The 5 step plan to improve your business

Perform a simple planning exercise every month that will help you make the best of your business.

Step 1. Do an appraisal of the past month’s performance

Identify the most important elements of your business – those things that have the strongest influence on the profitability of your business, such as turnover, gross profit, overheads, marketing, customer service, pricing, etc.

Evaluate each element on a scale of 1 – 10 (convert the points out of 10 to percentages if you wish to – for example 6 reverts to 60%).

You have now determined your businesses’ strong points and weak points (like in a SWOT analysis).

Step 2. Set goals for the next month

You must now determine a new goal for each of the elements for the next month. Obviously these goals must envisage better performances in the weak areas and at least sustaining good performances in the strong areas in the coming month.

A goal is always intended to attain better performances, but it must always be realistic – any improvement or growth is good – just as long as there is growth!

Step 3. Involve your staff in your planning

After you have done your own appraisal and planning, as indicated above, have a staff meeting and secure their involvement and interaction.

It is suggested that the staff members be invited to do their own appraisals. Afterwards consensus must be reached regarding the collective and final appraisals and goals.

Step 4. Determine action steps

A goal without a plan of action is no good – it is just an intention. Like New Year’s resolutions, nothing comes of it.

Any goal must always have a target date. In the business context your goals must provide for the following:
– Who will perform the specific action(s) that are needed to reach the new goals?
– How will the action steps be performed (methods/techniques)?
– What are the time frames / target dates (when)?
– To whom must be reported to – who should check/control? (remember, delegation without control caters for shoddy management).

Step 5. Draw up a monthly budget

After all the preparation has been done and goals have been defined, the new monthly budget must be drawn up. A monthly budget is a sine qua non for any business – it is a concrete tool and certainly your best planning tool.

A simple planning budget will include the following items:
– Turnover
– Cost of sales
– Gross profit
– Gross profit (GP) percentage
– Expenses (overheads)
– Net profit

The monthly budget will provide the guidelines for the ensuing month’s business activities. It will also serve as an inspirational and motivational tool.

Reaching the goals incorporated in the budget will provide an objective platform for determining incentives and allocating rewards.

Author: Dr Ben Cronje

Dr. Ben Cronje is a Franchise Consultant and can assist any business person to franchise his/her business. He is co-author of a practical guide for franchisors. He also assesses business and management skills of aspiring franchisees and business managers and is experienced in drawing up business plans and doing strategic planning.

About Rietmark

Rietmark was established in 1997 to assist small and home businesses with the marketing of their business or service. Every month 80 000 advertising booklets are printed and distributed in Pretoria Moot, North, East and Centurion. We also offer design and printing services - business cards, flyers, car magnets, banners, chromadek sign boards, posters, vinyl stickers and more!
This entry was posted in Your Business and tagged , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s