Businesses are just like people. They need to be fed, they need to be active, they need to rest and recover, they generate waste, they are living beings that learn, they need relationships and a community to thrive and they have a number of systems that need to operate at the same time to make the business work.
Just like the body needs a heart and the circulatory system, bones for structure, muscles for agility, nerves for communication and skin for protection, so a business needs cash flow (commonly known as the lifeblood of any business), sales which forms the structure, knowing the numbers, which equates to an even body temp of 37.5 degrees, people to work in the business and a vision/core promise to ensure consistency of activity to keep it healthy and strong.
After 18 years of building and running my own business and working with over 1200 small business owners, I can definitely say I have seen some pretty sick, unhealthy businesses.
Just like a gym instructor has seen many bodies and people that needed a workout, I have seen and happily transformed many a business from death’s door to a vibrancy of business health, cashflow and profit.
Most of the time, business immunity is not really understood by business owners and they usually just think “I’ve got to start working on the business and not in it”, when in fact, I believe there are five main areas to work on to ensure your business stays healthy.
Cash Flow – The Heart Of Your Business.
Many small business owners don’t understand cash flow and how it works in the business. Many take money from the business, either get the business to buy stuff they ‘personally need’ or take money out of the business because they want something their lifestyle can’t afford.
If you take money out of the business, for small or big things, the business has less to take care of itself.
Let me give you an analogy: It’s like filling your car up with fuel for a big trip that’s going to take exactly a full tank to get there and then, half an hour into the big drive, your sister shows up and ‘needs half a tank of fuel’ to get to her destination.
Without hesitation, you give her half a tank of fuel and then keep driving and when the car indicates it’s running out of fuel, you complain that you don’t have enough money to fill the tank, it’s your stupid sister’s fault for needing the money and it’s just hard work driving a car… Better off being a passenger!
Yet, your two passengers are angry, because the car has stopped and there is no money to pay their wages… I could go on. My point here is… Don’t take money out of the business. It’s not yours, it’s the business’ money and the business needs it.
If you can’t pay yourself a wage, pay taxes and run it properly, you are not in business, you are in a bad joke and you won’t be laughing for long. Your business is destined for the hospice and cemetery. Tough, yet true.
Sales = Strength & Structure.
To keep the business immune from disease and distress, the money must be coming in. It’s essential that every day in every way, the business needs to be promoted, pitched, talked about and be sold.
Leads and enquiries for your product and services come from marketing and business development.
If you are a sole operator or have a small team, it’s even more critical that the business be selling daily. Whether its networking events, online advertising, referrals, advertising campaigns or one-on-one consultations… whatever your business needs to sell… do it every day.
Even when you or your business are flat out with appointments. In my experience, most sales come from the activity the business did the three months prior. Think about your business for a moment.
Look at your sales results now, now look at what you were doing in marketing and sales three months earlier.
Christmas is always a great example. Most small businesses in September are pumping and delivering their products and services and so, come late Dec/January, sales are slower because of the three months prior, (Sept) the sales focus dropped because everyone was focusing on doing the work.
Keep focused on sales. Never stop sales, as that will impact the business big time.
Know Your Numbers
Our bodies keep an even stable temperature of 37 degrees for a reason. That temperature is the optimal level for cellular health and for the body to function efficiently. Any deviation and the body gets sick and disease starts to form. The same applies to business.
The temperature of a business is knowing your numbers. Many small business owners don’t focus on numbers – profit margins, pricing, interest rates, taxes, budgets, conversions and other relevant and important numbers.
If one area of the numbers is wrong in your business, it will impact the entire system. I worked with a business many years ago that was turning over $600,000 per year combined in their two stores.
They imported some of their product from China and sold it to customers. They did not understand their total cost of the product and all the fees included to make the product available.
After reviewing their business, it turned out that their main product, which they sold 500 hundred units per week, was being sold at a loss of $2 each. That’s $1,000 per week. That’s $52,000 per year loss!
Similarly, I worked with a massage therapist and she didn’t understand her numbers and, while she wanted the work, her low prices meant she might as well have shown up to the client, done the massage and then given the client $50 dollars at the end.
There’s a lot to cover in this section about knowing your numbers… which I won’t do now. My message here is, stop being scared of the numbers. Work closely with an accountant and bookkeeper and keep track of your business temperature.
Whatever you are afraid of will have power over you and that won’t be good for your business. Your job is to work out how your business works financially and then monitor it.
The business will get hot with bad margins, low profits and high interest rates. The business will get cold with no sales, no budgets and low conversions. All of these will lower the business’ immunity.
4. People Conversations & Relationships
Are like the central nervous system, they……
You can read the FULL version of this article in our quarterly eZine, ‘Holistic Living Magazine,’ look for Edition 5 on this archive page. There’s many more articles about the immune system waiting for you too!
Jen Harwood – Business Coach