Is your business healthy ? Is it really performing ?
Because if it isn’t, it may be profitable now, but it probably isn’t worth much if or when you sell it - you will be “found out” through the buyer’s due diligence processes. And you will be much poorer for that.
How does that make you feel ?
Quick and Easy Solutions
So in both good economic times and bad, business owners and leaders reflecting on these challenges will commonly ask us for this advice: “what are the quickest and easiest ways that I can improve the health of my business ?”
Which makes us smile - “quick and easy” solutions aren’t always the best approaches to making a business healthier. And if they were really quick and easy, you probably would have tried them by now, right ?
But there are certainly some great things that most business owners and leaders can do relatively quickly, either themselves or with the help of a trusted adviser, that will improve business health, performance and value - and many of them are actually relatively inexpensive to do, and will certainly pay for themselves.
So here are our “Top 40” questions that you should really ask yourself right now about your business health, broken down using our Six Pillars Strategic Framework:
- Do you have a clear Purpose (Mission and Vision) that ultimately defines what success looks like for your business?
- Have you determined the Personal Values that you would like your people to follow, that will guide their behaviours?
- Do you have an Exit Strategy, as a business owner and leader, that you are already working towards?
- Do you know the likely Sale Value of your business, or at least the value that you are targeting?
- Is your business really Sustainable, including for its owners and leaders?
- Do you have a fit for purpose, up to date Strategic Plan that brings all of this together?
- Have you invested in defining your Brand, and are you acting consistently with that?
- Do you really know who your Customers should be, how they will find you and what their buying journey with you should look like?
- Do you know the strengths and weaknesses of your Competitors, compared to yours?
- Do you have a Marketing strategy for how you will attract and retain business?
- Will your Sales processes convert leads and grow your existing business ?
- Are you investing in an Innovation strategy that will refresh your product offerings and differentiate you from competitors and substitutes?
- Do you Price your products for maximum value?
- Do you have Terms of Business that will protect your commercial rights without scaring away your customers?
- Do you have an Employee Value Proposition that attracts and retains the right people?
- Will your Talent Attraction Strategy bring the best candidates to your door, so that you don’t have to go looking for them (and paying recruiters a fortune to do that)?
- Do you get the best out of your Recruiters, when you use them?
- Do you have an Onboarding strategy that bonds new hires to your business and makes them productive as soon as possible?
- Do you manage both Performance and underperformance in ways that keep your people focused, engaged and productive?
- Do you have a Career Development strategy that will keep your key people from looking elsewhere, and grow your future leaders and even successors?
- Are you managing your Employment Risks well, e.g. through your contracting, FWA compliance and WHS practices?
- Have you benchmarked your Remuneration levels and practices?
- Do you have the right Rewards for overachievement, including non-financial benefits, or are you just paying out commissions or bonuses for no good purpose?
- You may have a Budget, but are you using it for the right purpose, and do you have agile Forecasts that will help you navigate rapid change?
- Are you tracking the right “lead and lag” KPIs for your business, in a Dashboard or your management reports?
- Are you managing your Working Capital (cash, debtors, creditors and inventories) well?
- Are you tracking your Gross Margin levels, your Break Even point and your Variable vs Fixed Costs?
- Does your Accountant really help you with your business, or are they really only tax or wealth management experts who don’t really understand your business?
- Are you managing your Digital Assets and Cybersecurity risks well?
- Do you really know your Production Capacity and Constraints?
- Are you really managing your own Procurement, or are your suppliers managing you for their own best interests?
- Do you have the right Business Processes and Systems, and have you automated them well?
- Are your Premises really fit for purpose?
- If you have business partners, do you have living and breathing Ownership Agreements in place?
- Do you have the right Funding in place?
- Are you able to call on the expert Trusted Advisers that you really need to succeed, or are you still relying on “amateurs”?
- Do you have the right Insurance Policies in place, and do you really understand them?
- Are you really managing your Risks, or at least aware of your true Strengths, Opportunities, Weaknesses and Threats (SOWaT)?
- Are you properly protecting the assets that you can’t see and maybe aren’t even on your books - your Intellectual Property?
- Have you really learned the right lessons from the 2020 Coronavirus Recession, and changed your habits for the better?
In our experience, most Australian businesses would struggle to truly say “Yes” to more than 2/3rds of those questions - so how well does your business score ?
And if you really want more clarity about these opportunities and challenges, we invite you to complete our Business Health Check, so that you know how healthy your business really is, and what you need to focus on right now to make it healthier, perform better and more valuable.
A True Story - from Profitable to Valuable, via Business Health
We have a client this year who had dreams of selling a highly profitable business for many millions of dollars, but when we “took a look under the hood” we saw that the business was only profitable because the owner was doing the heavy lifting herself.
We advised her that she needed to invest in her business’s People, Processes and Productivity so that any potential buyer would see real value worth paying for in a business that she would no longer be working in. The good news is that she is now doing that work, with our help, and its clear that the business will be in great shape within the next few months and she can really start planning her exit.
So when would you like to start your own business health journey?