What questions would you ask your business?

Your business idea has taken off and is now performing well. With it, the business goals, financial needs, and challenges have also changed. Allowing you to put either more or less emphasis on certain areas of your venture. However, knowing your small business finances is doing well only tell half of the story. Do you know what you can do with it? What kind of questions does it post to you? Will you be able to upgrade your business?

The following questions are a great starting place to help you figure out the next steps.

1) How is my pipeline doing?

The business environment is always surrounded by uncertainties that can affect your pipeline at any given time. Thus, it is important to consistently track its progress. The revenue stream will always fluctuate on a weekly and monthly basis but does it point towards an upward trend?

Pay attention also to the things that drive up or slow down your pipeline. They serve as an indicator if you are meeting your short term goals or some changes are necessary such as in your marketing efforts or maybe billing strategy. At the same time, try to recognize if these drivers are within your control If not what can you do to adapt?

2) What kind investments that will help my operations?

  • Don’t fix something that isn’t broken, the saying goes, but what about improving its efficiency? For example, your operations might benefit from investing in newer computer systems, a bigger office space might help with productivity or outsourcing minor repetitive work.
  • Consistently look at the systems that are in place in your business for areas that could be improved and strategize accordingly so that you can obtain or open up the capital necessary for minor or major investments.

3) What are the drivers of my business growth?

  • Growth is the center of every decision thus it is important to know and understand the contributing factors
  • The drivers of business growth can come from a small change as you continue tweak your operations, marketing, and business strategies. They can be external factors that you have not thought about or cannot control. What kind of pattern to do you see from your observation?

4) What financial weakness does my business have?

  • Take a look at your KPIs (Key Performance Index) to determine whether or not your financials is where it is supposed to be. They allow you to see where improvements can be made. For example, it might allow you to see that there is an investment opportunity that can help improve your revenue or free up some tied up capital.
  • A great example is your billing strategy. If your billing strategy gives too much time for your customers to pay, it can hurt your cash flow and your ability to adapt to any unexpected changes.

5) What financing options are available to me?

  • Take a look at your short-term and long-term plans. Do they consist of a clear strategy for what kind of financing that might be needed in the short and long run? How about the plans to use the additional capital?
  • To keep your small business financially healthy, both of your short and long term plans must include the types of financing most relevant to expected and unexpected needs. For example, a expansion plan might require an SBA loan whereas a line of credit might better suited when you need to cover for expenses on the go
  • A small business loan will not solve your business problems but they will help you stay ready for any unexpected changes or opportunities.

Having a business is like having a family. To make sure that the family is able to sustain itself and create the future it wants, regular conversation with each family member is needed to understand what type of support is necessary so that the family can move forward together as a unit. In the same manner, having the same conversations with your business “family” will help avoid simple mistakes that can potentially threaten its impact and longevity.