How Healthy is Your Business?
Can you imagine running a marathon? Some people will be motivated by this thought. Others will be filled with dread. Regardless which camp you fall into, I think we can all agree that you would need to train appropriately before you attempt this challenge. In other words, you need to be sure that you are healthy enough for the task at hand.
The same is true for your business. Along with the hard work you do for your business, your business must also work for you. It is imperative that you make sure that your business is healthy enough to withstand whatever the levels of stress are that you plan to put it through. Are you planning to transition your business? Are you looking to expand? Are you planning to take some cash out of your business as you work towards financial independence? These and many other activities will put stress on your business and if you are starting from a position of poor business health, then the results will not be as positive and you need them to be.
While you can lace up a pair of shoes, head out your door and see how you fare on a test run to get a gage of your competence to complete the marathon, you can’t necessarily attempt to transition your business to see how it will respond to the stress. You will need to assess your business health up front. Fortunately, this can be done.
How healthy is your business? In this PAG discussion, take some time to address your business and try to assess the health of your business. What metrics will you use? What areas will you focus on? There are no doubt various dynamics in your business that all work together in some way to determine what your business health is – some positive and some negative. It is important not to ignore the warts but also to not allow these to take focus away from all of the positive aspects of your business.
In taking a step back to make an assessment of your business, be sure to spend some time on financial as well as non-financial matters. Think about your people, your customers and your opportunities. What is in place that will facilitate you accomplishing your vision and what areas need more attention? For your financial assessment, try to think at this point in terms of how you feel financially right now. Is it difficult to pay your bills on time? Are you awake at night worrying about your business? Are you looking for ways to invest excess cash? The small details of the financial assessment are more difficult to pinpoint; but that’s OK.
We have developed a proprietary tool that has proven to be very useful in both the assessment of business health and in planning for the future of a business. Our Business Health ProfileTM is an algorithm that will utilize your financial information and provide you with a score on a scale of 1 to 5. Each score on the dial is associated with a different level of business health and the amount of stress a business can withstand is impacted accordingly.
There are times when your business will have few options and you will need to focus on getting things in order to work up to a required level of business health. Other businesses will have sufficient health to pursue their vision and accomplish various things – these are the marathoners.
Whether training for a marathon or preparing your business to achieve your goals, you must start from a position of sufficient health. Accomplishing either task will not be without stress. But if you are healthy enough, you can keep running through the blisters.