My last post was the first in a three-part series about checking in with the health of your business. I wrote about how your business health should be monitored, just as your physical health does.
In that post, I shared some signs that your business health may need a check-up, such as having difficulty making ends meet and having trouble with not ever really getting ahead. I also went into some detail about how you may start your business check up with a review of your business branding. You can read that post in its entirety here.
In this, the second post in the series, I will share some things you can do to review the financial health of your business. The critical part of business ownership that doesn’t tend to be much fun to deal with.
How to conduct a check up on the financial health of your business
Put your books under a microscope. In order to do better, you need to know exactly where you are today. How much are you spending each quarter? How much are you earning? Where are you spending most of your money? Where is most of your revenue coming from? Are you spending more than you should in certain areas and under-spending in others? By conducting this sort of review of your finances, you’ll be able to see things that might be having a negative impact on the financial health of your business. This review will help you determine if your current business process is working, or if it might need to be changed.
Identify cash flow issues so you can rectify them. If your cash flow is in bad shape and you’re in a constant state of catch up, take steps to put yourself in a better cycle. Look at where you might be overspending and make a budget that will get you into a better financial position. You might find it beneficial to work with a financial planner to help you get into the black.
Examine your debts. If you have business debts, look at how much you’re spending on interest. Who wants to be spending hundreds of dollars a month on interest? Nobody. Look at the debts you have that carry the highest percentage of interest. In most cases, you’ll want to pay down the debts that are costing you the most, first. One debt payment strategy is to make minimum payments on all other debts, while paying as much as you can afford on the most expensive one. When that one is paid off, take the amount you were spending on it each month and invest that into your second most expensive debt. Rinse and repeat until all your debts are paid off. Again, this is something a financial planner could help you with.If your budget is out o f whack, when was the last time you raised your rates?
Consider a rate increase. After you’ve taken a good look at your books you may see you aren’t doing anything wrong, financially. If this is the case, you might want to look at what you’re charging for your services. When’s the last time you adjusted your fees?
Make a new plan. If your check-up has identified some problems with the financial health of your business, start making some changes to your business plan and get those issues corrected as soon as you can.
Now that we’ve conducted check-ups on the branding and finances of your business, in my next and final post in this three-part series, I’ll be looking more closely at the health of the services you provide, and the people to whom you provide them.
Until then, do you have any other finance review tips to add to this article? If so, please leave a comment and contribute to the discussion.
Also published on Medium.
In business since 1991, Terry Green is the founder/CEO/President of BizEase Support Solutions, an American-based, online marketing support company comprised of a team of talented professionals from around North America. BizEase excels at providing speakers and business coaches worldwide with seamless online marketing solutions, from setting up shopping carts and editing video, to writing blog posts and managing Social Media and PR campaigns. BizEase clients (who span five continents) take great joy in allowing the BizEase team to take care of the details so they can get back to doing what they do best! Click here to get our weekly tips ezine delivered to your inbox every other Friday, with tips on plugins, apps, and tools to make you more productive today!