Are you sure you are managing your business well?

The British Chamber of Commerce states that businesses are growing in spite of a weak economy in the UK.  SMEs can and should play a significant part in improving growth but good management strategies can make the difference between success and failure.  These strategies have to be learned but as a recent paper from Stanford University Management Practice and Productivity: Why they matter concludes, many managers are unaware of how little they know about good management practice and their own abilities to apply them.

As this research paper states, “There is no magic lever for management excellence.”  There are, however, tried and tested key strategies – best practice - which, if employed, can lead the way to this excellence and thereby greatly enhance the possibility of success.  However, these skills need to be acquired and before you can even do that, you have to identify what they are.

Key performance indicators help to show you how your business is doing, to see what progress is being made and whether you are achieving you goals and objectives.  If you are not achieving them they will highlight which areas need attention.

Look at these key management requirements and compare your management practices against them.  How did you fare?

·         Start by writing down the things that limit your growth; the things that limit your profitability; the things that irritate customers in your industry and the things that prevent your staff excelling.  Try to identify a measurement or ratio that captures each factor

·         Some Key Performance Indicators (KPIs), such as revenue or profit growth, are common across most businesses.  Others will be specific to your industry or service, such as billable hours for professional services firms or customer turnover for a mobile phone operator.   Find out how others in your industry measure their performance

·         Review the set of KPIs chosen and check that they cover the major activities of the business.  They should include both forward-looking and historical measures and reflect your strategic objectives

·         You need to be able to measure your chosen KPIs without significant difficulty or expense

·         Review KPI performance at your monthly management meeting

·         Constantly compare progress against your business plan and its objectives

Nick Bettes Consulting provides business coaching for business owners in Reading and Berkshire.  One of the approaches we adopt is to assist in identifying and pursuing KPIs which form the dashboard for your business.  If you invest a little time and effort into learning how to develop your ability to manage you will get a significant payback from improved business performance.  This holds true for SMEs throughout the UK, including those in Berkshire!