Everyone remembers their own personal health, but many Business Owners forget that their Business also needs to stay fit and healthy. Check ups and lots of attention will help foster a strong and Financially Healthy Business. Check out these tips to improve upon or gain perspective on your own business.
1. Budget, Budget, Budget! Just as the saying goes in Real Estate Location, Location, Location, the same adage applies to Budgeting in your business. Having a plan, involves crunching those numbers and preparing a budget for your business. This should be done in detail,department by department, line by line. Be realistic and honest; don’t overestimate your sales or underestimate your costs.
2 Cashflow. It is important for every business owner to prepare cashflow projections for the coming year. They should be updated regularly and maintained on a 12 month rolling basis. The projections you create will help identify the times during the coming year when there may be cash shortages and allow time to address those concerns – being prepared is the best medicine.
3 Costs Accountability – Question all of your business’ costs. Look to cut the fat or at least reduce. See if you are in fact getting the most competitive deal on everything you buy. Shop around and if you have a pre-existing relationship see if your bottom line price has any wiggle room, make sure your suppliers are rewarding your loyalty.
4 KPI’s: Decide what are appropriate key performance indicators for all areas of your business and monitor these constantly. Monitoring these closely will keep you on track and heading in the direction of your choosing.
5 Streamline –This isn’t just a term for a more flattering figure, really look at all your processes; sales, operations, logistics, administration – is there any ways to simplify or eliminate any processes this could have a noticeable impact on your operating costs.
6 Employees: Engage your employees. Make sure they understand the goals for the coming year and how they can contribute to their accomplishment. Introduce an incentive scheme.
Also remember that employee retention adds value to your company, look for ways to reward and appreciate the people who make up the collective whole of your compnay
7. Management Accounts: Set of summarized accounting data (balance sheet, cash flow, and income statement) prepared and presented (usually every month, fortnight, or week) specifically for a firm’s management. The objective of management accounts is to provide timelyand key financial and statistical information required by managers to make day to day and short-term decisions.
Regularly reviewing these at minimum quarterly if not monthly will make sure you are tracking sucesses and failures
8. Financing – is your funding structure appropriate to your business as it currently stands;the right mix of short and long term debt? Does it require re-structuring? Have you sufficient funding for 2011?
These are the questions that should be easy to answer or you should already be in the process of figuring it out. Not understanding what it is going to take to run a business in your industry is what often thwarts the Small Business Owner.
9 Act now. Don’t put off to tomorrow what can be done today. If tough decisions need to be made just do it!
10. The Big Picture – Many Small Business Owners are so immersed in the day to day operations of their business that they are oblivious of the “big picture”. Take time to stand back and look at your business as a whole. Take a real critical eye and ask yourself, Do you like what you see? Do the numbers add up? Does it make sense?