Every business owner asks this question many times over the course of their career and it’s a very important question to ask.  If your business cannot make a profit, then something needs to change immediately.

However, some business owners don’t familiarise themselves with their own business financial statements and reporting.  They keep trying to make their business profitable without changing anything or even realising that their business is not making a real profit.  Unfortunately, that head in the sand strategy is likely to end in major problems and sometimes even bankruptcy.

So, if you’re looking for a way to tell whether your business is viable or not, try these three methods of testing viability:

Ask What Makes You Stand Out

Whatever field or industry you’re marketing to, odds are that you have competitors.  It’s always a good idea to ask yourself what makes your business stand out – what makes your company a better choice for your customers.  Is it a better service?  Better quality materials?  Cheaper prices?  A unique solution to the same problem?

If you can’t find a unique selling point your customer base is interested in, then your sales will go down as soon as a better option becomes available.

Take a Good, Hard Look at Your Financial Reporting

Get together with your finance team or your CFO and ask them to give you the financial data of your business, their interpretation and analysis of the data and their projections for the coming period. Finally, ask them for their recommendations in eliminating weakness in your business strategy.

Keep an Eye on Cash Flow

Whether you’re making more money than you imagined but it’s disappearing to pay for business costs or you can’t keep up with your customer demands because money isn’t coming in quickly enough to purchase the supplies, cash flow is a great indicator of the viability of your business.

If you’re ready to take a look at your financial reporting to see how you can make your business more viable, get in touch with us today!