Ensure your business is in the best possible shape by giving it a health-check. With just a few checks, measures and important questions, you’ll be able to tell which parts are fighting fit, and which areas need more focus. And the best part? With this guide by Paul Bailey, managing director of MasterObjective, you can be your own doctor - no waiting rooms or hefty fees required.
Your business model
Take a look at your business model, the core of what you do. Are your customers still buying the same products in the same quantities? Is this providing the same margins you enjoyed previously? How about your premises - are they still right for you? Are you fully utilising all of your space?
Your staff
Do you still need the number of employees you have? And those you employ, do they have the right skills? Are you fully utilising the skills you have at your disposal? Is your management team moving with the times? Would you say they willingly embrace change? Look at your processes. Are they as formalised as they should be? Have they been thoroughly interrogated for wasted time and resources? They are always opportunities to save money by eliminating waste.
Your cash flow
Do you monitor and keep abreast of cash flow requirements on a rolling, 13 week basis? Conduct a sensitivity analysis, and be honest. Could you cope if your best possible sales predictions came true? What sort of shape would you be in if the worst case scenario was realised? And what would things look like if you hit your average sales targets? Closely monitor your debtors. Speak to your customers regularly and consistently to build relationships and establish a prompt payment discipline. If you don’t take payment deadlines seriously, why would anybody else?
Your management information systems
Are you on top of and in control of your figures? Do you know your break even sales level, your margins, reject rates? Is the information available in a timely manner, and are you measuring cash and sales on a daily basis? How long does it take to get month-end accounts? Could this information be made available sooner?
Creating a plan
Don’t bury your head in the sand. The situation will not improve by itself, so you need to take action. Identify the potential threats to your business and then develop strategies to overcome them. Seek advice, don’t reinvent the wheel. Your advisers will undoubtedly have seen other businesses in a similar situation to yours. Learn from their lessons, it’ll be less painful. And don’t be afraid to spend money on good advice. Your outlay can be more than recouped by the money you save in the future - and it might even save your business.
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