To improve it, first measure it

THE burdens placed upon small and medium business owners are constantly increasing.

From staffing issues and OH&S to professional development and the ever more complex world of taxation, auditing and cash flow, the demands seem to be on a progressively onerous trajectory, requiring more time, more sweat and more headaches.

Before all this becomes too overwhelming, it is a sensible idea to return to the basics so you can maintain control. Achieving this goal requires accurate measurement tools.

In order to select the most suitable solution, it’s a good idea for your management team to first ascertain the fundamentals that make your business tick.

Initially, put everything on the table and consider such elements as staffing level requirements at various times of the day, stock turn, cost of sales, profit per item, expenses, wages, wastage, compliance, divisions within the business, products versus services, gross income, net income and various other inputs associated with your business.

Next, ask a simple question — which of these is worth measuring? This is important because, in itself, monitoring takes time and effort, so don’t create extra work for no benefit.

Once these critical decisions have been made, take advice from an expert on which software package or stock monitoring system will be the best fit for your circumstances.

Accurate advice now will save time and money and result in reliable business data that is easily interpreted so future decisions and plans can be made.

It is also advisable to consider when and how frequently you need the information displayed. Monthly graphs? Weekly tables?

Once complete, you’ll need reliable advice from trusted professionals who can help turn your new business reports into a beautiful set of profitable numbers.

So if you can’t measure it, you can’t improve it! Matthew Le Maitre is a business adviser at Advisory Partners