Are you in control of your business or does the business control you? Starting and running your own food business is hard work and not without risks, but it is also an exciting and satisfying challenge, but you need to respond to changes in your business quickly – often immediately. By looking at the poor performance indicators of your business you may find possible causes as to why your business is not performing well. By looking at these poor performance indicators analytically you may find ways to improve your business performance controls.
Symptom – Low Profit
Possible Causes
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- Poor sales performance
- Wrong pricing strategy
- Poor purchasing
- Not controlling expenses
- Ineffective staff
- Poor decision making
Symptom – Falling Sales
Possible Causes
-
- Old product
- Poor marketing strategy
- Targeting wrong clients
- New competition
- Poor season
- Staff performance
- Falling demand
Symptom – Increasing Expenses
Possible Causes
-
- No records to control where, when or how the money is spent.
- No performance standards to control how people spend their time or business funds.
Symptom – Staff Issues
Possible Causes
-
- Low staff motivation
- High absenteeism
- Old equipment
- Wastage
- Lack of staff training
- Lack of operating systems
Symptom – Cash Flow Problems
Possible causes
-
- Falling sales
- Expenses too high
- Poor pricing policy
- Purchase problems
- Too little capital to start
- Debtors slow in paying
- Excess stock
- Poor use of financial records
Symptom – High Production Costs
Possible causes
-
- High purchase cost for raw materials
- Inefficient production
Symptom – Overdraft at Maximum
Possible causes
-
- Undercapitalised
- Low overdraft level
- Poor choice of finance
- Poor financial control and record-keeping
- Poor credit control
- Low productivity
- Poor stock control
Symptom – Advertising not working
Possible causes
-
- Wrong target market
- Wrong media
- Poor advertisement structure
Symptom – Overtime levels high
Possible causes
-
- Demand exceeding normal production capabilities
- Inefficient production
Symptom – Can’t pay creditors (suppliers)
Possible causes
-
- Profit levels too low
- Poor productivity
- Poor financial control
Symptom – Business growing uncontrolled
Possible causes
-
- Lack of planning
- Lack of management information systems
Symptom – Customers not coming to the store
Possible causes
-
- Marketing strategy
- New competition
- Wrong location
- Poor signage
- Poor visibility
Symptom – Partners want out
Possible causes
-
- Low profit
- Argument over management
- Lack of partnership agreements
- Seeking new challenges
Symptom – Lease coming to an end
Possible causes
-
- Term of the agreement expired
- Ensure you exercise your option
By looking at the poor performance indicators of your business you’ll start to understand the business performance controls to save time, money and reduce wastage and take back control of your business.
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