Many businesses need to hold planning sessions that serve to inform the business strategies for the coming year.
strategic planning is important and the first area to look at is your historical data, which gives you a comprehensive view of your business performance and enable you to make key decisions that ensure you make informed decisions about your strategies and set SMART goals, hence specific measurable achievable realistic target.
Before getting into the strategic discussion of your business, you will need to have a clear understanding of your business performance in the past year. This is where Business Intelligence comes in. Use your business acumen solution to analyse the following key areas to help you get a clear view of your business performance in the previous years, and in turn identify key areas of focus for growth.
1. Operational performance
One of the first things that come to mind when evaluating business performance is revenue or profit. Determine your business’ operational performance by measuring your total sales in both volume and Pound, total revenue and total profit for the year. Hence look at your profit maximiser which is your excel or google sheet where all your sales are recorded by services or products.
Also look at your cost excel or google sheet them you will be able to determine if you made a sizeable profit or a lost. Our calculator Lucy can help determine your profit or loss and any taxes deductible of profit if any or you notice area where your business is more performing in term of sale when looking if you achieved marginal profits with a particular product or service or particulars products or services.
Then you will need to determine how much these numbers have grown from the previous year and see where you can boost products or services which does not bring lots of income, and the one which bring lots of income label them as best sellers in your marketing strategies.
If you generate an overall lost, you need to implement saving cost strategies and reduce your loss to a minimum. If it marginal losses the same look at the services or product not selling that much and start a boosting strategy to bring focus to the less performing area of your business or discontinue a product or services, diversified a product or services also review selling strategy and pricing strategies as your price maybe to high or too low both of these can result in loss of sales. review your discount scheme has too many discounts also can hinder profit and generate losses so find the right balance to give an incentive to customers to purchase.
You might also want to look at metrics like lost customer to new customer ratio, customer lifetime value, and average sales per invoice, you may also look at invoices due on thirty days or more or invoice unpaid and start claiming your bad debt for unpaid invoices that help get into profit, and compare the current financial year to previous financial years. The best place to look is in your business plan your profit and loss account that you complete and enable you to compare your business performance by financial years.
Business Intelligence (BI) tools are typically equipped with sophisticated analytics functionalities to facilitate you working out these numbers. In reality this number only make up one piece of the puzzle, hence to get a true representation of your business performance you will need other information such as competitor performance and market conditions.
2. Market conditions
Internal data can only do so much; you need information on external factors to help you understand your business’ performance. It is crucial that you determine the size of your market share. Measure the growth in market share from the previous year to see how much your business has grown over the past 12 months.
You may also conduct a PESTEL analysis to scan the market environment and a Porter's five analysis or asked us to conduct a girlfridayz's Road Block Model analysis on your business for only £150 all you need it three competitors or more.
In your analysis of market conditions, you will also need to bear in mind your competitors. Measure the changes in your major competitors’ market shares over the past year, and see if you can identify any potential or emerging competition (from new entries or substitutes). With this information, you’ll be able to shape your strategy to address your competition better.
3. Employee productivity
Another key contributor of your business performance is employee productivity. Determine the productivity of your key employees by measuring their contribution towards revenue and profit. by conducting KPI and performances review such as regular supervision.
The same way you periodically measure salespeople on the number of sales and revenue they generate, measure customer service employees on their contribution to revenue from retained clients, by doing regular surveys asking the customers pertaining question on the service they received.
A part from the information mentioned above, it will also be useful to measure overall employee satisfaction with the company. Identify all the factors that contribute to their productivity — company culture, management style, organisational policies, compensation, opportunities to grow...
Determine how your company fares in keeping your employees satisfied on each of these factors. Through this you will be able to identify opportunities to increase employee productivity, which will help you formulate this year’s strategy.
4. Customer satisfaction
Employee satisfaction is key for a business' success, but customer satisfaction is critical. Your customer’s satisfaction with your product / service or company is another strong indicator of your business performance. Conduct regular customer satisfaction surveys as part of your customer relationship management program, and determine what change in customer satisfaction over time.
Also ensure you track and monitor key metrics like your DIFOT (delivery in full on time), identify lost sales, and create mutually beneficial discounts or rebates. This way your customers will feel valued and looked after, which will naturally increase their satisfaction with your business.
Good Business intelligence software is typically equipped with CRM and sales opportunity management capabilities, as well as solutions for finance and operations, to give you the operational, market, employee productivity and customer satisfaction data you need.
Most Business intelligence solutions are built to support the analysis of unstructured data drawn from other sources, so that you can integrate data from different sources to generate one view of the truth. With this, you get an accurate understanding of your company’s performance, which will help you build a well-informed business strategy.
To learn more about which key metrics all managers and executives should know and measure for a healthy business, contact us at Girlfridayz for business support and advices or just use our services which are geared to support you with business growth or start up.
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