In our previous post, we explained why even small business owners and leaders should conduct periodical Business Reviews to identify their sustainable growth opportunities, manage their risks and thereby increase business value. Now we will explore when Business Reviews should be undertaken.
Businesses are like living creatures – in a sense, they are born, they mature, they get sick, they get well, and they can also die. So the Business Review for a “newborn” small business might be similar to the way that a paediatrician examines an infant, looking for congenital health issues and supporting appropriate development. On the other hand, the Business Review for a mature business that is rapidly losing market share and money might require some “Accident and Emergency” triage, to figure out which injuries and diseases to treat first. This means that:
Firstly, Business Reviews should be carried out early – before any chronic issues hindering sustainable growth or locking in unacceptable risks become established.
For example, an organisation selling specialised goods might not implement good sales and procurement practices while it is focusing on initial product design and launch marketing, and lock itself into working with expensive resellers and / or manufacturers that will eventually bleed them dry. The FMCG sector has seen many good products and businesses come and go for those simple reasons.
A small business owner or leader can use an early Business Review to fix a simple mistake before it burns too much cash and before it becomes easier to “wedded” to the wrong decisions. As the health and wellness saying goes, “prevention is usually better than a cure”.
Business Reviews should also be carried out when an established business is in need of “turnaround”. Now that might seem logical, but most troubled businesses only deal with their problems in a superficial way, through a sometimes misplaced sense of urgency, and don’t step back and think strategically. Using our “business health” analogy again, if a sick small business owner or leader treats the visible symptoms of a business challenge without diagnosing the causes, the disease will inevitably recur, when there will be much less time and fewer reserves left to treat the real problems.
Here’s an example of how a strategic Business Review works better than a tactical, panicked response: