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So How's Your Business Doing? Ready to Find Out?
So How's Your Business Doing? Ready to Find Out?
A business needs clarity to survive. Without clarity about your goals and your mission, your business could die. That's what makes an assessment so vital to the future of your company.
When New York City’s former mayor, the flamboyant Ed Koch, died this past February, I couldn’t help but remember the famous words he uttered so often …”So, how am I doing?” It reminded me of how vital it is to know how you’re doing and where you stand at any given moment, especially in business.
Taking a business assessment can be an eye-opener, giving you a clear view of where you are currently and where you want your business to be in the future.
Five Key Assessment Areas
Whether you’re selling natural food or manufacturing plastic parts, there are commonalities that all businesses share. Below are five such key areas that you will want to consider before taking such a business assessment:
1. Know Your Purpose
This is important because without knowing your purpose, you are a wandering generality. According to the 2013 State of The Business Owner (SOBO) Report, which surveyed 1,700 business owners, one of the top three reasons why entrepreneurs start a business is passion (the other two are independence and pursuing new opportunities). It is that passion that translates into the initial purpose and vision behind your business. But in our experience, most DO NOT have clear purpose now.
Almost all business plans live in a file somewhere. Is your mission statement relevant? Where have you veered off course? A quick assessment gives you an opportunity to reflect on what you set out to accomplish and determine whether or not you have stuck to your founding principles.
2. Show Yourself the Money
It’s really about producing a profit. You need to get a “pay off” indicator because it will highlight what you need to do to make sure that the business really pays off. Are there enough profits to cover expenses, pay yourself and pay employees while also having some funds left over for growth and possibly expansion? Learn to spot your holes.
Day to day activities typically keep business owners from sitting down and reviewing their financials, at least until the accountant drops by. However, a quick business assessment provides the perfect opportunity to see the hot spots in your income and expenses, as well as the peaks and valleys you encounter in cash flow throughout a given year. Discover the untapped revenue streams. Are there unnecessary expenses? A quick look will help you make necessary adjustments which can increase your bottom line and open the door to planning for future growth.
3. Is Everybody Happy
Dwight Eisenhower once said, “Motivation is the art of getting people to do what you want them to do because they want to do it."
Study after study has shown that highly motivated teams that take pride in what they do are far more productive than teams that are watching the clock.
After an assessment, you can check in with your team. Go armed and you’ll learn how they really feel about their jobs and what could make them better. Are they comfortable in the work environment? Do they feel that they are fairly compensated? Are they willing to go the extra mile? Understanding the wants, needs, goals and factors that motivate your tam can help you find practical ways to make everyone happy.
4. Meet Your Ideal Customer
Social media platforms are now tracking visitor’s interests, friends, engagement and other activities to help marketers hone in on their ideal target audience. Are you using surveys or focus groups to determine who your buying audience really is? If not, check it out.
Your assessment should include determining how closely you have zeroed in on your target audience. Research is vital in an age of discerning customers and savvy shoppers who know what they want and how much they are willing to spend. Do you know the likes and interests of your target audience? Their age range? Income level? Marital status? Shoe size? You will want to know as much as possible about your customers to target your marketing and sales strategies appropriately, especially in a competitive marketplace. How much do you know? Can you learn more?
5. Scalability… and Freedom
The scalability of a business is its potential for growth. Who doesn’t want to see their business expand and flourish? Assessing your business will let you look at growth possibilities based on your finances, resources and the needs and wants of your demographic fan base.
But there’s one more important aspect to growth that you will want to determine. In the course of assessing growth you’ll also want to look at freedom, which means the freedom that you have as an entrepreneur to walk away and have a business that can sustain and even grow without you.
In the classic 1946 Marx Brothers movie, A Night in Casablanca, Harpo Marx stands leaning against a building. A military officer asks him, “What are you doing, holding up the building!?” Harpo nods yes, but the man yanks him away from the building, which immediately collapses.