Your Business Health Check: 20 Tips And 10 Reasons You Should Do It
Bear with me for a moment and think of your business as being a patient sitting under the watchful eyes of an investor.
Will he grant your business a full bill of health, being content that there are no major problems?
Or will he be concerned that there are signs of sickness inherent within?
Will he suggest improvements going forward, or would they call the emergency services, declaring that your business is in urgent need of specialist care?
Forgive my analogy, but if you are working in the healthcare business, then you can probably appreciate what I am trying to say.
By healthy, I mean the number of customers you have in your books. I am thinking of the profits you may or may not be making.
And I am thinking about the state of your business when compared to your nearest business rivals. Do you need a proverbial shot in the arm to boost your chances of survivability or are you the perfect specimen of good health?
Health they say is wealth!
It is the most important asset you have either as a person or as a business. Doctors advise us to do a check-up regularly, to ensure optimum health and peak performance.
Your business is a living organism and it should be taken care of properly. Most small and medium business owners neglect the health aspect of their business because they are oftentimes, primarily concerned about the customers and employees while neglecting the business itself.
When you work ‘within’ your business, it is just like eating food but when you work ‘on’ your business, it is synonymous to taking prescribed medication.
A business health check is simply an ample appraisal of the vital elements of your business. Even though we sometimes do a little check-up on ourselves, we often consult medical experts.
If your business isn’t as well as it should be, especially if it’s in a precarious life or death situation, then you need to find ways to improve the health of your business.
Okay, that’s the end of our health-related puns. 😀
Here are some of the things you might need to do to save your business.
#1: Revisit your vision statement
The vision you have for your business is the main driver of the business. How you address your business’s mission statement will determine your business future.
What are the things you need to make your goals, objective, mission, and vision come to pass?
This involves two parts. Part one deals with the diagnosis – the identification and analysis of elements in your business. This is the easier part of the health check. The second part deals with the solution and implementation. There is no fine line demarcating the two parts, they are interwoven.
#2. Know your business type
- What type of business do you run?
- Is it a sole proprietorship, Public Limited Company or limited liability company?
- Is your business strictly for-profit or it does it have a non-profit part like an NGO?
You might start as a sole proprietor but you need not stay that way, once you grow, it is time to change your status.
#3. Attract new people
Businesses live or die depending on the customers they acquire. If you are attracting more patients or clients to your healthcare services, then you have a chance to grow.
If you aren’t attracting new people to your business, or if you are struggling to keep those people that you do have, then your business will start to suffer.
In any case, you must always look for ways to improve the patients’ experience. You can start by giving them an excellent first impression. This begins with your business website.
Does your site have evidence of the validity of your practice, perhaps with staff accreditations? And on a purely aesthetic and functional level, do your visitors enjoy the look and feel of your website?
Does it convey the services you provide accurately? Would your patients find the contact information they need?
Moving offline, think about your visitors when they enter your practice. Are there enough signs pointing them to the relevant areas of your business?
Is the waiting room warm and welcoming? Are your reception staff polite and helpful? The better the impression your visitors get of your business, both online and off, might determine whether or not they choose your business.
#4. Handle external factors & operations strategically
What’s the plan for sourcing, production and managing goods and services?
How do you ensure that your customers are satisfied with the price of your products and services while the quality of your goods and services is improved or maintained?
- What strategies have been putting in place for the attainment of your business goals and vision?
- What are the structures that provide support for your strategies to accomplish your task?
- What’s your business culture?
- How do you organize your resources (capital, human and material)?
- What are the rules of engagement in your business?
- How does your business handle external factors?
External factors are factors that are beyond your control. How do you deal with these factors such as competitors, changes in market value, technology, environmental conditions and industrial actions?
#5. Keep records
- How do you manage your records?
- How far back can you trace your history – customers, employee, deeds and other document files?
- What are the factors responsible for your profit and how do you plan to increase your profit margin?
Having record ensures you can track where you are coming from so you can make references.
Can you check a transaction that occurred some few months ago with accuracy? Are your finances accurately recorded so that it can be retrieved easily? Some troubles can be avoided when you keep proper records of your finances.
#6. Check your expenses
A health check on expenses reveals to you how well or bad you spend. It also helps you plan for the future.
- What are the things you spend more on with little return?
- Are there expenses that take up the majority of your cash flow?
- What causes an increase in your expenditure?
You should note that not all increment is bad. It might be because of your growth or expansion. As the business grows, expenditure grows too but your income should grow with it.
To save on your expenditure, you could look out on best deals, discounts or other actions than can save you money. Be cautious, not all cheap things will save you money in the long run. Find innovative ways to cut costs without reducing the quality of the business product.
#7. Check your marketing strategies
You cannot shy away from marketing.
- How do you market your products and services?
- What ways do you promote your business?
- How do you reach your prospective customers and how do you make them stay?
- What is your plan to grow your current customers and serve them better?
#8. Have a suitable human capital
- How do you locate and acquire the required personnel for your business?
- Are your current employees sufficient to carry out all the services your business requires?
- Can they serve all the customers well without pressure or stress?
- What’s your plan for human capital development?
#9. Analyse your finances
Finance is the major way to know how a business is faring. Analysing the financial aspect of your business is bound to call a couple of things to your attention. Your total income before any expenditure is used as a marker for this check.
Examine the cash flow pattern of your business.
- How do you make sure that the business’s cash flow can take care of the business’s needs as well as the owner(s)?
- What is your plan for handling the accounting and other financial information to ensure you are performing at an optimum level?
- Are you happy with your revenue?
- Do you have a target for a particular period in time?
- If no, you should have one right away. If you do have a revenue target, say weekly, monthly, quarterly or even yearly; did you meet your last revenue target or you exceeded it?
- If you didn’t meet it, how do you plan to do better?
- If you exceeded the target, how can you replicate a similar occurrence and even exceed it further?
#10. Stabilize your sources
Check your sources of revenue and assess them. Multiple sources of income are great for individuals and businesses alike. One key thing is to keep your focus right; do not major on the minor while you minor on the major.
Thoroughly check and identify your greatest potential revenue source. It might not be the highest paying currently but it must have the potential for growth. Then find out how to grow that source or those sources? Mind you, it might mean dropping some income source options, but it’ll pay off in the long run.
#11. Receive your payments in time
All goods delivered and services rendered on credit are receivables.
- How do you manage and collect your business receivables?
- Do you always follow through your collections?
You need to be very keen about your receivables and ensure all receivables are collected in due time to reduce loss.
- What is your collection policy for overdue accounts?
- Is there any written agreement or a legally binding document?
Set a budget in financial decisions. A budget is simply financial planning and just as with any other plan, there might be discrepancies between your plan and the actual result.
- What is your budget?
- Are you operating within your budget or without?
As you make a comparison between your actual result and your budget, note the discrepancies and how to rectify them.
#12. Classify your customers
How do customers affect your revenue?
All customers are not the same or equal. Some customers are good for your business and revenue generation (from experience and interaction with the customers).
Some are not so good for your revenue. You must highlight how each customer or group of customers affects your income and expansion. Ask questions like:
- Is this customer dealings hassle-free?
- Are the sales worth the time with this customer?
You should note that not all paying customers are good for your business in the long run. Do you ask for referrals or is it freely done by your customers?
#13. Ask yourself some questions
All in all, a Business health check targets the technique, scheme, and information required to organize everything; from the procedure required to provide support, to the detection and correction of abnormalities and to the sustained growth that leads to the peak performance of the business.
This is a simple business health check worksheet with a yes or no answer.
- Do you have a high stock turnover?
- Do you have low staff turnover?
- Are your expenses lower than your revenue?
- Is your financial record up to date?
- Do you fall short of your expenditure budget?
- Do you have a smooth relationship between Director and shareholders?
- Is your data management up to date?
- Are your purchases pattern regular?
- Do you pay low interest on your loans?
- Do you exceed your revenue budget?
- Are your business assets state-of-the-art?
- Do you gain more customers than your competitors?
- Are you ahead with pay as you earn (PAYE)?
- Do you pay back loans promptly?
- Are your business assets more than liabilities?
You must be sincere with your answers. You will know the performance of your business when you answer these questions truthfully. If you have more yes, congrats! You are doing great but you must work on those questions you answered no. In case you have more “no” than “yes”, you need to intensify your efforts in restoring your business to a healthy phase.
#14. Revisit your business plan
As with any business, a business plan must always be your place to start. You should have created one already, of course.
Assuming you do have one in place, however, give it a checkup (darn it, another pun) and ask yourself the following questions.
- Am I meeting my financial targets?
- Have I reached the demographics I wanted to target?
- Has my business grown in the ways that I hoped it would?
If your business isn’t reaching its financial goals, then you might need to make cutbacks in your business.
You might want to make an effort with your marketing too, or you might want to find ways to generate more income, perhaps by adding another service to your practice. These suggestions might also cover the other questions raised earlier.
By taking stock of where your business is now, in relation to where it was and where you want it to be, you will then be able to move on. This might include adjusting your business goals or creating new ones to accommodate any changes you want to make in the future.
#15. Ensure customers can make an appointment with you
How easy is it for your customers to make an appointment with you?
The easier it is, the better the experience. So, you might want to give them the opportunity to book an appointment through your website.
If you’re in the medical field, you might want to outsource to a healthcare call centre if you don’t have enough personnel to manage your practice phone calls.
Then consider the waiting times for your patients or customers. If the only appointments available are weeks away, then they might turn tail and use a more efficient business.
As a medic, you might want to increase your opening hours, take on more staff, or use one of these healthcare appointment solutions to improve the service you give to your patients.
The happier your customers are, the more likely they are to return to you in the future. You can also use them within your marketing, perhaps by encouraging them to refer other people to your business, and by asking them to write testimonials for your website.
You might also take out TV and radio ads, giving voice to some happy customers willing to showcase your business (and give themselves five minutes of fame).
Once positive word gets around about your practice, you can almost guarantee growth within your business.
#16: Concentrate on staff training
Of course, you should already have trained staff working for you. Your business would quickly falter if you hired medical staff without the relevant training and qualifications to care for your patients, for example.
But beyond your staff’s core competencies, you should make training an on-going affair. This includes training your team in new technologies and better ways of working within their roles.
You might send them on training courses or book them onto e-learning courses that can be completed at home.
You might also find mentors within your current personnel, asking your lab technicians to show new hires how to safely use a vaccine fridge, or getting the experienced ones to shadow those who have just started within your practice.
Role-play scenarios could be a part of your staff training sessions, perhaps in terms of customer relations when working with your reception staff, and high-risk situations with your staff when dealing with certain illnesses.
The better trained your staff are, the better your business will be, and that can only be good news for your reputation.
#17: Find ways to innovate
On a health-related level, new innovations in healthcare will better the lives of your patients.
On a professional level, the use of new technology will improve the work that you and your employees do.
And on a purely business-related level, when you start to use the latest innovations within your business, the more elevated your business will be over your nearest competitors.
To find out about the latest innovations in technology, you need to do your research.
This includes reading the relevant trade journals pertaining to your industry, visiting industry conferences, and attending trade shows.
If you’re into the medical field, you can also learn a lot by reading healthcare articles online.
You will then be better equipped to future-proof your business by investing in the latest tech and practices inherent within your industry, meaning that your survivability is all but guaranteed.
Of course, you don’t always need to rely on the innovations of others. You might have ideas of your own, and your employees might have something to offer too.
Think about how you could innovate then, and meet with your employees to hear their ideas.
We aren’t talking about anything major; you don’t necessarily need to invent an astonishing piece of tech to revolutionise the face of your business health.
But you might come up with a way to attract new customers that will give you a step ahead.
#18: Find ways to improve your reputation
You will improve your reputation by following the ideas on this list, but there is always more you can do.
If you notice any bad reviews or comments about your business on medical reviews sites, forums, or on social media, take note of them. Make improvements to your business, and respond accordingly to those who have given vent to their feelings.
You should also use feedback surveys within your business, perhaps through your website or forms on your reception desk, asking customers to fill them out. Then take actions based on their comments.
When your customers notice that you are making an effort, you will improve your reputation.
#19 Get feedback
Another way to improve your reputation is to invite the media to your business. Give them the opportunity to share the good work you are doing.
You can do as suggested earlier by adding patients’ testimonials to your website. Alternatively, you could achieve the same with text or video messages from your employees.
You might also give a share of your business profits to charity. That, alongside the care you are showing your patients, will give your reputation a solid boost.
#20: Expand your business
You can do this in two number of ways.
For one, you might merge with another business to strengthen your position in the marketplace. This will give you access to new patients, employees, and increased services within your business.
You might also find ways to grow without merging with another business, such as taking on more staff so you can add new services to your practice, or by moving to another location and business premises to extend the reach of your business.
By finding ways to expand your business, you will increase the number of people who use your services. This will then increase your profit margin.
Reasons a business health check is a must for your business!
You might ask why?
Why are all these checks important to my business? Well, here are a few reasons.
- First, it is essential for any business that wants to grow, and I believe your business is one of them. To ensure your business grows all around, you will need a good health check to ascertain the current state of your business and what you can do to take your business to the next level.
- A business health check highlights your strengths and your weaknesses. So it not only addresses how you can improve or sustain your strengths but also shows you how to control or eliminate your weaknesses.
- As it addresses strengths and weaknesses, it also reveals opportunities and threats. It will show you the opportunities you can and should have exploited, and the threats and risks you can and should avoid.
- It gives you an external and better perspective of your business. How you perceive yourself and your business may be stereotypical but when an external view comes in, it will reveal things you ignored or might not have noticed.
- It will also show you the financial status of your business. As part of the outcome of the health check, you will know where your business is flourishing and where it is not. The financial issues you have will be revealed so you can plan to work your way out.
- An extension of showing your financial status shows your business profitability. It will identify the factors affecting your profit margins. There are silent but salient factors that affect the profit margins that you might not notice, this health check will reveal them to you.
- Your business health check will make known your creditworthiness from your financial status. This will let you and other concerned parties know your access to credit.
- It aids you in sustaining your customers and promotes your sales and marketing strategy.
- It helps you to manage your human resources and improve the organizational culture of your business.
- A business health check will help you know the class your business belongs to.
These are but a few of the advantages, the list is inexhaustible.
A business health check is an exercise that is well worth your time and effort. The little tweaks and changes you carry out during a business health check has an amazing compound effect on the overall health of your business.
As a professional medical check-up is done by a doctor – an expert, so should a business health check be conducted by an external, knowledgeable person. This avails you the opportunity to see your business from a different perspective.
The external expert is not as involved in your business as you are and so, can take note of things you’ll likely overlook.
The appraisal, just like the one done to the human body, must start with yourself, then it should radiate out into other essential parts of the business. It must be analytic and problem-solving in nature to point out your business strengths, weaknesses and ways to improve.
An external, independent consultant, expert, coach or adviser can proffer solutions in an ideal environment where the business does not have influence.
With his experience, he will put you through all the parts of the health check.
The expert will give you the support needed to make the appraisal and plans to put the changes into action.
You as the business owner, still reserve the right to accept, discard or alter it with accordance to your style of implementation so that clarity of purpose and vision is not tampered with.
As with any business, you need to do all you can to survive in the face of constant competitions.
Now you know what a business health check is and how it is performed. I have suggested a few ideas for you here, and I hope you found them useful.
A healthy business will bring growth and prosper the business owner, employees, customers and other stakeholders as rightly said.
If you have any other pieces of advice, be sure to share your tips.
I wish your business the very best of health!