What are the 4 things every business owner should know:
People go into business for a number of reasons either they are fed up with being an employee and want to be the employer, they have the desire to take control of their lives to build wealth or they know that they can deliver something better than what is already being offered. Whatever the reason, there are certain things which are critical to understand when going into business:
1) That the profitability of the business depends on how well the employees consistently perform the critical activities.
Let’s break this down…Do you know what the critical activities are in your business? Do you know the how employees are performing and do you measure the consistency?
2) Employees perform best when their performance affects the bottom line and when their performance is measured.
Are you often telling yourself “I know I need to tell my team more” “ I know I need to share what’s in my head”
Going from a one man / woman company where only you needed to know the plans and goals can be a challenge for some business owners. But trust me, if you don’t share what is in your head and involve the team on the business goals, there will be chaos within the business. Building a winning team is part of the mastery of gaining Leverage as part of the 6 steps to building a better business.
Remember : Your team are not mind readers – don’t keep them in the dark!
3) Small changes in the critical areas can have a great impact on the bottom line.
Do you know your margins? Your breakeven points? Do you know your conversion rate?
If you know these numbers and really know them, you will understand that by making a small % increase in one area will dramatically impact your profit.
4) What gets measured gets done and what gets rewarded gets done again.
‘I know that my team are working as hard as they can”
“ I know that they are hitting targets”
Do you? How are you measuring your performance, your team’s performance, individual performance?
Do you have reward and bonus structures in place for your team? Rewards don’t always need to be monetary, if you are having regular reviews and performance meetings with your team, you should know any personal goals they may have – can you reward their achievements by contributing to their personal goals.
Remember: The act of recognition is far greater than the reward!
