Each New Year people form resolutions in hopes of making the coming year better than the last. Among the most notorious list-toppers in this regard are better diet and exercise habits. Although these are hardly original aspirations, no one can thrive without good health, and most people are all too aware of where improvements are needed.
Similarly, one of the best New Year’s resolutions for business owners is to foster a healthy business—entrepreneurial brain children have pants sizes, too. Here’s how to assess your company’s current health and set goals for the new year.
Key Metrics for Business Health
First, calculate how your business is doing financially in terms of the following key metrics:
- Pre-tax net profit margin. This is the total revenue your company earns after expenses and before tax.
- Current ratio. This indicates whether the assets you can liquidate in one year will cover financial obligations that will be due in less than a year.
- Quick ratio. A present-moment snapshot, this number is your cash plus accounts receivable divided by your current liabilities.
- Accounts payable days. The number of these helps show whether you’re paying bills too soon.
- Accounts receivable days. The number of these helps show whether you’re not receiving payments from customers soon enough.
- Inventory days. This ratio is the number of goods available divided by goods sold; it indicates the number of days required to move inventory.
Other important, if less quantifiable, assessments concern how well you understand business strategy.
Tips for a Healthy Business Culture
Toxic work cultures can cause reduced productivity and profit loss. Here are some tips for promoting a healthy business culture:
- Define and stand by your company values. Decide what your core values are, why they’re important, and communicate them to employees. Actions speak louder than words, so show how your policies and protocols uphold these values.
- Put your employees first. In order to maintain job satisfaction and reduce turnover, prioritize safety, respect, fairness, and emotional intelligence in your company culture. Employees who feel valued will be more productive and stay with you longer.
- Hold yourself and upper management accountable. One of the most common sources of employee dissatisfaction is management staff who don’t abide by the same rules and values as their direct reports.
- Communicate. Failing to communicate key updates and concepts or to ask employees how they feel about current work situations causes confusion. It also makes employees feel disconnected from important company decisions and policies.
Improve Your Company’s Health With a Business Accelerator Program
Enrolling in a business accelerator program and working one-on-one with a business coach is an excellent way to get guidance on keeping your business healthy. If you own a small business in the Northwest Chicagoland area and are ready to accelerate your business growth with coaching, consider applying for admission to our business accelerator program with Next Level Northwest.
Next Level Northwest is a business acceleration public-private partnership serving the Northwest Chicagoland region. We support regional and local businesses through collaborative and innovative initiatives to help grow the economy. Download our Program Overview PDF here.
Ready to take your business success to the next level and become a Next Level Northwest graduate? Download and prepare your application following this process today!