Many entrepreneurs and business owners won’t hesitate to see their doctor on a regular basis. So, why not do the same for your company or small business? In much the same way that we may get an annual physical or take our car in for a tune-up, it is crucial to give your business “a physical,” so to speak, and take inventory of, well, not only actual inventory, but how your company is truly doing. And this needs to be done consistently, regardless of whether or not you are considering selling your business in the near future. Because, after all, if you want to be successful in business, it is important to know how to measure it. Here are some tips on how to do just that:
Look at any and all recent financial statements.
When measuring business success, an obvious component is profit and cash flow. How much money is going into your company, and how much are you spending to run your business? Compile and look at financial statements, balance sheets, and cash flow statements from at least the past year.
Gauge customer satisfaction
Consider your customer base to ensure that others are happy with your business. Do you have many repeat customers? Are customers referring other people your way? Are your online review ratings and client testimonials satisfactory? These are all questions you’ll want to answer when taking inventory of your business.
Conduct regular performance reviews
Your customers are happy, and that’s great — but what about your employees? These folks are essential, and without them, you wouldn’t have anyone to run and help grow your business! By conducting performance reviews once or twice a year, you will be able to gather valuable feedback and potentially increase workplace productivity.
Get an annual business valuation
Life is full of unpredictability, and the same can be said for your business. Everything from issues with business partners to something such as a divorce could affect the way your business is thriving, which is why it’s all the more important to track the true value of your business on a regular basis through a professionally done business valuation. This way, you will know your company’s worth and will be better prepared for any potential changes or setbacks that come your way. And you will be better informed so that you can regularly make improvements to increase your business’ value — for when you are ready to someday pass the torch!
Monitor the growth of your business
Sure, you may know that you’re pulling a profit and that your customers are content, but are profits growing from one year to the next? Are you consistently attracting new customers? If the answer is, “No,” to both of these questions, you may need to make some changes. Developing a client list of email addresses is one way to track your customer base, and leveling up your marketing strategy and/or adding new products can also help in business growth.
Trust the business experts every step of the way — contact The Jacksonville Business Broker today to learn more and receive a free and confidential business valuation.