Healthy Business, Healthy You

Getting a Healthy Business is Like getting a Healthy You

A healthy business is what we 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 our personal health one objective might be losing weight. For business health, objectives could be improving profitability and liquidity (cash availability).

Secondly, Measures:

We need to think what our measures will be and do we use them. For losing weight, measures might be actual weight and BMI index. In our business, it could monitoring our gross margins, money in our bank account. When choosing our measures it is important to look at them as targets that we are aiming to meet. For our 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:

We need to decide what our initiatives and plans will be, to achieve that what we have set as targets. For personal health it could be doing more cardio exercise, changing and modifying diet. In our business it could be looking at things like cutting down on waste, improving efficiency, and improving or customer collection of money owed.

Fourthly, Monitoring:

We need to keep an eye on what’s going on. So in our 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 our management accounts to review Gross Margins, seeing how long people actually take to pay us by reviewing our 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 we are seeing.

For personal health, if the weight and BMI measures aren’t what we want, then we would review our eating and exercise regime, if needed we can eat less chocolate and increase intensity of exercise. For business health, we 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.

Pro Active Resolutions- Your Accounting Solution and Business Friend

Share this Post