We are halfway through the calendar year so it’s the perfect opportunity to review your business performance. Step back and look at the big picture of your business operations and make an assessment.
Use our three questions to answer at your mid-year check as a starting point.
- How close is your actual financial performance to budget? (If you do not have a 2017 budget, compare to prior year)
- Are revenues ahead or behind?
- How is each service performing to budget?
- Are expenses ahead or behind?
- Is payroll above or below budget?
- Is net profit above or below budget?
- What actions can you take now to get back on track or exceed your budget goals?
- Change marketing tactics to increase volumes?
- Monitor your conversion percentage of new client calls or tours to actual reservations booked?
- Increase some of your rates?
- Reduce discounts?
- Eliminate lowest selling packages?
- Sell more to each client that visits with proactive upselling of bath, treat or activities?
- Is your business making your life better?
- Paying you a competitive salary?
- Reducing business and personal debt?
- Contributing to savings?
- Paying for dream vacations or personal assets?
- Allowing investment in your business to improve quality of care?
- Funding needed repairs and maintenance?
Celebrate your success if you answer the majority of the questions with yes and ahead of budget! If you feel disappointment in your mid-year performance don’t give up. There is still time to take action and make changes to get back on track.
Remember that you control the outcome and things can change. Determine if your budget needs adjustment and then focus on the items listed in number two. What steps can you take now to reach your annual budget?
Operating your business should not be a struggle or financial hardship. Recently a pet business owner shared that they struggled for 18 months to save for a $2,000 purchase. My first thought was instead of the struggle why not increase rates by 50 cents for one service and fund the purchase?
There are very few services in your business that you could not increase by fifty cents or a dollar tomorrow and risk losing volume. Even a small business serving 25 pets a day can create a significant impact with just a rate adjustment. See our example in the chart below:
| $0.50 Increase | $1.00 Increase | |
| Daily Revenue Increase | $12.50 | $25 |
| Monthly Revenue Increase | $375 | $750 |
| Annual Revenue Increase | $4,500 | $9,000 |
| Time to save $2,000 | 5-6 months | 2-3 months |
Sometimes you are too close to your business operations to see easier solutions. It’s important to block time away to step back and review performance. Just follow these steps:
- Find two-four hours of time in the next two weeks to work from your remote office
- Use our three questions as you review your financial reports and make notes on opportunities
- Bring your list back and discuss ideas with your management or professional support team
- Decide on three action items to implement in next 30-90 days
I know some of you are thinking, “I’m too busy right now to spend time on a mid-year check”. My question back is “Would you find 4 hours to submit a winning lottery ticket worth $9,000?” That winning ticket is waiting for you to find it in your business financials and key performance indicators.
Susan, this is spot on! Understanding our businesses in a way that we can determine when we need to raise rates, the effect of an increase in labor costs, as well as how much to put back to cover maintenance/repairs has become paramount to our success. Your financial programs and tracking KPI is truly a gift for those of us who are extremely busy and can only put together a few hours a month to review our metrics. Thanks for all you do!
Thanks Al! We appreciate all you’ve done too to help the industry use KPI. It’s definitely a conversation I’m having more frequently now which is great.
Susan,
Thank you for all your help and class work and consulting when it comes to the financials. I’m marking my calendar right now to take myself out and spend the day looking at my financials like you always tell us to do.
Yeah!!! Mary Beth you made my day…keep up the great work you are doing outside your comfort zone. It will pay off.