Startling facts show that 70% of start-up businesses in South Africa fail within the first three years, whilst 90% fail within a ten year period. To keep up with these vast changes and inconsistencies, businesses must be responsive, resilient and adaptable in order to secure sustainability, survival and ensure profit and growth.
Many business owners have great technical skills, but lack all round business and financial knowledge to ensure the sustainability and longevity of the organisation. The majority of businesses have at least a few issues that prevent them from doing better. It has become increasingly important for businesses to consult professionals when it comes to planning their financial future and growth.
Here are five reasons why you need to engage with a professional to conduct a business health check:
1. Thorough structure analysis: an incredibly important starting point is that businesses need to be structured correctly. Owners must understand all the aspects of their business. Small businesses usually have huge entrepreneurship but very little structure and so developing an appropriate structure for small and medium businesses to enable sustainability to occur, whilst maintaining the entrepreneurial values and execution ability is essential for the health of a business. Structure creates a solid foundation and platform for client retention, as well as happier and better performing staff. It also enables controlled growth, appropriate financial planning and reduces risk.
2. Risk reduction advice: business is all about risk and return. If you can reduce the risk - you optimise the return - this methodology does exactly that. Offering business owners advice on how to structure their business in order to optimise it and to ensure ongoing profitability is maintained.
3. Benchmarking your business against relevant business practices: a business health check will analyse your business using diagnostic software based on and aligned to best business practice. The process includes a full ratio analysis, a financial needs analysis and a personal insight survey of all staff - which is completely confidential and identifies issues within the business from the personnel perspective.
4. Access to up to date and market relevant financial advice: with the help of a financial advisor, you and your business are privy to current and future market trends which will enable you to differentiate your business from competitors.
5. Formulation of a resilience plan: ultimately, a plan that will enable your business to deal with situations as they arise will help protect your bottom line. When issues are identified that could potentially detriment the long-term survival of a business, a collaborative plan is developed to correct the situation. The risk of not rectifying the issue is also assessed and quantified, which allows the business owner to see where the risk lies, and make an informed decision whether or not to address the issues - while knowing the underlying risk.
By comprehensively assessing all areas of a business, these services help businesses identify issues that can create a slow rot as well as potential black swan events that can engulf an organisation. Business diagnostic services assist businesses with on-going sustainability and profitability and provide organisations with the necessary insight to elevate them into that rare 10% that will survive past ten years.
