Are We Asking the Right Questions?
Often in business we are questioning how we undertake the operations of the business, we question the available financial data, we put questions around the efficiency of the team and the processes, but are these the right questions?
The questions that we need to be asking are those that are focused on the value being provided to the customer.
We need to be determining what the customer see’s as important, how the customer defines success, what the customer thinks of our business. From this information we can then ask the questions of what data or metrics do we need to have to ensure that we are able to provide this value to the customer.
Just because the data is available, just because the financial information is being compiled on a regular basis, does not mean that that is useful information. We need to have the one focus measure and the various support measures that are answering the questions about what value is being provided to the customer.
This usually means that the financial data that we are compiling for monthly accounts etc is not the main focus area. This is useful information, but it’s telling us what has gone on in the past. We need to be asking the questions about what the customer is doing in the future, and having the data that gives us an insight into this.
Are you asking the right questions? Do you have the one measure clearly identified that will drive the future value of the business.
Photo: – by fontplay.com
Good Management Information is the Key to Better Business Performance
Can you answer any of the following questions about your business?
1. What single item in your business has the biggest impact on your cash flow?
2. Which one of your products or services contributes the most to the bottom line?
3. What is the value of your business?
4. What is the maximum sales growth that your business can realistically sustain in the coming 12 months?
It is important that fundamental questions like these can be readily answered. If you are confident you can answer these questions then you have an appreciation of the critical financial relationships that impact on your business. As a consequence you are in a much better position to make proactive decisions which can improve your business performance and lead to better cash flows, increased profits, increased business value and a better return on your money.
Because of economic pressures and time constraints, many business owners and managers are forced to think in the autopilot and often resort to running on gut feel. They don’t take the time to undertake detailed analysis of their businesses financial performance. Inevitably this can lead to poor decision making. You need to be able to answer the questions above and understand what the consequences of the answers mean to your business.
Photo: – Brenda Starr
Small business will succeed through innovation
There has been an excellent study been released by Intuit titled “Small businesses will innovate today to succeed tomorrow”.
This study shows that Small Business is the natural innovator of the economy. Through the forces that drive small business owners to look for the development of the business and market they are inspired to innovate.
This study found that small businesses have a number of innovation advantages that enable them to more readily identify opportunities, quickly react to changing conditions and remain competitive. The six innovation enablers include :
- Personal Passion – as it is there own money on the line, small business owners are willing to try new approaches.
- Customer connection – in a small business there is a stronger connection between the business and the customers. This helps small business understand customer needs, identify new opportunities and fix problems quickly and efficiently.
- Agility and adaptation – unlike large corporations, small businesses can quickly adapt to changing market conditions and implement new business practices.
- Experimentation and improvisation – when pursuing new opportunities, many small business owners and managers aren’t afraid to experiment and improvise, accepting failure as a part of the path to success.
- Resource limitation – small businesses are adept at doing more with less. And these resource constraints lend to their innovative mindset
- Information sharing and collaboration – small businesses traditionally rely on strong social networks to share information and inspire innovative thinking.
These enablers listed above succinctly summarise the life of a small business.
It is key for the future of small business to be continually innovating. To do this it is necessary to ensure that the business is focused on the customer. The business needs to be listening to the customer and ensuring that their product or service is serving a need of the customer. It we keep doing what has always been done then the innovation will die and the business will follow.
Focus on what matters to the customer. Measure what matters – measure what is important to the customer.
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