You should review the status of your business every six months, if not more often. This includes an analysis of your brand and the products or services you offer to consumers.
This review can be a simple process of taking a step back and looking at your business from a couple points of view, or a rather lengthy evaluation with a professional consultant.
If you’re going to do a self-evaluation, the hardest but most important thing to do is to remove any emotional attachment you have to your business. Think rationally. Emotion is what you bring back when it’s time to market your business and advertise your products. Look at everything from an objective, independent perspective, just like a consultant would do:
- Evaluate your cash flow situation
- Assess actual sales vs. projections
- Consider how far out are your receivables
- Rate your advertising return on investment (ROI)
- Look at employee turnover rates
- Where is your company in terms of the industry standard
These are a few of the areas to evaluate on your own. Take the time to get the information you need to make intelligent decisions, and think through what the cold, hard facts are telling you. Look at it as if you were someone on the outside looking in.
You need to know the value of your company … and the value you provide to your market segments.
If you’re honest and open with your consulting firm, a six-month assessment may not be as critical with them as doing it by yourself. Your consultants should know where you are on a monthly or quarterly basis. The idea is to help you take corrective action while it can have a positive impact and before it becomes a huge risk or serious problem.
Looking at your business impartially enables you to discover if certain employees need to be released or divisions need to be trimmed or modified. Your investors and shareholders have to know you can make the tough decisions when they need to be made. Removing yourself from the urgent demands of daily activities to review your status reduces the risk of making fatal mistakes and reveals the validity of your company.
As the owner or CEO of your business, the responsibility for making hard choices falls on your shoulders. It may be your chief bookkeeper who is engaged in fraudulent activity and needs to be prosecuted. It could be that your closest friend and VP of sales is stealing clients and collaborating with your competition. You may have an obsolete product line that needs to be terminated. It’s difficult to make a decision unless you have the correct information, and your job is to make sure you have all the right information.
Let us know if you would like help.