How to “Health Check” your Business
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8 Tips to improve the health of your Business
OK, you have been running your business for a while now. And it is going well, the way it has always gone.
Like many other business owners I work with, you might be feeling that there must be a better way of doing things. There are glitches, annoyances and recurring problems keeping you awake at night. So you dare not turn your phone off. (On that subject, think about it now. What would happen if you turned off your phone for 48 hours? Or a week? If that thought scared you, you better keep reading!)
When you start a business, you begin with the basics and work out from there. It is easy to forget that actually, the basics always remain absolutely central to how well your business performs. How easy your job is. How good your staff retention is. How smooth your cash flow is. And how well you attract and retain customers.
So here are eight areas which are the basics of your business drivers. Answer "Yes" to all or most of these, and you have a thriving, valuable business. You are ready to sell for a very favourable outcome. Answer "No" to half or more, and you have a right to be scared!
- A quality product. Are you still focused on offering products or services you genuinely believe in? This is not just a driver of business, it is a driver of you and your staff. If it has become diluted or compromised, now is the time to realign with it.
- Get noticed where it counts. Do you have a clear message about why your product or service is so good? And do you communicate that message to the right markets?
- Make the most of what you have.Are you taking full advantage of the opportunities already available to you, like the location of your premises, the expertise of your staff, the equity in your business?
- The bottom line. Is your cash flow regular and plentiful? Are you paying no more than you should for some supplies, or charging no less than you should for some products? Do you chase defaulters? Thank prompt payers?
- Treat your customers well. Do you have a broad and loyal customer base? Nothing annoys a customer more than indifference. So are you acknowledging your customers loyalty?
- A growth strategy. Do you have ideas about how you might extend your product range or services into new markets or new offerings?
- Eliminate constraints. Do you have the time, funds and appropriate staff or other resources to act on your ideas for the business?
- Internal support. Do your back-office systems actively help your business sell products, implement improvements, receive money and keep customers?
And if you are working towards selling your business, think about this for a moment.
Will your business run without you if you are hospitalised for a month? If it won't, you need to work towards making yourself dispensable. Future buyers will discount a business built around a key person.
The good news is that there are many ways to turn any one of these areas around. It is likely to be easier than you think and, in most cases, one solution will improve many areas.
Benchmark Business Sales Can help you to get it right so you achieve the best price possible for your business. Remember, you only get one opportunity to sell your business. So give yourself the chance of attaining the healthiest outcome.
Written by Bruce Coudrey
Principal Benchmark Business Sales and Valuations
Bruce Coudrey has been Principal of Benchmark Business Sales & Valuations, since 1999. Benchmark is one of Australia’s largest national business brokerages. Bruce is a Registered Business Valuer and has acted as a court-appointed expert witness.
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