The COVID pandemic has brought the health and wellbeing of people from all over the world to the forefront of our concern. But what about the health of businesses?
Just like you, your business needs a regular check up and diagnosis to make sure that it’s performing at peak efficiency.
Now is an ideal time for this check up to occur, as we reflect, recharge and plan in preparation for the new year.
Why you should conduct a business health check
A business health check and strategy review can help you assess the strength and longevity of your business performance, and reveal any blind spots, inefficiencies and limitations. Here are some of the ways in which it can help:
- An assessment of the present situation. Determine your current business position at any given moment, by evaluating its key elements.
- SWOT analysis. Highlight strengths to capitalise on, weaknesses to address, opportunities to exploit (including working on your business rather than just in it) and threats to overcome.
- A focus on business strategy. Revisit your goals, determine how likely you are to achieve them, and pivot your strategy if necessary.
- Plan for the future. Solve current problems to help support future growth and success.
Timing of a business health check
While there’s no prescribed timetable for conducting business health checks, the general recommendation is that it should take place at least annually. However, you may find that it’s worthwhile to conduct it more regularly, for example carrying out an in-depth annual check with less detailed quarterly reviews of key aspects or actions. Large impact external events, such as COVID-19, are also critical times where a business health check may be necessary given so much can change quickly.
Having a checklist to turn to for this type of business and strategy review will make it less onerous, so that it becomes a normal and regular part of the way your organisation operates.
Business health checklist
1. Internal evaluation. Identify and appraise the key elements of your business performance, including their suitability and efficiency. Have there been any major changes since the last appraisal?
- Products and services, product development
- Production, operations and logistics
- Marketing and sales
- Workforce and human resources
2. Financial evaluation. Is your business financially sound, and does it have appropriate systems to measure this? Look specifically at:
- Budgets and key assumptions set with an evaluation of key changes to these
- Accounting systems, including latest technology opportunities, data security
- Cash flow, debtor control and payment options, inventory control, supplier credit terms
- Working capital
- Asset financing
- Financial reserves.
3. External evaluation. Now take a detailed look at the outside factors impacting your business:
- Customers. Does the business rely on a limited customer base? Can it be expanded? Are customer needs being met? Are they changing?
- Competitors. Measure changes in your market share. Review any new products introduced by other players. Are there new market entrants?
- Suppliers. Identify key suppliers and how they are tracking. Is your supply chain safe? Do new or backup suppliers need to be sourced?
- Industry trends. Have new developments appeared, and are you keeping pace? If not, make implementation plans.
- Technology. Are you making optimum use of the technology you already have? Does it need updating to improve efficiency and meet customer expectations? Identify the latest advancements and how they could help you.
4. Strategy review. Evaluate your current business vision, future plans and concrete objectives, based on the information revealed by following the checklist.
When to seek external support for your review
A business health check usually begins with an internal assessment conducted by the owner or manager of the business. But an objective external view will help you to identify aspects that can be missed by someone who is always at close range. External support is available to help you to analyse your results in-depth and create a strategy based on the findings.
Help is at hand
Your local Bentleys advisor can help you complete a thorough health check of your business, and support you planning for the future. Contact us today for a no-obligation discussion. We can help you get where you want to be.
Disclaimer: This information is general in nature and should not be relied on as advice. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs and seek professional advice before making any decisions based on this information.