Use a Midyear Financial Checkup to Boost Your Business by New Year’s Eve
Maintaining your business’s financial health is a lot like preserving your physical health; you need to schedule regular checkups to make sure everything’s running smoothly.
With the year half over, it’s a good time to hit the pause button and assess how well your business is doing. If it isn’t performing as well as you’d like, don’t fret. A financial review may be just what the doctor ordered to finish the year in good shape.
Here’s what you can do to take the pulse of your business.
Check In with Your Goals
If you set objectives for your business at the beginning of the year, ask yourself how much progress you’ve made toward achieving them. This allows you to see where the business is exceeding or meeting expectations, and where there’s room for improvement.
Looking for wins, big or small, can motivate you to tackle the goals you might be falling short on. Reevaluating can also help you determine where you should be boosting your efforts—and what may no longer be a priority for your business.
Run the Sales Numbers
Sales often move in cycles, and your position at the halfway point doesn’t necessarily determine what kind of numbers you’ll see for the year. But analyzing your sales figures can be a good way to gauge how your business is doing compared to last year, while pinpointing which products or services are revenue drivers and which ones might be duds.
Pull your sales records for the first half of the year, and consider breaking them down quarterly, monthly or weekly to really dig into the data. The more you drill down, the more the numbers may reveal about what’s selling and what’s not. From there, you can start thinking about how to adapt your sales strategy to increase revenue.
Review Your Expenses
If your business’s financial health is suffering, your spending may be the culprit.
Here’s where a profit and loss (P&L) statement and a cash flow statement can be helpful. Your P&L statement shows your business’s net profit after subtracting expenses from gross revenue. The cash flow statement shows the flow of cash in and out of the business.
Scrutinize these two documents carefully, paying particular attention to your various expenses. That includes things such as day to day operating expenses, debt service for any loans owed by the business and your tax payments. Look for expenses you can pare down or eliminate to potentially increase your profit margin.
Revisit Your Marketing Strategy
Marketing is a big part of running a business, but if your campaign isn’t producing the results you anticipated, you may need to rethink your approach.
If you’re marketing your business through social media, for instance, analyze which channels seem to be the most successful for lead generation. Facebook may be a marketing goldmine for some businesses, while Pinterest or Twitter prove more profitable for others.
Identifying the high and low points of your marketing strategy can boost your business by helping you weed out the tactics that are doing little to increase exposure and expand your customer base. Not only that, but it could save your business money if you stop wasting cash on marketing methods that aren’t panning out.
Get Customers Involved
Customer feedback can be an invaluable resource. Consider creating an online survey through your social media accounts or website so customers can share suggestions with you anonymously. If your business has physical locations, setting up a suggestion box is another option. You can also gain insight into what your customers are saying about your business by checking review sites such as Yelp or Angie’s List.
If you encounter criticism, try to view it as constructively as possible. If more than one customer is complaining about the same thing, work to identify the root issue. Once you know what the problem is, you can address it.
Summer may be halfway over, but there’s still time to turn the heat up on your business. Taking these steps now can go a long way toward getting your venture where you want it to be by winter.