Are you Checking these 4 Things Regularly to Ensure the Sustainability of your Business?
We use maintenance and attention to help keep our cars, bodies and relationships running smoothly. We don’t say to ourselves, “My car is running fine. I don’t need that 7500 mile oil change.” – unless we want a car that needs more than a $30 oil change!
We know we need to check in with our friends on a regular basis, if we want our friends to be there for us later, even when life has us running in totally different directions.
As business owners, we want our businesses to be sustainable.
There isn’t a metric for this that works for everyone – we need to be growing and evolving at a pace that works for us.
Too slow and we will probably run out of money (and time and patience).
Too fast and we will damage customer experiences and relationships.
One of the ways to ensure a long life for our business is regular business check ups.
What should we be looking at?
1. Our Dollars
We need to keep our business feet on the ground (and a roof over our heads). Set specific dollar goals.
2. Our Numbers
Even though number of sales do not equal dollars in the bank, they do indicate our business reach so we need to look at them. Every sale has the potential to generate more sales later. So, less sales now, even if we have changed our pricing structure so that it doesn’t mean less dollars, can impact us down the line.
Our numbers also include our social currency – Instagram, Pinterest, Facebook, Twitter. This isn’t about being popular or following the crowds, but a sustainable business needs to be where its customers are (you don’t have to be everywhere though). I actually just joined Pinterest a couple weeks ago and I will admit I am measuring my progress in percentages. I feel better saying to myself “300% growth on Pinterest this week” than looking at the numbers.
3. Our Percentages
What percentage of each sale is profit? Changes to profit margins have a way of sneaking up on us as we change suppliers, fees get increased, we pay for help, our sales numbers change, etc.
Another important percentage metric to look at is where our sales are coming from. It is not sustainable to have too much invested in one customer or venue. I made this mistake with Etsy. Sales there kept me so busy for the first couple years that I did not build the sustainable network I would need as that venue changed (even though I totally knew better!).
My husband’s business used to rely on a small handful of large customers. When one left or went out of business he was always scrambling to replace them. Now he has many more small customers and his business is on more stable footing (all his large customers went out of business during the last few years and it was truly his regular business check ups that kept his business from going down with them!).
It is also a potential problem if we are getting too many supplies from one supplier or do not have a backup supplier for a certain necessary component.
4. Our Heart
Not all the important business stuff can be measured with a calculator.
When we just can’t drag ourselves into the studio to make our whoseewhatsee one more time, something has to change even when all our business vital signs look good. Sometimes, we just need a little downtime, sometimes bigger things need to change. We can get quiet and check in with ourselves.
Life is short and moves fast – we only get so many years on this amazing planet and we really want to be enjoying them!
Regular business check ups allow us to be pro-active instead of re-active.
The advantage to being a small business is that we can be quick and nimble and pivot when we need to. We also have to use common sense and good business sense.
We have to know when a number being down somewhere means we have to invest more (time, money, energy) and when it means we need to invest less and move our focus somewhere else.
How about you? What things do you review to keep your business growing and evolving?