VBJ-August2017-ONLINE

August 2017
THE VALLEY BUSINESS JOURNAL
www.TheValleyBusinessJournal.com
11
LOOKING FOR
SIGNALS
Here’s a tip, to safely ride a bike
around town constantly be “watching for
signals”. For example, when waiting at a
stop light, its good practice to keep watch
on adjacent traffic and their intentions.
Warning signs include a car signaling to
cross your path, wheels turned in your
direction or a driver simply not paying
attention. Similarly, business owners
need to be watching for signals. Not doing
so may result in a financial collision
with damaging results. The first step is to
identify the “signals” to watch that warn
of potential trouble.
For the startup, it might be not
knowing how much revenue is needed
each month to do business. Without this
figure, it will be difficult to recognize
when cash flow is becoming an issue and
financial commitments will become a
challenge to meet. Every business should
watch for low profit margins hinting that
pricing strategies may need review or
operating expenses are drifting too high.
A company unable to keep products
stocked resulting in limited selection may
be missing a signal that customers will
be soon seeking to purchase elsewhere.
Additionally, this may be a sign that your
manufacturing capacity is not sufficient
or the supply chain feeding your inventory
is not adequate. External signals that
may be taking place could include stock
market swings, interest rate changes or
a turn in consumer spending.
“Key Performance Indicators”
(KPIs) reflecting events taking place in
the business and market place can help
keep challenges in check. A set of well
thought out KPIs can guide business
owners and decision makers as they
identify trends allowing them to intelli-
gently adjust direction of the company.
This might include temporarily reducing
spending, negotiating new contracts with
vendors, review pricing strategies or increasing
production output. Guess work
is turned into educated decisions. Within
larger companies, each department may
have its own set of KPIs. The quality
department may look at survey results,
parts returned from customer and “dead
on arrival” products from vendors. It
may report on system downtime both
planned and unplanned as well response
time requirements and fulfillments for
users. Purchasing may want to watch
progress to reduce costs in order to react
to price increases from vendors.
Watching for these types of “signals”
is a key to keeping your company healthy
and on-track towards its goals while
preventing the unexpected collisions of
business.
Ted Saul is a business coach and writer
that assists with Business Plans and Project
Management. He holds a master certificate
in project management and has
earned his MBA from Regis University.
Ted can be reached on LinkedIn, TedS787
on Twitter or emailing Ted@tsaul.com.
by
by
Ted Saul,
Steve Fillingim
Sr. Staff Writer
connect: Ted@tsaul.com
“
Business owners need to be watching
for signals. Not doing so may result in a
financial collision with damaging results.