Preventative Care Important for Finances Too

Nov 16, 2011

Chet Buchman

We still have a month or so before the New Year, but it is always a good time to discuss getting healthy. Right now you may be doing a mental checklist of what you ate today and how much you have exercised this week. Like most people, you are either feeling pretty proud of yourself or really guilty, and possibly figuring out ways to justify your bad diet. “The kids had ballgames four of the five nights this week.” Well you can stop blaming the kids and relax because I am talking about a different type of health, your business health. Now go through that checklist; what exactly are you evaluating? It is not near as easy as, “I walked two miles last night after three pieces of pizza, and so far today I have had a yogurt.”

Checking the health of your business is difficult for several reasons. To start, what does it even mean to have a healthy business? And what parameters are used to check it? When the word “healthy” is used you may think “profitable,” thus your business is healthy as a horse because you are profitable and you can move on with your day. Sorry to disappoint you, but making a profit is not the only “healthy” factor, although it is important. Dropping five pounds is great, but that does not necessarily make you healthy.

Does your spouse know what to do with the business if something were to happen to you tomorrow? If your answer is no, then your company may have high blood pressure. Do you know the costs associated with acquiring a new customer? If this is also a no, then your business may also have high cholesterol.

There are many “vitals” that you should look at annually, such as your own personal finances (yes these can affect your business if you are feeling cash-flow pressure at home), product pricing, performance metrics, succession planning, strategic initiatives, staffing, company morale, etc. Not all of these topics are easy conversations to have with your spouse, management team or even yourself, but all are necessary. “Doctor, I only have tightness in my chest when I go up a flight of stairs, and I only get headaches when I stare at the computer for too long.” It is easy to overlook these seemingly little things, but it is important to know the root causes of these symptoms and how each may affect the overall health, and ultimately the success, of your business.

Getting a check-up can do more than protect your business from potential risk. A check-up may shed light on other aspects of your business. Maybe you increase efficiencies by setting strategic initiatives or become more profitable by changing your pricing model. Any improvement to your business should help reduce stress and anxiety, which can significantly improve your quality of life.

Preventative care is important for you, your family and your business. Get a check-up even if you feel that everything is under control. With our economic climate constantly changing, it is in your best interest to visit a specialist yearly and make sure you have all of your bases covered. If you own a business, you have far more than money invested in it. You owe it to everyone involved to make sure it is in the best shape possible, improving your business health and your peace of mind.

Article provided by Chet Buchman, CPA, CVA at Swindoll, Janzen, Hawk & Loyd, LLC. Learn more on this topic at www.sjhl.com/BusinessHealth or call him at (620) 241-1826.