With the end of the year fast approaching, and 2021 just a few months away, this is the perfect opportunity to dust off your business plan and complete a business health check.
Many business owners will put the completed business plan in a drawer and forget about it until the end of the year when it is time to draw up the next year’s plan. However, a few months prior to the end of the year is the perfect time to check how your business is performing and to check whether you are on track to achieve your business goals.
Even if you do not have a written business plan, you should take some time to ask yourself about how your business is going and consider what you want to achieve in the next few months.
The following questions can help you to complete a full health check on your business plan, just as you would have a doctor give you a complete check up once a year.
Your customers are the heartbeat of your business. Without your customers, you have no business. Are you customers happy with what you are providing? Look at your goals for increasing the customer base in your business plan. If you wanted to increase your customer base by ten per cent in 2020, then you should be close to showing a seven per cent increase by the end of September.
If you are only showing a three per cent increase, you may want to review your goals and review your action plan to increase your marketing or networking activities over the next six months to reach your goal.
Using the analogy of a body, the circulation system draws oxygenated blood from the heart to the rest the organs of the body, making it possible for the organs to work. Your financial system within your business makes it possible for every other department to work. With a good strong cash flow, you can draw the finances from your customers to pay for your operational costs, without relying on borrowing upon interest.
To complete a business health check, you should look at your financial situation as you close your accounts for the financial year. Do you have cash flow drains that are not aiding your business? Are you making enough sales to create your projected business income at this point of the year? Are you reaching your financial targets?
If not, consider why not and what you can change on your action to fix the circulation of funds throughout your business.
Look at your business for marketing and operations goals. Is your business working like it should? Are you on track to meet your operating goals? Have there been situations in the past six months that have caused reductions in operations capacity or performance due to COVID-19 or other reasons?
How can you avoid these situations in the future? Will you meet your operational and marketing goals for the year? If not, what will change in your action plan for the next six months to make sure your business meets the operational goals?
When you complete a business health check, you complete a SWOT statement and a risk analysis plan to mitigate the risks you face in your business. Just as your immune system in your body works to prevent illness, knowing your business’ risks can help you to mitigate those risks.
Take a good look at the current market situation. Have any of your competitors got a new product that will threaten your business? What risks does your business face for the next six months? Did any of the risks you thought threatened your business not happen after all? Are there new risks you must analyse?
Finally, to complete a business health check, you also check on the brain health of your business. Consider your business plan as the brain – this is document which sends out the signals to every other department in the business (as the brain controls the body). Update your action plan for the business. Use this ‘health check’ to review and change your goals and objectives, especially if they were too ambitious. Refine the signals you send out to the rest of the business and you will find it easier to achieve your goals in the next few months.
Completing a health check on your business plan before the end of the year is a wise investment of your time and resources. You can check you are on track for the year and make adjustments if you are not going to meet your goals by the end of 2020 if your business continues on the same path.
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