When Do You Need a Business Health Check?

Successful business owners tend to have a growth mindset and strive for continuous improvement within their business and industry. As businesses expand and grow, they experience successes and tumultuous times, each with its own challenges. It is prudent for business owners to regularly evaluate their overall organisation with an aim to provide them with a holistic understanding of their operations. This is important because it allows owners to identify the areas where their business excels and, conversely, the weaknesses that warrant remedial action.

Business owners are typically so entrenched in the daily operations of their business that they barely have time to step back and assess its overall health. We often hear owners say they are struggling to cut through the clutter to identify the high-priority strategies to achieve their goals.

A business health check helps identify key strategies to address deficiencies that may be responsible for letting profitable opportunities slip by. Solving these problems is likely to help ensure the business’s future growth and success.

For instance, a business might find that its effective marketing is making up for its substandard product development. Insight like this would show the need for improved resources in product development.

What Elements are Involved in a Business Health Check?

A business health check is a current, comprehensive, and holistic assessment of the key components of a business. It provides an assessment of the business’s financial performance and stability, compliance risk, the appropriateness of its structure, and key operational functions and processes.

Key Areas of the Diagnosis

There are two key diagnostics that the business health check utilises:

A Growth and Profit Solutions Diagnostic (GPS) provides clarity on which strategies will accelerate growth and profit in a business. Using ten key success factors for an organisation, it highlights the top three areas of high performance (what’s working) and the top three areas for improvement (what’s not working). This facilitates the development of strategies to leverage these strengths and reduce the impact that weaknesses have on the business.

A Change Success Diagnostic (CS) identifies the current probability of change success in an organisation. It focuses on three core factors, which are beliefs, readiness, and capability, in understanding an organisation’s ability to successfully undergo a change initiative.

An example of the type of insight uncovered with a business health check involved the review of various product and customer reports for a business. During this process, we identified that a sales team member was reducing product margins to win more sales, directly impacting the bottom line. The business health check enabled the client to work with and educate the particular sales team member on the effects of this behaviour and its negative impact on the business.

Business Health Checks are invaluable assessment tools which can be used to gauge an organisation’s preparedness for change. Morrows Director Graeme Marks and Tax and Strategic Business Associate Kellie Stark discuss the importance of Business Health Checks in an edition of Morrows Conversations.

What are the expected outcomes of conducting a Business Health Check?

The key outcomes that result from a business health check are a comprehensive understanding of the key areas an organisation needs to modify to fulfil their potential. Strategising to capitalise on strengths and overcome key weaknesses is most effective following a robust diagnostic process – this is because you gain clarity on your key business challenges and opportunities, and an understanding of your change success probability.

A business health check offers valuable insights and contributions to ensure the successful growth of a business. If you have further questions about business health checks, please contact your Morrows advisor or either Kellie Stark or Lisa Wilson of Morrows Strategic Business Advisory to discuss your next steps: