Reviewing your Business operation

Nov.24.06

There are many factors that impact on the operation of your business. As the year 2006 draws to a close it is important that as an entrepreneur or business person you review these factors. It is important to do some of these at this time especially if your financial year coincides with the end of the calendar year. Even if it’s not the end of your financial year we encourage you to still take note.

1. Review the economic and business environment:

• Look at how external forces in the market change. Consider how these will impact your cash flow, receivables, profit margins or customer orders;

• Know if there are likely to be any major changes in your suppliers or the competition;{{more}}

• Be aware of what is happening in the local economy – inflation, changes in interest rates, rise in unemployment, salary increases, economic growth, changes in systems of taxation – and how these changes will influence what you can or cannot do in your business;

2. Review your human resource policies:

• Policies should be up-to-date in keeping with any transformations that may have taken place in the local and international labour market;

• Ensure that best practices are in place for effective employer-employee relationship;

• Evaluate the benefits/compensations that you provide to employees;

3. Review your environmental responsibilities:

• Ensure that the way you operate your business does not destroy the environment;

• If your current practices are causing environmental problems then consider the measures you need to take to correct this problem;

4. Review insurance coverage:

• Insurance coverage must be sufficient;

• It must keep up with changes in your business;

5. Review your business equipment and technology needs

• Examine current equipment and determine if they are meeting your business needs;

• Look at the current level of technology being used by the business and decide if you need to update or upgrade;

6. Review your financial management system:

• Check that your record keeping system has been accurately recording information;

• Ensure that your accounting is up-to-date and all reconciliations have been done;

• Determine that your system for paying your debts and for collecting money owed to your business is working;

• Take an inventory count;

• Scrutinize the way you handled all money to decide if your personal money was kept separately from the business at all times;

• Determine if you will be able to pay any taxes owed by your business when it becomes due or bonuses to employees;

• Examine your current budget and decide if it is adequate;

7. Review performance indicators:

• Consider if your key performance indicators reflect the goals of your business and if you can verify when they are achieved;

• Highlight the goals you were able to achieve during the period;

• Identify the goals you did not achieve and the possible reasons why you were unable to do so;

• Examine your system for keeping employees up-to-date of progress;

8. Review your business communication system:

• Recognise the methods of communication that were most effective in getting information out about your products;

• Examine the communication needs of your business and decide if the current system in place is effective to deal with internal and external needs;

• Identify the problems, if any, in your current system;

• Consider if you have to update your system and the cost of doing so;

• Know what alternatives are available to you.

Submitted by the Centre for Enterprise Development Inc. (CED) a non-profit company that provides business development services to the local private sector.

We are located on the 1st Floor, Methodist Building, Granby Street. Kingstown. Telephone 784-451-2235/6. Email cedsvg@vincysurf.com or cedsvg@hotmail.com. Visit us on the web at www.gov.vc/ced