Tier 1: Annual Revenue, Profit Margins and Setting Goals to Improve Them
The most successful service businesses have a process in place to assess the current state of their operational and financial KPIs, set goals for improvement, then track progress against those goals.
Typically, this takes the form of annual planning that involves:
- Reviewing how their business performed during the year prior.
- Setting operational and financial goals for the upcoming year.
This essential step establishes the foundation with which you can begin improving your profit margins. You need to know where your numbers are and set some goals for where you want them to go, so that you can track progress over time.
Tier 2: Ongoing Tracking of KPIs and Pacing Toward Your Profit Targets
When it comes to the ongoing tracking of KPIs and pacing toward revenue goals, it’s useful to have daily as well as monthly routines.
If you’re the business owner, a daily report can help you keep track of how many calls came in for the day and how much revenue was generated. It also lets you know if your company is on track to meet its monthly goals. Then, at the end of each month, you should also do a full financial review with your bookkeeper to get full clarity on how you performed in relation to your goals. This is crucial for making any necessary adjustments throughout the year to hit those year-end goals.
Tier 3: Optimizing for Efficiency, Implementing Best Practices, and Empowering Your Team to Achieve Maximum Performance
Setting goals and tracking progress is the first step toward improving your profit margins. However, optimizing for efficiency and implementing best practices in your business are how you begin to hit—and exceed—those goals.