This guide outlines a 12-point business health checklist to estimate the state of your business and help ensure your business survival.
We all know women are the backbone of small businesses – and fighting hard to keep those businesses alive during the COVID-19 pandemic. After suffering long weeks in lockdown (most of us with demanding kids as well!) it’s time to review your business to make sure it does not become a victim in the tidal wave of insolvencies expected in the post-pandemic era.
So to help the thousands of mumpreneurs out there, digital liquidation firm SM Solvency Accountants has produced a handy business survival checklist so you can see straight away if your business is healthy — or heading towards troubled waters. And what happens if it all goes pear-shaped? The expert firm offers a unique digital solution (read: no long round-table meetings with men in suits) where you can easily ramp up your business from the comfort of your home office.
Business survival: 12-point checklist for a healthy business
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Your business is making a profit.
You should be able to see a consistent revenue stream and a steady profit every month, even if it is only small. This is a sign your business has a good financial future for business survival. You should also be attracting new customers and not offering huge discounts to get existing customers through the door (virtual or real!)
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You have a comprehensive business plan.
Your plan should outline your goals and future projects for not only this financial year for but the next, taking in predictions of the economic climate, cost of staff and any projected increase in product and possible new competition.
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Expenses are not increasing.
To keep your profit increasing you must make sure your expenses stay flat, and do not grow faster than your revenue. Expenses naturally increase when your business has a growth spurt, but they should stay in line with any revenue boost for business survival.
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Your website is performing well.
Check Google Analytics to see if your number of customers and views is increasing. You should be across key SEO words which will attract new customersfor business survival.
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The industry is healthy.
Look at what is happening with similar businesses. Is the industry stable? Is your business up to date with new and competing industry trends?
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Your cash balance is increasing.
You need a healthy amount of cash in the bank to cover any urgent expenses for business survival. You should not use all your profits to cover your costs or invest back into your business. Cash is king!
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You have good access to finance.
If finances do get tight you need to be able to access finance from a reputable source for business survival. You should have a good relationship with a finance facility to help when finances are strained.
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You have new clients and repeat customers.
Do you have a steady stream of new clients, and are you retaining existing customers? If so, your business has many options to generate revenue post-COVID.
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Debt ratios are low.
There are two debt ratios to examine: a business’ debt-to-asset ratio and its debt-to-equity ratio. Solvency formulas specifically measure how much your business owes compared with how much your business is worth. A lower number is ideal.
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New projects are on the horizon.
Even if your business is doing well now there needs to be strong signs of growth for business survival. You need to have solid post-COVID projects in the pipeline to make sure your business does not become stagnant. This is especially important as many hospitality and retail businesses need to adapt to the disruptions caused by the pandemic.
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You have solid financial records.
These are the backbone to your business, and should be up-to-date and monitored regularly.
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Your staff are happy!
Happy staff makes for contented customers. Keep the communication between the manager and workers flowing and make sure you offer rewards. A Christmas party may not be on the cards, but a small thank you gift like a gift basket shows you appreciate your staff and understand how important they are to your business survival.
