When you look at small businesses, it’s really difficult to judge whether they are healthy or not from the outside. But we often have a kind or sixth sense of a company’s health when we interact with them. Sometimes we can just tell that something is not well, but we can’t always put our finger on it.
But if we think of a business the way we do humans then that gives us an indication of where to start.
The first important thing you can do is to assess the health of your business in its current state. In particular, we will focus on how your health as a company could be affected by a number of factors, such as age, health, employee age (or entrepreneur age), location, etc.
I will also cover off some tips on what to do and how to do it.
Of the four metrics, however, the profitability of a company is perhaps the most obvious metric to measure. We all know our personal health can be improved, so vice versa so can the health of your company.
Your company’s profit is a measure of how well your company has performed over time. Profit margins are also useful to measure the performance of your business at a particular moment in time. But money is not the only indicator of business health.
The analysis of cash flow will help you understand what your company might look like in the short and medium term. If numbers are not your strong point, then I would certainly suggest getting a business coach in to take a look. Even having an external pair of eyes look assess performance can help assure you that you are on the right track. After all as entrepreneurs many of us are so deep in our day to day we can neglect these crucial long term strategies.
Having a business consultant analyze your base rates can help you assess how healthy your business is, diagnose potential problems and help to nip them in the bud before they become a real issue.
When you think of takeovers, the first thing an organisation does is analyze a company’s financial metrics which allows lenders to see how it is doing in comparison to its competition.
Imagine, for example, that these metrics belong to a single company, but you can see how calculating these three metrics alone can enable a quick health check of the company. A potential small business lender will take all these metrics into account when assessing the health of its business and other factors such as sales and profits. [Sources: 11, 13]
You can promote economic growth by continuing to work with partners who can help your business succeed.
As well as the money side. I like to look at the health of the people in the business. Are people happy in their work or stressed, overworked and dying to shut their laptops?
In these cases, some form of mental and phsyical care needs to be incorporated into the business. Be that a ‘personal day’, where employees are allowed to take a day off to do whatever they wish and not have to be sick for example.
Or for small businesses, connecting with organisations or apps that offer mental health services. Such as the service offered by Calm. Bringing meditation and mindfulness into the workplace.
It is also helpful to think about behavioural changes by helping your employees to set personal goals and develop healthy habits. [Sources: 17, 18] These are absolutely crucial for the mental health of your employees and yourself. Clarity on the direction of your own goals and the direction of the business help to not only ensure you are all on the same page but also help with communication and overall vision.
Regularly reviewing the health of your business is an essential part of governance that unfortunately gets pushed aside in the drive for profits for many small business owners. And I get it, you’re so busy in the day to day how can you begin to take a step back and look at this stuff. But that’s where you need external help. Get a consultant to assess your business, the intrusion will be minimal but the benefits can potentially save you from ruin.
Obviously you need to have enough revenue to support your current targets, but also consider the requirements for future growth. If you’re a sole trader and you want to grow your business, you’re going to need to factor in the costs of support, even if that’s just a part-time employee on weekends. But that extra cost needs to come from somewhere, perhaps with that vision in mind, you simply set aside a weekly sum to be able to pay someone in future. Just taking time to sit and think through the ideal scenario can help you plan your business future with much more control.
The truth is most small businesses are reactive and not proactive and that’s why so many have a high fail rate. There is way too much information on the internet about how to create funnels, and landing pages and nowhere near enough information on how to effectively run your business with a long term vision.
Knowing your underlying operating profit margin and getting comfortable with your profit and loss sheets. Planning the budget and creating a vision of the long term goal should be the starting point for many small businesses. And these metrics need to be assessed on a regular basis, to ensure you are on the right path.
Don’t be one of those entrepreneurs who neglects the essentials of your business health. Set a vision, i.e. your long term goal. Assess the performance of your sales, and your products. But also your own mental health and wellbeing whilst working, set healthy boundaries so you can operate your business with professionalism and integrity. Plan for the future and your business cannot help but thrive with the proper care and attention.
Success is a very important part of life, but is there any evidence that happiness is more important than success.
Happiness is such a priceless feeling and there are neuroscientific and psychological studies that show that it leads to better health, better mental health, and greater well-being.
There is also strong evidence that happiness correlates with, and often precedes, career success, and that positive emotions lead to better outcomes in the workplace. And subsequently there is strong evidence that happiness is more than important to success. Sources: 15, 16, 20
The biggest correlation between business success and happiness is that money can’t buy happiness. If you build your business focusing on the things that make you happy, then you inevitably become successful. But that’s something many people struggle to believe in. Why? Often because as entrepreneurs we are often in the thick our work and oftentimes not able to see the wood for the trees.
In these situations, it’s always best to take a step back and have someone else take a look at what it is you need to be doing with your business to create the balance between doing something that brings happiness and success.
If you work hard, you will become successful. But will that be enough to make you happy?
The pursuit of happiness may be a daily task, but if we celebrate our small wins each day then the happiness seems to grow naturally.
In other words, happiness is crucial to a healthy and successful life.
But what’s important here is to understand what happiness is to you. To do this one process is to write down your own definitions of what happiness and success mean to you. That level of clarity gained from this exercise can help you identify true happiness and success. As an example, if you say that success is completing your tasks for the day then you’re more likely to be successful each day as opposed to not being clear and having some vague idea that success is related to the dollar amount in your bank account!
If you want more happiness and success in your life, it really helps to surround yourself with people who are happy and successful. Building strong relationships gives you the opportunity to find a higher level of success and happiness in life.
You will feel happier and prove that happiness is not something you have to wait for before you succeed, but that you can feel happy now by proving it to yourself. And seeing others happy and successful does something wonderful to the brain, it gives you the desire to achieve the same.
When you look at happy people, they will tell you how easy it is, that you don’t need anything to actually get happiness from it.
The field of positive psychology contains a lot of research into how our behaviour affects our happiness and how it affects success and happiness and is definitely worth checking out.
One interesting point to note is that after reviewing 225 studies, it has even been shown in some cases that success does not produce happiness in the way we might think, and that it is indeed happiness that leads to success.
Success is like a vision and without happiness there is no sense of purpose in it. It is important to remember that happiness is the most important thing in this equation, because that is what our ultimate vision is about.
When I started to meditate it took me a while to figure out which form of meditation works best for me. But what’s really important when starting meditation for the first time is to try and find a meditation practice that feels comfortable and is doable for you.
The easiest type of meditation to follow is a guided meditation. That literally means when a teacher talks you through the process and you simply listen to the sound of their voice as they ‘guide‘ you through the practice. There are many different types of guided practices available as a starter for 10.
One of my favorites is a lovely ‘Breathing‘ meditation I have that simply focuses on breathing in and out in a relaxed state. But the possibilities are endless.
Perhaps the most important thing to do is ensure you are in a comfortable place. Ideally in a space where you will not be disturbed during your practice.
New meditators will often fidget whilst trying to sit still and spend so much time in their heads that the slightest distraction can throw them off course. So a nice quiet place, certainly in the beginning is absolutely crucial.
Next you need to sit or lie down to practice. Let’s not beat around the bush here, if you’ve never meditated before the first time is going to be tricky.
You will probably ask yourself whether you’re doing it right, what you should be feeling, whether you are meditating or just sitting still. Whatever goes through your mind, just allow it to pass.
Witness the thoughts like clouds drifting across the sky. Just let them go and don’t beat yourself up about how well you are doing. Trust me this gets so much easier in time.
The purpose of meditation is not to punish oneself for not being perfect!
Rather, it is about training us to become aware of the sensations that permeate us, such as the sound of breathing, our heartbeat and the movements of our body.
Learning to meditate requires repetition and patience, not only for beginners but for all of us. But in all honesty it simply takes practice, practice, more practice – and a lot of practice. I joke it’s called ‘a practice’ for a reason. Because that’s what we have to do each day. But the benefits are phenomenal.
Meditation touches a large part of our thinking and is generally something we do regularly, with time allocated to this practice ideally daily. You can read more about the benefits of meditation to improve sleep and reduce stress in my meditation guide here.
Think of it as a form of training and learn to focus your attention back on the present, which helps you develop a stronger sense of concentration, calm and awareness in your everyday life.
An alternative meditation which is another simple practice is a focus meditation.
Simply start by sitting still, sitting with your eyes fixed on the point of your eyebrows, and let your thoughts and sensations rise and fall while you sit still and feel them. You can do this for just a moment or longer it’s entirely up to you.
When you start meditating, start with a few minutes and then ideally build up to about 10 minutes a day.
Meditation is a great way to feel calm and happy and to improve the overall health of the brain and reduce the risk of depression and anxiety.
Meditation is so powerful. It has truly been a life changer for me. It’s helped me deal with stress, anxiety, depression and burnout. It’s why I now teach meditation worldwide and have over 50,000 downloads! If you’re a beginner to meditation, I would suggest grabbing my ‘Just Breath’ meditation which guides you fully through the practice. You need nothing fancy, no white clothes, mountain tops or candles. Just you, your mobile device and a comfy seat.
I look forward to connecting with you in your practice.
HOW TO USE DIGITAL TRANSFORMATION EFFECTIVELY IN YOUR BUSINESS
Digital Transformation is a term that has become increasingly popular as a recent ‘buzzword’. But what does it actually mean? Here Ayse Durmush – The Transformation Expert shares her expertise on what digital transformation actually is and how you can use it in your business.
From identifying where data is sat, to how to design new integrated systems. Digital transformation has become a catch-all for many things, some people even call updating the website a ‘digital transformation’. But in reality, true digital transformation is a dramatic change across the entire business, using aspects of digital to make improvements to the bottom line. True digital transformations affects everyone from the CEO to call center staff to people out in the field and ultimately customers.
Why go through a digital transformation
In reality, digital transformation is actually organizational change, hence the ‘transformation’ part. It can be expensive, take people out of their day to day roles and can take months to plan and execute. So why bother?
According to Gartner in 2016 66% of companies expected their digital transformation to generate more revenue and 39% of companies actually expected the transformation to reduce costs long term. So for many, the results far outweigh the effort in transforming the business.
Personally, I would prefer we simply rename it ‘business transformation’ as the digital is implied in today’s environment, whether that’s aligning customer data, getting data scientists on board or changing to a new cloud provider. In fact, I can’t think of a single business where this isn’t implied.
The biggest hurdle with digital transformation is actually the strategy – and in my experience, many organizations can get overexcited at the prospect of a new website or system being brought in rather than setting the business objectives clearly up front. Do you really need to spend $1m on a completely new digital infrastructure or would revamping some systems meet the business objectives. In order to create the right kind of strategy, it’s important for businesses to have representatives involved from across the business from client facing to back end. This way a fully rounded view of where change needs to be made can be assessed.
Experts in Digital Transformation
That may sound daunting but with the right digital transformation expert managing the programme this can be executed effectively and a strategy created with senior management that doesn’t impact the business too negatively whilst staff are working on improving the processes required.
Digital transformation can sound like an incredibly painful and exhaustive process, but there’s a reason why so many businesses are employing Digital Transformation Managers – because the uplift in not just the numbers but in staff morale and overall business improvements is huge. I’ve seen this first hand and it’s one reason why I personally love creating and managing digital transformations for businesses.
Ayse Durmush aka The Transformation Expert has worked on digital transformations at Virgin Media, Lombard and Royal Bank of Scotland among others. Successfully creating strategies and delivering worldwide transformation projects for years. She offers transformational services to both businesses and on an individual basis for people who are in need of personal support in taking their lives to the next level.