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 their 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 as it allows owners to identify the areas in which their business excels and conversely, the weaknesses which warrant remedial action.
Business owners are typically so entrenched in the daily operations of their business that they barely get time to take a step back and assess the overall health of their business. We often hear owners convey that they are struggling to cut through the clutter to determine the high priority strategies to achieve their goals.
A business health check allows for the identification of key strategies to help a business improve the deficiencies that may be responsible for allowing profitable opportunities to slip by. Solving these problems is likely to help ensure the future growth and success of the business.
For instance, a business might find that their effective marketing is making up for their 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 refers to a current, comprehensive and holistic assessment of the key components which make up a business. It provides an assessment of the business’ financial performance and stability, compliance risk, appropriateness of structure as well as 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 margins on products to win more sales, which was 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 occurs most effectively following a resounding diagnostic process – this is because you are provided with clarity on your key business challenges, opportunities and 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:
Direct: 03 9134 3438
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