You know how we get full body checks annually? It’s a must-do ritual. This is because we are concerned for the good health of our physique, right? Now, do we test our companies the same way? How do we know, if we have a good business? Simple…
In my many years of diagnosing hundreds of businesses, there are a few symptoms to look out for in businesses. In other words, that if you have a headache, don’t go treating the pain between your ears, but start finding out what is causing the pain.
If you have employees, are you making optimum revenue with the size of your team?
Some businesses go right on hiring, without asking themselves what the ideal size of their teams should be. They think that since there is work to do, and people are busy, we should hire more people. How do you know if your current team should remain the same size, without expanding until revenue increases?
Rule of Thumb : For most industries, manpower costs should be 30% of sales revenues. If total salaries are more than 30%, it probably means that your team needs to be more efficient generating more revenue. If total salaries are less than 30%, this means that you are efficient and effective with your team, but do also look out for signs of burn-out from 1 or 2 individuals in the company. A team of business coaches can better assist you to look into your optimum team size, and income potential.
Are your customers well diversified or is a major bulk of your revenue coming from 1 or 2 clients?
This means that you have most of your eggs in one basket. If more than 50% of your company’s income comes from 1 or 2 clients, it is time to diversify. Many companies make the mistake of being busy delivering on the work for these big clients, and forget about filling their pipeline, and doing business with other people. Yes, it means you will be busy, but when those big projects are completed or if something happens, you are not stuck with a gap to fill.
Do you (or your operations) keep making regular mistakes that result in refunds?
This is a sure fire way to know if you have your delivery and operations squared away. If you are constantly providing refunds, this means that your consistency of delivering to your customers need work. Somehow, you may be getting the specifications for your customer’s order wrong, or customers expect more from the level of service you are currently providing. If this maintains a problem, look into your systems and processes soonest possible, especially before you begin expansion.
Our Business Diagnostic and Evaluation can single out where the problem lies in your company. Where many mistakes occur, it either Systems or People that needs work in any business.
Do you have high turnover and resignation rates in your company?
High turnover and resignation rates are painful for small and medium sized businesses. It creates backlog, and plenty of fire fighting, but worst of all and depending on how big your company is, it potentially sucks the business owner back into some of the work. And yes, working harder.
Companies with high employee turnover rates usually suffer from a few issues:
- Poor and inaccurate recruitment: Sometimes the department needs people so badly that they are willing to hire anyone with 2 eyes and a mouth. A company’s recruitment needs to be a proper assessment of whether the candidate is fit for the job & role, and fit by the company’s values.
- Lack of systems & processes: With insufficient standard processes, employees might be struggling on how to get great work done, and that becomes a frustration between employers and employees. When employees are frustrated and they get little support from their employers, they leave.
- Insufficient training & development: Training and development assists employees to understand more about the company, and clarity in getting their jobs done. Even if they are frustrated, training sessions and meetings are seen as ways to air out frustrations, and gain more clarity from supervisors or bosses.
Conducting a Business Diagnostic on your business is helps you gain clarity on the challenges you have in achieving your goals. You will be evaluate your business comprehensively, and see all the areas that must work in synergy, to get your business humming to the top. Click HERE to get your FREE Diagnostic Test.
And if you need to meet with one of our Business Coaches, we will need a deeper look into your business, assessing every angle from financial, sales, lead generation, operations, human resources and etc. No stone left unturned. Click HERE to get your COMPREHENSIVE Business Diagnostic and Evaluation Test, or go to www.businessdiagnostics.asia to find out more.
Stay tuned for Part 2!
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