Business Health Check

As a business owner, staying ahead of the curve requires more than a creative and innovative mindset. Understanding the state of your business and pinpointing the areas needing attention is one crucial yet often overlooked area. This is where a business health check comes into play.

So what is a business health check and what does it involve? 

A business health check is like a medical health check. It is an assessment of the overall wellbeing and performance of a business which involves:

1. Key performance indicators (KPIs) for the current year with prior year comparisons.
2. Ratio analysis for sales, activity, profitability, performance, liquidity and leverage (gearing)
3. Financial analysis
4. Benchmarking against comparable businesses of a similar size and scale

The aim of a health check is not to detect issues. A health check is focused on identifying a business’ strengths, weaknesses and potential threats so you can make educated decisions about its future direction. A health check is about taking actions to mitigate risks and enhance overall performance and health.

Key Takeaways

A health check shouldn’t been seen as a reactive tool and something you do when things go wrong. Think of it as a proactive tool to help you adapt to ever-changing customer/client needs and stay one step ahead of the game.

A health check is essential for any business to remain viable and grow from strength to strength.

Why not give your business an early Christmas present. Afterall, prevention is better and often cheaper than finding a cure.