Is My Business Healthy?
Amidst the COVID-19 pandemic, the health and wellbeing of our Village has been a top priority. We’re sure this has been a top priority for you and your Village as well. If your Village includes your business, how are you evaluating its health right now?
Keeping a microscope on your business and checking its pulse is critical to survival and recovery when we emerge on the other side of COVID-19. Here are five ways you can evaluate the health of your business and how it is doing beyond the day-to-day.
1. MONITOR CASH FLOW
A cash flow statement helps you understand where a business’s cash goes over a period of time by showing how money moves into and out of the business. By evaluating the sources and uses of the business’s cash, you can determine where you could cut expenses or where you should invest more resources to produce greater profits. Monitor Accounts Receivable carefully, work with customers to negotiate payment schedules to cover your costs, contact your trusted suppliers and vendors about making your payments slower, and minimize fixed expenses if you’re experiencing cash flow issues. Understanding cash flow and any issues that arise with it is vital to predicting what the future may hold and get an accurate read on the overall health of your business.
2. TUNE IN TO MARKETING
Pay attention to what your competitors are doing well from a marketing standpoint and explore the various marketing channels that your business could leverage to deliver a valuable message to current and prospective customers. While personal interaction is the richest channel to truly communicate how you can add value, a digital and social media presence is essential to the world we’re living in now. Social media channels such as Facebook, Instagram, Twitter, and LinkedIn are an important, low-cost, low-risk way to promote and build a presence for your business. Ensuring business information is findable on Google is also essential for people to find you and become customers.
Social media and Google reviews also provide a channel to listen to customer feedback. Positive feedback from customers is a clear sign that your business has fulfilled its promise to the customer, which demonstrates how healthy the business is from a customer service and overall performance lens. Be in a position to listen for customer feedback as retaining satisfied customers is easier and more affordable than acquiring new ones. A focus on retention is good for the bottom line.
Entrepreneurs and small business owners start businesses because they are passionate about what they do, and they excel at bringing that passion to people. However, that may also mean that small business owners lack the management or leadership skills to run the day-to-day operations of the business. We get that, but we also know that businesses succeed when they operate as more than a passion project. Make it another passion of yours to grow your business leadership skills—anything from knowing the latest updates in your industry to digital marketing skills to understanding your financials. There is a myriad of online courses and webinars from business development agencies, colleges, and chambers of commerce on these topics that are convenient and easily accessible for you.
Part of building those leadership skills could also include being a leader that your employees want to follow. By showing your employees that you value and appreciate the work they do for your business, you’ll create a culture that unites your employees and builds passion around your mission. Invest in training, give employees flexibility that promotes a strong work-life balance, and reward them for their loyalty. With a united team and ignited mission, the health of your business will thrive.
Remember, when you’re evaluating the health and wellness of your business, you have to measure several of its vitals. Go beyond the financial picture to check the pulse of these five factors. If you do that, your business will recover and continue to thrive.