April marks two very important milestones for business owners: taxes and the start of the second quarter.
Leaving taxes aside for your accountant to handle, the start of Q2 is a great time to take an assessment of how the year is going so far and determine what you are doing well and where your business can improve. Quarterly goals are important to help you lean into the annual goals you have for your business.
In fact, Fast Company says that 90-day goals tend to be more successful and easier to achieve because they feel attainable. The key is to string these quarterly goals together to they build on each other to take you through to your annual goals.
Here are 3 important ways to take stock of how your business went during the first quarter, to help you successfully transition into the second quarter.
1. What goals and metrics did you hit in Q1?
The first quarter is significant because it is sets the pace for the year. In order to hit annual goals and metrics, Q1 provides the foundation for which to base the rest of the year. Inc. drives this point home explaining that by assessing each quarter individually, you’re creating the short-term objectives that will feed into your overall strategy for your business.
Common metrics businesses should keep an eye on are sales revenue, gross and profit margins, overhead costs and monthly profits or losses. Your small business should have very specific goals, based on your industry and size, to meet these metrics.
At the end of Q1, evaluate your goals and determine which ones have been reached or exceeded. Commend your team members for their good work on meeting these goals or come up with tactical performance plans to alter course immediately. For some objectives that were easily met, it may be time to be more ambitious and increase the current goal. For others, you’ll need to identify what specific factors led to not meeting your goals, so you can change the problems within your business.
In an article for Harvard Business Review, Michael Mauboussin spells out a few unique metrics that are hard to measure but also important for your business goals. He makes the case that by being overconfident in you or your team’s abilities; you’re really undercutting your success.
Q1 is a great way to realistically use data and performance records of your staff overall to see if your confidence in your departments is on par with their actual results. If they aren’t, you need to adapt and make improvements now, don’t assume you’ll catch up in Q2: make a plan to regain lost ground.
2. What goals and metrics did you fall short of in Q1?
Most small businesses will start the year off excited and determined to try new projects and reach new goals. It is perfectly normal to fall short of high expectations presented in the first quarter, but don’t let that discourage you or keep you from taking a realistic look at where business is at now.
After identifying which objectives and metrics have fallen short of your specific Q1 goals, determine why your small business did not meet them. Possible reasons are that the goals were unrealistically high, there was a lack of communication or maybe there was an unexpected incident causing a loss of business. Whatever the reason for not reaching the goals, it is important to make corrections and move forward in a positive direction. Management and employees should be encouraged to offer suggestions for improvement and possible new methods to reach the company’s goals.
Going back to Mauboussin’s Harvard Business Review arguments, in addition to overconfidence, he also charges the status quo with being an important metric to challenge in business. If your business results from Q1 aren’t aligned with your projected goals, how can you change the way things are happening and embrace a different approach to achieve different results in Q2? After all, the saying goes that the definition of crazy is doing the same thing and expecting different results. You might have to get a little uncomfortable by embracing new technology, new approaches or new ideas for making up lost ground from Q1.
3. How are you committed to making Q2 better?
After you devise specific tactics to improve, get all the business stakeholders to make a commitment to adhere to the updated plan. The team should then communicate the plan to the entire staff. Set deadlines for new and continuing objectives; meeting weekly will help keep everyone involved in the progress and notified of any potential issues by department and overall. Discuss how new developments will be implemented going forward and emphasize the importance of committing to your small business’s goals.
It is crucial that all team members are aware of the company’s goals and motivated to implement them. Getting the whole team in on the journey to make Q2 better, when approached properly, can actually be a huge addition to your company culture and your employee engagement.
According to the Deloitte 2015 Human Capital Trends report, employee engagement is exploding to be the number one employee retention issue in the changing workforce. Today’s employee wants to be a valued and fully integrated member of the team, so ensure you’re allowing each person an opportunity to be a stakeholder in your quarterly success in a unique, measureable way. Q2 is a new quarter and a fresh beginning to achieve new and continuing objectives, so don’t miss out on this important chance to amend your annual plan to meet your current progress.