This was originally posted on International Freelancers Academy
Performance reviews are generally thought to be bothersome and time-consuming. Worse, a lot of us can recall an unpleasant memory of a former manager who gave us unconstructive critique instead of well-thought-out feedback (just one more reason we probably went solo!). But now that you’re the boss, only you can hold yourself accountable to your business.
Despite the negative connotations it carries, a review offers a structured way to assess and develop your business. Reviews help you spend time on your business, understand the impact of your activities and ensure your continued focus on what’s truly important. Even though you’ll need a lot of discipline to make this work, it’s worth the effort.
Regular check-ins to spend time on your business
Design your performance review as a regular check-in on how you’re doing at meeting your business goals. Running your own business is hard, so creating regularly scheduled review time helps structure the review as part of a natural routine. The aim is to get you in the habit of spending time working on your business, instead of just working in it. Scheduling performance reviews will allow you to reflect on where your business has been and where it is going.
Setting goals to understand your business
Even if you’re not really sure how you’ll reach them, setting goals is important (the goals themselves, less so). The process is what matters most. How else will you know what kind of numbers matter for your business?
By spending time thinking about the triggers and leverage points that affect your business (including what drives your revenue or profit), you establish what numbers will move your business in a positive direction. Maybe it’s the number of billable hours you charge, your hourly rate, or the number of clients. This way, you can focus on what matters to your business.
Measuring progress to stay focused
As mentioned, once you’ve set you’re targets, they’re almost useless. If you hit your goals, amazing. If you miss them, amazing. The objective of setting a target is to acknowledge how your business is doing against them to keep your focus. You promised yourself that you would land two Fortune 1000 clients to drive revenue, how are you are doing against that? Did you loose focus on it? By checking in on your plan, you’ll focus on these goals instead of getting sidetracked by the day-to-day grind and never-ending list of avoidable distractions.
Performance review and plan framework
First things first: schedule a regular non-negotiable check-in date into your calendar. I recommend doing this every 3 months. Next, create a simple template to guide you through the review process. Create an outline with the following themes: reflection, planning, and general feedback to get you rolling:
Reflection may be hard, but it’s a critical component to enhancing your understanding of your business. Write down how you’ve done against the goals you set last quarter and the more detailed you are, the better. If you do not have them, don’t fret; just write about how you think your business is doing in general, flagging any areas of concern. Break down the goals you had previously set and write (writing makes it count) about each one: what went well, what was unexpected, how close you came to meeting your “target.” Be sure to include specific examples to try and find the leverage points that pushed your business in different directions.
Having analyzed the current state of your business, your next step is to set up goals for the next quarter. Ideally you want to limit yourself to three goals. That way you stay focused on what’s important to your business. You can always carry forward last quarter’s goals if you’re still working on them, or simply adjust your targets. Also important is to have those goals written down and posted in a highly visible place.
Take some time to determine how you’re progressing toward each goal. What’s working, what’s not, what needs to be modified. At FreshBooks we use the Start/Stop/Keep framework. Write down what you should start doing, stop doing, and keep doing. There’s no reason to keep working toward something if your situation has changed drastically. You may also find that some of your other efforts need additional attention. Or maybe you’ve been presented with a new opportunity that will require shifting your priorities.
Lastly, when you hit your goals, make sure to treat yourself. You can even make this part of your quarterly budget. And if reviewing and planning is something you tend to put off, you may even want to reward yourself for going through this performance review process (yes, being the boss has its perks!).