This post is sponsored by Intuit QuickBooks. All opinions are my own.
It’s easy for business owners, especially small business owners, to spend too much time working in your business instead of on your business. A lot of business slow down in the beginning of the year as bigger clients may still be allocating budgets and consumers are still recovering from their holiday spending spree. That’s why I like to take advantage of the extra time in January to do an annual checkup on my business, and spend time analyzing how the business can be better. Here are three of my favorite areas to scope out.
1. What can be Automated or Outsourced
If you want your business to grow, one of the easiest ways is to do more of what makes your business money. Simple right?
If you’re an owner who is doing a lot of the revenue generation, you need to figure out how to free your time from the non-income producing work, so you can spend more of their time more time driving revenue.
There are a ton of businesses whose sole focus is to make business owners life easier, so if you’re looking to automate parts of your business it’s a good idea to start with areas other business owners would be using automation as well. There’s solutions for accounting, payroll, outsourced administrative assistants, and a host of services catered to different business types.
Figure out what’s stealing the most of your time and see what solutions area available. I think you’ll be pleasantly surprised.
Every business needs to track their financials, so it’s a good place to start. One of my favorite ways to keep an eye on the health of my business is with automated financial reports sent to my email every Sunday. Quickbooks Online makes it easy to create different types of reports and have them sent to your email. I’ve found that having my rolling monthly Profit and Loss and Accounts Receivables reports sent weekly to my inbox help me to keep an eye on whats important without spending too much time.
The reason I recommend a rolling monthly report sent every week is that it lets you see trends, as well as see some information multiple times, which makes it easier to pick out things that don’t look right and need your attention.
It doesn’t save a massive amount of time each week, but by pushing the reports to my email instead of waiting for me to log in and view them every week, I’m much more likely to get to them.
Business is about creating systems and routines that ensure the right things are being done on a regular basis, and software is a good place to start
2. What Should You Be Concentrating on
Especially when the business is new, you should be focused on finding what produces the most revenue for your company with the fewest complications.
I’ve seen a lot of businesses struggle because they’re taking on any client they can. They’re looking out for their short-term needs (cash) instead of creating a long-term sustainable business.
This can significantly stall out the business as they can’t create systems around one-off customizations or products to serve everyone.
One of the reasons I constantly mention that business owners should keep their personal costs down is so that they don’t get stuck having to take on customers they shouldn’t. You need to have the flexibility to turn down difficult clients and focus of the customers who are best for the business long term profitability.
Business owners will usually have a gut feeling about who the best customers are, but it’s a good idea to quantify it. To know that a certain type of customer brings in more revenue is one thing, but knowing they bring in 5X that of other types of customers is another.
Quantifiable information makes it easier to to change your business to serve that type of customer better.
This is another area Quickbooks Online can help. If you’re using invoicing, it’s easy to pull a report about the profitability of each customer. If you’re more of a retail business, you can do the same thing with your different product categories.
Don’t forget to allocate your expenses by customer type or product. Some customers and products may be costing more than their fair share of your expenses.
3. What Can Kill Your Business
Another area I like to check on each year is what can kill my business. If you’re the type of person who enjoys brainstorming and solving problems, this can actually be a bit of fun.
You can do this exercise by yourself, but it’s even better if you have more people.
The whole idea is to come up with different things that would destroy your business NOW, so the more people the better – especially because most owners are too deep in their business to see all of their outside threats.
Start brainstorming ideas and see where it leads.
Are you too dependent on a couple key employees? You need to incentivize them to keep them around.
Are there substitute products you haven’t defended against? Maybe you need to start offering those as well.
Once you’ve identified the areas you need to work on, it’s common to find other strengths you have in your business or new strategies to use against your competitors.
If you get some great insights out of these 3 exercises, set a calendar reminder for next year, so you can do them again and see how your business has changed. Business is all about constant improvement, so an annual checkup like this can help to keep you from becoming complacent.
If anyone has any questions feel free to reach out. I’m always happy to help.