Reviewing Your First Quarter Business efficiency
As the first quarter of the year comes to a close, businesses have the opportunity to conduct a business performance review to assess their current business position.
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The business performance review is an important process for SMEs to succeed in terms of profit and growth. Entrepreneurs must constantly assess their business performance to determine whether it is successful or not.
This includes business structure performance evaluations, financial analysis, staff evaluations and operational performance. The goal is to learn from the recent past in order to make immediate and long-term progress.
When reviewing the performance of your small business, consider the following steps:
Examine your goods and services
Product and service success is an overview of an item's or service's effectiveness and market impact.
Businesses can use a variety of metrics to assess the success of their products and services and understand how a specific commodity affects their revenue, public image and profitability.
It is critical to remember that many buyers want to feel confident in their purchasing decisions before finalising a transaction.
Customers can use product and service reviews to research their purchasing options and consider the pros and cons of a product or service.
In order to plan for the coming year, business owners must understand how profitable each of their products and services is.
Examine your Customer satisfaction Score
Understanding which customers are generating the most revenue and/or profit, as well as reviewing your most profitable customer relationships and satisfaction, should be a top priority.
Customer satisfaction must be considered by business owners as one of the most important indicators of a small business’s success. Customers who are dissatisfied with your products and services are likely to return.
During my recent interactions with LeadAfrique International's Co-founder (Leticia Ohene Effah), she explained that her customers help the company improve its products and services.
She stated that customers know what they want and that she learns how to meet those needs by listening to them.
She went on to say that many of the features they add to their products and services are as a result of customer support.
Examine your cash flow needs
Cash flow constraints can significantly stifle business growth. Effective balance-sheet management of receivables, payables and inventory levels ensure that you have enough cash to run your business.
A cash flow statement is a key indicator of a company's health, profitability and long-term prospects. It can also tell if a company has enough liquidity or cash to cover its expenses.
Inflows are represented by cash received, while outflows are represented by cash spent.
A company's cash flow is calculated by deducting its total expenses from its total income over a given time period.
Operating activities, investing activities and financing activities are the three types of cash flows.
Failure to properly monitor and manage your cash flows puts the business at risk and can lead to a variety of issues such as holding too much stock, long payment terms, overspending and overtrading.
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Examine your reporting mechanisms
In the information age, a company's success and longevity are heavily reliant on its ability to collect, process and interpret data from a variety of sources, allowing it to make better decisions, forecast future results and drive improvements.
Effective reporting extends beyond data collection to include a wide range of reporting techniques that provide management with valuable information to help them make informed business decisions. Inventory, production and sales reports all reflect a company's bottom line and should be reviewed on a regular basis to identify trends and opportunities.
Examining your employees' performance and productivity
Your employees are the driving force behind the success of your company.
Therefore, it is critical to recognise outstanding performance while benchmarking and improving those who are underperforming. Employee performance evaluation and measurement is critical for all businesses.
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Every business owner must accept responsibility for all operating costs and then constantly evaluate products and services in order to improve deals and more competitive suppliers can have a significant impact on profitability.
Business owners must foster a strong culture of communication among employees to ensure that the team is motivated and focused on the overall company objectives.
They must reconsider their performance expectations.
The writer is a Lecturer/Business Coach University of Professional Studies Accra
[email protected]
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