8 Tips To Keep Your Business Healthy
Effective Strategies to keep your Business Healthy
What is a Business Health Check?
Entrepreneurs are often too busy running their day to day operations to focus on the big picture. As business owners, they need to look at their business like a newborn. It has basic needs that need to be fulfilled to keep it active and healthy. However, it’s important that they go to the doctor for regular check-ups to make sure their health is well and that there are no serious concerns to be worried about. Similarly, businesses not only require their daily operations to run smoothly in order to operate efficiently but every now and then they also need regular business health checks to keep their business healthy. To make sure that they have no serious health issues so that they can thrive.
Related: If you are looking for ways to manage business stress, read our guide to managing stress as a business owner.
Business health checks are used to assess the condition of a business and require a series of assessments using different criteria to diagnose the potential weaknesses of a business.
Business Health Check Tips
Not conducting regular health checks on your business can have severe consequences which can lead it to lag behind the competition instead of dominating it. That is why we have curated a list of essential items to include when performing a check on your business. It is wise to always speak to your accountant to accumulate all the financial information required to carry out this check and keep your business healthy.
- Review Financial Statements
Why is it Important to Review Financial Statements?
Financial statements are the backbone of every business. That’s why it’s essential to actively track your finances and be aware of any disparities. Each financial statement highlights a different financial aspect pertinent to your business. They are the quickest way to see a snapshot of your business as a whole, so if changes or decisions need to be made, the information they provide can allow you to do so.
Use this measure to assess the financial position of your business, to determine if you have enough cash to pay your staff and purchase business supplies. It is also vital to ascertain if your business is making a profit and if it is growing, investors highly value this metric. Various ratios and analytical measures can be used here to determine the health of the business financially.
Please see our video below that provides information on the four types of financial statements, which are crucial to reporting your business finances accurately.
Video: 4 Types of Financial Statements for Reporting
Financial statements are reports that provide information regarding the business activities and the financial performance of a company. In our video, we have covered the four main types of financial statements that are used for reporting.
The advent of new software and technologies has made it easier to manage your finances and keep a track of your reporting. Different tools, like cloud accounting software, can help create and maintain financial reports. These tools can also help manage your cash flow, track your bills and expenses, etc. It can be confusing when selecting between a large number of cloud accounting options available in the market, our expert online accountants have curated a guide to choosing between the best cloud accounting software.
2. Check Sales Report
Why is it Important to check your Sales Report?
The second most important thing for your business is to rigorously track your sales. Regular check-ups are necessary to ensure that the sales pipeline is performing in accordance with the sales strategy. That is why it is essential to develop a sales report, so regular reporting can be conducted. Sales reports can be a valuable tool which can be used to track sales revenue, the health of your sales funnel, the length of your sales cycle, etc. It can also help set realistic goals for you and your team. You can set different metrics within your sales report to see the information that’s important to you. Marketing can play a crucial role in the success of your businesses sales department. One way to measure the success of your marketing efforts is to use Marketing ROI. You can learn more about this here.
Use this measure to determine the growth of the business. If your business is not generating any sales and is losing customers, the health of your business regardless of the amount of money it holds is bound to get worse. If the problem of attracting new customers isn’t addressed, the business can run into a financial difficulty sooner rather than later.
3. Analyze Customer Feedback
Why should you Analyze Customer Feedback?
Customer feedback is a valuable and powerful tool that can help you understand how your customers feel about your business. That gives you a unique perspective and opportunity to make worthwhile improvements, which can help you attain and retain customers. Thus, communication is the key to retaining customers and building a relationship with them.
You can use tools like CRM’s (Customer Relationship Management) or MAS (Marketing Automation System) to effectively communicate with your customers and partners to keep them up to date about your business.
Create a system to take regular feedback from your customers and involve the company leadership in it. This will help you get valuable insights and lead to innovation and business growth overtime to keep in healthy and running.
Unhappy customers will leave sooner or later, increasing the churn rate of the business. They might even leave negative feedback and give bad reviews, impacting the brand negatively. Unhappy customers identify weak customer service, weak operations or weak training and development of staff. As business advisers we see high growth businesses struggling to hire the right talent which creates issues with the level of service provided. We have used our past experience to curate a guide to hiring the best staff for your business.
Clear House Accountants provide ambitious entrepreneurs solutions for Business Growth. Learn more here.
4. Audit your Website and Social Media Traffic
Why should you Audit your Website and Social Media Traffic?
Your website officially showcases your business to potential customers and clients. You can leverage crucial data information to grow your customer base by understanding your web audience and their attribution channels. There are several tools that can be used to monitor the growth of your website or keep a score of the traffic that your website or social media is receiving every day. This data can be useful for building your marketing strategy and to help you understand the purchase behaviour of your customers throughout the purchase cycle. Below is a list of tools that can be used to perform the required checks on your website which are highly effective to keep your business health under check.
5. Research Industry Trends
Why should you Research Industry Trends for your Business?
Industry benchmarking can give businesses a good yardstick to compare their performance against. Keeping a pulse on the latest industry trends can become quite tedious, but tools such as Google alerts make it easy to keep up with all the latest trends and practices. Reviewing these trends and changes on a regular basis can help identify new business opportunities and weaknesses in a business’s existing business model and help to keep your business healthy. Once identified, a business can work on using these trends to improve performance or disrupt the market. It is also very important to have the right business mindset to meet business challenges head-on. One of our partners has curated an amazing report on “The 2020 Business Mindset”, the report can be read here.
6. Secure your Data
How Securing your Data can Help your Business Survive?
Data is one of the most valuable assets for a business owner. Unfortunately, storing data on physical hard drives can lead to vulnerabilities in the face of burglary, fire or natural disasters. Therefore, using a cloud-based application to store data and ensuring information is always available and automatically backed up, can be key to improving business performance. Cloud-based apps can considerably improve the performance of your business. Read our guide to get a detailed insight into cloud-based applications.
7. Communicate with Advisors
Why is it Important to Communicate with Advisors?
For a successful business, it is very important to align operations with your business strategy. Working in silos is not effective and can lead to wasted effort and stagnant business operations. It is important to have all the key stakeholders on-board during important meetings. You must arrange regular meetings with your team members, the board of directors and investors to discuss monthly strategies, review business performance and to evaluate if you are on the right track. Your Business Advisors should consist of competitive accountants providing value-added accounting services, lawyers who are experts in your niche and consultants who can cater to your varying needs and requirements, in order to help identify a business’s blind spots.
8. Monitor your Cash Flow
Why should I Monitor Cash Flow?
As the saying goes, cash is king, you should not take this saying lightly, as we have seen too many businesses fail due to poor cash management solutions. Reviewing your credit lines and keeping track of net cash flow is crucial for a business to succeed. It takes immense time to track transactions and make assessments. It is, therefore, better to ask an expert for help or to hire a business accountant to save you time and effort.
Some of the major elements that need to be tracked are revenue and expenses on a monthly basis, inventory costs and cash flow. Online tools such as Float and Pulse can help you forecast your cash flow. Alternatively, we provide all our clients with an amazingly intelligent, beautifully intuitive, cash management solution, and best of all the lite version is completely free. We have also worked hard on curating amazing cash flow resources for our clients, speak to us to learn more.
See below a step-by-step approach to monitoring your cash flow:
If you review your business’s health regularly and follow the tips we have discussed in this article you should be able to monitor and improve your business’s health by leaps and bounds, in a short amount of time, the data will also help plan for future business strategies to help the business stay healthy and to compete with its competitors.
Clear House Accountants are qualified Accountants in London with years of experience in dealing with financial, tax, managerial and operational affairs for businesses of different sizes. We help businesses stay compliant, plan for growth and prepare for scenarios which can hinder performance and financial productivity.
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5 Ways to Get Paid on Time as a Small Business
