How to Carry Out a Business Health Check on Your Business |
Posted: July 30, 2018 |
A business that is efficiently earning for you needs proper maintenance for fluent running. If you think that only living beings require health check, then change your perception because businesses are also prone to ill health. All businesses have some strengths and weaknesses. As time passes, some weaknesses become worse and start depreciating business without any prior indication. Just like doctors, business health check professionals are also available to serve you with their experience and knowledge. The whole process of the health check is meant for safeguarding the business in nearer future from potential risks. The experts ask some questions regarding finance, resources, marketing, sale, management and culture. Some of the Most Common Tools for Business Health Check • Financial management • Marketing and sale • Production or service delivery • Marketing and sale
Process of a Checking Business Health 1) Business Revenue Analysis Revenue is considered the total earning of business without excluding any expense. The flow of revenue is essential to run your business for a long run. A revenue goal is essential for every business that can be divided into milestones of monthly and annual basis. For a regular business health check, it is essential to monitor the flow of revenue on monthly basis. If a pre-specified goal of revenue earning is missed, it requires immediate strategic planning to conclude the major reasons for failure. The business health check experts prepare a budget and then compare it with the actual outcome. The difference after comparison clearly defines how much loss occurs and which areas need rearrangement. If the revenue goes much higher than expected, it is essential to find out the reasons so that they can be implemented in the future for better results. The clients working with your business are also the major factors affecting revenue. It’s ok to retain all good and bad clients at the initial stage of business. Nevertheless, after a certain period of time, you must get rid of such clients that are the major reasons for your revenue loss. 2) Business Expenses Analysis Expenses are considered as the spending of business on various activities. Whether you are buying new machinery, hiring services of experts or spending on daily use products, everything comes under expenses. The profit of a business is obtained by subtracting expenses from revenue. If the expenses are rising much rapidly than revenue, it’s time to initiate a business health check. As the level of business growth, the expenses also grow higher, but if there is any other reason, check the spending amount on various commodities like office supply, travelling and eatables on monthly basis. Identify the unnecessary expenses, find the effective measures of reducing, implement them and monitor the results after one month. Compare it with the recent expenses and see whether the strategy succeeds or not. 3) Evaluation of Receivables The pending money that you are expecting from the clients in the nearer future is called receivable. In exchange for goods and services, every business receives a certain amount of money. Every company must closely, monitor the receivables as how frequently clients are paying. Make sure that there must be a regular flow of income so that your business does not face the shortage of revenue. Make some strict and clear policies regarding overdue and charges for the same. To ensure this flow, make legal agreements with clients on the time of deal that bound both parties to provide expected products, services or payments on time. All policies must be mentioned clearly for the situation in case if a party is incapable of fulfilling the commitment within the pre-specified deadline. The experts of business health check help you in calculating the loss due to late payments and preparation of legal documents. The business that you are running may seem alight due to the continuous earning but there are many hidden factors that need a timely check-up. Ignoring the weaknesses of business makes the whole structure vulnerable after some time. It is essential to monitor that what factors are responsible for week performance at present and which are the upcoming threats. The professional agencies like TR Consulting have experts who can do it for you. They deeply examine all aspects that are responsible for the performance of the business and generate smart ideas to improve the current situation.
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