One of the important things to know if you run a business is how strong it is, from day to day. You can measure it’s strength in all sorts of ways, some specific to different businesses (footfall is an important, useful measure in a shop, and a less helpful metric to an online consultancy firm, for example), some that simply differ according to your priorities. Some count money in the bank as an important gauge of strength and weakness, while others are more concerned with how they’re spending and investing their profits rather than banking them!
Today we’re looking at some of the way you can gauge the strength of your business, so you can feel confident that it’ll still be there tomorrow and reaching for even greater heights!
The Market
Your business is only as strong as the market it relies on: if the demand for your products and services is bounded, then no matter the strength of your offering, you cannot exceed that bound.
You need to know just how much demand there is for what you offer, and the extent to which you are exploiting that demand. Discover how market research firms like Attest can help you understand your market and your position in it, letting you know if you need to diversify to seek a wider market, or if there is a bright tomorrow in bringing your existing offer to more and more people.
Your Own Business
While you might need help from an outside agency to gather information beyond the borders of your own business, what you do have ready access to is how your own business is performing.
You need to make sure you’re taking this opportunity to ensure you have reporting structures in place that get you all the information you need to judge how strong your business is. You need to make sure you know and can account for all your profits and outgoings. This is good business practice anyway of course, but you also need to make sure you know what you consider strength to be for your business and rate your performance against that stance.
If you consider strength to be measured in money in the bank for example, you need to make sure you’re not just keeping regular track of your business’ balance, setting thresholds that indicate encroaching catastrophe (or celebration!), but also making sure you have a thought through policy to indicate when it’s reasonable to spend down your balance, and account for future profits that this investment could bring in. If you don’t your setting yourself up for short termism, and it’s resulting failures.