Review and Refocus
As we are half way through 2016 this blog will emphasise the importance of reviewing an SME’s 2012 performance year to date and the important of refocusing budget and strategy for the 6 months ahead.
I will giving you advice on how I personally review and reshape an SME at the half year point to ensure it achieves the budgets and targets that were set at the beginning of 2012. As always my advice will be short, sound and to the point! The really important advice is that it’s you that needs to make the action as no business can afford to get to the end of the 2017, look back and ask what went wrong? A good business uses the 6 month point to assess and say what’s working? What’s not working? And what changes need to happen to get us on track?
The Line in the Sand
In my opinion it is important that any SME actively manages it figures but it’s crucial that an SME stops and reviews the business performance at the 6 month point of their financial year. In the last 2 months I have spent hours working with businesses, identifying how they are performing year to date and readjusting their revenue budgets, spending patterns and bottom line figures. I can’t stress this enough: It is no good continuing with the same strategy through the year if you are aware you are not achieving your targets!
Most businesses look at either revenue or cost. I encourage SME’s to review both as you may be underachieving in revenue but may have spent less than forecasted. This could end up being a good thing however, if you’re performing on revenue but over spending this could be very bad!.
Below I have listed a step by step process on how to review and refocus your SME:
1. Make Time
You need to plan a half year strategy meeting and ensure all key members of senior staff attend. In reality if you are a proactive business the meeting should take no longer than a day.
2. Be Prepared
This meeting could be the most important meeting that happens from now to the end of the year so ensure that you are prepared. You must have:
- A copy of your revenue targets
- A breakdown per department (if applicable) of the performance year to date
- A breakdown of individual sales staff performance year to date
- A copy of the budget
- A copy of your half yearly accounts or management accounts
3. Set the Meeting Objectives
Time is money in my world so giving a day to a meeting must add value. Prior to attending the meeting I always work out what I am looking to achieve. Below is a list of information I would suggest you might like to get out of the meeting. You should look to establish:
- What has been under achieved by each department in Number of sales / Revenue / Gross Profit and have accurate figures for each area
- If there has been over performance (review this per department)
- Which individuals that are performing against their targets and which are not and by how much
- How the cost base per department is performing against budget
- If the capital expenditure is on target and if not how much is the business over
- The volume of bad debt the business has
- Your bank and cash flow position
- An agreed plan to address all issues and ensure the company achieves all 2012 budgets and targets
4. The Meeting and Accountability
The meeting should be run in line with the objectives being discussed and met. As previously stated the whole point to having the key team involved is to use their brains to address any underperformance issues. If a business is not achieving its targets, everyone should be aware of how they can make an impact and put it right.
If you find that the business is performing and on track, key members of the team should be made aware of thier success and ensure that this positive message filters down to the rest of the company. From a motivational point of view, this is crucial to helping with staff retention and a healthy culture.
Once the performance is discussed a list of priorities needs to be agreed to attack each area of underperformance and ensure that any successes continue or improve further. A group discussion needs to take place to review all issues and proposed solutions. Action points need to be agreed and individuals given accountability to ensure action is taken.
I have listed below compulsory action points that need to be generated from the meeting:
- Agreement that any underperformance year to date per department needs to be rolled over to the second half of 2012 to ensure overall performance
- Re-budgeting of all revenue targets to restructure the underperformance
- f it is felt that a department targets are not achievable the amount must be absorbed by an over achieving department. (Not fair but commercial)
- Agreement on the date of role out of new targets
- Performance management to commence with all underperforming staff
- Review of Marketing activity and results
- Review of sales conversion to ensure the most is being made out of every lead
- Commitment to regular bi weekly meetings to focus on key areas of underperformance until the figures improve