Successful business owners don’t simply mark their calendar for an end of year review but engage in ongoingreviews on a regular basis. While natural to gloss over flaws and look only internally, it is crucial to lookoutward for fresh perspectives on improvement. “The desire to ‘explain away’ results that arenot meeting expectations needs to be suppressed,” said Richard Pummell, Human Resources Lead forDevelopIntelligence, a company that helps owners meet business goals through employee development.
The first measure of the effectiveness of your business model starts close to home: your original businessplan.
There is a temptation to put on blinders and focus only on your own business’ ledgers but the best way toevaluate the success of your business model and create an actionable correction plan is by looking outward, notinward.
Rather than focusing solely on cash flow or debt management, it is better to get an overall understanding ofwhere your business sits in the marketplace compared to others. “At the highest level, do your employees,customers, and vendor partners differentiate you from the landscape of other car wash operators?” said DanCrowley, President of Peer Executive Groups, a business consulting firm specializing in business analysisgroups. Employee satisfaction, customer satisfaction, and vendor relationships should be surveyed to obtain aclear understanding of how your business is perceived. “As you gain experience with your business, you’llbetter understand the way your local market, competition and customer satisfaction impacts your results,”Pummell said.
Next, look at how your company is achieving the financial and operational goals that have been set. “Didyou write down your goals? Are you meeting them? Where are you coming up short? Where are you coming up better?”Crowley said. The answers may be surprising and should inform your decision-making as you adjust course.
One benefit of evaluating your business on a consistent manner is that it provides opportunity to make small,frequent corrections to your business model rather than imposing sudden big shifts. Too big a shift can confusecustomers and distort your focus, driving prospective customers and partners away. “Subtle shifts can beeffective while going largely unnoticed, or delivered as enhancements based on customer feedback,” Pummellsaid.
Obtaining the feedback of all key stakeholders is the first step in correcting course when your business modelneeds adjustment. Communicate your Unique Selling Proposition (USP) or ‘Message of your Mission’ toall key stakeholders. “Ask them their opinions and thoughts to achieve the success desired. Noteverything is adaptable and useful but it gives you an opportunity again to communicate your vision,”Crowley said. If your key stakeholders can see what makes you unique from other car wash operators, the businessmodel is on track for success. Next, see if the messaging you’re using in the marketplace is aligned withyour vision and ten year plan. If not, make adjustments as needed.
“I measure the success of my business in terms of sales and customer service. The followingthree metrics have been the most helpful for me in keeping track of how my sales team is doing,”Jonathan Prichard, CEO of MattressInsider.com:
Utilization KPIs measure how much time your agents spend doing the tasks you want them to do,such as answering support tickets, engaging in chats or answering sales calls. These KPIs are especiallyeffective, because they give you — the business owner — insight into workload and how muchemployees can handle in a day. Both overloading and under-assigning your employees are dangerous positionsfor your company to be in.
While utilization tells you what percentage of time your team spends doing what, productivitymeasures what they do during that time. For example: If they spend 7 hours answering supportcalls (utilization), a productivity KPI will measure how many tickets they are resolving per hour.Productivity KPIs are critical to measuring employee performance.
Customer satisfaction KPIs measure how customers rate your agents, the quality ofsupport received, and their overall satisfaction with the resolution. It’s true in business that thecustomer comes first, so making sure they’re satisfied is an essential KPI.
One of the more effective ways to improve the financial performance of your business model is to focus onoperations. “Every financial indicator that is below where it should be is usually there because of anoperational issue,” Crowley said. If you want to improve your financial success, focus on Key PerformanceIndicators, or KPI. If revenue per employee is not matching up with industry numbers, there’s usually anoperational reason behind it. Correct operational issues based on industry benchmarks and financial success willfollow.
Look outward to the overall market and industry benchmarks to evaluate the financial success of your businessmodel. “Focus on your measurements versus industry benchmarks, speak to vendors and peers from othermarkets who have been there before you to see what you should be achieving,” Crowley said. Based on thisfeedback you can determine whether the financial goals you set are achievable, and if under-performance isrelated to lack of sales or a lackluster market.
When you identify a gap between your planned model and your actual results, find someone in your network that youcan discuss your findings with. This can be very helpful in receiving unbiased feedback and serves as a greatway to test hypotheses to see if they ‘ring true’ with someone who is not as emotionally connectedto the business. Joining a peer collective like Crowley organizes is an effective way to understand businesstrends and benchmarks impacting the car wash industry.
Whether you are working with a consultant or independently, it is important to be in a constant state oflearning. “Keep up with the latest research, association information, industry experts, and businesstrends,” Crowley said.
“The key is to remember WHY you started the business and what you want to get out of it. Don’t losesight of those key pieces of information, and adjust your journey to get to where you want to go,” Pummellsaid. Change can be positive and productive. Inaction can be devastating.