What are the benefits of consistency to a small business? Most will answer it is a critical element for forecasting revenue, and that is true. It is impossible to plan for profitability without consistency. Businesses who are consistent know the direction they are headed, but many don’t understand that the principle of consistency provides benefits not only for the company but for their employees. For a moment, imagine holding a large coin with “Small Business Owner” written on one side and “Employee” on the other. Flip the coin over in your hand and consider how consistency impacts each side. How do the actions, or inactions, for each side effect profitability?
On the side of the small business owner, the prerequisite for consistency is, of course, the business plan. A business plan is the written description of the potential of the business. A good business plan provides the structure and organization necessary to evaluate how marketing, sales, products, services, customers, and other components should increase the probability of success. It communicates the long and short-term goals. It includes specific actions. While there will be some things that happen beyond the control of the business owner, identifying the KPIs (Key Performance Indicators) and consistently focusing on them, allows the business to forecast where it will likely be at the end of the year. Forecasting is the most valuable benefit for consistency. An owner can’t know where money will come from to cover raises, improvements, expansions, and other expenditures without an ability to forecast the expected revenue. Consistency provides this capability.
On the flip side, consistency offers excellent benefits for the employees. Believing the expectations for the satisfactory performance of assigned tasks applies to everyone empowers employees to confidently and comfortably work through their daily plans. When expectations are fair and remain the same, trust is built between managers and employees. Employees are more productive when they know management will not “flip or flop or stop” the expectations for each worker and work initiatives. The result is greater job satisfaction and increased productivity, which is the reward for a small business that holds the principle of consistency as a standard of work — being consistent results in predictability for all measurements. When management is consistent, employees are not surprised or confused about the expectations for them. The work environment is less chaotic. When employees can be counted on to work with consistency, their work results are predictable, and management can focus on other areas anticipating daily operations to function with less attention needed.
If consistency is critical for the success of the small business, why are some small business owners failing in this area? First, many haven’t taken the time to identify their KPIs. These should be written down and should be measured. Some owners don’t know how to measure results. If a method for measurement is in place, the timelines for reporting how KPIs are measured must be evaluated and analyzed regularly. Inconsistencies in pricing models may also be a factor due to careless errors in calculation costs. These errors may be the result of a lack of accountability and discipline. Inconsistency in work methods—the way the job is performed each time—has an impact on revenue.
An example is in the construction industry, which includes general contractors, plumbing, cabinetry, HVAC, and small electrical businesses. Work methods must be consistent for pre-trip and end of day routines. Many small business owners experience pre-trip issues, such as employees leaving the workplace each morning without confirming that all materials and tools needed for the job have been secured, as well as obtaining any necessary permits. Returning to the workplace to collect any forgotten materials and tools or delaying or failing inspection results in lost time, fines, additional payroll hours, and other expenses. If the expectation for the end of each workday is for the employee to update job status and turn in any paperwork, it is essential to recognize that accurate billing for services and preparation for the next workday is hindered by the inconsistent end of day work methods.
But why are employees inconsistent? The first action for management is to train the employee for the job and give them all the tools necessary for success. During the training, it is essential to check for understanding. Communicate expectations and get agreement from the employee. They can be counted on to the job, right? Unfortunately, not always. When an owner or manager cannot rely on an employee to complete tasks for which they have been trained. The three most common reasons are procrastination on the part of the employee, poor time management, and the employee’s opinion they are not held accountable for their performance. Employees are very aware of the lack of enforcement for policies, rules, and discipline.
Still not sold on the power of consistency? Maybe it is easier to consider the outcome for consistently making the wrong choices. Now, contemplate the rewards when the principle of consistency is applied for the right work actions and attitudes. Employees are proud of being viewed as specialists in their positions. This is the outcome of the consistent expectation the job will be performed to the expected level of satisfaction. Take it one step further and consider how this impacts the customer’s perception of the employee/business? What is the potential referral power of every satisfied customer? This is just one of many ways consistency increases production and profitability.
In closing, there are two main reasons to explain why the business lacks consistency. The first is the most common. The time required for running the daily operations of the company leaves little time for the owner to identify and measure their KPIs. Many fail to comprehend the missed opportunities when this is not a priority. The second reason is that as a result of the first, owners do not hold themselves, their management team, and their employees accountable. Employees must understand that once trained; they will be held responsible for completing their work to the expectation of management.
Is consistency an opportunity for growth in your small business?
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information: