It's essential to regularly review your business plan and measure your performance to remain competitive. But selecting the right criteria to measure is often where we find issues lie or where a business could be refocussed for improvement.
What are your Critical Success Factors
Critical success factor (CSF) is a management term for an element that is necessary for a business to achieve its goals. It is a critical factor or activity required for ensuring the success of your company. While we can report and assess regular business factors like your income statement or balance sheet, determining the underlying CSFs takes a little more research and digging. What works for one business may not be the determinant for success for another, even within the same industry.
To be effective, a critical success factor must:
- Be fundamental to your organisation’s success.
- Benefit the company or department as a whole – contributing to overall goals.
- Be synonymous with a high-level goal.
- Be influenced and changed by strategies within your control.
10 Critical Success Factor Examples
- Cash Flow from Investing Activities – Shows the change in an organization's cash position caused by investments, gains, or losses.
- Marketing Expense – Encompasses the total costs incurred by the marketing department, including advertising, salaries, research, and surveys.
- Sales volumes – increase sales by 15% within twelve months
- Employee Satisfaction – increase employee satisfaction from a 64 to an 83-approval rating within eighteen months.
- Increase regional market share by 5% within two years.
How to Measure Business Performance
Check your progress against objectives
Fundamental to this task is that you have a business plan in place. We can help you set your plan and ensure you have the right objectives.
Review financial targets
Consider whether falling sales or profitability can just be blamed on current market conditions. Talk to a Sudbury’s advisor if you are unsure of the underlying cause of poor performance. It may be time to re-assess operational performance, cut costs or rethink your approach.
Carry out a SWOT analysis.
As your trading environment evolves you need to reconsider your Strengths, Weaknesses, Opportunities and Threats (SWOT). Bring your key business stakeholders together and carry out a group SWOT. Listen to your employees - they can provide you with insight into where you are working well and where you are not performing, and why.
Benchmark your firm.
We can help you benchmark your performance against similar industries. Weighing up your firm's position against competitors will help you identify gaps in your offer, as well as in your market generally.
Schedule regular reviews.
Your business plan shouldn't be shelved as soon as it is written – it should be reviewed regularly. Assess your objectives regularly and certainly when market conditions or operational performance changes.