Writen by Lee Lister
It is a well know fact that many businesses fail within the first few years – so how can you make sure that your business is not failing at the moment. Here's a Business Health Check for you.
Sit down quietly in your office, with your records to hand and work your way through this business health check. You don't need to do it all at once, but try and do it within a few days. You should review each question deeply in order to get a detailed view of your business.
Management:
1. Do you rely too much on one manager, including yourself?
2. What would happen if one or more managers left or were ill for some time?
3. Do you have enough managers with the right experience?
4. Do you have too many managers?
5. Are your managers trained or experienced to the optimum level?
Staff:
1. Do you have enough staff?
2. Do you have a high staff turnover?
3. Can you find staff with the right skills and experience?
4. Are your staff fully trained?
5. Are your staff in the right departments and geographic areas?
6. Do you have a strong sales and admin group?
Operations:
1. Your internal efficiency – does your company run efficiently from marketing to after sales?
2. Can you manufacture or fulfill your sales quickly and meet your customer's expectations?
3. Do you have bottle necks in any of your business processes?
4. Do you receive frequent complaints about any part of your business?
5. Can you provide your goods and services during sales cyclical increases?
6. Do you have high stock levels that you regularly have to sell off at below normal prices?
7. Do you have a strong marketing and advertising strategy in place?
Sales:
1. Are your sales strong and gradually increasing?
2. Are your sales reliant on external factors that you have no control on? Think ice cream seller.
3. Do you have strong cyclical sales and can you cope with them?
4. Do you have alternative products and services available for periods when your standard stock is not selling so well. Think diary sellers.
5. Do you have a strong product range that has a naturally increasing set of price points?
6. Do you have up sells available to capitalize on each customer's total sales value?
7. Do sell products that are complimentary to your major products?
8. Are you selling what your customers are asking for?
9. Are the sales of one particular product diminishing?
10. Do you often get asked for something you don't have?
11. Are you sure that the prices you charge are set at the optimum level.
Financial:
1. Do you have a steady cash flow or are there periods of stagnant or negative cash flow?
2. Do you collect the majority of your invoices within 30 days?
3. Do you have a problem with obtaining loans?
4. Are your stock costs high?
5. For retail or manufacturing companies. Are your staffing costs a large proportion of your total costs?
6. For service companies. Are your charge out rates at least 200% of your staff rates.
7. For service companies. Are your consulting staff being charged out at least 75% of time?
8. Do you have a good gross profit?
Suppliers:
1. Can you suppliers force you to take large deliveries?
2. Are suppliers difficult to find?
3. Is supply readily available?
4. Do you have the opportunity of obtaining supplies from several companies?
5. Can you obtain deliveries when you need to?
Customers:
1. Do you rely on just a few customers?
2. Can some of your customers insist on lower prices?
3. Do you have a lot of late payers?
4. Is the cost of obtaining new customers high?
5. Do your customers often repeat order?
6. Do you have a high percentage of customers who only order once from you?
Market:
1. Is competition very strong?
2. Do you have a near monopoly?
3. Do you have a strong and recognized brand in your market place?
4. Are you aware of future changes in your market place and changing your offerings to meet these?
5. Are you leaving some market niches unexplored or untouched?
6. Are there markets that you could exploit?
7. Are your marketing costs a high proportion of your costs?
These questions are planned to give you a good understanding of the weaknesses of your business. If you have too many negatives then you know you have some remedial work to do.
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© Copyright 2006 Biz Guru Services Ltd
Lee Lister writes as The Biz Guru, for a number of web sites including her http://www.clikks.com where she sells her informational products. With over 20 year's management and business consultancy experience with businesses large and small as well as being a serial entrepreneur, she now helps others set up, develop and market their businesses.
If you would like more help and assistance in setting up your new business then visit http://www.startmynewbusiness.com for advice and assistance.
This article may be freely distributed if this resource box stays attached.
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