What is Your Business Health Score?

July 9, 2024

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An expert OBM taking the operational mental load off agency owners so they can become better leaders.

Meet Jillian

Owning a business is a rollercoaster ride. As entrepreneurs, we're constantly navigating the ups and downs, seeking ways to grow and improve. One powerful tool in our arsenal is understanding our business health score. This metric can provide invaluable insights, helping us make informed decisions about HOW we want to grow our business moving forward. Goals are great, but when you set a goal, we often overlook one of the biggest factors – Where we are today. Let's dig into the concept of business health scores and show you how to get yours.

In my years of experience working with various businesses, I've observed that each company's journey is unique. There's no one-size-fits-all approach to sustainable success. However, certain fundamental principles apply across the board. One of these is the importance of regularly assessing your business's health.

What is Your Business Health Score?

A business health score is a comprehensive metric that provides a snapshot of your company's overall well-being. It takes into account various factors such as financial performance, customer satisfaction, operational efficiency, CEO involvement and growth potential. By calculating and monitoring this score, you can gain valuable insights into your business's strengths and weaknesses.

Understanding your business health score can help you:

  1. Identify key areas for improvement and growth
  2. Make data-driven decisions
  3. Track progress over time
  4. Benchmark against industry standards
  5. Identify vulnerabilities you may not be considering
  6. Create a roadmap to the goals you set

Knowing your score empowers you to take proactive steps towards increased revenue and sustainable growth. It's like a regular check-up for your business, helping you catch potential issues before they become major problems.

How To Check The Health Of A Business

Assessing your business's health involves a systematic approach. Let's break it down into manageable steps:

Step 1: Evaluate Financial Performance (or in my terms, Profit Health)

Begin by examining your financial statements. Look at key indicators such as:

  • Revenue growth – Look at the last 3 months – the last 3 years to get the full picture/trend.
  • Profit margins – Don't settle!
  • Cash flow and savings – Don't cringe!
  • Monthly expenses – Do you need everything you're paying for?
  • Team expenses – Keep not cringing – It gets better I promise!

Do you want to lay all these out on the table to review them. Some questions to ask yourself….

Where do I want this to be?

What has to be true in these areas to reach my next goal?

Based off of where you are today, out of 100% where would you score your self?

Psst! You will use these questions in every review so tuck them away.

These metrics provide crucial insights into your financial health and position. They can help you identify trends and areas that need attention.

Step 2: Review Operational Efficiency (or how I like to say it, Systems and Team Health)

Efficient operations are crucial for business health. Evaluate:

  • Team cost – How much time are they making you money vs costing you money?
  • Team positions – Is everyone in the right role?
  • Main systems and processes in the business – What could be streamlined?

Streamlined operations contribute significantly to overall business health. So again, let's pop over into our questions again…

Where do I want this to be?

What has to be true in these areas to reach my next goal?

Based off of where you are today, out of 100% where would you score your self?

Step 3: Examine Management Practices (or what I like to call, CEO Health)

Strong leadership and effective management are vital. Evaluate:

  • Decision-making processes – Who makes decisions and do they have to?
  • Team communication – Regular touch bases are important (even though I know they cost $$$).
  • Team satisfaction and retention – Are you checking in with them to get this info?
  • Strategic planning – What are the goals for the future?
  • Risk management – Is your business protected?
  • Delegation – What is on your plate that doesn't have to be?

Annnnd one last time…

Where do I want this to be?

What has to be true in these areas to reach my next goal?

Based off of where you are today, out of 100% where would you score your self?

Good management practices can significantly impact your business health score.

Now you can take your percentages and average them. This will give you a percentage score as a baseline for the growth that's to come with all this awareness you have on your business now.

By systematically working through these steps, you can create a comprehensive picture of your business's health. This process allows you to calculate a health score based on various factors, giving you a holistic view of your company's performance.

Remember, maintaining a healthy business is an ongoing process. It's not just about achieving a high score once; it's about consistently monitoring and improving your business's health over time. This dedication to continuous improvement is what separates thriving businesses from those that struggle.

As you work on improving your business health, it's crucial to maintain a balance between your professional and personal life. For tips on how to balance business and personal life, check out this helpful resource.

In today's fast-paced business environment, having access to real-time data is invaluable. Many modern business management tools can help you track your business health metrics in real time, allowing you to make quick, informed decisions based on the most current information. Having an online business manager, COO or Operations Manager (what ever you want to call them!) can help you manage, track and make improvements to these things faster.

Your customer success team (or whoever is the one talking with your customers/clients the most) plays a crucial role in maintaining and improving your business health as well. They're often the first to notice changes in customer behavior or satisfaction levels. Empower them with the tools and knowledge to calculate and track customer health scores. This information can help you proactively address issues and improve customer retention.

Remember, your business health score is not just a number—it's a roadmap for growth and improvement. Use it to identify areas where you can enhance your management practices, boost financial performance, reduce customer churn, and optimize product usage.

As business owners, we face unique challenges, but we also have the agility to make rapid improvements when needed. Love a quick win! By regularly assessing and working to improve your business health score, you're positioning your company for long-term success and sustainability.

In conclusion, your business health score is a powerful tool that can guide your decision-making and help you build a stronger, more resilient business. By systematically evaluating various aspects of your business and calculating your health score, you're taking a significant step towards ensuring your company's long-term success. Remember, a healthy business is not just about financial performance—it's about creating a sustainable enterprise that provides value to customers, employees, and stakeholders – aka, YOU.

If you would like a ready made quiz to get your score, start here. Can't wait to see your results!

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