Take time to measure and manage your business

July 28, 2020 - By Jeffrey Scott

Photo: Dmytro Varavin / iStock / Getty Images Plus

How do you find time to manage and grow your business, given how busy you are?

If you are lucky, there is so much new business to be had, it feels like drinking from a fire hose.

You must be making money on all this business, right?

Maybe. It’s not a given.

Case in point: Last year, I met a business owner of a $5 million business whose company was working full-out and who had taken the time to set up a budget. By many accounts, he was doing well, except the owner was exceedingly busy and never had time to dive into his numbers and reflect on his leaders’ and company’s activities. By the end of the year, instead of the 15 percent budget he was aiming for, he barely broke even. The numbers looked good, until they didn’t.

Just because the bank account is full of cash doesn’t mean the business is operating efficiently. Cash is not the same as profit. It also doesn’t mean you are heading in the right direction with your business, divisions and organizational structure.

But where do you find the time to figure this all out?

There is an underlying assumption that the harder you work the more money you will make. But it doesn’t work like that.

Business is a cycle of activities and results.

You do some activity (the work), and you get a result that can be measured. Often it’s measured in dollars or percentages. From that measurement, you make some course corrections and ideally perform better the next time around.

The more frequent you measure your results and make corrections, the better you will do.

Daily measurements allow you to give your team members daily feedback so they know how well they are doing.

Weekly measurements allow the team leaders to understand how they did and reset their activities the following week.

Monthly measurements of budgets versus actuals give you and the managers a big picture view of your results, with time left to course correct.

Quarterly measurements of goals versus actuals let you and your team know how they are doing at achieving your company’s larger strategies and lets them reset the priorities and how you go about them.

Making these course corrections and reflecting on your improving your activities takes time.

For every eight hours you work, you should take at least two hours to work on your business and define your course corrections. This takes self-discipline. This is called management.

It may look like you are doing nothing if someone were to peek into your office with your feet up on the desk thinking about your current situation, but this analyzing and thinking (and then communicating) will ultimately make your team more successful and thus, happier and more loyal to the company.

Make it a habit to take time to work on your business and reflect on your numbers. The busier you are, the more important this habit is.

Some call this time management, but I call this smart management.