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Business Health Checks – In Vogue or Necessary?

Jenna van Nierop

Unless you have been living under a rock you would have seen or heard the term "Business Health Check". It is used by banks, advertised in newspapers and online, and has commonly become a service provided to businesses in the advisory sector. But what does it mean and is it important to you as a business owner?

A business health check is not just about assessing business finances. Analysing the financials is a great place to start and will highlight key issues to address. However the actions arising from these issues won't just be finance based, they should focus on a whole range of issues such as people/staffing, processes, succession, inventory, cash flow planning, risk minimisation etc.

A thorough business health check will assess the finances of your business, make industry comparisons, and consider non-financial components such as policies, procedures, employee roles, job descriptions, work-life balance and compliance. The business health check should be followed up with a list of time based actions to ensure that the findings and issues are resolved in a timely manner. There is no point in completing an online business health check survey if the issues that arise are not dealt with. Working with an advisor to ensure that you remain focussed on actions will give a better outcome for your business. You will become answerable to your actions and this will drive the change needed to grow and strengthen your business.

A business health check should be important to every business owner. In order to grow and be profitable, the business owner needs to understand their financial results and everything that contributes to (or hinders) business success. If you are in doubt ask yourself these questions:

  • Do you have enough cash in your business?
  • Do you want to create more profit?
  • Do you understand and manage your business risks?
  • Do you know how to manage and strengthen your cash flow?
  • Are you able to best manage your overheads?
  • Can you test the financial impact of decisions before you make them?
  • Is your business, and are your employees efficient?

 

Every business owner should be answering yes to these questions. If you can't answer yes then you need to consider seeking the help of a business advisor to give you the necessary information and tools.

 

 

Smith Thornton Accountants can provide a no cost Needs Analysis meeting to business owners, (like a business health check, but better). The analysis performed not only covers the business health, but also the personal affairs of the business owner such as work life balance, succession planning, and assessing risks external to the business. Our Strategy 360 service is aimed at working with you to address issues or actions that arise from this assessment, along with regular reviews of financial performance and budgets to ensure that you remain on track to reach and exceed your goals and aspirations. Contact us to find out more.

 

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