As a small business owner, you typically wear many hats. It is easy to get caught up in the day-to-day operations of your business. But just important is taking the time to plan out how to measure what success means for you and your business.
Taking the time to determine what your goals are and how to measure them can have a profound effect on the success of your business. It can also help you better inform your employees of what they are working towards. If your employees know what being successful in their position means and how that translates to success of the business, it will translate to a more engaged employee.
So how are you doing that right now?
Are you looking at your net income, comparing revenues year-over-year, or looking at other financial numbers? If so, you’re looking at lagging indicators. These lagging indicators are great at seeing what has already happened, but they don’t do anything to predict how you will perform in the future.
If you want to get a picture of how you are going to perform in the future, then you need to look at leading indicators. These types of indicators are measurable tasks or actions that can determine future revenues, expenses, etc.
For example, say you own a farm called Acme Farm and you want to increase your revenue by 25%. A leading indicator that will predict future revenue might be number of new CSA customers per month. This is a measurable goal that all employees can be actively engaged in.
Turning a leading indicator into a plan for success
Engaging your employees with your business can sometimes be difficult. But it can be made easier by incentivizing your employees. If Acme Farm created a referral program that rewarded employees for customer referrals, then employees become incentivized to help meet the ultimate goal of increased revenue.
Engaging your employees with your business can sometimes be difficult. Below are a few simple ways to motivate employees:
1. Set goals and recognize success. Your employees want a challenge, it’s human nature. Setting achievable goals for employees allows them to work towards something concrete and it helps to measure their performance against it.
2. Listening to what employees are telling you is important, and it help to let employees know that they are being considered.
3. Compensation: to keep your top employees, you’re going to have to pay them a competitive salary. This as many employees may be easier said than done. If you can’t afford competitive salaries or raises, think about performance-based bonuses for individual employees or teams.
4. Care about their future: allowing or creating opportunities for people to move up within the business and or encouraging continues growth and education. Employees feel valued and important when they feel their manager/employer really cares about where they are headed within the company.
5. Create a good culture: People should enjoy showing up to work. Assess where you are at in this process. If your employees are loving coming to work, how are you going to keep that attitude going? If you have had a string of resignations or workers seem unhappy get some feedback. Find out what’s wrong with the culture and develop a plan to implement some change.
How we can help
While setting measurable goals is a key the success of your business, finding the time to can sometimes seem overwhelming. At All Seasons Tax & Accounting Services, we can help you to review your financial position, understand what your goals for your business are, and then develop a plan for your business’ growth. This can allow you to do what you do best: Running your business. If you have more questions, please feel free to reach out to us.