How a business health check can stop your company form flat-lining
A business health check involves a full ‘diagnostic’ of a business, starting with an evaluation of your current position and an assessment of the critical elements affecting your business.
Australia is often thought of as an entrepreneurial nation, and for good reason.
Australians seem to be keen to harness their skills, knowledge and experience to become business owners, with over 2.2 million businesses actively trading as of the 2016/17 financial year, which is an increase on 2015/16.
These numbers seem to reflect a very typically Australian ‘have-a-go’ attitude and the confident, independent spirit Aussies bring to turning their ideas and passions into their own, thriving, successful company. It isn’t all good news, though. When we dig deeper, the statistics reveal that 60% of small businesses cease operating within three years of opening.
The ASIC report on corporate insolvencies identifies the top three causes of business failure in 2016/17 as:
- Inadequate cash flow or high cash use (3,626 or 47% of reports)
- Poor strategic management of business (3,542 or 46% of reports)
- Poor financial control including lack of records (2,753 or 35% of reports)
These statistics should serve as a wake-up call to business owners, and show the need to conduct regular business health checks. Your dream can quickly become a nightmare if you only realise too late your company is sliding away from you. Even if there’s no immediate danger, a health check can help identify where your business can protect itself, and where you could be doing even better.
A business health check involves a full ‘diagnostic’ of a business, starting with an evaluation of your current position and an assessment of the critical elements affecting your business. This provides a full overview and offers key insights into the areas that need change, and how targeted improvements can deliver renewal and growth.
Why does your business need a health check?
1. Get expert, external perspectives
It can be easy for business owners to get caught up in the day to day tasks of keeping everything running and lose sight of the bigger picture. Having the trained eye of an external expert on your side can help you identify the existing strengths that you can build on and where you need to improve to ensure success into the future. Many business owners do not have this kind of strategic business expertise on their team.
2. Discover new opportunities
A business health check can also help you identify new opportunities by uncovering new growth in your industry, other growth areas you had not considered. This can help your business prepare for expansion and remain agile to changing market conditions.
Employees are usually not appropriate, friends and work colleagues may not understand or be experienced, but a business health expert is trained to quickly assess your business and help with problems and changes for improvement.
3. Rediscover your time and energy
Many business owners find themselves bogged down in time-consuming tasks that sap their motivation and pull them away from the really engaging work of guiding and strengthening their business. A health check can show you the first step towards changing this and freeing up your time and energy with new strategies or new technology.
4. Rediscover your business goals
It can be easy for business owners to get caught up in the day to day tasks and problem-solving involved in keeping everything running. This often means we lose sight of the bigger picture. A business health check allows you to reconnect with the reasons you got into business, offer clarity on the goals you want to achieve and make sure you’re on track.
5. Reduce business risks
As we know, cash flow issues, poor strategy and poor financial control are the top causes of business failure. These vital aspects of running a business are all too easily pushed aside and procrastinated over when we are distracted by numerous everyday tasks. A business health check can help you focus up and find effective methods for keeping on top of key business tasks, which can help you avoid becoming another business failure statistic.
If you want assistance in conducting a business health check or you’re unsure of the outcomes you found, request a free business consultation and our advisors will help restore your business back to health.