One of the questions we get asked all the time is, “How much profit should I be making?” That is a very open-ended question and the results vary significantly. There are many factors as to why some labs are more profitable than others. There are certain factors that lead to profitability.
- Do you know and monitor your Key Performance Indicators (KPI)?
- Do you manage to your KPI’s?
- Do you follow a budget?
- Are you priced properly in relation to your costs?
- Are your employees engaged in your business?
All five of these points are critical to a profitable business regardless of the industry you are in. Profitable companies adhere to these practices every day. In the first four points, there are metrics in place to follow and budgets are based on real numbers, but the fifth item is one that is harder to gauge but equally as important as the others.
Ask yourself, do your employees see themselves as part of the company or are they just there to earn a pay cheque? Of course, the two go together but the first part is really important and has been documented.
Tower Watson, an international professional services firm, compared companies that had high levels of company engagement and companies that had low levels of company engagement. The companies with high levels of company engagement had operating margins averaging 27% while low engagement companies had operating margins below 10%. Also noted in this study was that disengaged companies had around 40% of their employees likely to quit in the next 24-month versus when employees where engaged, that figure dropped to around 18%.
So how do you know if your employees are engaged?
Ask yourself:
Do they know what your brand stands for?
Do they have a clear vision of your vision?
Do you work as a team every day?
Do they know you care about them?
Do you engage with your employees just by asking how they are?
Do you know something about each and every one of them?
The biggest way to gauge this is when you talk with them do they say, “WE” need to do this” or is the response, “I told them “THEY” need to do this?”
Engagement is necessary to be successful whether you are a sports team, a social club and especially a business. Think back to any successful organizations or businesses you have belonged to and see what level of engagement was there. The key to being successful in business is to keep all the parts moving seamlessly. It takes a lot of work but the payoff can be huge. Ask yourself, “Is my team engaged?”
“What you do makes a difference, and you have to decide what kind of difference you want to make.” Jane Goodall
