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Business end year review: The guiding questions during evaluation

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Business end year review: The guiding questions during evaluation. PHOTO | POOL

This year comes to an end in a few days. The timing is critical for many businesses as there are some which undertake an annual performance review.

Entrepreneurs also need to put in place mechanisms to track their performance and the best time according to experts is at the end of a period, for example, the end of the year.

The festive season carries two important business cycles. One is the end of a business cycle and the other is the opening of a new business cycle.

Here are a few tips I have to offer on undertaking an end-year review.

1. Do you have a strategic plan and a strategy implementation matrix?

The first question to ask is if your business has a strategic plan and if so does it also have a strategy implementation matrix? A strategic plan is crucial to all as it contains the vision, mission, values, goals and objectives of the business.

It also helps stakeholders such as employees, customers, and investors understand what your business stands for.

Do not worry if you do not have a strategic plan, as it can be drawn up at any point in the business. I would strongly recommend you consider having one in place before the new season begins.

Some businesses have a strategic plan but do not have a strategy implementation matrix. This is the document or plan that breaks down the goals and objectives in the strategic plan into actual action points.

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Experts will tell us that the reason why some businesses with the best strategic plans fail, is because they do not have proper implementation mechanisms.

2. Have you drafted a strategy implementation matrix?

I would suggest that you retain an expert if you can afford it. If not, some lovely workbooks are available on the internet.

3. Do you have a mechanism for tracking performance?

Experts will also say that it is very important to have a mechanism in which to score and track performance. It is a very detailed and technical process where each objective, goal and activity in the strategic plan is actually weighted and scored.

General statements such as “ our performance was very good this year,” or “we did well,” are not based on facts.

A better way to track strategy is by using scores and being able to give measured reviews. For example, “we performed at 90 percent on our financial projections of annual revenue of Sh100 million.

I would advise you seek expert advice on how to track and measure performance.

4. Where are you with corporate governance?

This is very important to the business. It is important to have the right structures, policies, teams and operational procedures in place to avoid the “ jua kali” way of running a business.

Good governance is so under-rated yet it is a critical success factor in the business.

I will write about that in more detail, but did you know good governance is one of the things that will help your business remain investor ready?

Annual performance appraisal Do you have a mechanism for reviewing your staff performance on annual basis? If not, it is time to consider that as one of the end-year reviews.

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5. Financial review

This entails the preparation of books of account, stock taking and a review of the financial performance of the business. Your accountant is best placed to do that.

As we finish the year it is good to finish strong so as to set the foundation for the new business cycle.

Ms Mputhia is the founder of C Mputhia Advocates.

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