The doctor is in, and he’s ready to check your small business vitals.
Our bodies need regular check-ups and screenings to catch problems and find early warning signs of potential future problems.
Your small business is no different.
It’s time to pull out the virtual stethoscope, check your blood pressure and warm up the treadmill. Fluffy the Finance Feline is ready to give your #smallbiz the once over.
Free Small Business Health Screening
This post is part of the ever entertaining #WordCarnival, filled with fabulous sideshows and amazing acts. This month’s topic is health (shocker I know), and you can find all the posts here.
Small Biz Health Check-up: The Treadmill
Alternate Title: Can you go the distance?
The dreaded treadmill ordeal test gauges the fitness of your body, particularly your heart, over an extended period of time. Can you make it one mile, two miles, or more?
Is your business built to go the distance?
Consider these questions:
- Do you have more than one product or service? Do you have a pipeline to introduce new products or services over time (once a year counts)?
- Can you take a week’s planned vacation (on a deserted island where no one can call you) and expect to return to find your company has not stalled, stuttered or shuttered?
- Have you projected your cashflow for the next 12 months?
- Do you have your processes documented? Would that documentation be enough for another person to complete that task?
If you answered yes to all of these questions you passed the treadmill test. Congrats!
If you answered no to one or more consider what it would take to turn your no to yes. If you can’t make it on the treadmill, imagine the real rat race!
Small Biz Health Check-up: Your Heart Rate
Alternate Title: Are you pumping enough sales through to keep your business alive?
Simple fact: no sales equals no business.
Oddly enough this message was driven home to me by an actuary (an apex numbers geek). He was my boss at the time, and we were pricing a new product.
You can create a product that on paper delivers a return of 50%. But if nobody buys it you won’t make a dime. Without sales you have no business.
Consider these questions:
- Does more than 50% of your revenue (money in the door) come from a single client?
- Did you meet or exceed your revenue goals over the last six months?
- Do you have both new customers and repeat customers?
- Is your pipeline of prospects full enough to meet your revenue goals for the next six months?
If you answered yes to all of these questions your small business heart beats strongly. Congrats!
If you answered no to one or more consider what it would take to turn your no to yes.
Small Biz Health Check-up: Your Blood Pressure
Alternate Title: High Levels of Expenses Will Kill Your Business
Every time your heart beats, there is the pressure of your blood pushing against the walls of your arteries. If this pressure is high and stays high, it can cause a great deal of damage.
The pressure of high expenses beating against your business can cause a great deal of damage over time as well.
Consider these questions:
- If you add up ALL the costs of doing business (including your own salary), is the total less than total revenue in the past 6 months?
- Do you have a budget for your business?
- In the past six months have you kept your business costs at or below the amount you budgeted?
If you answered yes to all of these questions your small business is not being exposed to excessive expense pressure. Congrats!
If you answered no to one or more consider what it would take to turn your no to yes.
Disclaimer – I’m a Business Doctor NOT a Human Doctor
I’ve said what I think a certain test does, is, or pretends to be. However I’m not a people doctor and I don’t play one on TV. I help sick companies.
If you feel physically ill (other than as a reaction to last month’s net income results), call a real doctor. Or check WebMD – you’re sure to self-diagnose there with at least half a dozen random illnesses.
Final Thoughts
How did your business do? Tip top shape? Needs work? Code red?
Are struggling with how to turn a no to a yes? Sound off below, two minds are always better than one!
I love this checklist! When you put it in black and white like that…. ergh… guess I should really be thinking about those processes, huh? I’ve been really working on the whole “business running itself” thing. And realistically I know it’s probably never really going to do that – but I should be able to leave for a few days without things falling apart. For me, a lot of that is about documentation and getting things OUT of my brain onto paper. Not as easy as it might seem. But since summer is slow and I’m not actually at the beach… this is probably a good time for me to be thinking it all through. Love your advice!
Thanks Carol Lynn. You should definitely be able to take a week off without your business coming to a screeching halt! And I can totally relate to getting things out of your brain and onto paper. Sometimes I schedule time with my VA for the sole purpose of making that happen. I’m paying her, so I’m going to get value! And remember you can bring your laptop to the beach. Get under an umbrella and start typing.
Great list of issues we can actually examine and resolve to keep our businesses health, Nicole – nice analogies.
Thanks Sharon. Since I’m not a doctor I’m glad any mistakes weren’t too obvious.
Just got back from a coffee meeting with a colleague and we were talking about the similarities between knowing what you need to do (with your body or your business) and taking action on that knowing. It’s like human nature makes us wait until the absolute last minute before we wake up and get radical clarity that action must be taken NOW. Wouldn’t it be nice to help healthy businesses stay healthy? (As opposed to helping sick businesses get healthy?) I’m sure our Doctors would much rather focus on wellness than sickness. If you know the answer to this question, please share? Until then, I think this post is a fabulous way to help folks get the wake-up call they may need.
Fixing the human race from the scourge of procrastination is a monumental task. The best I can offer are things like this post. Hopefully a wake-up call before something really bad happens.
Wow…Loved that post and it is so full of great questions that I have failed on most of them which is great because it’s not like I did not know to have much of that in place. I get lost at times on what steps need to be taken and I definitely have let my sales funnel dwindle and it is time to build it up and your post reminded me and inspired me to get it together and make a few more things happen. Gonna save this for a future “check up”!
Hi Michelle,
Don’t think of it as failing, think of it as an early warning system. It will help you avoid the really bad stuff. Such as getting that sales funnel hearty. You can do it!
Well Nicole, that’s a checklist that’s got my blood pressure spiked! Geeze, guess I need to go in for a check up. Love your take on our health theme. Yay!
Eek – should I have a “Surgeon General’s” warning? As I’ve said to other people, see this as an opportunity to make changes.
Medical professional here … love your post, Nicole! Your analogies are undeniably creative and right on the money!
I really like what Tea remarked about helping healthy businesses stay healthy in lieu of trying to heal sick businesses. I imagine you’ve dealt with some businesses that are knocking on death’s door. You may have even seen a few who’ve flat-lined! Sadly, resuscitation doesn’t always work.
Glad to hear it Melanie. I thought they were pretty accurate, however I’m the first to admit I’m NOT in the profession. My mom was an RN who at one time had worked in the ER in Los Angeles. The stories she told…
Yes let’s all focus on preventative medicine. Unfortunately as you say I do see businesses that are simply too far gon.
According to my business financials, I’m a 93 year old morbidly obese diabetic who huffs oxygen every 10 seconds.
Hmm. Better do something about that!
Thanks to your checklists and a little bit of exercise, we’ll whip this baby into a sex-on-the-beach having 24-year old bay watch star vegan workhorse.
In all seriousness though, these are great points for anyone who is just going through the motions in their business without really thinking about the big picture financials (Cuz they’re hard…) Bwahaha.
Thanks Nicole! Great tips!
Nick you simply have the best sense of humor. And you tie it in so well to making a valid business point. Looking forward to your biz giving “The Hoff” a run for his money, saving all the babes, and … well let’s everyone use their imagination!
Nicole, I was virtually hyperventilating reading your checklists. I know it all, but a healthy dose of denial is okay. No?? Okay, I will take your medicine with a spoonful of … okay not sugar, and digest what I must do to pass the test next time round. Thanks for reminding me that my business health is of vital importance!
As I said above, perhaps I needed a “Surgeon General’s Warning”? The idea wasn’t to scare you into next year, it was more of a firm reminder. And no denial is not healthy, in business, in your health, personal life, or heck even that the garbage really should have been taken out two days ago.
Take my advice with a round of laughter (make that two). Feel free to click the laugh button for inspiration.
I love how simple this is – simple, but NOT easy, and you never once pretend like it IS easy, which I also love. I think a lot of small biz owners need more stuff like this — the simple “here’s how you can help define/measure success in realistic ways” checklists. It all gets so overwhelming and muddled, which just leads to muddled thinking, which just leads to more of the same old, same old. And we all know the old saw about the definition of insanity. By that measure, a lot of us ARE insane. Time for a new approach. Bookmarked this one!
Good to hear Annie. I was going for the simple, easy to follow but certainly would never say it’s easy. If it were easy the failure rate for new businesses would not be so high. If you talk to any business owner that has lasted more than 5 years you will discover they do the things in my list above. Some of it may not be in a structured way, but it gets done.
Awesome visual for our small business health check. Your questions should be part of a business owner’s steady diet not just a one-time health check but as part of a monthly/quarterly progress review. I’ve got my work cut out for me!
Clare for my Timeshare CFO clients I do perform this analysis on a regular basis. As well as for my own business. There are areas I could be better at – such as a more balanced sales funnel. Knowing is half the battle, good luck!
testing, one two three gazillion billion dollars… seventy ten words of amazing content that is definitely not spam