Every business owner or manager must do an annual checkup on the business.
Regardless of the size of your business, you cannot gauge the effectiveness of any changes you have made without analysing the benifits and bottom line. Just like your body needs an annual physical check up by your primary care physician, your business needs to undergo a major checkup each year. Sckuome questions you must ask as a part of your business annual checkup include:
HOW DO THIS YEAR’S SALES PERFORM COMPARE TO THE LAST COUPLE OF YEARS?
Do not be satisfied if you managed to macth them because if sales stayed the same then you have achieved zero growth. With inflation, this flat growth line is a warning sign for more troble down the road. Obviously, in stagnant economy like we are experiencing now, flat sales may be a small victory for you and your business, but under normal conditions if you not growing then you are falling behind.
WHAT IS YOUR COMPANY’S CURRENT BREAK EVEN POINT?
Knowing your company’s break-even point is vital in any business. In general, break-even point is where the operating profit is the same is total fixed cost. A sales break-even would provide the level of minimum sales to achieve so as not to run into losses. The breake-even level may deffer from year to year, so you need to be aware of this. Break-even analysis can also be used to analyse the potential profitability of a proposed product to be embarked upon.
WHAT ARE YOUR KEY FINANCIAL TARGETS?
Management information like this is critical to making effective decisions in the face of rapid economic change. So if you don’t currently have access to the financial statistics you need, developand implement reporting processes to monitor your performance, forecast, and set smart goals for the year ahead.
Understanding and analysing your key financial targets help you to monitor and recognize the vital statistics necessary for the success and growth of your business.
WHAT PERCENTAGE OF YOUR BUSINESS IS FROM REPEAT CUSTOMERS?
The estimated cost of getting a new customer versus retaining an existing one can be as much as five to one in terms of dollars spent.
How long has it been since you really talked to your customers? Just as you appreciate when your doctor takes time to talk to you, your customers will appreciate you if you take an interest in their needs. If you have a service business, have lunch or coffee periodically with some regulars, even if they only contact you once or twice a year. The personal touch in an impersonal world will be remembered.
Keeping customers is more cost-effective than constantly seeking new ones. Remember, happy, satisfied customers can become your best word-of-mouth advertisers.
SHOULD YOUR COMPANY OFFER A NEW PRODUCT OR SERVICE?
Loyal customers like to see you changing and progressing with the times. Creating new products and services is essential to the success of any business. If you are able to increase sales to current customers because of new products or services, you could see a significant growth in sales with comparatively less effort or expense. If you are stuck for ideas, ask for customers’ feedback through surveys and feedback forms. Now is the time to develop new offerings before your competitors do.
DO YOU CONSIDER MARKETING AND ADVERTISING AS EXPENSES OR INVESTMENTS?
The old adage that you must spend money to make money is true, but you must spend it wisely. Whether just being listed in the yellow pages or engaging special public relations to work with will depend on your budget. Spend it on channels that will pull in responses and orders. Being quoted or featured in an article speak volumes to your clients and readers who are your potential prospects. Especially during slow times like many are facing now, advertising is a must. You cannot afford to lose business during these tough times, but just as importantly, you might be able to gain share while your competition sits on the sidelines waiting for things to change. Marketing is really investing in you, your vision, and your company.
HOW IS YOUR BUSINESS DOING COMPARED TO YOUR COMPETITION?
Every company, no matter what the size, has competition, even home-based businesses. Is their business growing or downsizing? Is their pricing or service better than yours? If so, what can you tell potential customers about the price difference? Think about how you can improve your service to meet or exceed your customer expectations.
WHAT ARE YOU DOING TO GUARD AGAINST LOSS OF GOOD EMPLYEES?
As your competitors begin hiring again, you can bet they will try to recruit your best employees from you. Take a proactive approach by showing your high achievers how much you appreciate them. Although monetary rewards are important, but there are also non-monetary reward that are sometimes more important to the employee.
Greater awaraness of your company’s condition will allow you to focus on the areas important to the growth and success of your business. Having a regular assessment is akin to your medical checkup... its is crucial to understanding your company’s health – past, present and future.
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