Having a healthy business is like having a healthy you
A healthy business is what we all strive for. This blog will outline a five point approach for getting and improving business health, and how the approach has a lot in common with getting and improving personal health.
Firstly, objectives:
It’s important to have objectives, for improving your personal health one objective might be losing weight. For business health, objectives could be improving profitability and liquidity (cash availability).
Secondly, measures:
You need to think what your measures will be and do you use them. For losing weight, measures might be actual weight and BMI index. In our business, it could monitoring your gross margins, money in our bank account. When choosing your measures it is important to look at them as targets that you are aiming to meet. For your personal health it could a 10 pound weight reduction, BMI of 24; for business health it could be a gross margin of x%, and cash in the bank to meet so many months’ future commitments.
Thirdly, initiatives:
You need to decide what your initiatives and plans will be, to achieve that what you have set as targets. For personal health it could be doing more cardio exercise, changing and modifying diet. In your business it could be looking at things like cutting down on waste, improving efficiency, and improving or customer collection of money owed.
Fourthly, monitoring:
You need to keep an eye on what’s going on. So in your personal health scenario monitoring would be going on weighing scales, say once a week, and looking at our weight and BMI index. In improving business health it would be checking your management accounts to review Gross Margins, seeing how long people actually take to pay you by reviewing your aged receivables (debtors) collection report.
Fifthly, action:
The first four points outlined above are important in achieving business and personal health, the most vital part though is action, doing something with the information you are seeing.
For personal health, if the weight and BMI measures aren’t what you want, then you would review your eating and exercise regime, if needed you can eat less chocolate and increase intensity of exercise. For business health, you could look at changing the product mix, improve how quickly invoices are issued to customers, and the speed of communication and engagement with customers to help improve customer collection.
Blending all these five points together will help get and improve business health, and all personal health.
If you would like us to help you improve your business health, then please contact us. We can have a cup of (virtual or real) coffee, biscuit and a chat as to how we can help.
Get in touch with us to find out how to get a healthy business. For more business and finance , news, advice and tips, don’t forget to watch our weekly broadcasts, listen to our weekly podcast I Hate Numbers.