There are many businesses out there but not many are well-run. Running a business is both an art and a science which requires one to take conscious and deliberate steps. Running a business well can be the single most important feature of your business that can lure both customers and investors. How then can you ascertain whether or not you’re running your business well? The answer lies in some of the indicators that I shall discuss in this article. I’ve chosen 7 of some of the most important indicators that show that a business is being well-run. Not only will this information help people assess whether or not a business is being run well but it’ll help businesses take note of areas needing close attention.
Robust Customer Care
I’ll enunciate this by quotes from two famous people. The first one is from Bill Gates, “Your most unhappy customers are your greatest source of learning”. The second one is from Henry Ford, “An innovator should have an understanding of one’s customers and their problems via empirical, observational, anecdotal methods or even intuition”. As is epitomized by these two gentlemen, it’s important for a business to be keenly engaged in offering exceptional customer care. Invaluable insights that’ll lead to an increased value proposition and customer service are drawn from customer care activities. If you want to quickly see whether or not a business is well-run, just take a look at the quality of customer care.
Repeat Purchases And Growing Customer Base
The major crux of any business is to develop a loyal customer base that’s ever-growing. After all, that’s where revenue inflows are borne out of. I’ve often discussed with my friends on how it’s so easy to recruit people for any cause but extremely challenging to retain them. Retention of customers is buttressed by several things one of which is the customer care I mentioned earlier. That’ll lead to loyalty and those loyal customers play a vital role in leading to more customer inflows. I might not have to look at other things immediately but if I see a business characterised by high rates of repeat purchases and an ever-growing customer base then I can tell business is being run well.
Standard Operating Procedures (SOPs)
The most basic premise for success in any establishment is structure and order. Any business is comprised of various types of processes that are executed on a day to day basis. For instance, processing of customer complaints, reporting processes, how are stocks procured and so on. All these and other like processes must have properly crafted and laid down steps on how they are done. This helps in streamlining processes in such a way that troubleshooting can be easily done and productivity is enhanced. All pertinent business processes for any business must have comprehensive SOPs. That gives structure and order and that’s why it’s an important indicator for a well-run business.
Regular Meetings And Reports
I recall Strive Masiyiwa once said that a boardroom is like the operating theatre of a business. Well, not all businesses have a boardroom but there is a key principle to extract from that. Holding regular meetings is important for a business because it helps in deliberating on business strategy and making crucial decisions. Another closely related element is reporting; there must be periodic reports for the various business processes or departments. Successful meetings are usually based on assessments and discussions based on periodic reports. Examples of reports are monthly, quarterly, AGM, quality assessment or audit reports, amongst many others. Regular meetings and reports are a key component of monitoring and evaluation. Any business that does this is best positioned to make empirical business decisions far-removed from assumptions. Regular meetings produce minutes which along with other reports serve as key points of reference.
Positive Balance Sheet
We can’t talk of a well-run business without looking at the financials. Even when prospective investors assess any business they are most concerned about the financial aspects. The mere fact of mentioning financials presupposes that your business has well-documented up-to-date financial records. You might satisfy this presupposition but the expectation is that you have a positive balance sheet – that’s the main indicator showing you’re running your business well. Generally, revenue must be outweighing operating costs; assets must be outweighing liabilities. Debt servicing (in cases where debts are present) must be showing signs of a progression towards healthy or zero debt. Overall, if your balance sheet isn’t in the negative balances zone then it shows the business is being run well.
Limited Or Zero Employee Turnover
Dissatisfied employees are an indication of some serious issues within a business. Mostly when employees aren’t happy with their working conditions they’ll leave the moment they get a better alternative. The first indicator I discussed usually stems from workers who aren’t motivated in their work. A well-run business must have workers who are clearly happy and passionate about their work. If a business is locked in a perpetual cycle of hiring, firing and resignations then it’s quite apparent that human resources aren’t being handled properly. If on average you visit a business and see new faces virtually every time then just know something is wrong in how that business is being run.
Active Ad Campaigns
If a business is not running any form of an advertising campaign that’s quite tricky. Just imagine that big brands like Coca Cola, DSTV or Econet spend huge amounts of money on advertising. So it becomes quite funny that a small to medium enterprise would not run any ad campaigns. Most big businesses attest to the fact that one of their most significant budgets is the marketing budget. A well-run business invests a lot in advertising and this should be visible through their ad campaigns. Nowadays there’s fierce competition in the marketplace.
These 7 areas will help us assess how you’re running your business. Never mind you’re starting out or you’re a small business, focus on these areas.