How do you keep your mind focused on increasing the value of your business?
I come across this problem more and more as both and younger and older people are taking that step into a life as an entrepreneur. On the good side the internet has opened a whole world of opportunities for those with an entrepreneurial spirit to leave the corporate jungle and lead a more fulfilling life.
On the downside, there is an enormous amount of information and complexity out there and I see people from all walks of life, including seasoned veterans struggling to cope with it.
The bottom line is that to succeed in business you must have laser beam focus on delivering value and within that framework of value you need to focus on a set of goals.
When I talk about value, I mean this from two angles. Firstly, the customer angle i.e. what is it that my customers are looking for and secondly your own viewpoint i.e. that of the business owner who wants to increase the value of his business.
In this blog I want to focus on the second statement, which is all about you.
The key to running a successful business is by understanding how your business generates value to you as a business owner. In the corporate world they are called Value Chains or Value Streams. To the layman they are high level processes that include the usual suspects of Marketing, Sales, HR, Operations etc.
Focusing on Value using Strategy Maps
If I use a relatively recent example, a business owner told me he wanted to implement a new Payments and Till System that was connected to the Door Entry System. The rationale was that members could gain access the same way they do today but that the “Days and Time on Site” as well as other interesting data such as alcohol purchased could be retained for analysis. It sounded quite interesting until he pointed out his other critical business challenges such as poor cash flow, lower revenues, poor website, staff costs too high, members attendance reducing, poor stock inventories…… the list went on.
We talked for some time about what was truly important to him and after some time that profitability was key. I’m sure you all know that profitability is the difference between your revenues and costs over a given period and so we focused on some goals for these that we thought were reasonable. You’ll see that in the Strategy Map below
And so, once these high-level business goals were locked down, we then talked about all the other things that would have to happen to get the overall results. As you can see above the are several lower level objectives that need to be achieved in order to achieve the overall goal.
The process above is cyclic and you can refine the goals depending on how achievable the objectives are.
The beauty of this approach is its simplicity, it’s ability to help you focus and you can put the lower level objectives into a plan to help track success – example below
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Brian Hill is the principal partner at Rubiks Cube Management services and can be contacted at here