Taking time for a business health check is a good idea at any time, especially if you do not have an accounts system that tells you at a glance how you are doing. With economic changes ahead, now would be a good time to give your business the once over to ensure a strong foundation to take you through the other side of 2020. The focus should always be on working smarter not harder.
1. Evaluate where the business is now.
A healthy bottom line is key to business health. It’s not good enough to know how much is in the bank unless all debts are paid and there are no bills due to come in. You need to fully understand how much you are owed and how much you owe. How much work is in the pipeline and what is the expected profit?
2. Collect any outstanding money that you are owed.
Regardless of how much you trust someone or think they would never let you down, hard times make people behave in unusual ways. If the money is owed and there is no agreement for paying later, collect it. Don’t be afraid to ask for money that is rightfully yours.
3. Make a business plan.
Work out how much turnover and profit you need to make over the next year and what business you need to generate to achieve that. How will you generate that business? If you need a marketing plan, now is the time to either work it out yourself or get help with it. Know what your bottom line is.
4. Get rid of deadwood.
If you have anything that is not serving you whether that is services that do not make money or people that do not add value to your business, let it go.
5. Check your bank account.
Are you paying for anything that you are not using? Memberships or subscriptions that you have forgotten you had. Do you have regular advertisements that are not generating business? Cancel them – no matter how small. They all add up.
6. Look at debts.
If you are in debt at all, look at how manageable it is and whether it is worth putting the debt or debts into a manageable long term plan. If debts are on credit cards, consider whether it’s worth finding a 0% balance transfer.
7. Evaluate your suppliers.
Are you buying at the best prices? If you are buying bits and pieces all over the place, try to consolidate and renegotiate trade discounts in return for loyalty. If you buy a lot regularly from one supplier, enquire if there is further discount to be had. If you don’t ask, you don’t get.
8. Examine your cash flow.
Are you living week to week or is there money in the pot for any contingency. Can you arrange credit accounts where currently you are paying cash? Can you take a bigger deposit from customers so that you are ahead with costs rather than behind them if you wait until a job is finished before asking for payment
9. Make your business more efficient.
Look at any areas where inefficiency is costing you money. Excellence costs less in the long run than mediocrity and certainly less than shoddy work does. Make sure that everything you do only needs doing once and is what the customer expects. That way you will always be paid.
10. Mark out time every week for planning.
Most businesses are run reactively. Everything is led by what happens. A customer calling or walking through the door. An email arriving in the inbox. Supplies being unavailable. When anything occurs, the natural reaction is to act on it then. This often distracts from the tasks that should have been done that day. Obviously you cannot control when customers appear, but you can plan when you will be available for appointments. You can plan so that you are not short of supplies. You can plan your times for answering emails, dealing with installation planning and all of the other tasks. Time spent planning your business is always paid back in less wasted time.
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