In your professional services business, putting in place and using measures to make sure you’re going the right way at the right speed is crucial. The thing is, all your business is selling is its expertise. There’s no stock in the warehouse to keep an eye on, no daily till-take to cash up. You’ve got a finite number of people with skills to do the work each day. They’re making money working for clients wanting deliverables done to as a high quality standard as quickly as possible. Day-by-day, managing work to be done and people to do it can mean the difference between your business doing really well, or lurching from one urgent issue to the next.
Measuring how things are going isn’t a new concept. But it was once again highlighted to me when I heard about the fate of someone I’ve been trying to sign up to Abtrac for several years. I was talking with him on an arranged ‘follow up’ and in conversation he told me he’d just traded his car for a new one, adding:
Stopping myself from saying what I really thought I asked him how he managed his speed and knowing when to have the car serviced without an odometer. He said “I’m a pretty good judge of how things are going”.
He had the same attitude to managing his business. He always said he knew exactly how the business was tracking, tapping his head sagely saying “It’s all up here”.
So I had a certain sense of schadenfreude when I learned he’d gone bankrupt. He lost his new car and much more along with it. I also felt angry. Without warning, staff with families to care for and mortgages to pay were literally escorted out of the office when the liquidators came in.
The reality is nobody can guarantee to always drive at a safe speed without their speedo, and similarly nobody can run a business without using continuous measures to help them assess how they’re going. Confidence is not enough.
But here’s a funny thing. There’s a prevailing attitude in some businesses that it’s only the accountants job to measure and manage business performance. “The accountant does the counting”. To which I say piffle bosh bunkum.
Why? Because by the time the relevant data hits the accounting system, it’s history. By the time it impacts the bottom line, it’s history. Accounting is like driving a car only looking in the rear view mirrors. Sure you need to know where you’re at, and where you’ve come from. But better businesses don’t wait until the results are in before engaging their management prowess. They know they have to be on top of what’s happening long before it’s billing day, so when the invoice is cut they’ve achieved the maximum revenue from the most efficient use of the time spent. And they know that means managing the business and everyone in it, each and every day.
So better businesses put in place continuous measures, just like on cars, making sure they’re going the right way at the right speed, every day. And whether you’re charging an engagement on a fixed fee, hourly rate, through a retainer or on some other basis, effective management makes the difference between doing well, or just getting by, or worse.
Good management is knowing about the little things you have to do well, and making sure they’re being done. Good management is knowing long before month end if you’re going to make budget or not.
Sounds easy? It can be.
My business is delivering good software and signing up people to use it. But I know the reality is that while Abtrac will make a significant impact on each of our client’s bottom line if used properly, just like the speedo on a car, it’s the proverbial ‘nut behind the wheel’ that makes the difference.
So what small changes could you do this week to make a difference. Maybe a few minutes a day asking each person what they’re doing, how they’re tracking and when do they think they’ll finish the piece of work they’re currently working on. Maybe a few more minutes each day checking results from timesheets vs budgets for each project to ensure there’ll be no surprises at month end, especially on your big ticket projects. Or maybe it’s reviewing the last project of the same type as the one you’re quoting on today, to see how it actually tracked last time, before committing to a quote on this new proposal.
Read more on how to succeed in business management here.
Managing your professional services firm is a job in itself. And as your firm grows the amount of time you need to spend on management grows exponentially. The number of times I’ve heard people saying they no longer “do the fun stuff” is the reality of a business that has grown from being small, but isn't big enough to run ‘departments’ and full time managers. It’s the reality of most businesses everywhere.
So sit down and take 5. Take an hour. What measures could you put in place to better manage your business. It could be the most worthwhile few minutes of your day. And whether it is or is not. Do it again tomorrow.
As always if you want to learn more about managing your professional services business, to validate what you’re doing already or to pick up some new ideas, feel free to contact us at any time.
We will be pleased to respond.
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