How to perform a health check
Health check introduction:
Health check, unlike what Accountants and bookkeepers want you to believe is NOT a series of questions. it is not a series of checks that focus on what you think about your business. you will be asked questions that no one can answer. like: where are you now? what do you want to get from your business? and so on. this type of questions can’t help you. most small business owners just wanted to replace a job with a business.
We, on the other hand, say: first, let’s look at the numbers. why? because the numbers tell you the whole story. and when we establish what happened in your business. then we can dive in on the things that need focus and attention.
Health check first step:
The first step must be going through the business data and analysing every financial parameter. we start with Profit and loss and check profitability. we continue with the balance sheet. to check what is the debt we took. and then we continue with cash flow. because cash is king in most businesses. next, we will run the du-Pont formula. which will tell us how financially stable is the business. if you want to survive, you must be able to compete on the financial level. all the other levels come next.
Health check Second step:
Now that we have dived in on hard financial data. we can focus on the fixes. what do we mean by that? you see a small business is very simple to run. if you follow certain rules. when you first started, you may or may not wrote a business plan. if you did you know what is your “fastest path to cash”. we will examine now how you make money. how you cover costs? are you profitable?
Health check third step:
Now that we have all the financial data. and we know the problematic areas. we need to target those areas. and the best way to do that is strategic analysis. this analysis will give you an action plan that will deal with all your business problems.
Health check fourth step:
Now marketing plan is the order of the day. marketing is key for any business. you must understand. without a way for you to reach the market, there is no way you can make it in business. no matter what is the quality of your service. many businesses along the years had good products and bad marketing. not knowing which channels are best for you is a problem. not utilising your budget to the limit is a problem. you must measure your success from every method, so you can focus your efforts on the best one.
Health check conclusion:
Performing a health check is key. revising your health check is KPI. knowing your market is important. knowing your competitors is vital. we live in a competitive marketplace. so knowing what’s going on helps you target your efforts to perform at a maximum level. if you are serious about your business, then you must run a full strategic plan. and why not get it free as part of our Bookkeeping service to you? make a decision to be great, and we will help you.