Biz Fit Test: Inventory-Based Companies
A business, just like a body or car, needs regular checkups and maintenance to stay in optimum health. The Biz FIT Assessment checklist consists of 158 issues in five key areas that, when completed, will help give a business staying power and good returns. The goal here is not to compete to see who had the “highest” score in your group, but rather, to get a baseline to determine where you are right now, and then work toward improving your score over time.
Take the test, and then review your strengths and weaknesses, Come up with a strategy to improve your low-scoring areas. Incorporate your key goals and action plans into your Goal Worksheets. Share your strategy with your partner and facilitator. Establish benchmarks and timelines. Be specific.
Keep a copy of this assessment so you can re-take the test on a quarterly basis. Monitor your score. Watch it go up and your business improve!
Remember:
What Gets Measured Gets Managed, and What Gets Managed Gets Done!
Instructions
- Answer each question
If the statement is true, check the square. If not, leave it blank until you’ve done what it takes. Be rigorous, be a hard grader.
- Summarize each section
Add up the number of checked squares for each of the five sections and write those amounts where indicated. Then add up all 5 sections and write the current total on the top of the next page.
- Chart your score
In the Progress Chart on the next page, plot your score for each area. Starting at the bottom, fill in each column up to your total score for that particular management area. The goal is to have the entire chart filled in. The Progress Chart will indicate where you are doing well and what you need to work on.
- Keep taking the test
Keep playing until all boxes are filled. This process will take time but you can do it! Use your facilitator/business coach and partners to assist you.
Biz Fit TestTotal Score =_____
Progress ChartDate=_____
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Human Resources / Marketing/Sales / Operations / Financials / Executive Challenges
Human Resources/ Personnel:
Staff
We hold regular staff meeting.
Our staff meetings are results driven and creative rather than chatty or confrontational.
Our staff meetings have an agenda.
I honor my staff and include them in decisions.
I have met at least briefly with each of my staff members one-on-one over the course of the last two weeks.
My staff comes to me with possible solutions, not just problems.
All staff members know what our top three business goals are for this year and there is a 100% buy in from everyone.
I have designed incentive plans for my staff.
My people work well together.
HR Strategy/ Structure/ Systems
My business has the appropriate organizational structure for its size and industry.
Our top three business goals are clearly written out, visually displayed and tracked on at least a monthly basis.
I have developed an organizational chart for my business.
We have written out and updated job descriptions for every staff member.
We hold performance reviews for all staff members at least every six months.
Each of my staff members knows their responsibilities and authorities and the goals they will be assessed against over the next six months.
I am neither under-staffed nor overstaffed.
I only have the best people working for me.
I provide my staff with adequate on and off the job training and development.
If my company has more than 20 people, a mentor is assigned to every new hire.
I use progressive discipline to address performance problems.
Hire/ Fire
When I am hiring a new employee, I know exactly what qualities/skills I am looking for.
During our hiring interview the candidate has to work on at least one “real life” task (e.g. sell a piece of jewelry or play a role consulting with a customer) rather than simply talk about him/herself.
I know my rights and obligations under State and Federal Law.
When firing an employee, I have a good lawyer I can consult if I am not sure what to do.
My employee turn over is lower than the industry average.
Add up the number of boxes checked for Human
Resources/ Personnel and enter it here.
List entire staff including owner and rateExcellent 1
each according to the scale at the right. Good 2
Average 3
Fair 4
Poor 5
Name / Position-Responsibility / Hours/Week / Wage / RatingMarketing/Sales:
Marketing Strategy
I have a marketing plan, I follow through with it, and I update it on at least a 6-month basis.
I know my sales by department in both dollars and units.
I have a great system in place to prompt word-of mouth referrals. I don’t just rely on ads.
I have built strategic referral alliances with other businesses that serve the same clientele (e.g. wedding planners, florists for jewelers or clinics, physical therapists for pharmacists).
My target markets are clearly defined and I know exactly what they value.
I know how to best reach my target market.
There is a strong growth within my industry/target markets.
We are always on the lookout for new products and revenue streams.
I understand the main external drivers for my sales.
We maintain a database of all current and prospective clients and keep in regular touch with them through e-newsletters, mailings or other means.
I know my top three competitors: their strengths and weaknesses.
I clearly understand where I am weaker/stronger than my competition.
I know how to play my competitors’ weaknesses to my advantage.
My staff has “mystery shopped” our three main competitors in the last 12 months.
All my staff knows how we want to position our business with respect to the competition.
I can easily complete the following sentence: “Customers should buy from us rather than from our competitors because of….and….and….”
I know why each of my different inventory mixes are priced the way they are.
I have a strategy to take advantage of growing e-commerce.
Sales and Advertising
I have an advertising budget and follow through on it.
I know what I spend on different advertising vehicles (such as TV, radio, papers, periodicals, direct mail etc.) and what the returns are.
All our marketing materials are up to date and communicate our business image.
Our sales staff keeps written track of their sales effort (e.g. with a log sheet) and I (or the head of sales) review it regularly with them.
Each sales staff has quantifiable sales goals and is regularly assessed against these goals.
My business has a daily sales quota and I track it.
Only those who can really sell are selling. We don’t train a weak staff.
Our sales staff trains with role-plays and video.
Our sales staff excellent product knowledge.
Our sales staff is extraordinary listeners.
Our sales staff’s dress-code and style of communication supports our business image/brand.
Our sales staff has all the tools and supplies needed for sales presentation readily available.
Our displays reflect the image/brand we want to portray to our customers.
Add up the number of boxes checked for
Marketing/Sales and enter it here.
Operations:
Inventory
The breadth and depth of inventory is in line with our brand.
I know how much inventory we have by department (in both units and dollars).
I know my “fast movers” and have a system to make sure we are never out of them.
We have a system to control the amount of obsolete inventory.
We use an electronic inventory control management system.
We have a purchasing plan, and we never go to trade shows without it.
Exterior
Our building and the interior offices project the business image we want to portray to our customers.
We have the best location for our business.
The signage, lighting, and window display are in line with our business image.
Customer Service
We always strive to deliver on time.
If we are delivering late, we are doing a great job of keeping our customers updated on the state of the job.
We have consistent phone etiquette: Who answers the phone? How fast is it answered? How is the caller greeted?
Interior/Merchandise
We have the best possible space allocation (i.e. between sales floor, office space, storage room, etc.)
The flooring and carpet are in line with out business image.
The lighting is in line with our business image.
My store is easily accessible for handicapped.
The decorative accessories are in line with our business image.
We have an effective merchandising/display plan.
Our customers can easily determine where products are located.
We focus on selling case inventory rather than memo inventory.
Administrative/Legal
If my business was leveled this afternoon, I would have enough insurance money to be back in business shortly.
I have negotiated the best deal on my lease.
I have reviewed my company’s legal structure with my lawyer and have determined the current structure is the best choice for me given all liability and tax issues.
We have an updated Employee Handbook; my staff knows where it is and how to use it.
We have an updated Policy and Procedure Manual; my staff knows where it is and how to use it.
I have taken all necessary precautions to protect my business from personal injury claims and on the job injuries.
Security
I have taken all necessary precautions to protect myself from customers.
Everyone in the business knows the procedure in the case of robbery, and everyone has participated in a drill in the last six months.
Everyone in the business knows the procedure in the case of fire, and everyone has participated in a drill in the last six months.
I have taken all the necessary precautions to protect myself from my employees.
Add up the number of boxes checked for
Operations and enter it here.
Financials:
Performance Reviews/Goal Setting
We have a purchasing/open to buy plan and never buy without using it.
I know my Owners Discretionary Profit goal for the next three years.
I know my key performance ratios. I keep track of them over time and benchmark myself against my industry performance group peers on at least a six-month basis.
I keep a monthly watch on my gross and net margins.
I feel comfortable talking to my banker, financial staff, and advisors about the financial state of my business.
I know what my GMROI is by category or department.
I know what my GMROI is by vendor.
Financial Statements
I have an excellent bookkeeper.
I receive accurate financial statements on at least a monthly basis by the 15th of the following month.
My year-end statements are finalized by the end of the first quarter after my fiscal year ends.
Cost
I know my company’s cost structure: $______in total costs are fixed costs, ______% of total costs are variable cost and my contribution margin percentage is ______%.
I know my company’s Break-Even sales amount on a monthly and yearly basis.
I understand and use Break-Even as a decision-making tool in my company.
I can complete the following sentence: For every dollar or fixed costs that I add, I need to add an additional $______in sales in order to make the same profit.
Managing Growth
My company is primarily profit rather than growth driven.
I have a balance sheet prepared on at least a quarterly basis.
I know the four general sources of funds available to acquire new assets, and I know which is best for my growth situation.
I understand how managing my inventory and accounts receivable more efficiently can reduce my need for outside funding.
Managing Cash
I understand the exact difference between profit and cash flow.
I regularly review Accounts Receivable and write off bad debts in a timely manner.
I know how much cash my business will need in the next week/month/three months and have taken appropriate action so these cash needs can be met.
I have a 12 month projected cash budget, profit plan and balance sheet prepared for my business which I monitor regularly and adjust at least quarterly.
I keep a very close watch on the following cash consuming issues: inventory levels, accounts receivable and sales growth and know what actions to take should cash get tight.
We invoice within 24 hours of completing a project/shipping.
We post a weekly accounts receivable aging report and follow up on late accounts immediately.
We have a policy for late payments (e.g. letter, follow-up phone calls, handing over to collectable) and follow through on it.
Banking/Financial Advisor/Taxes
I plan for and negotiate credit before it is needed.
All my sales are recorded on my books.
I use short-term credit, such as a credit line, to fund short-term cash needs, and I use long-term loans to fund long-term cash needs, such as buying new assets or expansions.
I have a banker who provides me with top level advice: he/she understands my business and is a partner in my success.
I communicate on at least a monthly basis with my banker, providing him/her with financial statements and business plans.
I work with a CPA who provides me with top level advice throughout the year and not just at year end to avoid taxes.
I pay all federal, city, and county taxes in a timely fashion.
Add up the number of boxes checked for
Financials and enter it here.
Executive Challenges:
Leadership
I direct people and efforts easily and effortlessly.
I have no problem telling people what to do.
I have a lot of personal discipline, and I am good at following through.
I am willing to constantly try new things, innovate, and make it easier and better.
I don’t get angry or “react”, I do not take things personally.
I delegate many decisions down the line, even if it means that mistakes are made.
I know my leadership weaknesses and have taken first steps to address them.
I am comfortable presenting in front of a group.
Work Life Balance
- I have at least three weeks of vacation each year.
- I take at least one day per week completely off from work.
- I have enough time to do the things I enjoy doing outside of work.
- I use a time management system, which works well for me.
- I have something “better to do” after work.
Vision/Transition Plan/Exit Strategy
My business has a mission statement.
My company’s mission statement is authentic and reflects my feelings and thoughts.
My staff backs my company’s mission statement.
I have put together a savvy board of advisors with whom I meet at least on a quarterly basis.
I am 100% dedicated to being the best and making the company extraordinary.
I have a clear vision for how I want the business to look in five years.
I have a transition team in place that consists of my executor, attorney, banker, spouse, key family members, and insurance agent.
I have a written will in place, keep it updated, and my transition team knows where it is.
I have planned all steps involved with an estate-planning attorney in the case of my death.
I have a written exit strategy in place including the year I plan to transition out of the company.
Health
I take excellent care of my health.
I have an annual physical.
I eat well.
I work out at least three times a week.
I am addiction free.
Support
I work with a CPA, a banker, an attorney, a consultant/coach, and a group of peers from whom I receive top-level advice on a regular basis.
The goals of my business are in line with my personal goals.
My family fully supports my involvement in my business.
I have a right-hand person/executive assistant who handles every detail so I have time and energy reserves to do what I do best.
Fit With the Plan
I am staying on top of the latest developments in my industry.
Four out of five days I am excited getting up and going to work.
I am a business owner at heart.
I have enough personal funds.
I am proud of myself as I am. I do not have anything to prove.
I learn from my failures and disappointments.
Add up the number of boxes checked for
Executive Challenges and enter it here.