By Ronald A. Feher
“You’re in pretty good shape for the shape you are in.” – Dr. Seuss
How do you know if you’re healthy? You can’t really tell by how you look or feel. There may be things going on in your body that you couldn’t know about on your own. So how do you know?
You schedule regular exams and preventive procedures. You take medication when necessary. And, you keep a wary eye out for glaring symptoms that something might be wrong, such as a pain you didn’t have before, changes in your lifestyle and/or just a gut feeling that something is wrong. You keep watch, address things when they come up, and you do the best you can to live a healthy lifestyle. If you do that, outside of something out of the ordinary, you’ll live a long and healthy life.
It’s no different when you’re trying to gauge the health of your business. How do you know your company is healthy? Actually, you should follow the same general rules that you do for yourself. Your company needs regular reviews and preventive procedures. Your company needs the occasional medication to bring things back to normal. And most importantly, your company needs someone to identify and recognize glaring symptoms for things outside of the ordinary that could lead to bigger problems if unattended.
Here are 10 signs that your company is healthy. You have …
- A value proposition of what makes your business unique and valuable to potential customers.
- A business strategy, with corporate goals for the current year, an assurance that everyone in your company understands the strategy, a set of balanced metrics to measure the strategy, and the confidence that you have the right team in place to implement the strategy.
- Key financial indicators for your business, yearly goals aimed at cutting costs, knowledge of how and why revenue has grown or shrunk over the past three years, and knowledge of how much it costs to produce each product or service within your company.
- Specific plans for generating sales leads, metrics to track the effectiveness of those leads, a CRM for tracking leads and clients, and knowledge of which products/services produce the most and least revenue.
- Systems in place to track the effectiveness of your lead generation activities, and a sales plan for the current year.
- Customer retention plans for the current year, a process in place to stay in touch with current and past customers, and a customer feedback process.
- Team and individual goals that support the overall business strategy, and a mechanism for tracking employee satisfaction.
- A marketing plan for the current year, and a mechanism for tracking your marketing efforts.
- Key Performance Indicators (KPIs) for your business, knowledge of your competitors and what they do better than you, and knowledge of your ideal customer.
- Documented processes and procedures, and a yearly audit of hardware, software, vendors, and website content.
Businesses are like people. In order to be healthy, you have to work at it. In order to keep a business healthy, you have to work at it. Even if you have a unique product or service, the window of opportunity for that to sustain your company is short. If you don’t continue to improve; or continue to innovate; or continue to offer new products or services; or continue to offer them faster, better, or cheaper than your competition, you will soon find yourself out of business.
There are many companies out there that are making money in spite of themselves. They have a product or service that everyone wants and regardless of how well that product or service is delivered, people keep buying it. This however, will not last forever. There will be competition and someone will be able to offer the same product at a cheaper price or with better or faster service. If your goal is to make as much money as you can while the window of opportunity is open and then get out of the business, then do nothing. Ignore the list of ten.
But, if you intend to build the business, sustain the business, and stay in business, then pay attention to the list and take seriously the content within. There is more to the health of a business than just its finances. There is strategy, sales, marketing, processes, procedures, employees, customer care, vendors, and systems and every one of them will have a positive or negative effect on your finances. If you are simply measuring the health of your business by revenue or even profit, then you are missing all those areas which affect the longevity of your business. And isn’t how long your business can thrive and how long your business can survive important? Isn’t that a testament to the overall health of your company?
How do you know if your business is healthy? The previous list can be used as an EKG for the health of your business. It can help to measure your business heartbeat and your business rhythm. Ignore those things for a while and the rhythm becomes erratic. Ignore them totally and your business will flat line. And just like your own health, if you ignore the symptoms, they will not simply go away, you will.
Ron Feher has over 35 years of management experience in working in large, mid-size, and small companies and possesses a breadth and depth of experience in a variety of disciplines. As Owner and Chief Improvement Officer of WhiteRock Business Solutions, Ron concentrates on a company’s most valued asset, their people. As COO for Vision Resourcing Group, Ron develops and presents products and services to support career and vocational training for adults and students. As a Career Coach for Lee Hecht Harrison, Ron supports and coaches outplaced employees from various industries and disciplines. You can reach Ron at rfeher@whiterockbusiness.net or 949-466-0943.