Dear M & M: What are some things I can do to perform better in 2020? –Doug
Dear Doug: The first step is to decide what you want to do better and set up a system to measure it. Don’t just say you want to increase sales or make more money. How much more in sales do you want or how much extra money do you need? Identify how much then set actionable steps to accomplish whatever that amount is. What are your most important key performance indicators (KPI)? Let’s say we want to generate more cash or profit. One could set up a system to monitor costs of goods sold (COGS). (COGS) is what it cost you to make or deliver the product or service (includes raw materials and labor costs to make). We are now measuring and monitoring what we are paying for raw materials. How many raw materials are we using? What labor cost are we spending to produce? Can we buy materials somewhere else at a lower cost or possibly substitute some ingredient that is cheaper or easier to assemble saving labor costs? If we can produce a product or service cheaper without adjusting selling price we will generate more money to pay for everything else. Hopefully, at the end of the day we will have more money left over. Pick something you want to do better. Make it measurable. Set up a (KPI). Monitor that key indicator. Decreasing customer complaints 10%, increasing existing customers average ticket sale by $100.00, reducing returns 25% could be some goals for you in 2020. Pick one goal. Work on it. When you achieve your goals pick another one. “Goals are a pure fantasy unless you have a specific plan on how to achieve them.” — Franklyn Covey.
ASK M&M is prepared and submitted by Mark Schmitt, director of the Small Business Development Center at Cochise College; and Mignonne Hollis, executive director at the Arizona Economic Development Foundation. To ask your questions: Call the Small Business Development Center (SBDC) at Cochise College (520) 515-5478 or email firstname.lastname@example.org or contact the Arizona Regional’ Economic Development Foundation at (520) 458-6948 or email email@example.com; www.aredf.org.