Evaluation: Helping Your Business Keep Getting Better
Most small businesses keep records simply because the government insists on it. Records form the basis for financial statements and tax returns, used to calculate your tax liability. Often this process is only done once a year when the tax return is due (too often, the week before the filing deadline).
Our team at Silver + Goren believes record-keeping is not a chore but one of the critical factors in running a successful business!
The success of your business depends on the quality of your decisions. The quality of your decisions depends on the quality of your information.
What makes good information? It needs to be accurate, timely and relevant to the decision at hand. Most business people are constantly inundated with large amounts of data. A key element of effective organization is getting the right information at the right time to the right people.
Most operations should define a few measures of areas critical to their business processes – known as key performance indicators. These should go directly to those with the responsibility and authority to influence how the process is accomplished.
Key performance indicators can be financial or non-financial in nature and can be considered alone or in combination with others. They can be measured in dollars, units of time or employee turnover, as examples. They can be anecdotal, such as customer satisfaction surveys or customer complaints per transaction. Management needs to be able to drill down to the operations to evaluate how effectively the business is performing on the frontlines.
How frequently evaluations happen depends on the nature of the process being measured. Generally as you move down the process level of the organization, the more frequently the reporting needs to occur.
While it can be cumbersome, don’t forget the bottom line: help management get the maximum performance out of each area of the business.
“What you can measure you can manage.”