Do you own and operate a healthy business? Taking proactive steps to avoid unexpected and costly problems in the future is considered good business planning. That’s why every small business owner should consider a hassle free annual business checkup. Here’s a quick look at 10 ways to become more efficient, effective, and profitable in business.
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1. Review your company’s vision and mission statement
At the inception of your business, you may have heard other successful entrepreneurs and industry pundits discuss the importance of strategic planning. A key component of planning involves the creation of your company’s mission statement – the roadmap for your entrepreneurship travels. Your mission statement, propelled by your vision, articulates the road ahead – the big picture that informs the details.
As each year comes to a close, it’s important to revisit your vision and mission statement for a couple of reasons. First, you can reflect on how your business has delivered on your mission to date. Secondly, you can course-correct for the year ahead. For many startups, where you start is not always indicative of where you’ll go. This “living” document can benefit from fresh insights you’ve learned along the way. So, if you need to transition from “confused entrepreneur” to clarity it’s time to revisit your mission.
2. Re-evaluate your revenue model
How do you monetize your products and services? More importantly, is your revenue model effectively driving bottom-line growth? One of the quickest ways to prepare your company for growth is to evaluate current revenue streams and test new ones (i.e., product or service sales, ad revenue, subscriptions, freemium, flash sales, commissions, licensing, affiliate, etc.).
Your revenue model will constantly evolve. As David Ehrenberg, founder and CEO of Early Growth Financial Services, explains, “The overall architecture of your approach may not change much over time, but you should continually be refining your model and reforecasting… Just keep an open mind and accept the fact that you may need to pivot your revenue model at some point if it’s not working to support your business.”
3. Leverage a workplace collaboration tool
Employee engagement statistics suggest, “67% [of employees] believe there are colleagues who can help them do their job better,” while “only 25% frequently go outside their department to seek or share knowledge.” Successful workplace collaboration can deliver tremendous benefits in the form of improved company culture, employee retention, productivity and more.
According to a Steelcase Threesixty Collaboration whitepaper, “Fundamentally, collaboration is about working with one or more people to achieve a goal, such as collectively creating content, brainstorming, etc. Ideally, all perspectives are equally respected, brought together to leverage the group’s shared mind.”
One of the quickest ways to improve collective performance is to leverage technology. Consider improving employee collaboration in five key areas: online meetings, document sharing, brainstorming, task management and file storage. Online collaboration tools like Google Apps, GoVisually, Asana, Kona, Smartsheet, TeamBox, Conceptboard and Bloomfire can connect teams and ideas – yielding an inspired workplace for all.
4. Document internal systems and processes
How effective are company operations? Did you know that a lack of standardized systems creates knowledge-transfer inefficiencies? Moreover, inefficiencies trickle down … requiring more equipment and people to meet demands. Meanwhile, the time and productivity lost due to inefficient processes can reach deep into your pockets and negatively impact employee morale.
Documenting key processes will help close information gaps, provide insight into bottlenecks, and reveal hidden opportunities to help your team work smarter. More importantly, an operational roadmap can contribute to “big picture” thinking. You may be surprised at how many people on your team don’t fully understand the “big picture” and how their contributions impact it. Use tools like HelpNDoc and Lucid Charts to write complete help files, manuals, and diagram data flow.
5. Check in on supplier and vendor relationships
Supplier relationships are critical to your business. Prepare for the year ahead by checking in with vendors to assess risks and changes that could impact operations. For example, does your supplier anticipate price increases? If so, consider sharing forecasts to lock in more favorable rates.
Does your supplier have plans to discontinue a product? Ask before it is too late, in order to preclude increased lead times. Has your supplier instituted a change in process or procedure? If so, it could impact your company by requiring more administrative man hours, leading to increased costs. Manage these types of external risks with suppliers by anticipating, and asking, the right questions ahead of time.
6. Review your financial management system
Do you have a financial plan and budget? Is there a solid system in place to tackle accounting and financial reporting, budgeting, accounts receivable, and daily financial tasks? Will your financing situation change? How will you better manage your company’s daily cash flow and bookkeeping?
These are important questions to ask before heading into a new year. Start by reviewing your current accounting system. Is it time for a more robust small business accounting software? Next, observe how you collect bills and pay employees, independent contractors, suppliers and more. If you previously experienced cash flow problems, seek to improve collections policies, invoice timing and automate communication. If you are handling things in-house, it may be time to outsource some (or all) of your financial management activities.
7. Purchase small business insurance
Most small business owners don’t think twice about business insurance – until they desperately need it. What happens when an employee slips and falls, holding your company accountable for those newly polished floors?
Could an unexpected building fire close your doors indefinitely? If you aren’t managing external risks, now is the time to start. Simply put, business insurance safeguards your business. Look for tailored insurance policies because potential business threats are lurking in every corner.
According to Legal Zoom writer Michelle Fabio, every business owner needs insurance because “absolutely anyone can be sued, judgments can be collected through wage garnishments and bank account seizures, and even corporate veils can be pierced under certain circumstances; indeed, the smaller your business is, the more likely that you can be held personally liable for debts through your personal assets.” So, take proactive strides to protect your employees, customers and assets.
8. Create a business continuity plan
What happens to your business when “life” happens? Interruptions in business will cost you money – potentially lots of it. From family emergencies, sickness, and death to cyber attacks, theft, vandalism and natural disasters – these common scenarios can cause downtime for you and your business.
To manage these situations, plan for the worst (and expect the best) with a business continuity plan (BCP). Essentially your BCP will detail how business will move forward, and with whom, in light of catastrophic events. It costs nothing to prepare and can save you tremendous headaches and money when tragedy hits.
9. Commit to building customer confidence
How often do you share your success with customers? My guess is not often enough! Make a commitment to routinely send out customer feedback and success stories to customers and feature testimonials on external marketing communications.
To do this: create a simple feedback survey to inquire about customer experiences, results, and what they like or dislike about your business. Next, include a link to your survey on your company website, email marketing communications, and email signatures. Ensure customers have a way of sharing their feedback with you and then utilize the data to improve confidence by transparently fixing what is broken and sharing what works.
10. Develop a daily management plan
Many entrepreneurs experience the frustration of working “in” their business instead of “on” their business. One of the best ways to build your business is to create a daily management plan for the year ahead.
Your daily management plan should include preferences for managing productivity, a commitment to improved time management, and overall personal development. Start by considering the structure of each work day and seek ways to optimize your workflow. Become super productive by waking up earlier, dial back on email, social media and meetings, and plan your days in advance.
How are other small businesses wrapping up and looking ahead? Here’s a look of key insights and trends to help your small business thrive in 2014.
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