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Performing a Physical on Your Firm

March 29, 1994

Now is an ideal time to take the pulse of your business. This quick checkup is designed to help small-business owners figure out where they are and where they're headed for the rest of 1994.

You're in a good position to look ahead, because you've spent time and money looking back to prepare your 1993 tax return. With your financial picture fresh in your mind, take a few minutes to consider other key aspects of your company's health.

This checkup is divided into three sections. The first section is for business owners or managers to complete. The second section includes questions for your banker, accountant and insurance agent. The third part includes questions to share with your employees.

While there are no right or wrong answers, your responses will help determine the strengths and weaknesses of your particular business and pinpoint areas where action is needed.

To complete Part One, all you need is a quiet place to work, preferably without interruptions from telephone calls, pagers or fax machines. You'll also need a blank, lined note pad and a pen or pencil. Don't labor over the answers; the first thought that comes to mind is usually the most truthful.

Part 1

Ask yourself:

1. Is my business doing better or worse financially than it was at this time last year?

2. Have we gained any new clients or customers in the last three months?

3. Have we lost any clients or customers in the last three months?

4. Have we hired, fired or laid off any employees in the last three months?

5. When was the last time anyone on my staff met with our major clients or customers?

6. When was the last time we called on any prospective clients or customers?

7. What would happen to my business if our major client or customer went bankrupt, died or took his or her business elsewhere?

8. Do we have any new products or services to offer?

9. Do customers owe us more than $1,000? $5,000? $10,000?

10. What are we doing to collect the money we're owed?

11. What have we done recently to attract attention to our business? Have we advertised? Sent out a newsletter? Hosted a charity event?

Part 2

Here are some questions to ask your banker:

1. Do you have any new products or services to help my business run more smoothly?

2. Can I increase my commercial credit line?

3. If I need one, what can I do to obtain a commercial credit line?

4. How can the money I have on deposit in your bank work harder for me?

To ask your accountant:

1. What new tax strategies can we work on for 1994?

2. Can I take advantage of the increased office equipment deduction? (It increased from $10,000 to $17,500.)

3. If we're not already using a computerized bookkeeping system, what software do you recommend for my business? Can someone at your firm help select the software, install it and train my employees to use it?

4. What can I do to minimize my state and federal taxes this year?

To ask your insurance agent:

1. Are my business and inventory adequately covered against fire, thefts and natural disasters?

2. Should I purchase a business interruption policy?

3. What kind of personal disability policy is best for me?

4. How much life insurance do I have? Should I buy more?

5. If I rely heavily on a top manager, should I purchase a 'key person' insurance policy to cover him or her?

6. What can we do to reduce our workers' compensation insurance premiums?

7. Are my business vehicles adequately covered? Can we reduce the coverage on older vehicles or ones that never leave the property?

Part 3

Based on the answers and responses you've collected from yourself and your key advisers, it's time to sit down with your employees. If possible, get away from your business for a few hours. Reserve a room at a local restaurant. Find a picnic table in a nearby park or reserve a room in a club or recreation center.

If you can't get away, hire a temporary worker to answer the telephones for a few hours. If your business is too big to close down for a few hours, create a committee of representatives from every department to participate in this quick checkup.

Begin by asking everyone what could be done to make their particular jobs easier.

Who could help them do their jobs better?

What kinds of office equipment, computers or communications equipment are needed to boost productivity?

What's going wrong that we can fix right away?

Put together a few short- and long-term goals. Short-term ones can be as simple as cleaning up the office, painting the lunchroom or beginning a simple office recycling program.

Long-term goals might be landing a new client or customer, renegotiating the prices paid for major supplies, setting up a new training program or moving into a new space.

Ask your employees to tell you what your customers are saying about your business. Remember, your employees are on the front lines every day and often have the best solutions to your toughest business problems.


Briefly: Consultants, attorneys, accountants and other professionals looking to boost their business are invited to attend a Jugular Marketing seminar on April 16 sponsored by Consultants Roundtable. The session runs from 7:30 a.m. to 5 p.m. at the Marina del Rey Hotel. The cost is $129 if you register by April 1. For information call: (310) 517-7958.

Jane Applegate is a syndicated columnist and radio commentator. Write to her: P.O. Box 637, Sun Valley, CA 91353-0637.

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