Good health is important. It is important to our bodies, and it is important to our business. When you care about the health of your business, you are demonstrating an interest in more than just the money that flows through it. You are showing that you fully understand the different parts of your business that contribute to its success – its good health. Just like we visit our Doctors once a year for a checkup, we take our cars to a mechanic for a tune-up, or we visit the Dentist for a cleaning, we should also conduct a checkup on our business at least once a year. Some suggest conducting a checkup twice a tear. Whichever you choose, you may be wondering – What exactly is a Business Checkup?
If you are an owner of a small to mid-size business, the odds are that your business is what is sometimes called a “Life Style” business. In other words, the business is there for an income with which you support yourself and family. The more income you have, the better your lifestyle.
According to the Exit Planning Institute (EPI), most business owners have between 80 and 90 percent of their personal wealth tied up in their businesses. Further:
- About 63% of businesses are owned by Baby Boomers, and inevitably all of them will one day leave their business.
- Of these, 83% have no plan for their future or the future of their business.
- Half of these owners will need the business to be profitable after they exit.
Personal wealth does not come from revenue alone; it comes from the value of the business. Value is linked to revenue. You have to focus on BOTH to have the financial security to maintain your lifestyle. So how do you do that? (Business value also affects business loan eligibility and amount – that’s another story.)