If you are trying to stay healthy, you can do a lot by eating well and getting exercise, but in order to prevent potential problems it is always a good idea to consult a doctor for a periodic check-up. Likewise, your business can stay healthy financially by maintaining a good cash flow and using best business practices. Financial problems can be averted by assessing your business’ financial health on a periodic basis.
Here are some suggestions:
- Regularly monitor your market share as well as your competitors' to see if you're well positioned for growth and to determine whether you are gaining or loosing ground. In order to calculate this, you'll divide your sales by the total sales in your industry in the relevant market. Your sales volume is of course easy to locate, but total industry sales might take a bit more research. If you are a local company, you're probably looking at just the industry sales in your area, so consider asking your local chamber of commerce. If you are competing on a broader regional or national basis, industry level data may be available through trade associations or publications.
- Look closely at your products and services as well as the evolving needs of your customers to ensure that you are targeting the right audience with something they will buy. To whom are you trying to sell? What are their characteristics and needs today? Are these individuals actually making the purchases or are others doing so on their behalf? Ask valued customers and decision makers in your target demographic for feedback on new and existing products/services to get a feel of what might be a successful addition to your offering and what you should discontinue.
- Evaluate your expenses. Is the price of supplies trending higher? Would it make sense to consider a less expensive location? See where you might be able to cut down on your costs without a major impact on the business. Also stay on top of your competitors' prices. If you can't bring costs down, you may have room to set prices a bit higher.
By taking some time to step back and look at the overall state of your business, you can make sure it is continually moving in the right direction, and if it isn’t, you can course correct. Toffer Grant is PEX's Founder and CEO. He founded PEX in 2006 as a prepaid card solution for small businesses. His background in the prepaid industry began at Clarity Payment Solutions, where he initiated 65 prepaid card programs in consumer, corporate, and emerging verticals of the prepaid card industry.