As many of my clients already know, I love my sports, both playing and watching – but especially playing golf. A basic tenet of any sport, be it team or individual, is the application of some form of measurement – a score line. A formal method of determining who won and who lost. Or who’s performance improved and who’s did not.
Business is no different – measurement isn’t just desirable, it’s vital.
One client had what, on the surface, appeared to be a good business with increasing sales, but was in fact barely breaking even. He couldn’t understand why. Reviewing their financial statements, we quickly realised that the underlying problem was with the margin they were making on the products they were selling.
Applying what was learned from the review, the business adjusted its margins upwards and implemented various new strategies designed to persuade customers to buy even more of the products with increased margins.
Most importantly, regular monitoring of the margins was established to measure the effectiveness of the new strategies and determine if the business was improving to the extent that it was making more money.
Long-term results show a very healthy margin being made but, of greater importance, a growing net profit contributing to a sustainable business. We know this because?
We’re keeping score!
Every business, regardless of size – from a one-man operation to a global enterprise – needs to know its ‘score’. Needs to understand precisely how it is performing, maintaining flexibility to react quickly with adapted strategies when matters are not going well – and to always be looking for ways of improving even when all appears satisfactory.
Do you or someone you know need help with monitoring the scoreline? Start keeping your score by emailing me – Mark Calleja – at firstname.lastname@example.org or call me on 02 9923 2959.