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Do you remember when you started your company? It was hard to know if you were going to make it as a business or not, but you went out and made sales. Revenue came in and everyone was happy. Then, more sales made you think you needed some basic processes people could follow. Pretty soon you had a real business that needed to be managed. The following are 5 signs you are managing proactively and not reactively. Proactive management makes a big difference in performance if you can deliver on what you're managing.

Building a business is a hard job. It feels like a constant race against time. Once you get behind financially it can be very hard to dig out. In fact it takes much more work to “come back” than it does to “stay ahead.” But most companies don’t really know where the bright line is between falling behind and moving ahead. The real secret is to understand how the “parts” of the company are working and which ones are struggling. All companies have some parts that are working best and some parts that are in need of improvement. But if you just look at your business as a whole, you will not be able to see where the problems are. In a recent webinar where Gary Pica, CEO of TruMethods and I jointly presented a discussion on profitability, Gary referred to the biggest challenge for owners is finding the “holes in the buckets” where profits are leaking out of the business. All businesses are made up of multiple buckets and if you don’t drill down to look at individual buckets you can’t really tell where the problems are. Here are 3 common problems:

It’s not payroll, not the number of clients, not ability to land new sales, not billing rates, not the business model, not overheads and not a lot of other things that might come to mind. The one metric that jumps out as the clear driver is total revenue per employee. Research shows there is very little meaningful difference in these aforementinoed metrics when you compare top performers to average performers in the IT service marketplace.