The Monthly Operating Review

Operations: Deliver and run the business

“Focus determines direction.”

The week shows you what is happening, and the month shows you where you are heading. An owner who looks at only one of them tends to be surprised. Take an HVAC company: four decent weeks can hide that the same callback has come up three times, and you will not see that from inside any single week.

The monthly operating review is a longer, slower meeting, an hour or two, once a month, that steps back and asks whether the business is healthier than it was thirty days ago. It builds on the weekly owner meeting. The weekly one keeps you moving. This one checks the heading.

Money, customers and operations

Start with the money, because everything else depends on it. Sit down with your figures from the month, and go through them the way The Monthly Financial Review lays it out: what came in, what went out, what was left, and how that compares with what you expected. Do not skip the cash position, and do not confuse a good month on paper with cash actually in the bank. The two can point in different directions.

Then customers. How many new ones did you win, and where did they come from? Who did you lose, and do you know why? Which customers took far more time than they were worth? Which ones would you happily take ten more of? These questions cost nothing to ask, and they tell you more about your business than most reports do.

Then operations. Where did the work run late, break or get redone? Which supplier let you down? Which system or process slowed you? Look for the repeated problem, not the one-off. A one-off is bad luck. A repeat is a design flaw, and design flaws are the ones you can fix. If you want to go further into this, the lesson on Quality Control covers how to catch these before the customer does.

Decide, do not just review

A review that produces only a nice discussion is a waste of an afternoon. The point is to leave with decisions. I like to end with three questions: what will we start, what will we stop, and what will we change? Write the answers down with a person and a date beside each. Then check them at next month’s review before you look at anything else.

Keep a running log of these decisions, even a simple page in a notebook. Six months later it becomes one of the most valuable documents you own, because you can see what you decided, what it cost you and what it actually delivered. Owners who do this stop repeating the same mistakes, because the mistake is written down where they can find it.

The Owner Meeting Agendas download on the Resources page includes a monthly agenda alongside the weekly one, laid out in exactly this order, so you are not building the format from scratch each time. If you also do the monthly financial review and your monthly marketing routine, treat all three as one sitting, not three separate meetings: money first (The Monthly Financial Review), then marketing (Your Monthly Marketing Routine), then operations (this review), with the weekly owner meeting as the short version in between.

Be honest about what you find, even when it is uncomfortable. The review is only useful if the numbers on the page are the real ones. If a month went badly, write down why in plain words, without excuses and without blame, and ask what you would do differently if the same situation came up tomorrow. That habit of straight talk with yourself is what makes the meeting worth the time.

Your first review

Choose a date in the last few days of this month and block two hours for your first review. Before then, pull together your income and expenses, your bank balance, your new and lost customers, and a short list of things that went wrong. On the day, work through money, customers and operations, then finish with start, stop and change.

Plan on one to two hours each month, plus an hour or so of preparation if your books are up to date, more if they are not. That is a good reason to keep the books current all month rather than in one painful evening. The download is free, and you do not need any software beyond a spreadsheet or a notebook.