Thinking of buying or selling your business in the New Year, how is your Performance Plan?
Free PDF Download|
How to sell a business - By Andrew Rogerson
In addition to the financial statements, the next performance area to measure and manage can be simple business metrics that include the number of incoming calls to the business (and this can be broken down into times of day if call volume is an important metric,) the number of hits to the website, volume of email, volume of faxes and volume of orders placed on-line (if important.) Depending on the business, the total number of orders placed and/or the number of orders placed by each sales person. In simple terms, sales can generally be easily measured. It's important that the sales team is clear on sales targets and agree how they are to be measured. Sales people are motivated by getting results. Make sure the results are measured accurately, consistently and fairly or sales people will become de-motivated; which is obviously the complete opposite from what you want to do. It's important to start by building Key Performance Metrics for your business. Don't be afraid to change and add other metrics as they are normally easy to isolate and therefore count.
Make sure all metrics are counted monthly and as many data points shared with everyone in the business as possible. Celebrate successes and ask the team for suggestions when the performance isn't acceptable.
The next aspect to a Performance Plan for the business and something not always done is an annual performance review. There are different approaches to this topic; some are personal preference. For example, some businesses tend to link the annual performance review to also a salary review. My preferred strategy is not to link them. My reason for this is that I don't think they are linked. Compensating someone on performance is important. However, the good performance of one person does not always mean the business can afford to pay as collectively the business may not be performing well enough. The argument goes that incentives should include as many workers as possible so if they are successful so too will the business, but you can have a top performing employee that is bring in the best sales for the business but his demeanor or attitude to co-workers may not be acceptable. Therefore, how do you financially reward a top performer during a meeting and then point out behavior or communication problems. Rewarding people for sales is great however, you will lose any goodwill from acknowledging and rewarding great sales and then bringing up negative issues.
If the performance of each employee is measured with an Annual Performance Review an extension of that is to include feedback from the co-workers at the same level as the employee. This is called a Peer performance review. It can be controversial as someone may choose to denigrate the performance of a co-worker they don't like. So there are risks. However, it can provide constructive results if managed correctly.
A best practice for a Performance Review is asking an employee that reports to a manager their opinion on the performance of the manager and how the manager could do things better. This is called a Management Review. Once again this approach can have a downside but it can enable a business to grow and be internally stronger if open and honest communication is part of the business culture.
The final item to consider is your performance as the business owner. Not every owner has the time or desire to put such a process in place, but if you want your business to grow and have a healthy business environment I think it's one of the best means to enhance the success of the business. Depending on the size of the business, the Owner Performance Review can be done by hiring an outside consultant. An alternative suggestion is to do it by anonymous survey but this approach reduces the effectiveness as it restricts the answers that can be given and doesn't allow an exchange to clarify things.
There is a business axiom that says "If you can't measure it, you can't manage it." The Performance of a business can mean the difference between success and failure. Most businesses do not fail overnight. They decline gradually, with often the decline picking up steam towards the end. A good Performance Plan will provide warnings that if measured and managed will allow corrective action to be taken in time.
Part 11 of this article series, explains the importance of a Disaster Recovery Plan. Most businesses don't have the time to put this together. That can be a mistake and this article explains why.
Related ArticlesHow To Slow Down To Pick Up The Pace
Ten Top Tips For A Healthy Business To Start The New Year From Your Strategic Thinking Business Coach
“End of Year Thoughts From Your Strategic Thinking Business Coach”
Marketing Plan Tips
TIME FOR BUDGETS BUT NO TIME FOR PERFORMANCE MANAGEMENT!
Managing Employees Performance
A Checklist For Performance Managment Planning
Does your New Year’s resolution include buying or selling your business?
Should you buy or start a business?
How should I reward employee performance?
What Inspired Michael Dell to Sell Computers Directly to End Customers?
Are You A Great Manager?
Adaptive Organizations Beat Their Competition
Client Buying States
Personal Selling - It's Time For A Tune-up
Making Plans Now For A Better Business Year in 2006 Beyond
How To Identify Your Marketing Barriers, Tips From Your Strategic Thinking Business Coach
"I'm a Relationship Salesperson"
How To Hone Your Strategic Thinking Skills To Plan For The New Business Year, According To Your Strategic Thinking Business Coach
Free PDF Download|
How to sell a business - By Andrew Rogerson
About the Author: Andrew Rogerson
RSS for Andrew's articles - Visit Andrew's website
Andrew Rogerson is a 5-time business owner and Certified Business Broker that loves helping entrepreneurs sell or buy a business. Andrew currently holds the Certified Business Intermediary (CBI) designation from the International Business Brokers Association (IBBA), the highest designation awarded by the IBBA. Andrew has also earned the Certified Business Broker (CBB) designation from the California Association of Business Brokers (CABB.)
He holds a Certified Machinery and Equipment designation (CMEA) from the NEBB Institute and is a Certified Senior Business Analyst (CSBA) with the Society of Business Analysts. Andrew is a member of the Sacramento Metro Chamber of Commerce and past Chair of the Sacramento Chapter of the California Association of Business Brokers.
Andrew is also the author on a series of four books: Successfully Sell Your Business, Successfully Buy Your Business, Successfully Buy Your Franchise and Successfully Start Your Business. For more information go to http://www.businessadvicebooks.com
Click here to visit Andrew's website.
Successfully buy a business
Related Forum PostsRe: Buying Text Links - Can You Do It?
Re: Is it worth buying a Dell computer with financing?
surviving an economic crisis
Re: How do you create a million dollar idea?
How to valuate a business
Share this article. Fund someone's dream.
By Stan Prokop, Canadian Business Financing
|January 2013 Top 100 Twitter Users in Dallas, Texas|
|Howard Schultz Starbucks|
|Build A Healthy Corporate Culture|
|Things to look for with a photo on canvas|
|Do You Feel Like Quitting?|
By: Evan Carmichael
||Like this page? PLEASE +1 it!|
Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
I Had a Life During Tax Season!
Six Easy Steps to Creating a Killer Ad Campaign.
7 Steps to Acquiring an Instant Intellect
Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.