You’re taking the necessary steps to make sure your workers and customers are healthy, but is your business getting the same attention? It’s time for a check-up. This video is sponsored by the MyPlace4Parts Studio.
The subject of health is on everyone’s mind these days – to paraphrase the late, great Kenny Rogers, I just dropped in to see what condition your condition is in. Your business condition, that is.
Sure, you’re taking the necessary steps to make sure you, your employees and your customers have a safe business environment but is your business getting the same attention? Like most small-business owners, you may find yourself spending most of your time working “in” your business, rather than “on” it. It’s time for a check-up.
There are big-picture items and small — yet important — details that can get lost in the everyday goings-on of a shop. An annual business “health check” forces you to take a hard look at some items that you might not look at very often — or that you might even avoid all together.
Although the recent pandemic brought many challenges into sharp relief, the truth is, if you have up-to-date, accurate and complete information readily available you’ll more easily be able to apply for a loan, expand the business, acquire a business or, perhaps, even sell your business.
It’s important to know and have access to an assortment of essential business documents at a moment’s notice. Here are some key things you should assess every year. If you haven’t looked or evaluated these items in a long time, take time to do it. The health of your business is at stake.
You should havfde at least three years of historical financial statements including tax-related documents. Keep supporting documents for these statements. Be current on the payment of expenses associated with the business, including all taxes, payroll, operating costs, employee benefits and notes.
keep up-to-date documentation for all compensation plans, benefit plans and any oral agreements understood between you and your employees. In fact, this would be a good time to put these oral agreements in writing to ensure there are no later misunderstandings.
Have up-to-date documentation for all contracts with customers, vendors, landlords, tenants and outside service providers.
Does your business have a succession plan? Don’t think that just because you’re young and healthy you don’t need one. One of the only sure things is that one of these days you will exit the business – Do it on your terms.
You should have current information on your geographic market, competitors and opportunities for growth, as well as potential threats.
Most businesses have a written business plan, but most business owners haven’t update theirs recently. As we’ve seen recently markets and businesses can change overnight – have you planned for the unforeseen?
Are there any open positions in your operation that you haven’t been able to fill? What are your plans to recruit new employees? What skills will these new employees need different responsibilities may need different skill sets.
Assess your inventory levels. Working capital is tied up in inventory, so it’s a good practice to periodically review your inventory on hand for things like product mix, aging/obsolete inventory and unprocessed returns and defectives. Work with your tax professional to ensure that your inventory is properly accounted for.
Don’t get sidetracked with your business’s condition right now – a careful checkup can help spot problems early when they’re easiest to cure. Four out of five experts surveyed agree.