State of a business is usually defined as “assessing the value of assets, debts, cash flow and goods.”
I believe there is so much more to it!
For 17 years I worked in the medical field in positions from receptionist to practice administrator. During that time, I learned a lot about business in general. For the purpose of this blog, we will use a physician’s office to explain, and then show how this relates to all businesses.
First, what seems to be obvious about the state of a business is not always obvious to the owner of the business. Depending upon the type of business and what roll of the owner is, he or she may not know the state (health) of their surroundings, or even how to run a healthy business.
Let me also say that the state of any business is not necessarily driven by financials. There is also the physical state, mind state and labor to be concerned about. I found it very interesting over 17 years that a physician might own a company, but doesn’t know a darn thing about how to run their practice. Most of them will admit they just want to see patients, perform surgery and be financially secure. However, 95% of the ones I worked for had no idea what was happening within the walls of their own practice.
For any business it is important to constantly analyze many factors. The most important factor other than money is the people. Businesses can’t stay afloat without the right people helping it along. Obviously in the case of the physician, they are the reason the business exists. However, his/her staff is just as important to the inner workings of the business as the physician is. The physician can’t answer the phone, complete the paper work, call the insurance company, see the patient, treat the patient, follow up on the patient, keep stock of supplies for the business, bill the insurance, post payments, …and the list goes on and on. OK….let’s take that back a notch and imagine that the physician can do all of that. How many patients a day do you think they could effectively see, knowing that there is so much to be done? My guess is maybe 3-4. With the expense of rent these days, 3-4 patients per day would not be enough to even bother. Going back to my original point of “the people running the business are just as important as the owner”! Staff must have positive attitudes, be reliable and work like they own stock in the business, or most likely they are not the people/person for the job.
Next, the mindset of a business is usually driven by the people running the office. If the entire staff is just working for a paycheck and not necessarily because they love what they do, or the people/person they are doing it for, then your customer service and quality of service will eventually have issues. It will wear on a company, which directly turns into bad reviews that will do your business in. Also, mindset is the epitome of what a business stands for…If the owner/owners and staff don’t have the mindset that the service or item they provide is important and of excellent quality, this also can become the Achilles heel of a business.
The physical state of a business should seem relatively obvious as well, but I have walked into countless businesses that are dirty, un-maintained and out-dated. As a potential customer, I want to see the owner and staff care about their surroundings. This gives me the vibe that they care about their clients too. Letting your building and the landscaping deteriorate is also a sign to me that “they don’t care to take care of anything”! This equates to not feeling that they will take care of me. As the owner of a company it is important to realize that there is always someone newer than you in the market, who owns all the latest equipment, etc. Potential customers will gladly pay a higher price to a business that is clean, new or updated, over one that is run down and not well maintained. It doesn’t even matter if the staff is good at what they do…the overall appearance of a business can really affect the bottom dollar.
One thing I learned quickly in the medical field is that you need a well-rounded clientele. You cannot make it just taking Medicare, Medicaid and Tricare patients in the medical field. However, to just take cash and private insurances that pay more is a disservice to those in need. A well rounded medical practice will take a limited amount of lower end insurances as well as the rest. This insures that you are not perceived as being only interested in money, but are customer service oriented!
In my line of business (wedding planning), we try not to advertise as much on Face book because it is the place where most DIY (Do IT Yourself) Brides are looking for the lowest priced vendors. They do not generally want a planner, and won’t necessarily look at us for all of the other services we provide either. I have at least 1 or 4 brides per year that are so budget minded that they unfortunately do not enjoy their wedding day, because they can’t or won’t pay for the help (But that is another story!) Anyway, these are what I call my Medicare/Medicaid/Tricare Brides. We can’t stay afloat on just them, so we look for the cash/private insurance Brides who want the help, need the help, and are willing to pay for that experience. Boise Events always wants to help anyone it can! Just like any other business however, there is a limit to how many low budget events we can take without losing space to help bigger events as well.
The final piece to knowing you have a healthy business is in how your clients are finding you. Over the years if you find that you are paying less and less for advertising, but are busier and busier, you have reached the pinnacle of what every business should strive for. Your customer service and quality of service have turned into word of mouth, which is the cheapest but most effective form of marketing. Once you can stop paying for trade shows, on-line ads and are just paying to have your website hosted, but not much else…you have made it!
Keep in mind though that all of the other things we discussed above must be in line for this to happen. It can take several years to accumulate the right staff, get the right mindset and give the best service!