ANNUAL BUSINESS CHECKUP
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Just as we go in for annual checkups with our doctors and dentists to ensure we are healthy, and we have our automobiles checked to make sure they are in good operating condition, your business needs an annual review to fine tune it for the best "mileage" and service you can get.
With the economy in the shape it is in, it is even more important to review your company's "health" and take action to adjust things that will ensure your continued profitable operation.
Use this checklist to evaluate key functions and areas of your company. As you go through the list, score yourself based on how well you have planned and addressed these areas of your business for the coming 2009 business year.
1 - I have not thought about this or addressed it.
2 - I know it is important but have not done anything about it.
3 - I made an attempt but it did not work. Don't know what to do/try next.
4 - Have tried and had some success with development.
I would like advice on how to continue to improve.
5 - I have made a plan and it has already started to improve my business.
1 Review your business operating structure? Where a sole proprietorship may have been okay this past year, it may be time for a change. Set up an appointment with your Tax attorney to review the benefits of restructuring under an LLC, Corp C or Corp S as they pertain to your business and need for protection as well as the tax implications. Is your personal will in order and what will happen to the business if something happens to you? Is there a plan of action for the business operations? Are you maximizing your investment with the correct structure? If you are an LLC, C Corp or S Corp are your annual meeting and minutes due and have they been completed?
2 Review and update Insurance? With businesses changing throughout the year the needs for coverage changes as well. An appointment with your insurance agent to discuss your coverage for liability, fire, flood, property, life, auto, and health should be scheduled. Sometimes a discussion with your agent can identify areas where you would save money, or identify areas where your coverage is inadequate.
3 Review equipment needs and replacements. What equipment will need to be replaced this year, next year, how about 5 years out. When will new equipment be needed and is the expense built into your planning?
4 Set objectives for the coming year and develop a plan to reach them! Take some time to work through this step. What changes do you need to make to achieve the objectives you have set. It's great to set out on a trip to New York but it takes some planning to get there: what transportation - drive or fly, what roads - highways or byways: what hotels - resorts or roadsides, what will you do when you get there - relax or see the sights. It all takes planning.
5 Review your reporting structure! Do your Profit and Loss statements tell you where your business strengths and weaknesses are? Does your reporting system provide you with answers in a timely manner so you can direct your company to success or are they so "after the fact" that all is lost. Remember your reporting structure is your "management toolbox" and should be reviewed and updated on a regular basis.
6 Review Expenses to Increase your profits. What can you reduce, when can you reduce it and how can it happen. Remember it is not how much you make - its how much you are able to keep. Where are your company's line items out of control?
7 Employee evaluations and reviews. Have you had formal or even informal employee evaluations? Do your employees understand what YOU expect of them or are they operating in a vacuum? Are you getting a good Return on your investment when it comes to what you pay out for them - taxes, insurance, unemployment, holidays, vacation, sick time - how much does it really cost you per hour for that employee? Do you know?
8 Review benefits being paid by your company. Are the correct names on your benefits programs? i.e health insurance/life insurance, tax rolls, unemployment and workman's compensation reports? Any employees listed that are no longer working for you?
9 Staffing levels - over or understaffed?. Labor is the largest expense any company has in their direct expenses. If your company brings in funds on a per employee basis - i.e. manufacturing - employee makes X number of items per hour - do you have enough employees to make the required product for sale? If over staffed can you combine duties and cross train to cover needed duties?
10 Explore potential expansion ideas. If your business is lagging have you reviewed other areas where you could expand and maintain your level of cash flow?
11 Review your advertising. Are you getting bang for your buck? - Do you have a monitoring method to know how much impact your advertising has. Have you set your budget? What do you expect each campaign to bring to the overall income of your business?
12 Vendor accounts? Do you direct all of your business towards a few accounts for your materials? Have you reviewed your purchase volumes and negotiated better pricing, terms. Do you have several sources for the supplies you need the most or are you dependant on a single supplier?
13 Sales Planning? Do you have a sales plan in place to bring the customers to you for the coming year? Are you dependent on one customer or industry for your income? Have you explored other clients you can provide services or materials to? Have you explored creative ways to get the edge on your competition?
14 Budget Development for 2009. Have you completed a budget plan and set it in place for 2009 to use as a target for running your business?
15 Business planning What are you doing to make sure you get your share of the market in your area? What impacts have there been on your industry? What ones can be overcome with the previous check up items? What industry impacts must be addressed because of new laws or industry requirements.
16 Do you have an advisory board in place? Who do you get advice from? These professionals are not on you payroll but are paid as advice is needed on various sectors of your business. These professionals would include a banker, an attorney, a tax accountant, industry specialists, and a management consultant.
17 Do you have a reporting structure in place? Have you reviewed your structure and who reports to whom? Do your employees have more than one person telling them what to do? Are you hounded with employees coming to you for every decision or have you delegated authority to key employees?
18 Have you developed a relationship with your banker? The time to develop a relationship with your banker is before you need him. Is he able to support your business plans? Review your plans and discuss financial needs, lines of credit, money market accounts and other bank services. Banks are continually inventing new ways to provide banking services to the small business market.
19 Planning for the future. Do you have a succession plan in place if something happens to you tomorrow? Do you need the business to support a family? What happens to your employees? Do you have a plan of action for retirement? Are you grooming a successor?
20 Do you have a business or a job? Does your business operate on automatic pilot without you on a day to day bases or if you are away do the doors close and everything grinds to a halt? If there is not an auto pilot then you don't have a business - you have a job. Which is it for you?
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