How's your health?
An annual review of your business can be just as important as your own personal health check. It’s the opportunity to stand back and look at whether the business is on track to helping you achieve your goals.
The first step is to understand the goals. For any business owner, personal goals are just as important as business goals. The business is only one tool that will help you live the kind of life you want now and all the way through to retirement. It’s also critical to ensure the business is serving you, and not the other way around!
You may not actually know what your goals are, or you might find that your goals have significantly changed, or you have achieved many of the goals previously set out. That might mean a reset and finding a method for keeping yourself and your business accountable. Write them down, put a support system in place and make sure your adviser is aware of them, so they can factor them into their advice and help with accountability.
Only once you’ve articulated your goals should you take the next step: to review your business and make sure it is synchronised with achieving these goals. A great tool is a balanced scorecard review from four key perspectives:
Every business should have a budget; whether it be to get everyone on the same page, help you see changes that may need to be made ahead of time or act as a measuring stick.
Cash is king, and the key sign to a healthy business is a healthy cashflow. A three-way budget will reveal likely cashflow and allow you to budget for any additional expenditures.
The customer perspective focuses on the people who buy your products and/or services. Time to reflect on areas such as retention rates which can reflect how satisfied your customers are. Customer satisfaction is a great indicator of success and how long you can expect your business to be around for. A SWOT analysis (strengths / weaknesses / opportunities / threats) is also important here.
The internal business processes perspective looks at how smoothly your business is running, the key being efficiency. Are your processes documented? What if a key staff member left – do they take all the critical operational knowledge with them? Are you able to leave spontaneously for a two-month holiday and know that the business will continue?
Learning and Growth
The learning and growth perspective looks at your overall corporate culture, training and technology. Do your employees undertake regular training to stay up to date with the latest trends and enable you to stay ahead of the competition? Does your team feel valued? Your customers will be best served by happy, capable and well-equipped employees.
Finally, are all of these in line with helping you achieve your personal goals and those of the business? If not, then you may need to rethink your business strategy and even the confronting questions around why you are in business.
If you haven’t done a business review in the last 12 months or you would like assistance, our expert team can help. If you haven’t spent the time to articulate your goals, our discovery sessions help business owners and their family move towards the life they want. Of course, there is so much more to ‘taking the pulse’ of a business, but the above considerations are a great place to start.