Ever wonder why the medical profession recommends an annual physical check up and other preventive medical measures to safe guard against sickness / death? It is not a mandatory exercise, but it is something that most medical professionals recommend, because it helps ensure that their patients are healthy, and if there is something wrong, it can be spotted early and remedied as quickly as possible.
When running a business, the same thing has to be done. Every so often, preferably on at least a quarterly basis, but under no circumstances less than once a year, a financial check up needs to be done. This is to ensure that all of the critical business systems are running smoothly and that there are no indications of illness. If the critical systems are not checked, any problems that are present may continue to grow undetected until they become so large that it is very difficult and costly to fix. The problem may even be so damaging as to drive the business into bankruptcy.
The most common problems in business are:
a) Negative Cash Flow – the funds of the business and the owner are depleted and there is no other place where emergency funds can be taken. In a lot of cases this is because proactive financial planning and financial tracking mechanisms have not been implemented.
b) Sales – this is when there is not a cohesive marketing strategy and the business is not generating enough sales to produce a healthy profit.
c) Stress – running a business is stressful, and even though it can be extremely rewarding, the responsibilities of an owner can be overwhelming if they have not surrounded themselves with a team that assists them in maneuvering through the obstacles that are presented. Without the proper team in place a business owner typically does not receive the maximum benefit of owning a business and often times just limps along barely earning a paycheck.
In order to prevent all these things from happening to you and your business, you have to decide that you are going to monitor the health of your business and be proactive in managing and growing it. It is not just showing up every day, hoping that everything is ok. This is where the equivalent of your annual checkup needs to be done, but you will have to do it a lot more than just once a year.
Just as your body needs constant care, nutrients and exercise to stay healthy so does your business!
If your business is not generating the type of return you would like to see, and / or it is causing you a lot of stress then the health of your business needs to be improved before it is to late.
Not every person is in the best of health, and you can also say that of every business. If you want your business to be in top condition, you will need to have periodic checkups, assess and improve its strengths and address its weaknesses. The personal and financial rewards derived from keeping your business healthy are going to be well worth the effort!!
