Are You Solvent? A Business Health Check
A business is only as good as its cash flow so it pays for a company to stay up to date. In order to avoid a garnishee notice(for tax debts) must keep not only suppliers paid but also the government. Checking the current debts and cash-flow is only one of the many ways to check the ‘health’ of a business.
Here are a few other ways to see how well a business is operating:
Market share – How do you fare in the market?
Customer retention – Are you satisfying your customer base?
Business expansion / retraction – Expansion is not always good. Do you have the resources to expand?
Employee satisfaction and retention – The key to any business is your employees. Without them the business is nothing.
Overall performance of the specific industry – Is the industry doing well?
Financial Fitness – Cashflow is Your Pulse
The idea of doing business is to make money either for the company, investors or shareholders. As soon as a company starts losing money without a good reason alarm bells should sound. However, it is important to remember that downturns as well as operating costs can cause hiccups in a generally healthy company.
For a business to have a clear idea of their cash flow they must have a good accountant. That does not mean one that makes the figures look good but rather look at where the money is coming in and going out. Remember that expenses, such as those incurred when expanding a business, are positive.
Peer Examination – How about Your Competitors?
Are you getting walked over by your competitors? Then you should look at how they are operating that makes them dominate your particular business model. You should not look at what they are doing differently but looking at what you are doing better.
All businesses need to check their ‘brand’ performance especially if other similar businesses in the same industry or area are doing well. This can be done in the following ways with consideration for your competitors:
What is the strongest aspect of your business?
Can you afford to compete?
Is your business suffering from poor marketing?
Can you afford not to improve performance?
If you are having problem with your resources then you need to check where the problem lies. Think of it like plumbing that needs to be cleaned and checked every so often. Sometimes the pipes just need to be replaced in a company.
Staff and Brand Performance – Every Little Bit Helps!
The performance of every staff member within your brand (I.e company) makes up every dollar a company makes. Without fantastic staff performances the board could very well receive a director penalty notice if the company cannot pay its bills. A failing company may not even be the result of a poor performance but rather poor communication.
When considering the health of a company communication between all levels of management is key. If your lower level employees see problems then it should be easy for them to pass on suggestions and concerns. Likewise for lower and middle management having access to those who make the bigger company decisions.