SURVIVING AN ECONOMIC DOWNTURN

SURVIVING AN ECONOMIC DOWNTURN

An economic downturn is a general slowdown in economic activity over a sustained period of time. It can happen in a specific region (e.g. the Asian financial crisis in the late 1990s) or on a global scale (e.g. the global financial crisis in the late 2000s). The main features of an economic downturn include rising unemployment, falling share and house prices, low consumer confidence and declining investment.

Although one may not be able to completely protect one’s business from an economic downturn, understanding how it could affect them will help them develop plans to minimize its impact. They may also be able to identify new business opportunities.

Planning, reviewing and monitoring one’s business should give one the information one needs to make changes to help one stay financially viable. This should make it easier for one’s business to respond to, and recover from, an economic downturn. This can be done through:

Assessing business performance
Assessing your business performance should be an ongoing process. It helps you identify areas that need to be improved before they become major issues, as well as giving you the opportunity to consider how to respond.

Reviewing business plans
The first step of assessing your business performance is to review your business plan,
including financial statements, to understand what is happening within your business. Reviewing and updating your business plan will help you respond to the risks of an economic downturn.

Redoing/reviewing SWOT 
A SWOT analysis will help you identify areas that need to be improved in order for you
to respond to an economic downturn. It also gives you the ability to identify new
opportunities the economic downturn may present.

Financial analysis
Best practice financial management involves planning and forecasting financials based on the strategic goals of your business, and regularly reviewing actual performance against your forecasts. To conduct a financial analysis of your business, you need to analyze your current financial statements, including profit and loss and cash flow. Look for trends, such as declining sales, that may put your business at risk, and think about the impact they could have on your business's financial performance.

STRATEGIC FOCUZ CONSULTING | SURVIVING ECONOMIC DOWNTURN | 10th January 2017

strategicfocuz@gmail.com | Whatsapp 6018-3155357 | Contact 6010 - 3434216 

Back To School 2017

BACK TO SCHOOL

In most parts of Malaysia, today is the first day of school for newbies and back to the school desk for students...

Most parents had done their Planning to prepare their children for their Schooling days..This is what Planning is all about. With proper planning everything will go smoothly for everybody including the teachers, once schooling starts...

Hail to the Power of Planning...may 2017 bring blessings, fun and success to all...
 

STRATEGIC FOCUS GROUP

Key Performance Indicator

KEY PERFORMANCE INDICATORS IN STRATEGIC PLANNING

The setting of Key Performance Indicators (KPI) is an important aspect of the strategic planning process and plays a major role in the measurement of progress of the organization towards the attainment of its planned goals. This measurement of progress is an essential feature of the strategic plan implementation (i.e. formulating plans are one thing, but making things actually happen is quite another).
Organization management must periodically assess progress and take corrective action if progress is not being achieved. Without periodic assessment of progress, strategic plans are likely most likely to fail.

The terms "Performance Measures" and "Performance Indicators" mean the same and the use of the word "Key" as in Key Performance Indicators merely means the Performance Measures that are deemed to be most important. 

Key performance indicators should be clear-cut, that is they are either achieved or not achieved. Using key performance indicators, the management process will compare what was desired with what actually happened.

Organizations regularly uses KPIs, to track the performance and project the future success of the business. No standard list of KPIs exists that the business world recognizes and adheres to as a way to track these. Instead, KPIs can vary from industry to industry and even from business to business within the same industry.

KPIs are sometimes misunderstood, so much so that many have come to associate a KPI with anything measurable within a business. The fact that so many businesses differ on what they consider the most important KPIs, makes it that much more difficult to define what they are. In short, a KPI is a measure imposed on important financial and non-financial business information that provides an indication of either success or failure for the business.

The role of KPIs in the strategic planning process stems from the belief that KPIs provide a measurable and objective standard by which organizations can track progress and implement change. Businesses use KPIs in the strategic planning process to provide benchmark by which they can measure current performance. Businesses rely upon these KPIs to help them make more objective and scientific planning decisions, thus reducing the chance of human error. A business tracks KPIs over time to determine what progress the business is making and what changes it needs to implement if positive change does not occur.

Business managers and executives can sometimes run the risk of being tied to their KPI paradigm so much that it becomes the only way they measure success. Also problematic is the tendency to measure anything and everything as if all quantifiable data were useful in some way. This can result in a tendency for a business to collect massive amounts of data, only to be overwhelmed by it and not able to use it in any real or meaningful way.

RAMLI BARDIN | KEY PERFORMANCE INDICATORS | 1ST JANUARY 2017

 strategicfocuz@gmail.com | Whatsapp: 6018-3155357 | Contact: 6010-3434216