Are you concerned about the stability of your business? Do you want deeper insight into the best way to grow your business over the next few years? Have you considered what the next steps are for your company?
Did you answer yes to the previous questions? You aren't alone. Businesses of all sizes are experiencing uncertainty now with COVID-19, and there are a lot of owners that are wondering if they're on the right path for future success.
[quotes]If you want to really know the truth about how well your company is doing, consider doing a business health assessment.[/quotes]
Curious about why you need a business health check and how it can help you? We're going to break down what a business health assessment is, what it covers, and how it can benefit every business owner.
What Is a Business Health Assessment?
A business health assessment can be viewed as a comprehensive evaluation of the most important elements of your business. You'll answer several important questions that can help you get an honest view of where your business currently stands, and how your future can turn out.
Some people may use software and surveys to conduct assessments, others may prefer in-person interviews, and a few may want to do a combination of both.
After your assessment, you'll have answers to some of the most important questions you have about your business. From there, you'll be able to make better decisions around company growth, solve problems in your business before they become roadblocks, and see how the current state of your business aligns with your goals.
When you're conducting a business health assessment, you're going to answer a series of in-depth questions about your business structure, individual departments, and your overall business goals.
It's important to be open and honest during your business health check. [quotesright]Leaving out important information or glossing over issues may not give you the most impactful assessment. [/quotesright]
Areas of Focus for Your Assessment
Nearly every aspect of your business is going to be examined during this process. It's important for business owners to do a little research on their own beforehand and think of ways to compile important information so they'll be ready to answer questions thoroughly and accurately.
The exact questions you're asked will depend on the person running the assessment, but you should know that it's likely that you'll be asked questions in areas detailed below.
Overall Business Vision
Before you can understand if your current methods are working, you need to think about what the overall vision of your business is.
Take time to think about your current objectives, strategies, and plans. Are you executing on strategies and plans you set long ago? Do you feel like you're close to your original business plan, or has it evolved beyond that?
Internal Business Support
A lot of things need to come together to ensure that your employees can do the best work possible. Spending time thinking about your internal business needs could reveal areas for improvement.
How do you know when it's time to upgrade important software or equipment? Do you have a solid internal administration team? Where do you go when problems arise in the office? What processes should be reengineered? All of these are important things to consider during the assessment.
Profitability and Finance
Money is a huge part of your business, and there are several things that need to come together to ensure that your business is operating well financially.
What kind of systems do you use to manage bookkeeping and accounting? How healthy is your flow of cash? Are you confident that you'd be able to quickly find different ways to finance your business if you run into problems?
There are always external factors that are completely out of your control that could cause problems for your business. COVID-19 is a topical example of an external factor that affected countless businesses, but it's far from the only thing that could cause problems for your business.
[quotes]A competitor may take away a big client from your company or a key customer could suddenly declare bankruptcy (it happens – Enron, WorldCom, et al).[/quotes] Large storms or political unrest could cause issues for your business. A shift in interest from shareholders could change your business plans for the next year, so could the release of new technology.
If you don't pay attention to your competition, you could be losing out on learning ways to improve your business.
Take time to examine who your competitors are locally and what they're currently doing better than you: Don't make the mistake of just thinking about what they offer customers and clients, think about what they offer their employees.
This is especially important for businesses that sell products to their customers. Think about how you currently source, produce, and manage to make goods and products for people. Consider what you'd need to do if you had to find a new vendor, or offer a new product.
Employees and HR
How long does it take you to train a new employee? Are your current hiring practices finding you the right talent? Do employees have a solid way to report problems in their department?
A business is only as strong as the people that are working in it. It's important for you to honestly think about the current way you staff and manage employees if you want to gain helpful insight during your business assessment.
Business Development and Marketing
Business development, sales, and marketing are important for businesses of all sizes. If you want to get the most out of your company health check, spend time focusing on those departments.
Take time to think about how those departments work together to support each other. Think about current initiatives you've had in the past, what was successful, and what you wouldn't do again. What’s working and what isn’t and how well do the areas work together for the best leads and most sales?
Top 3 Reasons Why Every Business Should Do a Health Assessment
- Do you know where your business could be in 5 years? This is critical for future success.
- Have you figured out what your top-performing product or service is – or should be? A business health assessment will provide clarity.
- Can you be certain that now is the right time to grow a certain department and scale down another? A successful business is a dynamic business.
A comprehensive business health assessment can answer those questions and more! But are you still not convinced that your business could benefit from a health assessment? Consider these three great things it could do for your company, we believe you'll wonder why you haven't taken the time to do one sooner.
1. Reveal Opportunities
One of the main reasons why every business should do periodic health assessments is that they make it easy to discover potential opportunities for your business to do better.
When you take a comprehensive look at your business you're able to better identify new opportunities. You'll have deep insight into what's currently working and get ideas around what you can improve.
Your assessment may reveal that you have the potential to start the e-commerce side of your business much earlier than you previously had thought. [quotesright]After getting feedback from employees, you could find that you could offer an entirely new service thanks to the skills of some of your staff. [/quotesright]
2. Uncover the Cause of Weaknesses
When things aren't going well for your business, you're scrambling to figure out the root cause of your issue. It is important to solve problems, but you should put more of a focus on thriving once everything is said and done.
[quotes]The best thing about assessments is that they rarely just give you answers without giving you valuable insight.[/quotes] If you collect good data and answer the right questions, you may find the answers to some of your most pressing questions.
Do you keep losing your best employees and aren't sure why? Your business assessment could show that you don't offer as many perks as your main competitors, or that a lack of strong management makes people leave for better opportunities.
Has your cash flow been steadily declining and you aren't sure why? Your company health check could show that you're spending far too much on certain materials and that finding a new vendor could dramatically cut down on costs.
3. Prepare for a Better Future
Business owners should always be concerned about the best ways to grow their business and bring in more money. A business plan can set you up for success, but it doesn't give you a way to measure your methods so you can see if you're on the right track.
Your business health assessment doesn't just give you an idea of where you're at in the present – it can also help set your business up for a bright future.
The insights you gather from your assessment will play a big role in your future business plans. Once you have a concrete idea of what works and what doesn't for your company, you'll be ready to grow the way you need to ensure success.
Healthy Business, Bright Future
A business health assessment could be just what your business needs to get you through troubled times. Instead of reacting to current problems you see in your business, invest the time to truly learn about your company so you can take the right steps to fix things and preparing for a better future.
Business health assessments are only one-way entrepreneurs can improve their business. There are small investments you can make that return many multiples in ongoing profitability, especially when related to employees and management.