Now that you have your business health score, what’s next? Is it time to diagnose and detect the underlying causes for underperforming areas followed by charting a course of action? Yes, indeed.
When assessing various aspects of your business, there are a number of questions you'll want to take into consideration—highlighting areas of potential weakness and pointing out areas in need of appropriate help and support.
Let’s take a deeper dive into some of the key business components that ultimately ensure sustainable revenue growth, profitability and the next level of success:
Leadership
Your business is a direct reflection of who you, the CEO, are. It’s critical that you closely examine and monitor your leadership to determine your impact as a leader and manager on a regular basis since your employees are not in a position to do so.
How are your strengths and weaknesses impacting your business success?
How do you hone your skills regularly to consistently level up your business?
Do you seek out expert advice and support to help innovate and propel your business forward consistently?
Employees
Employees are the life of your business. It pays to recruit and manage your employees with a focus on business longevity and vitality. An effective human resources plan is a must, which should address issues such as an adequate organizational chart, effective and fair job descriptions, a useful employee policy guide, attractive compensation and benefits, employee training, a development and succession plan, and efficient recruiting, retention and termination processes.
Do you employ the right employees, each of whom contributes to making your business run smoothly, or are you forced to rely on a small percentage of key employees to get the job done?
Does your business suffer from a high employee turnover rate?
Do you feel the pinch when a few employees are absent from work?
Do your employees know what is expected of them?
Management Team
Ideally, your management team works well as a unit toward fulfilling your vision for success. Great management teams boast members with diverse skills that complement one another. It’s critical to analyze your team regularly and evaluate the impact they have on the business.
Who are the members and what do they bring to the team?
Do their strengths and weaknesses create a strong balance?
What training can you offer them (internal or external) to sharpen their skills?
Market
A viable market makes your business profitable. A review of your sales patterns can help recognize the areas in which your business has flourished and floundered. Also, examining new opportunities for growth routinely is a key requisite for business success.
What are the demographics of your market: who are your customers?
What portions of your customer base are most and least profitable?
Do you anticipate entering new markets?
Do you have a large customer base or are you dependent on just a few?
Accounts Receivable
Offering credit and discount to your customers can act as an incentive for them to make larger purchases. It can also attract new customers, but extending it does not come without risk. If you do offer credit to your customers, ensure that you take every measure to minimize your personal risk.
Do you conduct thorough credit checks before extending credit to customers?
Do you keep detailed records of accounts receivable?
Do you have outstanding debts that have been owed to you for an unreasonable period of time?
Competitors
If you run a successful business, you will always have competitors who want a share of your market. Competitors play an important role since they allow you to examine their successful business practices and use that knowledge to determine areas of improvements for your business.
Do you keep up with your competitors, and examine their strengths routinely?
How do your customers perceive your competition?
How would your customers compare you with your competitors?
Products / Services
Your business’s value is a direct reflection of the value your products and/or services provide to your clients, therefore, take the time to analyze how each of your products and/or services perform in the marketplace. Make each product/service you offer an asset that brings value back into your business.
Which of your products and services are the most and least profitable?
Which of your products and services do your customers favor and why?
Do any particular products or services cause frequent customer complaints regarding their price or quality?
Systems, Processes and Equipment
The right systems, processes and equipment for your business can increase employee productivity, business efficiency and ultimately, profits. On the flip side, inefficient equipment, systems and processes can slow or halt operations and drive profits down. Therefore, it’s crucial to examine your internal systems, processes and equipment needs carefully on a regular basis. Then, devote the time to research and implement the best options available for your business.
Do you have the best equipment, systems and processes for your needs?
Have you updated your internal systems and processes in the recent past?
Are your operations running as efficiently as possible given the resources?
Are there any bottlenecks/gaps that need immediate attention?
Do you spend a large amount of time/ resources on equipment repair?
Suppliers
You depend a great deal on your suppliers. Your management of supplier relationships can deeply impact the efficiency with which you do business.
Do you have a strong working relationship with your suppliers?
What are your suppliers' strengths and weaknesses?
How could your suppliers improve their service?
Marketing and Sales Strategy
With the wide range of media at your disposal, it's important to recognize the marketing streams that best attract your customers. Evaluate the methods you currently use, and examine new marketing strategies to determine the most effective approach.
Is your marketing strategy providing enough return on investment?
What methods do you use to attract new customers?
Review sales trends for growth potential to fund your long-term plans. Examine your sales by service, profit margin, selling method, geographic area, gross profits per service and rate of return. Ask yourself what will happen to your volumes, expenses and gross profits if you change any of these factors.
Have you noticed a decline in sales this year compared to previous years?
Do you have an effective Customer Relationship Management system in place?
Financials
As a CEO, it is absolutely crucial that you effectively manage your finances. Keeping detailed financial records and accurately forecasting future cash flow will help keep a firm handle on where the business is and where it is going.
Do you consistently forecast upcoming sales, cash flow and profits?
Are your forecasts reasonable and accurate?
Do you have the right support to keep detailed and up to date financial records that allow you to monitor performance?
Have financial difficulties caused you to:
Get behind on payments for supplies or taxes?
Get turned down for financial assistance from the bank?
Are overhead costs outrunning the profits?
Work-Life Balance
Review the hours you work each week on your business, how much time you have for yourself, family and friends, how much you could be making elsewhere, your opportunity for personal and professional growth and your stress levels.
Will you be happy doing what you’re doing now, a year, three years or five years from now?
Just as you need to schedule annual health check ups to ensure you maintain optimal health in the long term, you need to perform regular check-ups and tune-ups on your business. It’s not just about performance but also about optimization, innovation and risk reduction. So, your business can fly higher with less effort and resistance and have a bigger impact in the world.
Contact us at info@josh-i-associates.com if you would like to explore how we can help your scientific business win BIG.
Josh.i : We empowers CEOs of small- to mid-size scientific (biotech/ medtech/ diagnostics/ CRO) businesses with unique and innovative strategies to accelerate all aspects of your business growth with customized insights and roadmap for Success.