Does my business provide me with the income I deserve?
There are many different reasons a person starts their own business.
- Some are really good at what they do and they are passionate about it.
- Maybe they think they can do it better than its being done.
- They love their work and want to share it with the world.
- Some are attracted to the idea of having control over their own life. They can make up the rules, work the way they want to with whom they want to and they don’t want to have to answer to others.
Owning their own business can create the environment they desire for any number of these reasons.
Whatever the reason a person starts their business, they should always be measuring what they are getting out of it. Here are a few things to consider:
- Do they have the income they want or are they merely an employee with more hats to wear?
- More work but less pay?
- Is the business providing them the lifestyle they desire?
Slowly over time, many business owners become a slave to their business. Working more hours to keep up without an end in sight. Not able to afford to hire enough help, they are stuck trying to work themselves out of a hole but find that they aren’t gaining any ground.
Most business owners are technicians that are good at the work. There is more to building a business than being good at the work. Building value is the key to building a business. This should be the goal of every business owner. You should be doing more in your business than just merely earning a paycheck. The ultimate goal should be building value over the life of your business so that you can sell it and get that value out of your business and into your bank account when you retire.
Steps to improve your business ROI:
- Develop a set of key performance indicators (“KPI’s”). These should be key drivers in your business, i.e. # of new customers, average price per deliverable, collections, etc.
- Track the KPI’s weekly, monthly, quarterly and annually. You might have a couple of KPI’s you look at weekly and monthly and then more comprehensive data quarterly and annually.
- After tracking for a few months, you will have developed a KPI trend. Now set goals. Your goals should align with what you are trying to accomplish. If you want to make $10,000 more a month how does that equate to # of new customers or average price per deliverable. You should set weekly, monthly, quarterly and annual goals.
- Review your KPI’s and goals! The more you look at them the closer you will get to achieving them. Share part or all of them with your team.
- Be creative. After a few months when you get into the routine of compiling, reporting and reviewing add more KPI’s. Include marketing KPI’s, customer service KPI’s and lifestyle KPI’s. If you want to take more time off – make it a KPI. It will keep your priorities straight and help you realize if you aren’t making progress toward your goals so you can make the necessary corrections as early as possible.
Over the life of your business, you should be asking yourself “Am I getting the most out of my business?” If your income and lifestyle aren’t improving every year, you can be certain that you aren’t increasing the value in your business. The bottom line is your business should be working for you in regard to both income and lifestyle. If not, then start asking the right questions so you can get on the right track. The sooner you do, the more you will ultimately get out of your business. Regardless of why you started your business, it should be improving your life along the way and in the end, provide you with your retirement.
*PoleStar Entrepreneurial Group is all about helping business owners achieve their dreams. Let us help you reach your PoleStar!