Give Your Business A Financial Health Check

| December 8, 2015 | 0 Comments

How many times did you hear that prevention is the best form of cure? Hopefully you’ll be the kind who takes yourself to the doctor for a check up now and again. You wisely understand that leaving things until it’s too late is not a good policy. Well, the same things should apply to your business. Too often we just hope for the best and close our eyes to any problems, hoping that they will somehow disappear or resolve themselves. Likewise, when things are quiet we hope that they will pick up. A financial health check today will benefit your business now and deal with problems before they arise.

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Don’t just leave a financial audit until the last possible moment.

Develop the habit of knowing what is happening with your business and personal finances on a monthly or quarterly basis. Use the opportunity to chase outstanding debts and settle all accounts.

Don’t run your business on a wing and a prayer. Doing an audit, using business accounting software or even employing a professional, will mean you know exactly where you are.

Identify problem areas and implement solutions

Don’t just wait and hope to see where and when things will pick up. If any area of your business is losing money, you need to take action. There is little point trying to cover losses with profits from another part of your business. Work out the areas that you need to focus on and place your resources there.

What is your most efficient operating level?

When a business grows there is a maximum point of profit. Once you exceed that you are not operating as efficiently as possible. You are essentially working harder for less money. Consider how you can cut back to re-discover your most efficient size.

Explore new ways of building your existing business.

Look at your business horizontally and vertically. Consider how you could use your connections to improve or extend your business in a way that makes sense for you. That means employing the resources and expertise you already have.

Keep an eye on your taxation status and situation.

Hopefully your accountant should be keeping you informed. But it is up to you to take the initiative. Taxes have a way of building up and we can let things get out of control before we even realise this. If you have any doubts or questions about tax owing or responsibilities get in touch with an IRS Enrolled Agent. They will be able to tell you exactly what you need to do about a taxation liability. They may well be able to help you reduce that debt.

Reduce costs and explore new ways of becoming more efficient.

Could your business benefit from downsizing? Could you operate from less expensive premises? What other business could you combine with to share operating costs? Make a list of ways that downsizing could help you. It is a fact that many businesses only do this when the have to, for example in times of a recession. When that happens they realize they had become inefficient and should have done it long ago. Act now.

Keep an eye on your business, your outgoings and your expenses, and your business will profit. Everyone will be happier with that.

Category: Personal Finance

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