These 10 tips will help you evaluate the health of your business and stay on top of the things that matter.
1. Perform a financial review
Your business won’t survive unless you have control of your finances. Make sure you thoroughly manage:
- expenses and bills – pay quickly to build goodwill with suppliers
- customer invoices – chase everyone who is overdue
- payroll – keep Fair Work off your back with excellent records
- tax – make sure you always lodge and pay on time. Talk to the ATO if you cannot make payment – they can offer payment arrangements. Check our Taxation and Business Advisory Service to help you guide in Taxation
2. Review supplier arrangements
When did you last review the prices you suppliers are charging? Get multiple quotes for large purchases and ask for discounts if you have been loyal. Every dollar saved here is dollar of extra profit!
3. Revise Sales and Expenses
Tip #3, review your profit and loss statements regularly. Compare the results to your budget and to how you did last year. Is everything on track to budget? Are you doing better than the same time last year? Are costs and profit levels where they should be? If not, speak to a Perth virtual CFO about what you can do to improve and get back on track.
4. Stay attentive on inventory
If you’re running a retail, wholesale or manufacturing business then inventory is your lifeblood. You should:
- match stock levels to expected sales levels
- if you have perishable items, maintain good rotation stock rotation practices to avoid losses
- make sure inventory is stored securely to avoid loss from pilfering
- work with your virtual CFO to calculate your ideal inventory levels.
5. Build a relationship with your customers
Help your customers remember you and your product by maintaining regular contact:
- Use a CRM (Customer Relationship Management) or MAS (Marketing Automation System) tool take a lot of the time and effort out of your marketing and keep your customers and partners informed about your business.
- Use multiple communication methods. Email and social media are very popular but even ‘snail’ mail is having a resurgence in some instances.
6. Maintain a strong presence on social media
Social media can be a very effective marketing channel if you use it well.
Make sure whatever you post always has fresh content, send new tweets and post on Facebook and LinkedIn at least weekly. Here is our Guide on 5 Ways to Build Your Influence Through LinkedIn
7. Monitor your website traffic
Google Analytics is an excellent way to makes it easy to understand your website traffic. It will identify pages that are performing poorly and pages that are doing well. What search terms do you want to be found under? If your website is not appearing in the first 3-5 results on Page 1 of Google, then it is very unlikely to be generating you much business. Getting ‘ranked’ on Google is an art best left to experts. But beware, there are plenty of charlatans touting themselves as ‘experts’. As with any expense, get multiple quotes and insist on a performance guarantee.
8. Keep abreast of industry news and trends
Set aside some time every few weeks to review news and trends in your industry. Setting up a Google Alerts is an excellent way to let technology search and collate the news you want to read. For example, if you are mobile phone retailer you could set up an alert for ‘mobile telecommunication trends’ or ‘new technologies in telecommunication’.
9. Back up your data
Cloud-based applications enable you to store data off your computer and ensure it is always available and automatically backed up. Relying on your computer hard drive alone makes you vulnerable to loss from drive failure, fire, burglary or any number of disasters. If you do use a local hard drive to store data, make sure you back up regularly – at least weekly. Regularly check that your backups are working by doing a trial restore of your data. This is the only way to know you’ll be able to rely on the back system if you ever need it.
10. Speak to your advisors
Arrange regular meetings with your accountant or virtual CFO, advisory board, management team and even bankers. Discuss your recent business performance openly and seek their input. Through this ‘mastermind’ process you will harness the power of many experts and may well uncover ideas or options that you would not have thought of yourself.
The common trait I see with successful business owners is that they have developed these great habits
Everyone is time poor and there never seems to be enough time to do everything. Yet the people who make a habit of doing the important things (not necessarily the urgent) achieve success. Set yourself up for success and schedule time to do these ten simple tasks every month – the discipline to do this will keep things on track and under control.
About David Officen
David is the Founder and Managing Director of proCFO. David combines an accounting and consulting background with commercial experience both as a manager for large commercial businesses and as the owner of private and family businesses.