Stage 1 - Business Health Check-list

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Stage 1 of the business health check is designed to get you, the Business Owner or Manager, to think about the performance of your business by reviewing what has happened in the previous 12 months, documenting goals, actions and strategiesplus identifying issues where helpmay be needed over the next 12 months.

Once you have completed as much as you can, please send a copy to your accountant or business advisorso that they can arrangea meeting to discuss how they can help you to achieve your targets.

Index

1What has happened in your business over the last 12 months?

2The future of your business

2.1Exiting the business

3Review your business goals

3.1Goals to be achieved in the next 1 – 3 years

3.2Quarterly steps required to achieve this year’s goals

4"Swot" Analysis

5What makes your business tick?

5.1Return on investment

5.2Are you paying yourself a “fair” wage?

6Business changes in next 12 months

6.1Business Directions

6.2Changes in the business

6.3Cashflow issues

6.4Assumptions

6.5Are there any imminent changes in your industry or environment which may affect your business?

6.6Describe three ways that you could improve your business?

7What else do you want to achieve from your business in the next twelve months?

8Need help with areas of your business?

9Issues in your business that need attention or that you are unhappy with

1What has happened in your business over the last 12 months?

Key Indicators / Last year / Prior year / Variance/
Growth
Revenue $ / %
Cost Of Sales $ / %
Gross Profit Margin % / %
Total Overheads $ / %
Profitability $ / %
Current Ratio # / %
Cash Flow $ / $
Return on Capital Employed % / %
Accounts Receivable Days # / %
Accounts Payable Days # / %
Inventory Turnover # / %

(if applicable)

These are critical business KPIs that all businesses should know. If you are unsure of the answers to the above questions, you may wish to ask your accountant or advisor for help. We can provide you with these KPIs on a monthly, quarterly or annual basis.

2The future of your business

Do you have a business plan?Y/N

Is it up to date?Y/N

Do you have a marketing plan?Y/N

Do you follow it?Y/N

Do you have a strategic plan? Y/N

When was it last reviewed and “refreshed”?

Do you have a documented succession plan for future management

or ownership?Y/N

Who are your “key” employees?

2.1Exiting the business

What is the time-frame for your business exit?1 yr, 2 yrs, 3 yrs, 4 yrs, 5 yrs, more?

Are “you” your business?Y/N

Is your business “exit ready”Y/N

Do you have an exit strategy?Y/N

What value do you hope to achieve from it?$

Is that value realistic or achievable right now?Y/N

What do you need to do to reach this value?

Do you wish to retain an interest in your business after your exit? (as a consultant, etc.)

3Review your business goals

3.1Goals to be achieved in the next 1 – 3 years

Describe your 3 to 5 most important goals and how are you going to achieve them.

Goal / Strategies/Actions to achieve goal / Capital Required / When By?
1
2
3
4
5
Total / $

3.2Quarterly stepsrequired to achieve this year’s goals

Goal / Strategies/Actions/ milestones to achieve goals / Capital Required / When By?
First quarter
Second quarter
Third quarter
Fourth quarter
Other Please Specify
Total / $

4"Swot" Analysis

A business' ability to take advantage of opportunities and to offset any threats, depends upon it's strengths and weaknesses. By identifying your business’ strengths and weaknesses, and that of your competition, you will be able to develop effective strategies aimed at building on strengths and minimising weaknesses and to take advantage of opportunities and overcome threats.

5What makes your business tick?

What are the business drivers for your business?

Does your business run on systems and procedures?

Do you segment your clients into A,B,C and D ? Do you know how to do this?

Who are your top 20 clients?

Do you survey your clients regularly to see what they think of your business and how you could improve it?

What are your most profitable products or services?

Do you have an operations manual?

Do you have position descriptions for staff?

5.1Return on investment

How much capital is invested in your business?$

Do you consider the cost of capital employed in your business

as part of calculating your business return? Y/N

Current interest rate for deposits?%

Additional rate required on capital for the risk that you are taking?%

5.2Are you paying yourself a “fair” wage?

What could you earn in the workforce?$

How much are you currently paying yourself?$

What about other family members?$

What additional benefit do you require for the risk taken?$

6Business changes innext 12 months

6.1Business Directions

How much would you like to increase profit by in the next twelve months?%

How will you do this?

Increase sales – Y / N

If Yes,

Increase pricesY / N

Increase number of customersY / N

Increase sales volumeY / N

Decrease cost of salesY / N

Reduce ExpensesY / N

Other ______

6.2Changes in the business

What changes are you expecting to affect your business in the next twelve months?

Inflation rate%

Wages%

Rent%

Other costs%

Cost of sales%

Price increases%

Other ______

6.3Cashflow issues

How much is outstanding in Receivables?$

What are your standard trading terms?_____ days

Is this adhered to?Y / N

What is the age of your average outstanding?_____ days

What is your bank balance?$

How much is owing in Payables?$

Value of inventory?$

Are you planning to purchase any assets? If so, what value? When?$

Will you dispose of any assets? If so, what value will you receive? When?$

6.4Assumptions

Describe the assumptions that you have made about your business.

Examples

Assumptions / Items / Amount / When By?
Capital / Interest rate
Current Overdraft
Additional amount needed
Revenue / Number of customers
Number of transactions
Average sale value
Margin
Productivity of staff
The Market
Competitors
Operations
Financials
Other (Please Specify)

6.5Are there any imminent changes in your industry or environment which may affect your business?

If so, how do you plan to cope with these changes?

e.g. new competitors, supplier changes, staff changes, premises changes?

6.6Describe three ways that you could improve your business right now?

1
2
3

7What else do you want to achieve from your business in the next twelve months?

1
2
3

8Need help with areas of your business?

Areas /  / Comments
Sales
Marketing
Lead Generation
Receivables Management
Controlling Expenses
Working Capital Requirements
Increasing Profits
Cash Flow
Staff
Staff incentives
Internet
Insurance (Risk management)
Exit strategy / Business sale
Other (Please provide details)

9Issues in your business that need attention or that you are unhappy with

______

1 Stage 1 – Business Health Check-list