Manage to the Max
My last column explained why small businesses are so crucial to Hawaii and that they must be nurtured for the overall economy to grow. This column offers a simple but effective strategy to manage your business to maximum capacity.
First, you must appreciate that to improve, you need to have a benchmark to measure performance. We use such benchmarks and targets all the time, whether they be golf scores or grade-point averages. Once you establish the goal for your business, you can work to reach or exceed it, and make changes if needed to hit the target.
Let’s say you want to generate $500,000 in sales this year, but have been averaging about $400,000 in previous years. What comes next?
Start by recognizing this is a team effort. Everyone will need to work together to achieve the sales goal, so begin by communicating the goal to everyone, plus how and when the team is supposed to reach it. Break it down to manageable mini goals: For example, an increase in sales of $10,000 a month.
Then discuss with team members the mechanics of how to achieve the incremental increase each month. In the discussion, include sales, marketing, warehousing, delivery, accounting, accounts payable and anyone else impacted by the increased sales targets. When everyone is aware of the goal and working together, the results could be amazing.
Then execute and monitor. Keep everyone up to date on progress. Provide incentives, if necessary, to reach the goal. Monitor results, report to the team, tweak the process and keep on monitoring. It is only when everyone on the team is working together that the company will reach its full potential.
This approach works for other areas and functions within the company, including controlling costs, reducing waste, maximizing advertising results and achieving exceptional customer service. Remember to break the end goal into manageable portions, get the team involved and continuously monitor results.
Next month’s column: How to work with your bank.
Reg Baker has been a CPA and nationally recognized small-business consultant for over 30 years. He serves on the SBA’s National Board of Directors for Regulatory Fairness and Chairs Region IX. He also chairs the Chamber of Commerce Hawaii’s Small Business and Entrepreneur Committee and is a two-time winner of the SBA’s Financial Services Advocate for Hawaii.