What matters more to you, your business or your car? It sounds facetious; business owners spend much more time, effort and money working on their business, though tend to check on the health of their cars much more often.
Perhaps it’s because issues that affect your business can be harder to diagnose than those in your car. If you’re not quite meeting your KPIs, it’s not like you feel your business veering off to the left or hear a knocking noise on the nearside.
Or there might be some admittance that fixing your car is often far easier and cheaper than growing a business—a mechanic comes with a lower price tag than a business advisor, in most cases.
With UK business productivity growth at its lowest point since Napoleon’s era, and SME health only slowly spluttering back to life, it’s as important now as it ever has been to ensure our businesses are road-worthy.
And it’s actually never been easier to do so, thanks to our cheap and easy access to data. Inexpensive business apps collect tonnes of information on your sales, cash flow, people, marketing performance, inventory and more. Collate these into a business dashboard and you’ve got an instant overview of your entire business vehicle.
So, here’s what we suggest: give your business a check-up—much like you do on your car—by looking at certain things every day, week, month and year.
Here are some ideas to get you started.
Daily business checks can be passive, much like how you check your car’s doors are locked before leaving it.
Things like your sales for the day are good to inspect in the evening after you close your doors, while seeing which staff members are rostered in is a good insight to get over your morning coffee.
You might not act on these insights daily, but they can impact your short-term decision making—like whether you need to find extra cover for absent staff.
Just like you might fill up and clean out your car, giving it some fuel, a wash and a vacuum once a week, your business needs some weekly TLC too.
That might include looking at expense reports and seeing what outgoings you have coming up. Based off these reports, you might even like to start planning for tax deductions too, so you have a better idea of your cash position further down the line.
Another good weekly check is which of your wares have sold the best for that week. You can then start connecting the dots as to why that might be (the success of any promotion or marketing campaign, for instance) and begin to learn what really attracts the customers.
For a bonus insight, you can also check your business dashboard to see which products are making you the most profit. It might not change on a weekly basis, but it may inform which of your products you focus on promoting in your next campaign.
Once a month, you probably check your car’s tyre pressure and oil levels. It’s all about making sure your machine is optimised so things can run as smoothly and efficiently as possible.
Monthly checks in your business are designed for exactly the same purpose, as you start to put more of a strategic-planning focus into your business health checks.
With month-on-month data behind you, you can begin by looking at your business’ revenue growth, your inventory management to see how much value you have on the shelves or in storage, monthly sales, and how much cash you owe and are owed at the end of the month.
The trick is not to view these metrics in isolation, but see how they work together. For instance, are your sales hampered by a lack of inventory, or is revenue growth being restricted by redundant stock, seasonal sales blips, or trouble getting your debtors to pay on time? Checking these things at least once a month lets you find out.
Annual business checks are like an MOT. It’s the time to ask the big questions about business performance and inspect the key functions of your company—am I hitting my sales KPIs, is business growth what I expected, are we reaching our marketing goals.
Data pulled from your business apps help you come up with some answers, with metrics on business growth, campaign performance, month-by-month sales numbers, etc.
In both businesses and car-ownership, the checks you make more often (daily and weekly) keep you on course, while annual checks are all about deciding on that course in the first place.
Stretched automotive metaphors aside, there’s a lot to learn about your business. And thanks to freely available business apps, data dashboards and digital tools in general, it’s never been easier to collect and see the data that helps you make better business decisions—daily, weekly, monthly and annually.
Author: Mark Hattersley, 9 Spokes
9 Spokes provides free business dashboards for SMEs, where they can view key data from their business apps see their entire business more clearly.