Many different factors contribute to the overall health and fitness of any given business. For example, a business can be considered healthy if it has very little debt, the required level of operational income has been profitable for a long time, and has a high customer retention rate and other positive attributes.
Here are some other good characteristics of successful businesses:
- Healthy Businesses Grow
If your business is constantly growing, and in a sustainable way, then it is a sign of a healthy business. It shows that you have proper processes and procedures embedded in your business that are followed meticulously and on a timely basis. A company whose profit is stagnating or one that is consistently loss-making is unfit. For companies to become healthy, they need to grow at a regular pace, and growth can never be achieved without proper performance reviews of all aspects of the company. - Remove or Improve the Bottlenecks
Any element in your business that acts as a hurdle or obstacle to your company’s success can be considered a bottleneck. Your company’s least efficient processes and procedures can be considered as bottlenecks. Once you have identified such issues, you can then come up with solutions to improve them. This will have an amazing effect on the health of your business. Lazy and inefficient staff can also be considered bottlenecks, so to improve your company’s human resources, you can arrange professional training sessions for them then monitor performance and productivity. - Employee and Customer Retention
It is always a sign of good health when your business can retain good people, whether it’s employees or customers. You probably noticed that healthy companies have high employee retention rates. This is because employees in such companies are looked after better and feel valued: for example, a healthy balance sheet may translate into handsome bonuses for employees. Retention of good customers is equally important. You cannot afford to lose either good staff or good customers to your competitors. In simple words, healthy companies are more viable and resilient than companies with an unstable structure. They can offer better products or services to their customers and a desirable working environment for its employees. - Better Communication
Communication is essential between different departments within the business. Many different factors are involved in making your business fit, and healthy communication is one of them. If different individuals and departments in your company don’t communicate on a level that they are required to, then you will have an inefficient business structure. Try to encourage better professional communication. A company where employees don’t communicate or get along professionally will never be as healthy as the top management wants it to be. - Financial Health Of The Company
The best measure of a business’s health is its financial position. For example, if your company has little or no debt, or the debt level is manageable and for well-defined purposes, this is a good indication that you have a healthy business. Strong and sustainable cash flow is also important: leakage of even small amounts of money from your regular cash flows can have a huge effect on your business’s overall health, so try to identify the factors that govern these leaks and resolve them. Assessing your cash flow position regularly will allow you to identify any leaks and take action before they negatively impact your business’s long-term profitability.
For an impartial view of your business’s unexploited areas, contact Flourish to get your FREE Business Performance Assessment.
