Does your business need health check?
- October 9, 2019
- Posted by: Admin
- Category: Grow your Business
Business owners and managers spend most of their time managing and coping with everyday problems. But just as the doctor’s annual checkup helps track and maintain your personal health, the same can be done for your business by an annual checkup.
Here are seven business health checkups to be done each year. For your long-term health and personal success, these are important:
REVIEW YOUR BUSINESS INSURANCE COVERAGE.
Don’t just write the insurance policies automatically if they’re due. You should instead sit down every year with your insurance agent. Review the business activities and focus on improvements. Address threat forms which might occur. Question about new business insurance trends.
LOOK AT YOUR BUSINESS TAX STRATEGY.
Consider adjusting taxable earnings for the year, perhaps by accelerating expenses or delaying income at year-end. If you’re a cash-basis taxpayer, you could boost 2017 deductions by declaring and paying bonuses in December rather than in early January. Also, you may be able to defer invoices or make early purchases to reduce your 2017 tax bill.
SURVEY YOUR CUSTOMERS.
An annual customer satisfaction survey is an ideal way to evaluate results, to gain insight into possible new products or services and to let the customers know how valuable they are.
DETERMINE YOUR MARKETING EFFECTIVENESS.
Are your current methods and channels working well, or are you simply doing what you’ve always done?
UPDATE SUCCESSION PLANNING FOR YOUR BUSINESS.
Annually review your estate plan. For each key manager position, you should have a specific plan, for yourself. Be ready to be absent or idle for a short period of time. Your plan may include promotion from within or external recruitment.
REVIEW YOUR BUSINESS BANKING RELATIONSHIPS.
Every year you should go over your cash balances and banking relationships with your controller, CFO or accountant. Then meet with your banker. Ask about new products or services that could help your company. Address any service concerns or problems you might have had. And look for ways to boost interest earned and improve cash flow.
UPDATE YOUR PERSONAL ESTATE PLANNING (IF NEEDED).
If you’re a business owner, your company is likely to be a significant part of your estate. Your company, your personal circumstances and the tax laws are continually changing. You should take time each year to make sure your plans are current.
If you are serious about improving your business, consider an assessment of your operation.
An annual review is as important for a business as it is in your personal life. This is your chance to examine closely how your business operates, celebrate areas in which you are on track to meet its objectives and, if you are not, adjust your position.
Here are five steps to completing an annual review or business health checkup of your business.
1. Assess and adjust your financial goals
Review your goals for the year and assess how well you have achieved your plans. Track your success against your targets to make sure you know how things worked and didn’t work. This is your chance to learn this year and adapt this to the next year.
Your short-term goals are a leap towards your long-term objectives. These need to be changed as part of your performance review. You might need to do more if the goals stay the same in the short term. Consider the impact in the future as the goals shift.
2. Evaluate the changes in your market situation
One of the key elements of your financial review is the stability and external factors that will change it over the next 12 months. This will lead to your strategic strategy and the goals.
Start by looking at how the market value might have changed in the past year. Does it rise or decrease? Understand the factors affecting it and the subsequent market reaction. This will give important insights into what might be around the corner.
Consider how you have changed your competitive position on your market in the past year. Has this impacted and should it if not your pricing strategy? Look at the tourists and the market-goers. What did the remaining ones do?
3. Review all economic factors
Your ability to make or save money in the last year may have also impacted external factors. The way that you behave can have dramatic effects on shifts in interest rates, exchange rates and tax rates. And don’t forget to study trade agreements that can impact customer demand or pricing in a positive or negative manner.
Use all the resources available to look at how the business will grow and, if possible, longer in the next one to five years. In forecasting customer and business patterns that might affect your product, market research is indispensable. Consider technology an important focus: It keeps changing the nature of society and prepares the company for any effect.
4. Sense check your retirement/exit plan
You still don’t plan to leave the company in the next 12 months, but all you are doing is in line with your exit plans. You should understand this now and develop a plan how your employer can help your financial objectives if you haven’t prepared for pension.
Your plan of exit will determine your financial goals and the time you need to achieve them. If you are not on track, you must now determine whether you want to update your exit strategy or improve your operation, so that you can continue to achieve your objectives.
5. Prepare for the unexpected
One important result of the year’s analysis is to enhance your predictive ability. Take the time to chart patterns in your market factors. Invest some valuable time in the preparation of scenarios to find out what you can do if extreme events shock your business.
An annual financial report will provide valuable information on the performance of you and your business during the last 12 months. Once the analysis is completed, valuable information will be made available that can be used to change the business plans.
Business still changes, like life. You can see how you advance and improve your strategy to remain relevant to your situation today with your annual financial report.
In this article, we have given you an overview of how and why your business need health checkup, and what you can do to improve the health of your business.