for referrals, or even cold calling potential customers. When you do land a new client, record what you did, when you did it, and how it impacted your company’s profits.
Be Able to Adapt
The world of business is always changing. New products and ideas become available on a semi-regular basis, which alter the way things are done or change the competitive landscape. That means you should always be ready and able to adapt to changes in the world around you.
Being able to adapt can mean several things. It means being flexible enough to rethink your plans and strategies when something new comes on the market that changes the landscape around your company. One example is online stores that offer free shipping at all times while other stores still charge a fee. Having competitors offer free shipping on all orders can make it more difficult for you to expand your customer base, as the customers might prefer to work with the company that ships items, as it reduces cost and risk to the customer. Instead of only focusing on ways to add to your customer base to increase profits, you might also want to find a way to offer free shipping that doesn’t affect your bottom line too much.
It can be easy to try to go it alone when it comes to setting goals. But, having a team to work with you and to offer you insight and perspective is often very helpful. A virtual CFO can help you understand your business’ financial details, for example. Using that financial information, he can help you create a plan to reach certain financial goals, whether those goals involve increasing your company’s profits or reducing its debts.
You can try to do it all yourself, but doing so often leaves you over extended, which creates a barrier to achieving your goals. The team at New Direction Capital is available to help you develop your company’s goals and to create a plan for action. To create a plan for your business’ future, contact us today.