President Obama gave his State of the Union the other night. He discussed many things about the current state of our economy and his thoughts on the direction we need to go. Whether or not you are in favor of our current President, the exercise of a “State of the Union” is a critical process, not only for our nation but also for your small business!
Doing an annual “State of the Union” on your small business is critical to its success! You need to evaluate where you are at today. There are many aspects to look at in your business and this process could take hours to analyze thoroughly. The following is just a sample of questions which could be asked to get your “State of the Union” started:
- What tax entity is right for you?
- When was the last time you updated your business plan?
- Do you have the right financial team in place? (Attorney, Banker, Insurance Agent, Accountant & Financial Planner)
- Do you have systems in place for operations? Are these systems being followed?
Accounting and Financial Matters
- Is your business profitable?
- Is the cost of goods for your business average for your industry?
- Does the business extend credit to customers? (And then not collect payments?!)
- Are the bills of the business being paid timely?
- Where does most of your new business come from?
- What is the average cost to obtain a new customer? And what is that customer worth to your business?
- What does your business do to make your customers “Raving Fans”?
- Does the business have a process for handling complaints?
As you go through this process, you will determine “weaknesses” within your business. Any “weakness” will go on a “to-do” list. The most important items very well may be the items which have the greatest impact on your profits or cash flows. For other business owners, the most important item may be the item that relieves the greatest amount of stress. There isn’t a right or wrong answer…just what is best for you and your business!