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Owners or executives of small- and medium-sized businesses have a lot on their plate just running their day-to-day. You may not have the time or ability to really dig into every aspect of your business' systems or processes to see if they're running as efficiently as possible.
The following five tips will help you get a better handle on those issues so that you can gain insight into more aspects of your business and take its operations to the next level.
Any business operates on the idea that it should be generating more revenue than the expenses it racks up. With that in mind, having a look at everything you spend money on, and everything you bring in may help you identify areas where you can pivot. The latest data from the Australian Taxation Office shows the median company nationwide had income of nearly $122,000, versus less than $91,000 in expenses, but such performance is heavily dependent on many factors.
For instance, you may find yourself spending more than expected on raw materials. On the other hand, if you find yourself doing particularly well in generating revenues from a certain customer or sector, that might give you a new direction for your business.
Ensuring you have a full understanding of your revenue vs. expenditures is critical.
Related to the above issue, business owners seeking more insight into their operations also need to get a better understanding of cash flow overall. Some months may consistently see them spending large amounts and bringing in relatively little, while others see big revenues and fewer costs. Examining why this is will help you better plan for the natural ups and downs of business.
Additional insight into these areas could help position you well to take the next step in terms of tightening up your bottom line and preparing adequately for hiccups in your cash flow.
One of the largest expenses you likely face, if not the biggest, is the people who make your business run. It's not always easy to determine whether you're overpaying or underpaying your employees, or whether your business has changed to the point that you have too many or too few on the payroll.
Taking a deep dive into your payroll situation will help you better understand what would be ideal for your company and its workforce going forward. The latest data from the Australian Bureau of Statistics shows the average adult with a full-time job earns almost $1,700 per week. Looking into industry-specific breakdowns will help you determine where your company stands on this issue. That information could, in turn, help you strike the right balance with growth and employee retention.
Payroll represents one of the biggest costs for businesses.
When you're trying to assess your company's standing within your industry, it's also important to get as much insight as you can into what your competitors are doing well, and where they may be falling behind. It's not always easy to understand all the ins and outs of your competitors' business processes, but any efforts to uncover what makes them successful and which challenges they may face - such as competitive benchmarking - could give you unexpected insights into your own operations.
Business executives and owners are often quite conscientious about setting goals for growth, but they may not always do the necessary work to follow up on those goals. Even if they revisit what they accomplished over the course of a month, quarter or year in comparison with the objectives they initially set, more may be necessary. Understanding not only whether those targets were met - but also why the company met its benchmarks, fell short or exceeded them - is critical to finding a position for sustainable growth.
Benchmarks don’t have to be static and unchanging.
To gain stronger business insights, consider working with Ulton. We provide a number of services to help you better understand your business - and unlock its true potential. The more insight you can get into every corner of your operations with the help of our expert business advisors, the more informed your future decisions will be. Contact us today to find out how we can help your business.
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