Why you need to conduct a small business health check

When you’re caught in the day-to-day whirlwind of owning a small business, you can overlook the importance of monitoring your business’ health.

When you get a personal health check, your doctor assesses your vital signs to make sure you’re functioning well, and that’s the same reason why you need to check your business’ health.

Take some time to step away from your operational responsibilities to evaluate these important aspects of your small business so you can improve your business’ health.

Assess the strength of your team

When was the last time you really considered what your team members’ skills are?

You could be under-utilising some talents of people in your team.

Consider re-structuring or streamlining roles to take advantage of your team member’s knowledge as well as to give them more engaging, challenging work.

On the flip side, analysing your team could reveal a weakness.

You can find this by conducting a SWOT analysis (strengths, weakness, opportunities, threats) or even creating a swimlane diagram of your customer service process, showing the responsibilities of each team member.
SWOT analysis: Strength, Weaknesses, Opportunities, Threats

A SWOT analysis can help you identify how to best utilise your team’s skills and improve upon their weaknesses. 

Improving upon weaknesses in your team might be as simple as providing training, or you might need to hire a new team member to fill that service gap.

Either way, it will set your team up to work more productively and help strengthen your business.

Measure your current financial health and set goals to improve it

There are so many ways you can assess the health of your business using your financial data.

According to Queensland Government’s Business Portal, frequently used measures include:
• Profitability (gross profit and net profit margin ratios);
• Cash flow and liquidity (working capital and short-to-medium-term solvency);
• Risk and return on current and potential investments;
• Stock turnover and sales.

Understanding these elements of your business, which impact upon your business’ financial health, will help you identify areas to improve as well as opportunities to save or grow capital.

Once you understand your current position, you can set financial business goals to make yourself and your team more accountable for the business’ growth potential.

You can devise sound strategies about how you might improve your business’ health through increased cash flow, decreased debt, or investing wisely.

Attracting and retaining customers

Do you pay attention to who your customers are, what they’re buying from your business, and how often they’re buying?

According to Business Victoria, “Your customers should be the driver behind every marketing decision in your business”.

By collection information about your customers – particularly your most loyal customers – you can better understand how to improve the product or service you’re offering them.

These are some of the attributes of your customers, which you could analyse:
• Personal demographics such as age, suburb location, or even interests;
• How often a particular customer or similar type of customers buys a product or service;
• How often your customers buy your most popular product or service;
• How well you meet (or exceed) your customer’s service expectations (gauged through feedback surveys).

From this analysis, you can brainstorm marketing and advertising opportunities to engage your customers, find opportunities to attract new customers, and learn how to improve upon your service processes.

It can also help you to identify whether you need to minimise any negative customer behaviour, such as late payments for their product or service.

As data agency Rosetta proved through its customer engagement study, taking steps to improve customer service could do wonders to improve the health of a business.

The reports found “engaged consumers buy 90 per cent more frequently, spend 60 per cent more per transaction and are five times more likely to indicate it is the only brand they would purchase in the future.

“All of these factors lead to engaged customers delivering three times the value to the brand over the course of a year.”