How to Give Yourself a Performance Review in Your Home Business
Tips and Steps to Evaluating Your Performance in Running Your Home Business
Being your own boss can be a blessing; no boss means you have more freedom to make decisions and set your own schedule. However, a challenge in working for yourself is the lack of feedback and direction from a boss or supervisor. Without supervision, you don’t receive an annual performance review so how do you know you’re doing your best work?
The answer is to give yourself an honest performance review, at least once annually. If you’ve never conducted a performance review, it can feel weird, confusing, or imbalanced—almost like playing chess against yourself.
Thankfully, there’s a formula you can use to make your self-evaluation process easier.
Why a Self-Review Is Important?
Before we get to the details of a self-review, here are some reasons why annual performance reviews can benefit your home business:
- Evaluate your progress toward your goals. Hopefully, when you created your business plan, you sketched out goals for your business and your career. For example, you might have set a goal to grow the business to $750,000 in revenue by year 3. Your annual review is an opportunity to measure your performance and compare it to your goals. In this example, let’s say you just completed year 1, and earned $250,000 of revenue; that would put you on track for the growth trajectory you want to achieve. This step is important, so you know exactly where you stand with your goals.
- Provide context for your results. Giving yourself an annual review helps you understand the reasons you’ve had the results, good and bad, that you’ve have. For example, if you’re ahead of schedule with your goals, and you outperformed your expectations, this your opportunity to learn about the strengths and good decisions that got you there—or to realize that you didn’t set your goals as high as you should have. Or, if you’re behind in your goals, you can figure out what’s not working. If you don’t understand your failure, you may never recover from it, and if you don’t understand your success, you may never be able to replicate it.
- Identify areas for future development. A performance review is also an opportunity to step away from your usual work schedule and task list to think critically about your home business. After looking at what you’ve done the past year, you’ll be able to analyze your strengths and weaknesses, as well as your good and bad decisions. When you better understand your strengths, you’ll be able to enhance and showcase those strengths in the future. When you better understand your weaknesses, you’ll be able to either develop or compensate for them. For example, if you struggle with keeping accurate accounting records, you can spend more time practicing, or hire a contractor to help you out.
- Set new goals and directives. You should have many different types of goals for yourself, including overall long-term goals for your business, as well as lower-level goals to reach your business milestones each quarter and year. There’s no better time to set new goals and directives than during a self-review. You can evaluate the relevance and appropriateness of your long-term goals, determine the usefulness of this year’s short-term goals, and set or adjust your goals needed.
Your Main Goals in Doing a Self-Review
Like most aspects of running a home based business, you should have a reason and goals behind your actions. The same is true in doing a self-review. So what should be your overarching goals when conducting your self-review? Here's a few to consider:
- Be thorough and complete your work. It might be a no-brainer, but simply going through the motions of a review won’t be helpful. Many entrepreneurs like the idea of critically evaluating themselves, but they get sidetracked after getting started, and either rush through the process or end up abandoning it in favor of other activities. While it’s fair to want to prioritize money-making tasks, you shouldn’t neglect the importance of self-reviews. This review can set you on a course to increase your profits, and work less while making more.
- Remain objective. We all struggle with internal biases, intuitions, and feelings that compromise our ability to evaluate ourselves objectively. However, you’ll want to compensate for those biases as much as possible during your own self-review. You can do this a number of different ways, including relying on numbers as much as possible, checking your own assumptions and opinions, and drawing from the experiences, insights, and perspectives of others (when you can).
- Focus on actionable insights. As you review yourself, you may find out that you spend a disproportionate amount of your time on paperwork. That’s a clear insight, but it’s not valuable until you take action to fix it, such as setting a new goal to minimize the amount of paperwork you do manually. This exercise should give you clear directives for working in the future.
- Be consistent. Your self-review shouldn’t be a one-time commitment; you should strive to conduct them regularly. This will help you build a strong habit, and a checklist of evaluation criteria you can use, year over year, to measure your own progress. The more annual reviews you give yourself, the better you’ll be able to track your habits and improvements over time. Consider setting an annual review date. If you have an LLC, you can do it around the time of your “annual meeting” and license renewal.
- Create a permanent record. Make sure you have a permanent record of your findings, and store it where you can find it again. Formalizing the process with a document will help you take it more seriously, and help you remember your findings in the future. Aside from that, you’ll have a starting point that you can use to begin next year’s review.
How to Conduct Your Annual Performance Review
If you’re ready to get started with your self-review, these are the steps you should follow:
- Identify your goals and objectives. Before you get too far into the process, take a moment to list and identify any goals and objectives you’ve had up to this point. Be sure to organize them in a specific hierarchy. For example, you might chart your goals on a grid, with the horizontal x-axis representing a spectrum of goals ranging from business-focused to individual-focused, and the vertical y-axis representing a spectrum of goals ranging from short-term to long-term. A goal like “clean your inbox” might be short-term and individual, while a goal like “get acquired by a bigger company” might be long-term and business-centric. You’ll explore not only how you’ve managed to meet or work for these goals, but also whether they remain relevant goals for you in the future.
- Detail important categories for evaluation. Next, start outlining specific categories you want to evaluate yourself on. Some of these can and should relate to the overarching goals you outlined in step one. Others may stem from your personal curiosity, or be areas you think are important for your overall performance. For example, you might look at your productivity, your client relationship management, your employee management skills, and your skill and knowledge growth over the past year.
- Gather data. Once you have your categories outlined, you’ll want to gather as much objective data as possible. Here, it’s best to rely on third-party platforms that can give you a numerical picture of your efforts. For example, you can use Google Analytics to measure your web traffic results, GmailMetrics to track email productivity trends, and Toggl to evaluate your overall productivity. Of course, you also want to track your income and your marketing return-on-investment (ROI). Numbers don’t lie. They’ll provide the most accurate picture of your successes and challenges.
- Ask for outside opinions (if/when possible). Because you’ll still have some bias and preconceived notions about your business, consider talking to outside parties to help you form a clearer picture of your business. For example, if you’re evaluating your ability to manage client relationships, you can interview some of your top clients about their experiences with your business. If you’re evaluating your quality as a leader, talk to your virtual assistant, outsourced help, or employees about what you could do better in the future?
- Document your evaluation. Remember, your review won’t mean as much or stick with you unless it’s documented. Use a performance review template or create one of your own using your word processor. Be sure to identify all your outlined categories, and include areas for unstructured notes.
- Set objective scores. Once you have a document ready to fill in, start giving yourself objective scores (with additional notes in the margins) in each of your outlined categories. Rely on a combination of your objectively determined data points, your interviews with other people, and your own insights to come up with a “best guess” score on a scale from 1 to 10 (or something analogous).
- Identify strengths and weaknesses. Once you’re done exploring individual categories, you’ll want to evaluate yourself overall. Which goals were you best able to follow? Which ones did you struggle with? Which categories are your highest performers? Which ones require some additional work or compensation? List these in a separate area.
- Set new goals and priorities for the year ahead. Finally, and perhaps most importantly, use your review to set actionable goals, directives, and tasks for yourself. What are you going to do, right now, to improve yourself? What goals are going to be most important for you in the next year? Also, anticipate challenges you may have moving forward. Write these goals down so you can refer to them in next year’s review.
If you’re struggling to organize your own review, you can find employee performance review templates online. There isn’t a one-size-fits-all formula to a performance review. Instead, you want to use whatever methodology that leads you to actionable conclusions about your own performance.
Strive to give yourself a performance review at least once every year. If your business is struggling, you may want to do them more frequently to help you stay on top of what’s working and isn’t working in your business. The more you do, the more objectively you’ll be able to analyze yourself, and the closer you’ll get to your ultimate goals.