Preventive Care Is the Best Defense

Posted on December 17, 2013 in Planning & Advisors

“Ac-CEN-tu-ate the positive,” so the song goes. But for small business entrepreneurs, focusing on the positive while “playing ostrich,” or being unaware of the negative, can be a costly mistake indeed. Just as your doctor routinely checks blood pressure, weight, glands, and reflexes, so your business should have a periodic check-up.

You should look at three main areas of your business: What business is your company in? Who’s doing the work? And are you making enough money from it? But don’t fret if one or more of these areas isn’t as tidy as you’d like – you can’t change everything immediately . . . it’s important to take one at a time. And while consultants abound who specialize in this field, you can get started by doing some of this yourself.

This list is not exhaustive, but your company’s “annual checkup” will look at whether you have:

Overall planning: Clearly defined mission, written sales plan, annual (and realistic!) budget, setting prices or fees competitively.

Staffing: Clear position descriptions, clear sense of responsibilities, fair and appropriate resolution of employee problems.

The Business of Your Business: Consistency in the quality of your service, contingency plans, training programs for your employees, sufficient and up-to-date technology.

Sales and Marketing: Clarity on target market, knowledge of your competition, responsiveness to client needs, effective follow-up with prospects, evaluation of marketing efforts.

Records and Money: A bookkeeping system, an understanding of financial statements, ability to collect on outstanding invoices quickly, lines of credit, adequate cash flow – for both your company’s needs and your own.

And don’t forget your attorneys! A complete “physical” should also include . . .

Legal Stuff!: Complying with laws and regulations, protection for relationships with customers, vendors, and co-owners, and current employment policies.

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