Your business operates like the human body. At the top is the head which would be the business owners because they make the decisions and they guide the rest of the body on what they’re suppose to do. Depending on the size of your company your employees can be the organs that keep the body functional or the cells that do different jobs that supports one another and your physical business is the body which is being kept alive by the blood of the business your cash flow. Like you business you take of your body by making sure that everything is working functionally, you check in on it every now and then at the doctors and you exercise to stay fit and keep your vitals in check. However your business like your body can get sick when there’s something in it that’s not working right or when something outside your business weakens it and if left unchecked can hurt the value of your business or eventually kill it. Here are some things you have to look out for so that your business stays healthy and fully functional.
Having enough capital–
When you’re starting a business it’s best that you’ve saved enough to cover not only the starting cost of your business but also to make up for obstacles and other types of losses that might get in the way. Expect a slow start to what ever business you’re starting so saving enough capital to cover a couple expenses in the beginning will keep your business afloat until it takes off. Money issues can force you to repeatedly borrow funding from banks which would raise some flags among banks as they might assume your business’s financial structure was improperly planned and might see you as a liability. Save enough to cover all your business’s expenses and then some.
Improper book keeping–
Having your financial records being mismanaged could not only hurt your business’s value if you’re intending to sell it but it could also draw the unwanted attention of the IRS. In this position you’re liable to pay back all expenses you owe and failure to do so can result in lawsuits or worsts serving time. On a lesser note poorly kept books would make your business look less appealing to prospective buyers.
Diverse customer base–
Diversity in your customer base is good and the reasons why is because your business would not have to depend on one target demographic providing most of the revenue because a shift in the market can change that in an instant. You must branch out and try to target new markets so your business can manage if your favorite customers decide they want to try something new for change.
As said earlier your employees are the components of your business that keeps it running and one of the worst things that can happen to your business is losing your staff. If you want to retain your employees you must find ways to encourage them to stay which means taking actions and it doesn’t have to be giving them raises or promotions especially if your business just started but communicating with them, taking personal interest in them and recognizing their efforts can go a long way too. Happy employees could mean happy customers.
Bad press could hurt your business’s reputation. You would want your customers to refer to your business because the more people hear about it the larger your customer base could be. A way to prevent bad word of mouth from killing your business is to assess how satisfied your customers are which can be done through surveys or by getting any feedback from them so you can enhance their customer experience.
Managing your cost can be tricky for a business. You can make a budget to control the costs of some of the expenses in your business but unexpected expenses could arise or you could be overspending too much on your current expenses. Things like labor and inventory cost could hurt your pockets so if you find yourself in that position you cut cost and get rid of anything that’s taking space which could mean cutting the size of your staff unfortunately but if you want to keep your business profitable sacrifices must be made.
And all of this is just some of the things to be careful about when running your business but there are things that could happen that can kill your business entirely and you’d have no way to prepare for that which was a lesson many people learned in the 2008 financial crisis. Treat your business like how you would treat yourself and make sure you’re keeping it away from anything that is unhealthy (unproductive staff and excessive loans) ,have check ups regularly and your business should be healthy.