Conducting a review of your business is really just stepping back and looking at your business objectively so you can see it more clearly than when you're busy working in it.
If you are a business owner/operator or freelancer, it's a good idea to conduct a review of your business twice a year so you can keep on track, or discover sooner rather than later that you're on the wrong track.
After you've reviewed your business, you can work out what you want to do differently and what you want to achieve over the next period, then make those changes to your previous business plan so that you have a current plan for the next six months.
Ideally, you should conduct your business review when refreshed and relaxed and able to be somewhat objective, rather than preoccupied or busy and immersed in running your business. But that's not always possible.
I conduct my 6-monthly business review in January upon my return from two weeks' leave, and then in July. (January and July are the slowest months of the year for my scribing and editing business.)
If you're a small business owner/operator, now may be a good time to conduct your 6-monthly review.
Jot down the answers to the below questions about how you and your business have been travelling over the past six months:
- Did you earn enough during the past six months? Did you earn more or less than expected? Do you know why? How much would you like to earn over the next six months?
- How many hours did you work per week, on average? Are you happy with working that number of hours? If not, how many hours would you prefer to work each week?
- Are you happy with your profit compared to the number of hours you worked? If not, why not? Are you charging the right amount? Are you productive/efficient in the way you work? Are there any ways you could be more productive/efficient?
- How much leave or time off did you take? Were able to cope financially with taking that amount of time off? Did you take enough time off to keep you healthy and happy? How much leave would you like to take over the next six months?
- What are the different types of work you did in your business? What percentage of your total work time did you spend doing each type of work? (If you like, you can draw those chunks of work time into a pie chart.) Would you rather do more of some types of work and less of others? If so, why?
- How much did you spend on contractors? How much did you earn from the work done by contractors? What type of work did they do? Was it practical to employ contractors to do that work?
- How successful was your marketing (including advertising, promotions and word of mouth)? Work out a rough estimate of:
- How many new clients did you win from specific advertisements, promotions, specific social media, word of mouth?
- How much time and money did you spend on advertising? Social media promotions? Email or other promotions?
- Looking at what you earned through different clients, which marketing streams brought you the most income? Which marketing streams gave you best bang for your buck?
- Did your advertising/promotions target the right audience for your business? What other types of advertising/promotions or other target audience could you try? Is there another angle you could use to better target your chosen audience?
- Have you kept in touch with previous clients via emails, phone calls, meetings etc.? How could this be improved?
- Do you keep in touch and always thank clients that refer other clients to you? Is there a better way?
NB: It's no accident that nearly half the above questions are focused on marketing issues; marketing your business successfully is one of the most important aspects of running a business.
Now you've thought about most aspects of your business it's time to dig out your previous business plan (that is, the plan you revised six months ago) and go through it in light of all the issues you've been thinking about.
Your business plan doesn't have to be pretty. It just has to clearly show you how to get where you want to be.
My business plan is a bit rough because, after all, I'm the only one who needs to see it. But it's what I need: it sets out my overall longer and shorter term goals and a plan for the next six months. It's a working document. I may make some changes to it over the next few weeks or months and update it again when I conduct my next business review.
Here's a link to one of the many templates offered by the Federal Government for creating a Business Plan: Business plan template and guide
Bear in mind that a template may not cover all the issues that are important to you and in your plan. When using a business plan template, make sure you bend and change it to suit your own purpose, your own goals, your own business.
This article is based on my own experiences since 2002 when I started On Time Typing as a sole trader business in Darwin which has over the years evolved into an online transcription, scribing, writing, editing and proofreading business with clients across Australia.
Stay posted for future articles about different aspects of freelancing and managing online or owner/operator businesses.