Is Your Business Healthy?Chia-Li Chien, Ph.D., CFP®, PMP®, CPBC
Chia-Li Chien | Oct. 26, 2011
For the past seven years, I’ve been troubled by an “abnormal” cholesterol level reading. During each of my annual physical exams, Dr. Tignor has kept a special eye on two things—my cholesterol and thyroid. My thyroid had been normal for over twenty years. He still checks just to make sure. And although my cholesterol is somewhat borderline, Dr. Tignor does not think it is a big deal since overall I’m pretty healthy compared to most of his patients. So instead of turning to medication, I simply try to avoid high cholesterol foods such as red meat or shellfish over the year.
In March of 2011, I decided to lose some weight. (By the way, my weight is within the range of American standards.) My initial motive was to lose weight and keep it off, not knowing that by doing so, I could also decrease my cholesterol significantly! No prescriptions were involved in either my weight loss or in lowering my cholesterol. I went the natural way, looking for the right foods to eat, controlling portions and keeping up with my routine daily exercise. (I have a daily exercise program in which I workout for 50 minutes every weekday at 5:30 am. I’ve doing that for more than 15 years.)
So what made this plan work? A combination of the tools, along with following a process consistently and monitoring results regularly, as well as the flexibility to adjust the tools along the way.
In the small business world, don’t you think it takes the same to sustain a healthy profit margin? There are industry benchmarks you can use to compare your business to each year and see if your business is performing above or below the benchmarks. Most importantly, you know better than anyone else if your business is healthy or not. I’ve worked with many successful businesses and each one seems to follow the same steps of my cholesterol/weight loss program.
1) Select and apply the right combinations of the tools.
2) Follow the process that works consistently.
3) Monitor results regularly and make proper adjustment to either tools or process.
Let’s make some assumption first about what a healthy business is:
1) It’s a profitable business that is above industry benchmarks:
a. Net profit % before tax
b. Well diversified customer concentration and customers’ preferred choice to work with
c. Well diversified products concentration
d. High employee retention with high level of innovation and productivity
e. Preferred lenders’/investors’ choice
2) There is a consistent marketing and sales processes that continuously generate profitable customers and products (including services).
3) Projected results are regularly monitored and tools are adjusted along the way.
Is your business healthy?
Don’t be too quick to answer “yes” or “no” at this point. Do you have a chart like my cholesterol test results to show you how healthy your business is? Let’s take a look at Judy’s (not her real name) business for which I recently did a monthly “check-up” and “health” report.
At our last appointment, Dr. Tignor told me he did not want me to lose any more weight! The formula I created worked so well for me that I reached my goal and did not need to go beyond that benchmark. You see, consciously paying attention to what’s important makes a huge difference in life. Your intention of maintaining health is a must from personal to business health!
When was the last time you had a check-up and an opportunity to review your business health report? What tools and set of information do you rely on to help you make informed decisions? How do you know if you’re above the benchmark or not? If you can confidently answer any of these questions, congratulations on your intention to be a healthy business! If not, perhaps it’s time for you to seek out experts to put these foundations in place. It’s never too late to be a sustainable and healthy business, which builds value and assures the ROI you want and expect from your business!