New Year Business Health Check
For most, the beginning of a new year provides the ideal time to set personal goals and try to stick to them. Gym memberships and adopting a healthier lifestyle sees a surge in followers, but what about the health of your business? A New Year business health check can point out key areas for improvement and in turn renewed success. The recession has had major implications for businesses large and small and as 2010 begins, it's important that your business gets off on the right foot.
Gary McEwan, chief executive of Enterprise North East Trust says, "People have high expectations for 2010 after the last few difficult financial years. The economic downturn has hit every industry so it especially important now, more than ever, to ensure that your business is functioning at full capacity and that all avenues are being utilised."
"Being optimistic and positive is the only way the economy will turn itself around. Carrying out a business health check can identify areas for improvement or resolve any potential problem areas before they occur."
2009 has brought many challenges for business owners from the financial downturn to extreme weather causing some businesses to close due to flooding. Gary has the following advice for business owners who want to safeguard the continued success of their business in 2010.
Q: How can I improve my business' profit margins?
A: Profit margins are very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors.
A few simple steps can help you to increase your customer base and in turn improve your profit margin, as follows:
- Don't Sit Idle - Look for new opportunities. In a constantly changing world it is essential that your business evolves. For businesses that did well in 2009, don't sit on your laurels. Review past activities and identify new opportunities for the business' continued development in 2010.
- Add value - Offering new products and services may add value to your customers. By providing a one-stop-shop for your clients you can save them time and money as they will not have to look to other suppliers for certain items or services.
- Review cash flow - Regular updates and reviews of a cash flow forecast allow managers to help make sure that the business always has enough money at the right time to pay bills. Many businesses fail not because they are not profitable but because they don't have enough available cash. The cash flow forecast aims to give accurate figures of exactly when money is received and spent by the business so that managers can always see what the anticipated cash balance may be at any point in the future. By looking ahead at the exact timings of when 'money comes in' and 'money goes out', managers can plan ahead in case the forecast shows that the business may run out of cash. It is possible to take action like re-scheduling bill payments or increasing revenues to avoid any future cash deficits. Looking at the business' highest cost centres and looking at ways to reduce this will enable the business to run as leanly as possible, allowing for maximum profitability.
Q: What is the best approach for entering international markets?
A: When you decide to enter an overseas market, it's important that you take the best route for your individual business. There are four main ways to sell to customers in overseas markets. You may find you need to use more than one entry strategy, depending on the markets you target and the products you offer. There are the options of selling directly from the UK, opening an overseas office, using an overseas sales agent or an overseas distributor. Trading internationally can also involve important legal, financial and accounting considerations so to ensure that you go through the most appropriate channels, obtain advice from a business advisor who can support you through every stage of the process.
Q: Should succession planning be a priority?
A: It's a question that every organisation has to face: how are we going to fill the gap when a key executive moves on? This should be a major focus for any business as a stable support system of reliable staff with the company's key interests at heart is essential. In a climate of growing skills shortages and a lack of confidence* in the leadership potential of the existing workforce, succession planning has become a high priority for many business owners. During uncertain times it is more important than ever to know where key talent sits within an organisation and how to develop these people to meet short and long-term business requirements.
Q:I'm worried that flooding could impact my business‚ what should I do to ensure my business is protected should the worst happen?
A: The recent weather related events across the UK highlights just how important business insurance is. Stonehavens' floods were severe and unforeseen for many local businesses. Having the correct insurances and appropriate financial cover in place is vital for the survival of your business should the unthinkable happen.
Gary concludes, "Taking a step back to look at the overall business picture is certainly a wise move as when you are heavily involved in running the business it is often difficult to see the wood for the trees. The start of a New Year is often the perfect time to reflect on the past and make decisions for the future. And in business, this can be the best time to set goals for the coming year and get plans in place to achieve these."
"The New Year business health check can also highlight potential problems or issues and business owners who may be starting 2010 worried or concerned about the development of their business should seek advice. Getting help early and discussing any issues with a business advisor can ensure that potential problems can be resolved without sacrificing the development of the business in the coming year."
The Business Gateway service in Grampian is delivered by Enterprise North East Trust. For more information telephone 01224 289725 or visit www.enetrust.com.
ENDS
Notes to Editors:
*CIPD/DDI survey Global Leadership Forecast 2008-2009shows that only 44% of leaders rate other leaders in their organisations as good or excellent.
For further information please contact:
Sarah Bremner
Account Manager
Tricker PR
19 Victoria Street
AberdeenAB10 1UU
T: 01224 646491
D: 01224 654083
F: 01224 646492
www.trickerpr.com