Our loved ones, media advertisements, and our own conscience continuously remind us that it is critical to take care of our health and to ensure that we have frequent checkups as we hit certain age milestones. Why not use the same logic when it comes to owning and managing your own company?

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Perhaps the most effective method to do this is to set out a month each year to take a step back and assess the state of your company. For example, you may schedule it for a time when you are less busy – perhaps you provide a seasonal service, in which case Winter would be a good time to take stock and assess whether your company is fundamentally solid enough to go another fiscal year.

When doing a business health check, consider the following four steps:

Step 1: Reconsider your objectives.

When it comes to owning and operating a business, you almost certainly have a few goals in mind that you’d like to accomplish. The most obvious are increasing profit margins, inspiring your employees to become more committed in the company, and expanding your service area, among other things.

It’s critical not to lose sight of these objectives, and even more so to re-evaluate them on a regular basis, because the business world frequently throws us curveballs when we least expect them. As a result of the COVID-19 crisis, which no one anticipated coming, we are now facing the possibility of a global recession.

If you haven’t already done so, now is the time to do so, and one thing we can all learn from the current scenario is to re-evaluate our goals. It’s crucial to have a company plan for the future, but it’s even more necessary to do a business health check on a regular basis, comparing your profitability and productivity to prospective financial disasters.

Step 2: Mastery of Money.

To comprehend profit, you don’t need to be an accountant. Any business must produce money in order to expand, and if you don’t understand your organization’s expenditures vs. income, you may never be able to retire or sell your company when the time comes.

As a result, you must realize that business is primarily about ensuring that you deliver profitably, productively, and with sufficient information to make good judgments. Understand how many sales, customers, or dollars you’ll need to make each day to break even and eventually reach your profit targets.

As part of your review process, this is perhaps the most critical area of your firm to check. Most businesses will conduct a complete stocktake exercise once a year, but this should entail more than simply inspecting tangible assets; it should also include determining where your company is in terms of marketing and business growth initiatives at any particular time.

You must devise a method to evaluate and measure your average dollar sale by keeping track of it over a period of time. When it comes time for your yearly business health check, it will be easier to determine whether your company is growing or not.

This will allow you to track your key performance indicators (KPIs) and determine whether the methods you used last year were successful.If not, you’ll need to figure out what’s going wrong and make some changes, such as modifying or expanding your marketing efforts or focusing on customer connections, among other things.

Step 3: Productivity is the key to success.

It is critical for any business to expand to guarantee that it is operating at maximum efficiency. When it comes to running a business, time is undoubtedly the most valuable resource, which is why it’s critical to ensure that all of your employees are as productive as possible.

If you devote time and effort to helping your employees become more productive, you will not only improve earnings, but you will also free up time as a business owner to focus on putting in place processes that will ensure your company is recession-proof when times are tough.

Essentially, you will aid in the retention of every employee’s employment and your company’s viability when it is most needed. Regularly check in with your team and make sure you’re evaluating performance vs. effort.

Step 4: Find your niche and make sure you’re the only one who knows about it.

If you are in a position to provide a unique service or product to your consumer base, it is critical that you control it completely. This is what sets you apart from the competition, and if you don’t know what it is yet, it could be a good idea to get the assistance of a business coach or mentor who can help you figure it out (USP).

Use the correct marketing tools to assist you take full ownership of your differentiators once you’ve identified them. You’ve gained an advantage over your competitors, so make your marketing efforts count. Most business owners lack confidence in their ability to advertise their services or products.

A skilled business coach can help you test and assess a number of marketing opportunities that will help you improve sales and develop your company. This phrase from Brad Sugars’ book, Billionaire in Training, rings so true:

“People are willing to pay for service, when it’s the service they desire. If the service exceeds their expectations, they will stay with you, and they will say good things about your business.” 

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Written by ActionCOACH April 17, 2024
ActionCOACH is recognised as the creator and most successful practitioner of business and executive coaching methodology that offers owners and managers a new perspective on their businesses and companies.