For most of us who have struck out on our own, breaking away from corporate bureaucracy is one of the many advantages of flying solo. However, an annual performance review is an essential business tool.

There are many benefits of giving yourself an annual review.

• It’s critical to maintaining focus: Take the time to stop and think about what you have achieved, to assess the direction the business has gone in and to reset that direction if necessary. Life hurtles by at a rate of knots and if you don’t lift your head up and review your progress it’s easy to get off track.
• It helps you achieve your goals: Setting business goals only get you so far – you need to review your progress against your goals on a regular basis to ensure you keep reaching them.
• It forces you to give yourself positive feedback: Most people’s tendency in day-to-day business is to be too hard on themselves – to forget about all the successes of the year and only remember the mistakes. An annual review gives you the opportunity to recognise your achievements, and reward yourself for them.

Questions to ask

• What have I learnt this year?

We learn things every day, but not often do we stop to reflect on these lessons. Thinking about and documenting what you have learnt will help you benefit more from those lessons in the future.

• What went well and how do I do that more often?

Reflecting on what went well and, more importantly, why it happened will allow you to tweak your practices and processes to ensure it happens more often.

• What didn’t go well and how can I avoid it happening again?

The point at which something begins to go wrong is often several steps before the event itself. Being able to trace back exactly why things went off course allows you to fix that part of your business to minimise the risk of it happening again. For example, a bad debt may have occurred because you got busy and you didn’t have time to chase debtors as often as you usually do. Reinforcing the reminder to keep on top of these essential processes, maybe by outsourcing if you are too busy to do it regularly yourself, is critical to prevent history repeating.

• Am I improving the business?

Solo businesses tend to operate in short-term, reactive ways. This often means increased flexibility, but as the business grows, doing things this way costs time and money. Reviewing your performance allows you to recognise these factors and put in place steps to ensure you are continually improving how your business operates.

• What significant business relationships have I built this year?

Relationships with your customers, your suppliers and your networks drive your business. As well as nurturing your existing key relationships, it’s important to keep opening new doors and building new relationships. It keeps your business fresh, exposes you to new ideas and creates new opportunities.

• What was the biggest risk I took in the last year?

Anyone that has started a business has taken a big risk. It’s important to keep taking risks to keep pushing both yourself and the business forward.

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Additional tips

• Set aside some quiet time away from the distractions of phones and email to complete your review.
• Seek feedback from your customers to feed into the review.
• If you have a trusted mentor, discuss your review with them. A second opinion is useful as is a different point of view.
• Complete your review by setting yourself goals for the year ahead. What works well for me is setting annual goals and then breaking them down into smaller goals with shorter timeframes.

An annual performance review helps you to identify how far you’ve come, where your business is headed and the best way to get there. If it’s been a year or more since you last took stock of your business, the right time for your next review is now.

Do you give yourself an annual performance review? How does it benefit your business?