The first half of the business year is officially in the books. And although the lazy days of summer may be calling, don't overlook this opportunity to take a close look at how your business is doing. By the time September—and that fourth quarter—rolls around, it will be too late to make any measurable changes that could impact 2013's bottom line. Any changes to ensure a successful year must be made in the next 60 days. So let's get started.
First, you're going to break down your business performance for the first half of the year into seven key areas: Sales, Expenses, Cash Flow, Employees, Technology, Marketing and Big Picture. Next, you're going to use the questions below in each of these categories to help analyze your business. Answer the following questions as completely and honestly as possible. Then grade your performance in each area. This is your company’s assessment for the first six months of 2013.
After you've answered the questions and gotten feedback from your team and any outside advisors, sketch out a detailed two-part plan. The first part should cover immediate action items for July and August. What will you do in the next 60 days to improve your areas of weakness and drive your areas of strength? The second part should cover September through December. This is where you will map out how you will finish off the year on a strong note, and achieve, or exceed, the goals you set up last December for 2013.
The 7 Key Areas
Sales. How were sales from January to June? Did you increase business from existing clients? Did you land any new clients? If you did, how were you able to win the business? Were there any unexpected wins or losses? More importantly, what is your specific plan, between new and existing business, to hit your 2013 goals?
Expenses. You have two types of expenses: fixed and variable. Have any of your fixed expenses (e.g., rent) gone up in the first half of the year? How did your business do with the variable expenses? I call these expenses “profit killers.” If you don’t keep an eye on variable expenses like hourly wages and gas, they can quickly put a dent in your bottom line.
Cash Flow. How was your cash flow for the first six months? Were there any significant changes to accounts receivable or accounts payable? Since 2008, the chasm between A/R and A/P has grown significantly. Net 60 seems to be the new “net 30.” If your business danced the fine line between positive and negative cash flow, do you have available resources to cover any shortfalls? Moving forward, do you need to make any changes to reduce cash flow concerns? If so, what are those changes?
Employees. Did you have any significant additions or reductions in staff? What was the reason behind either event? Do you have any gaps on your team that you need to address in the second half? More importantly, how is morale? Are your employees energized to come to work each day? Unless you are a one-person company, this is the most critical area in the health and success of your business. Keep your finger on the pulse of what’s happening with your employees.
Technology. Are you getting the most out of your existing technology? Surveys show that most small businesses only use 25 to 30 percent of the features found in their computers, software, printers and smartphones. It’s akin to buying a 10-room house and only using three of the rooms. Does it make sense to do an assessment of your IT infrastructure to see how you can run a more efficient and effective business?
Marketing. Is your marketing in alignment with your sales efforts? Is your brand well positioned in the marketplace? Can customers and potential customers connect with you using social media? What changes, if any, do you need to make in the second half to better position your brand and support sales?
Big Picture. It’s halftime at the Super Bowl. You’re in the locker room with your team discussing your first half performance. Are you winning, losing or tied? If you want to win the 2013 Championship in December, you need a strong game plan for the second half. It needs to cover not only what you want to do, but what your competitors will do and what will happen in the marketplace. What economic indicators (e.g., interest rates, housing market) will have an impact on your business and industry? Where are they headed for the rest of this year?
Remember, we're only halfway through the year. If you've reached this mid-year mark, and you're not hitting your goals, the good news is you still have time to turn things around. If you are hitting them, congratulations! But that doesn't mean you can sit back and relax. Make sure you have a plan in place to continue the positive momentum.
Read more articles on leadership.