One of the challenges faced by us business owners is being objective about our own business! We are too close to it. It is our child and so it can do no wrong; even when it reaches its teenage years. But we must find a way to be objective. We have to find those things we can monitor and measure so we can objectively manage the progress of our business. This is called management information.
There are two types of management information; financial and operational. The financial information has been around since the caveman Flog opened the first corner cave. This is often called “lag” information because it reports what has happened in the past. They relate directly to the financial health of the business; for example:
- Cash flow
To understand how to manage your company’s financial information watch the Webinar Three Pillars of Financial Management here.
Important point coming up! Take immediate corrective action when required. The most common mistake made when managing information is NOT taking corrective action when necessary because you are convinced it will correct itself next month. It won’t; take action now!
The operational information tells us how well the business is working. These are more specific to a particular business or industry. And they change as the business grows and becomes more complex. And they have changed over time as technology allows us better measurement tools. Some examples of operational indicators are:
- Response time to customer requests
- Sales numbers game: numbers of leads that turn into prospects and eventually customers
- Customer satisfaction rating
- Quality control
Another important point coming up! Before you start monitoring and measuring any information you must first set the targets you want to achieve.
So once you have your management information and you are measuring AND taking corrective action when necessary you will be in a happy place because:
- You know what is going on
- You can anticipate problems before they become huge
- You focus objectively on the right areas of your business
- You are informed
- You make decision based on fact not intuition
Register for our Free Webinar for more information about managing and using information to grow your business. Click here to Register!