Limber up and get out the feather duster. It’s time to take stock of your business and do a bit of spring-cleaning.
I was looking for some guidance on this topic myself. But I actually couldn’t find anything particularly helpful, beyond a fair amount of theoretical guidance and some out of date blog posts.
So, I asked a very broad cross section of business experts from my network for their practical tips on what to do, when to do it, and what are their secrets to doing it really well.
Here’s what they very generously shared with me. It’s a great feast of helpful information and resources, so I’ve split it into 4 parts. This is the first part and it focuses on how often, and the best ways, to take stock of your business and keep it on track. (You can find the other parts on merlie.co.uk).
So first of all, what’s the point of taking stock of (or spring-cleaning) your business?
Taking stock ensures you always keep what’s important in focus
Laura Vanessa Munoz, the founder of social enterprise, Empowering Futures and champion to entrepreneurs and would-be entrepreneurs internationally, points out that ‘as entrepreneurs, we tend to take care of the urgent, rather than the important; that 20% that actually makes the sales and the business grow.’
It’s vital not to lose sight of what really makes the business work and what assures its future. Often, that’s not the everyday tasks. Operational matters can be dangerously distracting if not kept in balance.
One of my favourite responses came from business coach and fellow entrepreneur, David Mellor, who, when I asked him why it’s a good idea to spring clean your business, said quite simply that ‘armed with meaningful and relevant data, you can take timely action.’
So spring-cleaning is all about ensuring that you have that data and that you’re giving yourself the time to properly consider it.
Small business expert and confidant, Hannah Martin, co-founder of the content rich ‘how-to’ site, The Talented Ladies Club, agrees wholeheartedly.
‘It’s all too easy to get bogged down in the day to day running of you business and to lose sight of your ‘why, what and when: why you are running your business and what you want to achieve by when. These are your core business goals.’
How often should you take stock of (spring clean) your business?
The majority view amongst my group of experts was regularly. So not just in the spring. And that the frequency of review depended on what areas of the business you’re reviewing.
‘A regular spring clean forces you to revisit your business plan and vision and to make any tweaks you need to keep it on track,’ says Hannah. ‘That way, you don’t suddenly realise months down the line, that you’re miles off course.’
Dawn Whiteley, MBE, CEO of the National Enterprise Network and another highly respected small business champion echoes this advice. ‘Taking stock regularly is valuable if nothing else than to reassert that the plans you had for the business are still on track, or to change them if they don’t suit you any more. If the business environment, or your sector, or your personal circumstances have changed, your original ambitions might not be fit for purpose any more.
One of the advantages of regular ‘take stock’ reviews is that you can often spot any problems before they become a serious issue. This gives you more time, more options and the ability to make smaller changes to remedy any problem areas, faster and more cost effectively.
It’s the same with new opportunities. Spot them fast and you can action them better and quicker, exactly as David says.
Laura emphasises: ‘be really honest with yourself about the performance results. That’s often the hardest part.’
It’s why it’s often helpful to share your reviews regularly with others whom you trust to give you an objective view. You and your business will be stronger for this.
Many of us tend to focus on the negatives. But even a disappointing set of results can point to the need to make changes that will turn all that around. Many entrepreneurs start out with one principal application or use in mind for their product, only to discover that there are a multitude of other possibilities, one of more of which ultimately becomes the defining product. For technology, pharmaceutical and creative businesses, as well as those who are used to collaborating with others, including platforms and collectives, this is particularly the case.
Just because you start out with one idea and one target audience in mind, and even if that particular approach isn’t as successful as you’d anticipated, doesn’t mean that you need to keep a narrow focus if other opportunities look possible.
Dawn agrees. ‘Don’t be frightened to change the plan if you need to. Don’t be a slave to an old plan if it’s not working. Come up with a new one!’
Financial performance against targets and expectations, including costs incurred, was an area that the majority of my contributors recommended reviewing monthly.
Regularly and ‘when it feels right’
Simply Business’ Head of Marketing, Bea Montoya told me that whether you take stock of your business, monthly, quarterly or yearly is really up to you. ‘The flexibility that comes with running a small business means you can do this as often – or as little – as you like. However, putting aside some regular, designated time to assess where you stand is crucial when it comes to planning for the future. What went well over the last quarter? Do your targets need to adjust? Can you now afford to take on your first or more employee(s)? Taking stock of your business on a regular basis is an opportunity for reflection, learning and ultimately, progression.’
Entrepreneur and business influencer, Ash Phillips, who founded YENA (the Young Entrepreneurs Network Association) agreed that regular financial reviews are valuable because they bring focus to business strategy and its objectives.
But he also cautioned against being too rigid about these reviews or spending too much time on them. ‘As a small business/startup, I find the best practice is somewhere between regularly scheduled check-ups and ‘when it feels right’. This might not sound part of an accurate process, but it helps small businesses to stay dynamic, while focusing on the most important task – just cracking on! Often companies can be too analytical; it’s better to have an imperfect process for taking stock of lots of work, than to spend hours analysing a very small amount of work done.’
Strategy and plans
Generally, business plans, strategy and ideas were considered areas that required slightly less frequent review, but all of my contributors emphasised that these nonetheless needed to be reasonably front of mind, especially since financial results should always be considered against the back-drop of your overall business plan and your goals.
A number of the experts recommended conducting a review of plans and strategy once a month, often at the start of the month, as a good discipline that worked well for them.
Be prepared to be flexible & to adjust as you go along
David, whose business David Mellor Mentoring, regularly advises businesses and their founders on how best to operate and grow, recommends monthly ‘flash’ reports, looking at key financial and non-financial performance indicators. These quick and easy health checks enable you to then ‘drill down on any results that cause concern and then you can decide what corrective action you might need to take,’ he says.
‘And check on a quarterly basis whether any of the metrics by which your measure your business have been overtaken by events,’ he adds, ‘in case they need adjusting or replacing.’ It happens.
Ex-Olympian athlete-turned-entrepreneur, Josie Horton runs her judo business in schools across London. The academic year has a strong bearing on her business planning and activity. ‘I take stock every academic year, every term and at the start and end of each financial year,’ she says. But she points out the need for flexibility in planning and execution.
‘I look at creating a theme for every term that the children can relate to, using key words and clear objectives. This helps to keep them engaged, enjoying themselves, learning and improving. But if for some reason, this doesn’t seem to engage a group as well as I’d like, I’ll quickly adapt the lessons to accommodate the emerging class dynamic. It’s got to work for them and every group can be different.’
Some of us have customers who are a little more predictable, but many of us experience challenges with customer engagement, for a variety of reasons. Josie’s regular and close scrutiny of her customers’ behaviour, and her speed in accommodating a drop in engagement levels, gives her business a real strength. Repeat business and recommendations to potential new customers are key to success after all.
Josie’s the epitome of being flexible in business. When she suffered a freak accident early last year that left her without the lower half of one of her legs, she needed to plan and recover fast to ensure that her business could continue successfully and that she could physically carry on instructing and demonstrating. Managing the children’s knowledge of and reaction to her changed physical appearance was something that she also had to rapidly learn to accommodate, and still does; in fact, she’s so successfully turned a situation of extreme adversity into success that she’s become a very motivational and inspiring speaker, counsellor and role model to children and adults.
And of course, it’s not just your customers that you need to keep an eye on.
For Liz Whitaker, founder of Condor Communications (and author of a shortly to be published book packed full of terrific guidance on growing your brand profile and communicating successfully in business), staying alert to factors that could impact your business model and being prepared to act fast in response to them is vitally important. ‘The external world is changing so quickly, you have to be constantly on top of the opportunities as they happen. Once a year reviews, even quarterly ones, are not enough.’
Keep that business plan and SWOT analysis in sight… and remember, it’s not cast in stone, keep it dynamic and current.
So what’s the best way to ‘take stock’?
Founder and CEO of Makeitcheaper.com, Jonathan Elliott suggests that you ensure you can answer yes to the following 4 questions:
- is there (still) a market for what I offer?
- does what I offer (still) give enough value (is it different enough) for someone to chose me instead of my competitor(s)?
- can I (still) make money on this offering?
- am I (still) capable of making and delivering it?
Ash believes that one of the best ways is to find a mentor/adviser or even an advisory board (if you’re more established), who you meet with quarterly and who can help you to consider these types of question. Quarterly is enough time to see step changes in the business, and not too long to risk the business unhelpfully running away with itself, he points out.
With his own mentors/advisers, Ash tends to cover a real blend of topics, with a focus on sense-checking what’s happening now, looking at his targets and how well he’s performing against them, considering what could be improved to make results even better, and then turning to the big ideas and examining how close his business is to being able to make them happen.
Voxsmart’s Emily Jane Brown advocates good record keeping and making lists to help her to prioritise key tasks, keep track of them and review her progress. ‘I note everything down, because in any busy role, you can always think of ways to improve, but you need to find focus and break down the way to achieve this into manageable chunks.’
It’s hard not to feel overwhelmed sometimes. Having lists and being able to tick off the tasks you’ve thoughtfully identified not only gives a sense of progress and achievement, it also ensures you don’t miss anything out. (In Part 3 of this series, I cover our favourite tools and resources for taking stock and staying on track of our own businesses; several of these are really helpful for task and time management.)
Is there a particularly good time to ‘take stock’?
There’s never a bad time.
My contributors identified a number of good moments for reviewing how well the business is doing and what else it could do. What’s clear from their feedback is that different moments may suit different businesses and the personalities who manage them.
Grab the moments when you can, schedule others on a regular basis anyway, to ensure that you’re always on top of your business, even when you’ve got your head down, working in it.
Bea notes that most small businesses experience seasonal differences in trade. ‘Whether you’re an online trader seeing a spike before Christmas, or a tradesman regularly rained off in the winter, the chances are you’re going to have quieter times at some point. These can be a great moment to take stock of your successes (and challenges)’, providing you with a little more free time to consider how things are going and what you want to do next. It’s time well spent.
Ash agrees. Quieter periods, where clients are less demanding, are a perfect time to reflect on how things are going and your ideas for what next.
Emily uses her holidays, the time she spends away from her 9-5 routine, and moments of reflection when she’s travelling on planes. ‘Weirdly, I love to set time aside with a notepad when I’m on a plane. I have no distractions, my phone is off and I like the simplicity of just having my thoughts and a blank sheet of paper.’
‘Think time’ is really important. But make sure you’re not leaving too much to chance or serendipity.
David recommends having a set time for reviews, like the 1st day of the month. Look back over the preceding month and review how well the business did. Revisiting and refreshing business plans in the autumn, ideally with a mentor or someone who can give you meaningful and impartial feedback, so that you’re ready to kick off again in January, is something he also advises.
Like David, Hannah also advocates a monthly ‘big check’. She also puts time aside weekly to update her bookkeeping and accounts. ‘For me, it’s a Monday morning. I check what invoices are going out and what payments have come in. So I have an overall picture of the business’ financial health as I go into the week ahead, and I can act quickly where I need to, e.g. on unpaid invoices’.
Does size make a difference?
I was curious to see whether there was a difference in view between founders of small and large businesses, or between employed representatives of businesses/organisations and entrepreneurs, or between different types of business.
Although I didn’t interview a huge number of contributors for this research, it was pretty clear that amongst my diverse set of contributors, there were no obvious differences in their views. They all agreed that every business should be regularly taking stock of the same items.
Looking back, vs looking forward: how should you allocate your review time?
A final point for Part 1 that interested me, is the question of how much of your ‘taking stock’ time you should ideally spend looking back at past results, vs looking forward to next steps and new opportunities ?
My personal view is that looking back is very useful to ensure that you’ve delivered to plan and that you’ve learned from any mistakes. This is important to demonstrate to all stakeholders that you can run a steady ship and can adapt to changes where need be. However, at least 20% of that review time should be given over to what lies ahead and to the robustness of your plans for getting there.
I’d be keen to hear what you think.