A twelve-part blog series outlining how to save, turnaround, and grow, your struggling or failing professional client service consultancy, architects practice, design studio, marketing communications (marcomms), PR, digital or creative agency business.
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Total Business Turnaround
Part 02 | Reporting
No business can survive without some basic level of reporting. Without it, you have no idea where you are and that can quickly get you into trouble. Problems arise, and while you want to do better, you have no idea where to start.
Reports will help you get a clear picture of your business, where it is now and what it will take to get it where you want it to be. This has to be done right, however, and in the most efficient manner possible, enlisting the support of everyone involved. Problems within your business can be so multi-layered that it can be dizzying to follow the reporting path, but it must be done. With everyone helping as they should, the process will be much easier than otherwise.
The Signs of Trouble
You don't need reports to tell you that you are in trouble. Your business will tell you, if you know what to look for. In the absence of proper reporting, watch out for the following signs as they will let you know you’re in for a struggle and if you need to take immediate action.
Phantom Orders and Wishful Thinking
Limited Information Flow
Theory of General Negativity
External Signs – Changes in your banking relationships
Angry Suppliers and Creditors
The best way to deal with any of these signs is to have all the information you need at your fingertips before you take action, and before its too late. So get on top of your business reporting as soon as possible!
Business Areas to Report Upon
Report on all the specific areas of your business as each requires specific skills, take different lengths of time, and have different costs associated with them. These areas normally have one person or a team of people who are responsible for them and if there’s just one person in a business, then he must fulfil the leadership position in all these areas and report on each to be able to quantify the return on investment and determine where exactly improvements can be made. These areas include:
Marketing and PR
Key Performance Indicators
Key Performance Indicators (KPI) are easy to understand ratios and calculations that can be tracked over time to determine whether a particular area of business is improving or getting worse. They are generally calculations made from a number of different measurements. KPI can communicate that meaning simply and quickly and point to areas that need attention. Some key performance indicators include:
Number of Clients
Lead Cost ($)
Opportunity Percentage Rate
Quote Percentage Rate
Hit Percentage Rate
Efficiency (as a percentage figure)
Slippage (as a percentage figure)
Profitability (as a percentage figure)
Turnover (in dollar amounts)
To be able to take advantage of key performance indicators, you need to have data from your top down and bottom up measurements – the raw data of your business. The key here is to work in both directions, otherwise the reports won’t join up and they won’t mean anything.
Deciding that you are going to generate and use these data is one thing, but actually implementing it is something else. You need to create spheres of responsibility within your management team with each member knowing precisely what reports they are personally responsible for. In addition, you also have to make sure that the reports flowed in the right direction, from those responsible for generating them to those responsible for acting on them.
By empowering everyone to look out for themselves as well as for the company as a whole because they have vital information, and implementing a robust reporting system to pass that information to where it can do the most good, the search for reasons and excuses for not making decisions and handling problems in a timely and proactive manner is minimised
Having an up to date financial picture is crucial for you to steer your business. Management accounts offer this essential information. You should be receiving management accounts at least monthly and preferably weekly, especially during challenging times when daily reporting becomes even more desirable. If you are not receiving complete management accounts on a regular basis alarm bells should be ringing.
Here are the management accounts you need to see:
Profit & Loss
The Wheel of Continuous Improvement
The Wheel is about bringing it all together and seeing how all the aspects of your business interrelate and connect to produce a holistic system that should undergo a process of Continuous And Never-ending Improvement (CANI). Remember, each sector of the wheel is as important as the next, and each should be nurtured and developed to ensure the whole business can operate as smoothly as possible.