Proverbs 4:7-8 holds a piece of wisdom that can benefit every Christian entrepreneur. The verse advises, “Getting wisdom is the wisest thing you can do! And whatever else you do, develop good judgment. If you prize wisdom, she will make you great. Embrace her, and she will honor you.” Business management is no different. If you want to manage your business effectively, you will need to acquire wisdom and develop good judgment.
Business management requires planning. If you don’t have the right strategies to implement systems, your business will run into trouble. This blog post and corresponding episodes of The WealthBuilders Podcast reveal 7 keys to effective business management. They are:
1. Document a plan with KPIs
2. Develop a Dashboard based on those KPIs
3. Document and identify the key areas of your business operations
4. Identify and document positions for each area
5. Create recipes for success for each position
6. Manage and oversee the activities that are being done
7. Measure the results
1. Document a plan with KPIs
Andrew Wommack says, “If you aim for nothing, you will hit it every time.” Christian entrepreneurs are called to steward our businesses well, so we need to have a plan in place.
What are your KPIs (Key Performance Indicators) for the next three to five years? Your quality control process should revolve around these. First, define what success looks like for you and your business. Then, organize your KPIs and business objectives into categories. These KPIs will help you measure whether or not you are successful. They will also inform you of adjustments that could improve your business or ministry.
2. Develop a dashboard based on those KPIs
After you list your KPIs, you’ll need to develop a dashboard or a system that you can use to track them. You don’t need a fancy system to manage your business when you’re getting started.
You can’t manage what you don’t measure. That’s why organization is so essential in business management.
I list out my KPIs and use a spreadsheet as my dashboard to track them. I outline categories like my budget, year-to-date variance, and month-to-date variance.
If you’re lagging in any area of your business, this is a sign that the activities on your dashboard aren’t being done effectively. My team and I review the KPIs on this dashboard weekly so that we can make adjustments to our plans that will keep us in line with our goals.
3. Document and identify the key areas of your business operations
You’ll need to identify your business operations’ key areas and activities for effective business management. Once you identify your business operations and key areas, it’s important to document them.
One great way to identify our business operations is through The Business Model Canvas (BMC). The BMC is a one-page business plan that will become the foundation of your business operations.
We have many teachings about the BMC at Wealth Builders University. If you’re unfamiliar with how to create a successful BMC, you can start by reading the following blog: The Business Model Canvas Explained.
4. Identify and document positions for each area
After you’ve identified the key areas and activities for your business operations, it’s important to identify and document key positions for each area. Positions are all about people.
If you’re running a small shop, you may not include many people in this plan. You may be filling some positions with contract workers.
Create an org chart or a diagram that includes the key positions in your business. This chart will help you document the function of each position. It will also help you determine which positions need to be filled and how each position impacts your KPIs.
5. Create recipes for success for each position
It’s important to create job descriptions for each position. It’s also important to create recipes for success for each of those positions.
A job description outlines the duties for every position, including contract positions. This helps every employee and contractor understand what you’re expecting of them.
When you equip your employees and contractors with instructions, it helps them maintain your company culture. I call those instructions a recipe for success. You can begin to create a recipe for success by documenting the activities that are needed for each position to achieve your KPIs.
Most entrepreneurs who have experience in business management know the importance of creating a consistent company culture and customer experience. A recipe for success will help you do this.
If you build from the activity level, you can measure the performance of each position weekly and monthly. These recipes for success will be helpful when you assess the results of your KPIs and determine the areas where you may be lagging.
6. Manage and oversee the activities that are being done
If you’re looking for a foundation to help scale your business, this step is a key part of it. Effective business management happens when you oversee the activities of your team.
Take the activities you listed in your recipes for success along with some operational requirements to help track your team’s progress. You can use these to create an audit template for each position.
After you complete this template, you’ll have a checklist to use when making observations. This system will help you manage your business or ministry with quality assurance.
7. Measure the results
In order to succeed in business management, you’ll need to measure your results. While you need to know your performance metrics, you should also communicate them with your entire team.
When you measure the results of your KPIs, they tell you the story of how well you’re doing.
These metrics will help your team identify any potential gaps and create a third-party system of accountability for everyone involved.
For more business management strategies, check out WealthBuilders University! There are several business courses for aspiring and active entrepreneurs alike. Click here to learn more.
