Clarity: A crucial component for growth

We all know it’s important to be clear about your business’ purpose and objectives, but just how clear are you about yours?

One of the crucial components of growth and success is clarity.

Having clarity can help you stay focused, motivated and resilient in the face of setbacks, making progress toward your goals.

But where do you start? A good place to start is with the numbers. First of all, consider these steps:

Where are you now?
Where could you get to?
What is the gap?
Create a plan
Measure/monitor the results vs the plan

What areas should you be considering?

Rather than getting overwhelmed, we focus our clients on these seven simple key numbers:

Revenue growth – this can show how fast the business is growing. It’s the fastest
way to grow the bottom line, but must be done in a sustainable, scalable and
profitable way.
Gross profit – a measure of how profitable the main activities of the business are.
Net profit – a measure of how profitable the operation of the business is as a whole. This should be a target and not an end result.
Revenue per employee – this shows how effectively a business uses its intellectual property, systems and processes, staffing levels and how effective the team is.
Cash days – measures how long it takes for every pound spent to make its way through the business into your bank.
Core cash target – shows the ideal cash target to have on hand to be in control
and easily pay debts as they fall due.
Business return – shows the return the business generates for the time, money, effort and risk of the business owner.

Once you have the above numbers, you will be able to see exactly where our business is at. You can then see where you need to focus your efforts and build out an appropriate action plan with your accountant.

Studies have shown that those with clear written plans are 30 per cent more likely to grow. If you are held accountable to those plans, that rises to over 70 per cent.

That’s the power of clarit