Are you a high-functioning entrepreneur or the ringmaster of a crazy circus enterprise? Do you approach each work day with a clear sense of purpose, or do you let the day’s events drive what you do?
Take our quiz to find out how much you really control your business. Add up the points that best match your managerial style, and see our advice in the scoring results section below.
Setting company objectives
5 points: We’ve survived the recession; that’s an accomplishment in itself!
3 points: We prepare annual budgets specifically for our lenders. Success is when we beat budget.
1 point: We operate from a rolling three year plan and a more detailed one year plan of key department initiatives. Our board and staff have signed off on it. If we meet this year’s targets, all employees get an extra bonus plus a celebration day at the local amusement park. Booyah!
The founder’s work day
5 points: I hold everything together. Whatever needs to be done that minute, I do.
3 points: I’ve got a good team that helps keep everything together. Though I know I’d get more done if I had fewer interruptions from them each day.
1 point: With our three year plan in place my top job is to find the capital, partnerships and right employees to reach our goals. It’s an ever-changing mix. I also make at least two calls each day to bring a new customer to our company. Everything else is secondary.
5 points: We don’t do employee reviews. It’s too corporate and everyone hates them.
3 points: To avoid litigation, we conduct employee reviews when we absolutely have to fire an employee. Otherwise, we conduct a three month assessment for new employees.
1 point: We conduct formal annual employee reviews each year plus meet with employees each quarter to update priorities. The quarterly meetings give employees quality time to ask questions and offer ways to improve the company’s performance.
Managing underperforming employees
5 points: I feel like I’m in the “adult daycare” business. It’s impossible to find good employees these days.
3 points: We’ve got some great employees and some so-so employees. I’m worried about making changes that might upset other staff members.
1 point: We can’t reach our company goals without everyone’s best work. Since all employees meet with their bosses each quarter, the maximum amount of time we invest in an underperforming employee is nine months.
Using board members and advisors to “get to the next level”
5 points: I don’t need a board; I can manage by myself without their interference.
3 points: I have a highly supportive board that I trust. They are always available to sign documents and show up for board meetings.
1 point: My board challenges me to be a more effective leader and is available to help me sort through unexpected business problems.
5 points: I know exactly when our company needs extra cash because I have to pull money from my savings account or credit card to make payroll.
3 points: My controller monitors our cash needs. It’s covered.
1 point: I know exactly how much cash we collect and spend each week. Our sales reps and accounting staff are incentivized to avoid sales to deadbeats and collect outstanding invoices quickly.
Sales and promotions
5 points: We need to increase our sales so I’m going to spend more on advertising
3 points: We looked at last year’s promotions and know which initiatives were a complete waste of money and which ones are worth doing again.
1 point: We don’t discount our services to attract new business because our larger competitors will always be able to afford steeper discounts to price-sensitive shoppers. Our promotions are bonus-related to maintain our margins. Our customers think they are getting more for their money too.
5 points: Our customers can write to us through the Contact Us page on our website.
3 points: We have a dedicated person to respond to customer service problems plus we engage our customers to comment on our new research and development initiatives.
1 point: Our customer service initiatives are company wide. It’s part of everyone’s performance review – including me! Customer service is our company’s best safety net because we can make mistakes anywhere or at anytime. We work hard for customer happiness and re-orders because it is far more expensive for us to advertise to get new customers.
8 to 11: You are living the dream! You set high standards for your business and seek out employees and advisors who want to collaborate, work hard and share the joy of achievement. Well done. You are managing your company with precision and purpose.
12 to 29: If you are a company of one or the boss of many employees, you are selling your leadership capabilities short by not challenging yourself to set high standards for your company’s business performance. Start by upgrading your board of directors and circle of mentors and advisors. Disclose all problems. Tell them what you want to achieve and ask them to hold you accountable for business results. It’s easier to achieve goals when you set a productive path to reach them.
30 to 40: You know the saying: it’s easy to get lost if you don’t know where you are going. It’s time to reinvent how you manage your business before you invest another dime in your company. Start by looking at your cash resources and cutting all unnecessary expenses, including underperforming employees. The cash savings will give you some extra time to develop a plan to “get your company somewhere, rather than nowhere.” Ask for help! Your business plan should be more thoughtful than a list of short-term initiatives. You can do it!
Susan Schreter is a veteran of the venture finance community and entrepreneurship educator. To learn how to boost the financial value of your business and position your company to raise capital with confidence, visit Start On Purpose. You can do it!