How can you tell if you are operating a healthy business? When you set out to assess the health of your business, it is important to take a holistic view and look at the business as a whole. Periodic assessments of your business health should be a fundamental part of your business planning cycle, as thorough assessments will help you to determine key strategic business decisions moving forward.
When performing a business assessment, there are a number of areas which you will need to take into consideration. This monthly checklist will help you assess your business health, and help you keep your business running efficiently.
Review your business plan
One of the most important documents that your business should have – even before your think about incorporating your business via a company formations agent, is your business plan. Your business plan is essentially a roadmap which brings together your business goals and strategy, so it is key that you update this often.
Revisit your business plan at regular intervals to review it and measure your progress with time. Some business owners write a plan for a specific purpose, like raising funds, and then leave it to gather dust on a shelf. But to be truly effective, it needs to be a living document.
Review your accounts
Managing your accounts is critical, as the financial health of your business is the main determinant its longevity. Keep on top of these tasks to keep on top of your finances.
- Review your projected cash flow. Forecasting how much cash you will need in the upcoming weeks will help you reserve enough money to cover your overheads, so that you don’t get caught out. All you need to monitor this is a simple statement showing your current cash position, expected cash receipts for the next week/month and your expected outgoings for the same period.
- pay your expenses and bills on time to ensure goodwill
- chase all late invoice payers
- ensure all staff records are up to date for payroll
- file your returns and pay your taxes on time, each billing cycle.
Review your supplier’s performances
It is a good idea to review your supplier’s performance periodically. The aim of doing this is to assess whether or not you are still getting good value for money from your suppliers in terms of pricing, service contracts etc. If you are not getting good value for your money, this could be a good opportunity to renegotiate your contracts, or even to look for new suppliers.
Review your annual sales
It is important to review your gross annual sales as this helps you to understand whether or not your sales are growing in comparison to the previous year. This comparison will tell you if your cost and profit levels are where they should be, and make any necessary adjustments to your business plan as a consequence.
Keep your data safe
Sensitive information like your customer database, marketing materials and financial records are vital to the success of your business and should be stored securely. Put in place good data security measures, including a reliable backup routine.
Cloud-based applications can help you to store your data securely and ensure that your information is always available and automatically backed up. Relying on your hard drive alone could leave you vulnerable in the event of a burglary, fire or natural disasters.
Backups are extra copies of data which you can use to restore your data if your working copy goes missing or damaged. Back up your data every day and invest in a service that offers automatic real-time backups of files as they are accessed or modified.
Check your inventory
If you’re running a retail or manufacturing business, then it is safe to assume that you probably have a lot of capital invested in your inventory. Therefore, it makes sense to keep a close eye on your inventory to minimise cash losses from dead stock, out-of-style stock, and even stock theft. Actions you can take to keep your inventory carefully managed and under control include:
- using a proper inventory management system if you aren’t already using one
- carefully matching stock levels to sales forecasts
- making special provisions for perishable goods
- ensuring that your storage environment is dry, safe and secure
- working with your accountant to ascertain your optimum inventory levels.
Make sure your customers remember you
Your customers are crucial to the success of your business and in a crowded marketplace, it is important to ensure that your customers do not forget your product or service. Having a system to keep your customers in the loop can help your business to better understand and serve your customer base. Some tips to help you get started include:
- Using a CRM (Customer Relationship Management) or MAS (Marketing Automation System) tool. This will help your team collaborate internally to keep your customers and partners informed about any news about your business.
- Organise all your client data, keeping it in one secure, accessible cloud-based location. This means that your contacts are kept in one central safe place, and your team can access and update information whenever required.
- Use all available communication methods. For example, email newsletters are a highly effective way of keeping in touch with customers – as long as they’re well written.
Outsource where possible
As a business owner, your time is precious and the return on the investment of your time may not always be as high as you expect. Are there any tasks within your business which could be better managed by someone else? If yes, outsource them!
Outsourcing will give you more time to focus on the work that you love to do, and by handing certain tasks to the experts, you will probably get higher quality results.
Spread the word about your business on social media
Social media can help your business reach customer groups you may not have had affordable access to previously. If you use it regularly, it could be a very effective way of increasing your marketing efforts on a small budget. If you haven’t previously considered using social media for your marketing efforts, here are some tips to get you started:
- Create a social media strategy and write down your social media goals, so that you can hold yourself accountable to them
- Focus on listening to your customers, rather than just promoting your products and services
- Use social media management software such as Buffer or Coschedule to automate your social media marketing and free up your time to devote to more strategic tasks.
Monitor your website traffic
Knowing where your website visitors come from is crucial to your marketing efforts. To get the most out of your website, it is important to track visitors to your site and understand what they do when they get there. This will help you pinpoint which of your online marketing efforts are the most effective so that you can focus on the most effective marketing channels for your business.
One of the most commonly used tools for understanding your web traffic is Google Analytics. It is popular because it is free, and has a lot of robust features. It will help you identify how visitors are finding your site, and which of your web pages are performing well (as well as which ones aren’t). It is relatively easy to install if you have administrative access to your website, but if you are in doubt, ask your web developer to help you.
Stay on top of industry news
As a business owner, you need to keep yourself informed to identify and take advantage of new business opportunities. Consider implementing a process that ensures that you can disseminate and consume news items efficiently.
You can start by customising your social media newsfeed so that you get updates directly from industry experts. If you haven’t got the time to read interesting articles on-the-go, save them using an app like Pocket and set aside a couple of hours each month to revisit them. You can also sign up for Google Alerts and set an alert so that you receive relevant news directly to your inbox.
Meet your stakeholders regularly
Arrange periodic meetings with your accountant or bookkeeper, the board of directors and investors to review your business performance to ensure that you are on track. These meetings can help to nurture a positive working relationship with your stakeholders but fostering an open communication channel.
Automate as many processes as possible
Take an inventory of repetitive tasks in your business, which are a burden on your time, and automate them. It is possible to automate most repetitive tasks across the breadth of your business such as domain hosting renewal, social media management, customer e-mail updates, customer relationship management etc.