A body requires routine checks and examinations for its health. So does a business.
No matter what stage your business is in, to keep it going you must check its systems, pay attention to any ailments and prevent early death.
For the newborn business, the goals and system checks are pretty simple. Merely staying alive and maintaining your sanity is a measure of success at this point in development. Systems are very limited in the start-up stage because there are usually a handful of people (if that) trying to get capital, find more customers and deliver a quality product. Three common causes of mortality at this stage are:
- Atrophy—all capital and funds are dried up
- Neglect—the marketplace does not receive the product or service as well as predicted
- Stress—the business owner cannot take the pressures of running a business anymore and sells the business or closes up
As a business progresses, basic survival is the measure of success. Teetering on the edge of just making enough to survive is hazardous to anyone’s health. At this stage, there are still limited systems and employees; there might be marginal profit; expenses are covered and cash flow can and must be projected. Failure to thrive can be attributed to owner burnout, lack of vision, insufficient funds or marketplace factors.
Now is the time to improve your business’s fitness and make critical decisions. Are you going to go for the gold or are you willing to settle for being an amateur player? If you are reaching for gold, then you’re going to have to train your business, assess the weaknesses and attack them rigorously, optimize your strengths, consider growing and expanding your business and reinvest in its success.
Monitoring Your Business’s Health
Not every athlete captures the gold, but constant monitoring and exercising increases your business’ success and potential for optimum health. We find that when business owners work with us to understand their numbers (and specifically, the key drivers of revenue, profit and cash in their business) and then set stretch targets and monitor both the financial and non-financial key performance indicators every single month, better results are achieved.
You might have noticed similar results with your own body. If you weigh yourself every week, you’ll notice if things are getting a little out of control and you can take action to remedy the situation right then and there. On the other hand, if you worry about what your weight might be and as a result, you ignore the bathroom scales, next time you weigh yourself – perhaps in six months time – you might find yourself with a bigger problem than you imagined and it’s much harder to remedy.
If you would like to discuss your business’ health, call Scott A. Kunkel, CPA PC today in North Richland Hills at 817-498-1040.
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