What’s The Health Of Your Company?

Find out today by filling out our simple questionnaire.

Your customers are usually:
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4 Questions to Determine If Your Small Business Is Healthy and Thriving

Is your business prepared to run a marathon or is it on life support?

Most small business owners want to believe they have a strong and healthy business. In fact, more often than not the business owner’s position is “I don’t need to borrow money, I have my own. If I need money, I can just go to a bank. Everything is good!” That is the belief until there is an issue with the business – something as exciting as needing funds due to rapid growth or sometimes for unexpected tragedies such as a death of a key employee or the loss of a major contract. It’s during these times most owners discover the answer to the question “Is my business healthy?” Because they are now forced by a lender or investor to prove that very point. More often than not, the business is not healthy. It’s actually on life support with a respirator and the future prognosis is not good. It’s terminal.

The following FOUR questions, will help you understand where your business may have health concerns and like an exercise plan, get you on a path of a more healthier and profitable financial future.

Cash Is King, But Credit Is Better

Do you currently use your cash on hand to pay your expenses? After you pay your expenses, is the amount of cash left over increasing every month? Many business owners will be asset rich and cash poor. If you have cash on hand every month and that cash continues to go up every month. That is a clear indicator that you have a healthy business. A way to help increase your cashflow is management of credit or debt.

One suggestion to help your business become healthier is when possible put your recurring expenses on a credit line. This allows you when possible to make minimum payments on a schedule or when a large invoice is paid payoff those credit obligations. The key to maintaining a healthy balance sheet and a positive cash flow is knowing what to pay with cash and what to pay with credit. The credit extends your ability to keep debts current and improve your overall business credit score, while maintaining cash reserves until they are needed or in case of emergency.

How Old Are Your Receivables?

Another clear indicator as to the health of a business is the outstanding receivables. It’s sufficed to say the longer it takes for a customer to pay you the owner, the less operating capital you have to actually maintain or grow your business. A fast way to improve the health of your business is a clear collection policy and terms of payment.

As a business owner you have to know when to “fire” a client or customer. If you are frequently collecting invoices or payments over 45 days, such activity can drive your business into the ground. So as a precaution make sure you taking on clients that look like you, responsible and creditworthy. If not, you may not be in business for very long.

Are You A Revolving Door For Employees?

Most businesses try to retain good employees. If a company is losing or frequently turning over employees either by firing the wrong ones or losing your best employees there is a clear sign, things are not good. Many businesses fail to look at the hidden cost attributed to a losing or firing employees. There is a cost for training, administration, not to mention if the business is offering insurance benefits, 401K, and other employee benefits there is a leaking of costs associated with those benefits as well. You can’t dismiss the cost associated with unemployment claims and the resulting time invested regarding that process as well.

A business with frequent turnover will typically have other underlying issues within the business that will continue to drive down profits and cash flow. A suggestion is to check-in with staff and immediate lower management on the status of the working environment. As a business owner you have to have an ear to your market and customer, but also the pulse of your staff and team.

What Are Your Customers Saying?

Every company has a bad customer review or two. It’s hard to keep everyone happy all the time. It becomes a drain on the business when the majority of your customers are complaining, however a good way to track that customer feedback is via online testimonials, creating a customer escalation process, and offering training to all areas of the business where service is the focus and key to that training . A healthy business has the ability to evaluate, adapt, and track customer interaction and results of those interactions. One easy step to take is reviewing your current (CRM) a CRM is also known as a Customer Relationship Management system.

If you don’t have a system to track your customers you can go online and look at low cost, and in some cases, free systems to use to help you manage, support, and improve your customer service. This will help you keep customers, increase profits, and grow your business. Gauging whether or not you have a healthy business requires looking at the numbers—and more. These four suggestions give you a high-level look into whether your business is healthy and growing, has peaked, or in trouble.

Find out today by filling out our simple questionnaire.

Your customers are usually:
$
$
What percent of your expenses do these account for?

What's your credit score?

You must fill out all required fields.

4 Questions to Determine If Your Small Business Is Healthy and Thriving

Is your business prepared to run a marathon or is it on life support?

When I started working with small businesses I began as a marketing consultant, my job writing business plans, reviewing them, and when necessary providing advice to a potential business owner. Over time, actually many years I found that many business owners failed to repeatedly ask one simple question: Is my business healthy?

Most small business owners want to believe they have a strong and healthy business. In fact, more often than not the business owners’ position is “I don’t need to borrow money, I have my own. If I need money, I can just go to a bank. Everything is good! That is the belief until there is an issue with the business something as exciting as needing funds due to rapid growth or sometimes for unexpected tragedies such as a death of a key employee or the loss of a major contract. It’s during these times most owners discover the answer to the question is my business healthy? Because they are now forced by a lender or investor to prove that very point. More often than not, the business is not healthy it’s actually on life support with a respirator and the future prognosis is not good. It’s terminal.

These FOUR questions can help you figure out where your business ranks in regards to its health in your industry and what you can do today to change that tomorrow. Like a diet or exercise plan, these questions can help you identify your weaknesses but you have to make the commitment to change, to focus, and to react better than you have done in the past. After all, Rome wasn’t built in a day. It took time to get to your current position. It will take time to get you to a better one. Let’s get started!

Cash Is King, But Credit Is Better

Do you currently use your cash on hand to pay your expenses? After you pay your expenses, is the amount of cash left over increasing every month? Many business owners will be asset rich and cash poor. If you have cash on hand every month and that cash continues to go up every month. That is a clear indicator that you have a healthy business. A way to help increase your cashflow is management of credit or debt. One suggestion to help your business become healthier is when possible put your recurring expenses on a credit line. This allows you when possible to make minimum payments on a schedule or when a large invoice is paid payoff those credit obligations. The key to maintaining a healthy balance sheet and a positive cash flow is knowing what to pay with cash and what to pay with credit. The credit extends your ability to keep debts current and improve your overall business credit score, while maintaining cash reserves until they are needed or in case of emergency.

How Old Are Your Receivables?

Another clear indicator as to the health of a business is the outstanding receivables. It’s sufficed to say the longer it takes for a customer to pay you the owner, the less operating capital you have to actually maintain or grow your business. A fast way to improve the health of your business is a clear collection policy and terms of payment. As a business owner you have to know when to “fire” a client or customer. If you are frequently collecting invoices or payments over 45 days, such activity can drive your business into the ground. So as a precaution make sure you taking on clients that look like you, responsible and creditworthy. If not, you may not be in business for very long.

Are You A Revolving Door For Employees?

Most businesses try to retain good employees. If a company is losing or frequently turning over employees either by firing the wrong ones or losing your best employees there is a clear sign, things are not good. I have a friend that owns a digital media company. When we were discussing his employee turnover situation, he rationalized it was just the culture of the industry. We agreed to disagree. Most employees fire their boss, not their jobs! Many businesses fail to look at the hidden cost attributed to a losing or firing employees. There is a cost for training, administration, not to mention if the business is offering insurance benefits, 401K, and other employee benefits there is a leaking of costs associated with those benefits as well. You can’t dismiss the cost associated with unemployment claims and the resulting time invested regarding that process as well. A business with frequent turnover will typically have other underlying issues within the business that will continue to drive down profits and cash flow. A suggestion is to check-in with staff and immediate lower management on the status of the working environment. As a business owner you have to have an ear to your market and customer, but also the pulse of your staff and team. Encourage an employee to provide constructive feedback on the company, the management, and even the customer base. If the employees feel they can speak and their feedback is valuable, they will continue to stay to work on the issues with you the owner, versus simply giving up and leaving or worse having to fire the employee.

What Are Your Customers Saying?

Every company has a bad customer review or two. It’s hard to keep everyone happy all the time. It becomes a drain on the business when the majority of your customers are complaining, however a good way to track that customer feedback is via online testimonials, creating a customer escalation process, and offering training to all areas of the business where service is the focus and key to that training . A healthy business has the ability to evaluate, adapt, and track customer interaction and results of those interactions. One easy step to take is reviewing your current (CRM) a CRM is also known as a Customer Relationship Management system. If you don’t have a system to track your customers you can go online and look at low cost, and in some cases, free systems to use to help you manage, support, and improve your customer service. This will help you keep customers, increase profits, and grow your business. Gauging whether or not you have a healthy business requires looking at the numbers—and more. These four suggestions give you a high-level look into whether your business is healthy and growing, has peaked, or in trouble.