Make an operational analysis to achieve your goals
Every good business starts with an idea. The second step, which is no less important, consists of drawing up a plan that sets forth the projections or goals for the new business. There is a third level that every entrepreneur should include at every stage of development and growth: analysis and measurement of the business.
This tool will allow you to measure your plan and analyze how close or far you are from the projections you’re working toward. “Measurement is an objective way to analyze your business. It is important to establish metrics that quantify your business’s processes,” explained Vivien Montañez, senior vice president and manager of the Business Banking Division of Banco Popular de Puerto Rico.
How you are going to measure or analyze your company’s projections should be included in your business plan. “When you go to a third party, such as approaching a bank for financing, you have these metrics to help understand the industry and build confidence in the business plan you are presenting,” the expert said.
“Although we often establish goals based on sales or revenues, we have to determine the key performance indicators within the business’s processes. This will help us make decisions, to know when things are great, and when things are not going well, they give us time to improve and address the situations before it is too late,” Montañez said.
You can quantify various aspects of your business to monitor how you can achieve certain goals. Doing a business analysis increases a company’s odds for success. Inventory, peak sales in terms of your operating hours, marketing channels and employee recruitment are areas that should be constantly analyzed.
In small businesses or ones just starting out, the owner can do the analysis. If you need advice, there are specialists in the banking institutions who can guide you about how to perform various studies of your business. “As the business grows, the financial analysis needs become more complex. That’s why it is a good idea to turn to specialists in the various areas to provide orientation,” Montañez said.
Doing a business analysis is like putting a bell on the cat. It will help you figure out where you are in respect to your company’s goals, what you need to do to maintain control of operations, opportunities on which you can capitalize, and changes that are needed to stay on the road to success.