Author is Danny Evans, client manager at Champion Accountants
A healthy body demands routine checks and examinations. And awful healthy food like broccoli.
But we don’t have to talk about that. A healthy, thriving business needs the occasional check-up as well. No matter what stage your business is at, you must check its systems, pay attention to any potential ailments, and prevent any serious issues. No need for broccoli. What a relief.
For the new-born business the goals and system checks are relatively simple.
Merely maintaining your sanity and keeping your business alive is a measure of success at this point in development. Which, when it comes to the sanity part, is much easier said than done.
Systems are very limited during the start-up stage because there are usually a handful of people (if that) trying to get cash, find more customers and deliver a quality product.
Three common causes of mortality at this stage are:
- Atrophy – all cash dries up
- Neglect – the marketplace doesn’t take to the product as well as anticipated
- Stress – the business owner crumbles under the pressures of running a business
Like a character in a zombie movie, a business is looking for basic survival as it progresses. Teetering on the edge of just making enough to survive is hazardous to anyone’s health. As are zombies. At this stage, there are still limited systems and employees. There may be a marginal profit, expenses are covered, and cash flow can (and must) be projected and managed.
Failure to thrive can be attributed to owner burnout, lack of vision, insufficient funds, and marketplace factors. Or forgetting to leave the “Open” sign lit up during business hours. You’ve got to remember to do that!
Too many businesses get stuck in this stage. There are many businesses that are sold at a loss or simply close down when the owner has had enough. Every business should strive for optimum health and try to perform like the Olympic athletes we witnessed in Rio earlier this year. Except maybe not like that one guy. But we don’t have to get into that right now.
Now is the time to train your business body and make critical decisions.
Are you going to go for the gold or are you willing to settle for being a recreational player?
Because, you may not have heard, but gold is pretty special. If you are reaching for the gold, then you’re going to have to train your business and assess the weaknesses, attacking them rigorously. You’ll also need to optimize your strengths, consider expanding your business, and reinvest in its success. Then get a cake for the break room. It’ll improve morale.
Trying to reach your ultimate goal will require constant monitoring.
Not every athlete captures the gold. Otherwise the Olympics would be much less exciting.
However, constant monitoring and exercising increases your business’ success and potential for optimum health.
We find that when business owner’s work with us to understand their numbers (and specifically the key drivers of revenue, profit and cash in their business) then set stretch targets and monitor their financial and non-financial key performance indicators every single month, better results are achieved.
You might have noticed similar results with your own body. If you weigh yourself every week, you’ll notice if things are getting a little out of control and then you can take immediate action to remedy the situation. Although sometimes it’s because you forgot to take your shoes off. Those definitely add a few pounds. On the other hand, if you worry about the results before even checking, you may ignore the bathroom scale altogether. If you simply avoid checking, you may find yourself with a bigger problem down the road. Plus you won’t be able to fit into those nice chinos anymore!
If you would like to discuss your business’ health or require help with implementing any of the ideas in this article, please contact us. We’d be delighted to work with you to check the pulse of your business. But probably not your own pulse. We’ll leave that to medical professionals.
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