Performance Review
How often do you check your performance?
If you are an owner-operator or business owner, you know that regular evaluations are crucial for growth. Anyone can get caught up in the daily demands of running a business, but growth requires more than staying busy. It requires periodically taking a candid look at your performance to identify both strengths and weaknesses.
After all, you cannot correct a bad habit until you recognize it, and you cannot improve a strength until you understand its limits.
As we approach the end of another year, we often reflect on the previous twelve months. Why wait? Why not review your performance monthly or quarterly?
Regular scrutiny of your performance can spot inconsistencies before they become bad habits. The sooner you correct these issues, the greater the chance of improving your bottom line.
Evaluate the real numbers, not the perceived ones.
Numbers don't lie, so don't lie to yourself about where you actually are rather than where you want others to believe you are.
Do you routinely review your insurance coverage? A call to your insurer could uncover savings you were not aware of when you started the policy. Check the value of your truck at least yearly and adjust for value changes. There is no sense in paying for a policy that overvalues your equipment. In the case of a total loss, most ACV (Actual Cash Value) policies will only pay out the FMV (Fair Market Value). Adjust accordingly.
How is your maintenance program? Do you have one? Is it funded for scheduled and unscheduled maintenance? Do you have an equipment replacement account funded?
Focusing only on repair costs while neglecting replacement funding can sideline your business. You can choose to repair or rebuild your current equipment, or you can plan for inevitable replacement. Newer equipment generally increases profitability by increasing efficiency.
Weigh the options without emotion. It is a business decision, not a feeling.
Are your fuel costs appropriate for the way you operate? Making small fuel-economy changes can drastically affect your bottom line. Maybe it is a speed adjustment. Slowing down saves fuel. When your trip has extra time built into it, slow down and improve your fuel economy. It could be an aero device or two that improves your MPG. Every tenth of an MPG gained is money kept rather than spent. Strive for efficiency and turn part of an expense into cash in your pocket. Improving your fuel economy also saves you money on fuel taxes. It's a win-win.
Insurance and fuel are two places to evaluate your performance, but those are expenses. What about revenue?
Do you routinely review your performance from the customer's point of view? After all, keeping your customer is a top priority. You should be having these discussions with your customers to ensure they remain customers going forward.
Sometimes it is necessary to have a difficult conversation about rates and expectations. Your business needs change, and so do your customers' needs. A business-to-business discussion can help keep both parties on the same page regarding rates, needs, and expectations.
Instead of wondering how you could have improved over the last year, you could make course corrections during the year. When the year's end rolls around, you will not regret the actions you should have taken. Instead, you can relish the improvements you made throughout the year.
Regular reviews of your business and customers can help establish strong working relationships and solidify future business. It is much easier to have difficult conversations with your customers and yourself than it is to find new customers to keep you afloat. It can be hard to find new customers, but it is very easy to lose one. Routine check-ups for your business will make the end of the year feel more like a continuation rather than a new beginning.
Don't lower your expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself, and then do what is necessary to make it a reality.
- Ralph Marston
See you down the road,
Greg