The first quarter of the year is complete, and now is a great time for business owners to perform the first review of business and financials for the year.
Regular business check-ups are important to ensure you are on target to meet the goals outlined for the year in your business plan, and they can allow for proper analysis and warning of what is working and what isn’t. A review early in the year also provides an opportunity to modify your course of action, allowing you to take small steps as necessary rather than make major adjustments.
Some important points to consider when conducting a business review:
* Every business should have a team of business partners that includes an attorney, accountant, insurance agent and banker. Relationships should be comfortable, and trust in each partner is essential.
Consider the person’s level of knowledge and experience with your industry and business size. Schedule meetings with each partner. Review costs and charges, and consider what each person has done for the business. Review fees being paid to each person, and consider if the return is comparable to the investment. If not, negotiate and, if necessary, shop for a new partner.
* Review your list of suppliers. Analyze the total value of the business relationship, including costs being paid to suppliers, and make sure they are still in line with the needs of your business.
Look at the timing of your payments and discuss potential discounts your business could receive for paying bills earlier. Conduct regular reviews of the relationship and consider sharing the results of strategic planning sessions with your most trusted suppliers. Determine if there are new suppliers that you should consider.
* Review your financial results with your accountant and your banker. It’s easy to file statements away but they should be understood and reviewed. Evaluate cash flow and money management strategies. Ask your banker to propose products and services to ensure your best return on your money.
Consider your future lending needs and start the application process now if applicable. Also, compare first quarter financial results to those outlined for the year in your business plan. If numbers fall short, find out why, and determine what changes need to be made in expenses, structure and business partners to meet your plan goals for the year.
* Determine what additional services your banker can help with over and above traditional lending and deposit needs. Ask your financial institution to help with your investment, insurance and health care needs, including more complex investment solutions such as mortgage backed securities, as well as industry-specific knowledge and financial strategies that offer invaluable perspective and guidance to your company.
* Collaborate with your customers. Keeping the customers you have, and keeping them happy, is every company’s objective. Now is an ideal time to review information about customers and potential customers, then use it to guide marketing, sales and customer service activities that identify, attract and retain profitable customers.
Take steps to improve customer relations so that you are always working toward the goal of satisfying your customers. By connecting your company directly with your customers’ individual needs, you can potentially cut costs, increase revenue and provide your company a competitive advantage. Improved customer relations with existing customers can also help expand your client base to draw new customers, enabling you to create and enjoy more profitable, long-lasting customer relationships.
* Establish a timeline and measure your progress. Your business strategy has power once you establish a timeline with milestones and incentives for where you want to be and when. It may be appropriate to consider developing such a schedule in coordination with those of your customers and/or suppliers.
* Always look toward and plan for the future. Continue to focus on what is working well and make changes where necessary to avoid or better prepare for future challenges.
Now is the right time to plan and ensure your business is following a long-term business strategy. Regular reviews enable you to discuss, analyze and review options available for business planning.
This will help ensure that you continue to make informed decisions based on the best available information and are positioned for future success. Jane Bittcher is vice president and manager, Business Development Group, for Fifth Third Bank. Reach her at (614) 744-5562 or at [email protected].
