7 Steps for a Successful Business Tune-Up
As summer turns to fall, small business owners start to think about finishing the year on a strong note while gearing up to hit the ground running in 2015. A misstep or two at this juncture can really kill the momentum of a growing company. In order to ensure a smooth transition, take time now to review your business from all angles to see where improvements may be necessary.
Compare this process to a regular tune-up for your car. You want to make sure there aren’t any leaks, the tire pressure is good, your oil doesn’t need to be replaced and that your car will take you from where you are now to where you want to go. Using this analogy, here’s a 7-step checklist for tuning up your business:
- Product/Service – Review everything associated with your product or service. Is it priced accordingly? How were sales this year? Did you meet or exceed expectations so far? Are there any scheduled updates or newer versions? If your business is the car itself, your products and services are the engine. Get feedback on how you can improve your products and services from employees, partners, vendors and customers.
- Cash Flow – Cash flow is the fuel for your business. Without it, you are stuck on the side of the road and going nowhere. Are there any signs of problems with cash flow? In the last six months, did you have any issues with paying bills or receivables? Don’t wait for disaster to strike (e.g. a customer who owes you money goes out of business or several of your customers are affected by a natural disaster and can’t pay you for an extended period of time). Someone on your team needs to be the squeaky wheel in the event you aren’t getting paid in a timely manner by your customers.
- Customers – Are you growing your base of customers or are you barely replacing lost business with new customers? Does one customer represent a large percentage of your business (more than 20-25%)? If so, how is your relationship with that customer? Customers or clients represent the gas pump at the station. Their revenue is responsible for the gas in your car. It’s imperative to know your customers (and your relationship with them) inside and out.
- Marketplace – What’s happening in your industry or category of business? Is it growing or declining? What innovative products or services are being introduced to the marketplace? Sticking with the car analogy, the marketplace represents the weather and road conditions. You need to watch out for bad weather, potholes and detours along the way. Use your business plan as a GPS system to find the most efficient route from where you are now to where you want to go.
- Employees – Your employees are your pit crew. They maintain your car and keep it running and in good condition. They are also passengers and sometimes drivers. Do you have the best team in place? Are they able to handle whatever weather conditions, potholes and detours come your way? In some cases, all it takes is one person who doesn’t know what they are doing to really mess up a good business.
- Competition – How much do you know about your competition? If you were to enter your car into a road race, the other businesses in your category would be your competitors. Ask yourself these questions–how fast are their cars? Who’s driving those? Who do they have in their pit crews? Too many small business owners don’t know a thing about their competition. If that’s you, take time to figure out who is trying to take business away from you and who you need to beat in order to win new business.
- You – The final step in tuning up your business is to examine yourself. You are the driver. Are you prepared to drive your business to the destination you’ve selected as your goal? Do you have the tools, resources, right team and enough fuel to get you there? Can you beat the other drivers to the finish line?
Most business owners will actively review and follow 3-4 of the seven steps listed above. They then wonder why their businesses break down, run out of fuel and never make it to the finish line. In order to be successful, don’t cut corners and skip steps. Make time (that you say you don’t have) and tune up your business so that you are running it on all cylinders. Best of luck!
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