Well, the second half is here. Many business owners are evaluating how they are doing with their goals for the year. (Actually, all business owners should be doing this, but some are not). Many businesses are doing fine. I was talking with some business partners this morning that were experiencing 20+ percent growth in 2019 thus far. That’s great for them. But many others I talk to are languishing behind their plans. So what do they do? Give up or double down? The answer, as almost always, it depends.
Step 1 – Evaluate where you are
Evaluating your progress against your goals is the first step to answering the question. To answer the question, you have to have clear, measurable goals to begin with. Often I find business owners didn’t have clear goals at the beginning of the year, so they can only say whether they are happy or not.
20% growth may be something to celebrate. But it may be lagging your industry if your competition is averaging 25% growth. If you did not set out a benchmark, if you do not have key performance indicators (KPIs), then you are just making educated guesses.
Without specific goals, you cannot specifically answer whether you are on track or not. So if you don’t have goals, let’s first start there. Where did you expect your business to be at this time? Was it a growth number? Was it a profitability number? I find that many business owners don’t have a clear answer.
I recently was working with a new client. He simply didn’t have goals for anything. I asked him how he knew he was doing what needed to be doing. He said that as long as clients weren’t yelling and the balance in the bank account was growing, he was okay. I guess that is a little bit of a goal, but it’s not very specific and not very measurable.
My goal for him was to identify some specific things that we could start measuring right away. Open and closed help tickets for one. Profitability on projects was another. These are benchmarks that we could start looking at now, in order to begin making real plans for next year.
Step 2 – Evaluate the cause
Are you on track? If not, why not? What are the reasons for lagging behind? Is it an internal (performance) issue? Or is it an external (eg. market conditions)? Both are important, but they are addressed in different ways.
Let’s first discuss external factors. Are you sure it’s truly an external factor? Market conditions are almost always the first excuse when sales are lagging. But we have to be honest with ourselves. Is it truly external market conditions? Or is it that our sales team hasn’t done a good job? Or perhaps our operations team let a key customer down and that slowed down projects. Being ruthlessly honest with outselves is the first step.
If it’s truly external factors, then you should evaluate whether these are a long-term or short-term issue. Short-term market conditions can often be overcome. Longer-term external issues should force us to rethink strategy and evaluate options for expanding our business in new directions.
Internal factors are even more critical. We must be honest with ourselves as we evaluate our performance. Are we keeping up with our competition? Are we hitting our growth KPIs?
Understanding where you are off-course is critical to figuring out what adjustments must be made. But if the current direction is clearly not going to get you where you need to be, it’s time to make an adjustment.
Step 3 – Make course corrections carefully
Whether the cause is internal or external, it may be time to make some adjustments if you don’t believe you can achieve your goals with the current strategy. Making a course correction in the middle of the year may seem scary, but the results can be amazing. Consider this example:
Recently I was working with one of my clients that was having their best year ever. That is exciting news. But when evaluating “why?”, they couldn’t put their finger on the exact reason for growth. After a bit, I pointed out that we established benchmark KPIs for growth 12 months ago. Since that time we have seen more proposals written, more contracts won, and the single largest project in the company’s 15 year history!
The interesting thing about this client is that the course correction did not immediately have an impact. The balance of last year was a little better than the first half, but you could not specifically connect the dots between the course correction and the end-of-year results. However, one year later we can now clearly see that adjusting their proposal and bidding strategy has paid tremendous dividends.
How do I start?
Now that the Second Half is here, you should be able to get a good snapshot of how your business is performing. By being honest with yourself, looking at your numbers against budget (assuming you had one) and comparing your results to the same period last year, are some good places to start.
I get my clients to lay as much of this information out on the table as possible. Look for anomolies in the data. This is always a good place to start. Look for performance issues. Take a close look at the P&L and figure out how they are really doing.
Another thing I do with my clients is to perform a basic analysis against their industry. I have access to industry benchmarks for every classification of company. By looking at these benchmarks, we can determine if there are major discrepancies between their numbers and the industry standards.
But most importantly, just start. Just do something. If you don’t have a business coach, now is a good time to consider it. We can jump in and help you make the most out of this year, and start next year off with a clear plan and objectives. If interested, contact me today.