You have a successful business that is growing and profitable. Your business is making both its customers and shareholders happy. Now what?
Given how quickly the marketplace evolves thanks to new technology and available capital, well-run companies always need to think about continuous improvement in order to remain competitive. Below are a few suggestions to help improve your business:
Make Sure Your Employees Are Happy
A Harvard Business Review article confirmed that one of the keys to a successful business is keeping your employees happy. The article mentions that “[h]appy employees produce more than unhappy ones over the long term. They routinely show up at work, they’re less likely to quit, they go above and beyond the call of duty, and they attract people who are just as committed to the job.” The authors claim there are two components that help create a “thriving” workforce: vitality and learning. Vitality or passion to work can come from making employees feel like they are making a difference. Learning comes from your business being dynamic enough to ensure your employees continually gain new knowledge and skills. The combination of vitality and learning are what creates a virtuous cycle reinforcing an employee’s desire to contribute and their ability to create more value.
Benchmark Your Performance
Too often we meet with small business owners that do not know how their business performance benchmarks against competitors. As an illustrative example, your business generates profits equivalent to 20% of sales. At face value, these margins seem excellent. However, your competitors are generating profits equivalent to 50% of sales. Now you need to ask yourself the question, why are you making less than your competitors? What “value-add” services or cost efficiencies do your competitors have to obtain a higher margin? Fortunately, there are several ways to benchmark your business. We suggest you start with referring to benchmarking website such as BizStats. Larger businesses should evaluate paying for more sophisticated databases and services available on QuickBooks, Capital IQ, among other service providers.
Plan for the Future
Business planning is vital for sustainable earnings and optimal performance. Small business owners constantly need to analyze trends in effort to anticipate events that may impact their marketplace in the future. It begins with setting a strategic plan for the business and diligently tracking performance. As you establish a business plan, make sure you set goals by business segment (e.g. marketing, finance, human resources). Most importantly, assign responsibility to each goal and periodically track performance. Easier said than done, and yet a necessary step to success.
Are we missing anything? We’d like to hear from you.
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Whether or not you are looking for business financing, get your free credit assessment today to understand where your business stands. Camino Financial provides business development tools and capital to small businesses. We work with our business clients to access up to $500,000 in financing in a timely, cost-effective, and prudent manner.