You Should Evaluate Your Business In 2020 – Here Are Six Reasons Why

Having your business evaluated should be a non-negotiable procedure performed by all business owners, if they want to maintain their business’s success, or even strengthen it. Unfortunately, many business owners aren’t aware they can do this, because of the lack of publications surrounding business evaluations, or they cannot find the time to have an evaluation done. If you’re not sure why you should take a step back and view your business from the outside, the short of it is that not giving it a health check can result in some pretty nasty issues.

The long of it is that… well these top six reasons below will explain why you need to perform business evaluations periodically.

1. Nip risks and issues in the bud

If you’re like most people, you prefer to prevent mistakes and issues before they occur, so you don’t have to deal with the consequences. Most believe it’s much easier to nip issues in the bud before they have a chance to blossom into full-blown problems. Without an evaluation, it’s not always possible to see where these issues may pop up, which means they can seem to appear like magic. The magic that causes your business to fail. That might sound like an exaggeration, but over 60% of businesses are actually doing well and making profits before they declare bankruptcy or go into receivership. These businesses seemed to be doing well, and then suddenly they weren’t. The interesting thing with these businesses is that they didn’t fail due to one unforeseen event. They failed because small tasks weren’t being performed, over an extended period of time. These small failures could have easily been avoided if the business owners were aware of what they could lead to. But they hadn’t had an evaluation done and had no way of knowing about these issues.

2. You can’t see everything

It’s really difficult to judge your own work, because like it or not, you’re probably positively biased. We all want to believe that we’re doing amazing and not making mistakes, but sometimes this just isn’t true. In order to objectively view your business, and identify potential risks and issues, you’ll likely need to work with a business coach or advisor. These mentors can view your business from a professional yet impartial standpoint, and find holes that you may have been blind to.

3. Understand the key areas of your business

This list below details the main areas of your business that you should evaluate, in order to find your best chances for success, as well as the most vulnerable areas:

Business Strategy

• Business Strategy Plan
• Cost Reduction
• Compliance and Risk
• Legal
• Process Improvement
• Competitor Analysis
• Benchmarking
• New Product / Service Development

Marketing

• Marketing Strategy
• Branding
• Website
• SEO
• Digital Marketing
• Email Marketing
• Social Media
• Lead Generation

Sales

• Business Development / Sales Strategy
• Customer Relationship Management (CRM)
• Quoting
• Tendering
• Pricing

Customer Service

• Customer Service Policies
• Measure and Analysis

Human Resource

• Recruitment
• Training and Development
• Employee Incentives and KPI’s
• Workplace Culture

Leadership & Wellbeing

• Time Management
• Wellbeing
• Leadership and Direction

Accounting & Finance

• Bookkeeping
• Tax Compliance
• Payroll Administration
• Financial and Cash Flow Forecasting
• Financial Goals
• Budget Management
• Financial Policies and Procedures
• Financial Performance

Operations

• Operation Management
• Administration

Technology

• Productivity
• Cloud and Infrastructure
• Cyber Security

4. Focus on what will give you the best return on investment

It’s not impossible to have an endless supply of funds and resources, but it’s extremely rare. So you’ve probably found that it’s hard to achieve all of your business goals.

Something that can make your goals more achievable is following the example of venture capital and private equity firms. When they’re working for a company they choose 3-5 must-wins in that industry.

This helps them to spot the 3-5 tasks that directly cause the business to move in the right direction. These tasks are the ones that will have the greatest impact, for the least amount of resources. This allows businesses to maximize their return.

If you apply these principles to your own business after having an evaluation, you’ll be able to put your time, money, and resources into the areas that will directly drive your business forward, and stop wasting resources on tasks that aren’t accomplishing much.

5. You can’t move ahead if you don’t know where you’re going

We just discussed how important it is to put your resources into the right places, if you want to see growth. You can plan ahead all you want, and create the most detailed business plan the world has ever seen, but if you haven’t identified those 3-5 must-wins, you’re shooting blind.

Knowing where you need to put your resources helps you to decide what to focus on during the business planning process.

Evaluation allows you to have all the knowledge you need to be able to plan out tasks over the next 3, 6, and 12 month periods. Instead of wasting your team’s time on tasks that won’t drive business growth, they’ll be focusing only on the tasks that will move your business forward.

A typical business strategy allows you to separate tasks into:

• 100-day Plan
• 6-month Target
• 12-month Target
• 18-month Target

And don’t forget you can always supplement with monthly reporting and by adjusting your KPIs!

6. Set your team and advisors up for success

When your team does well, your business does well. This is why you want to supply them with a high learning curve; give them the opportunity to learn a significant amount of information in a short amount of time. They can then use this information to take informed actions. This doesn’t only apply to your team. Your business advisor will also appreciate this steep learning curve. If you evaluate your business before utilizing their services, you’re setting them up for success by giving them everything they need to know to make you more successful.When they begin thinking about how to scale your business, make it more profitable and create leverage, the more information you supply them with, the better. It can actually become a nightmare for advisors to learn about important information at a later time, after they’ve begun planning for you.

Honestly, by not evaluating your business before working with an advisor, you’re only hindering your own growth process. If it takes time for them to gradually learn all there is to know about your business, that takes time away from their true goal: to 2x or 3x your business over the next year. So set them up for success by giving them all the vital info, so they can immediately start working on the important aspects of your business, like how to increase profitability and sales, rather than focusing on tasks that don’t matter in the long run.

Recap

It’s difficult to identify opportunities for growth and sustainability without a business evaluation and this is true no matter how large or small your business. You’ll create a better ROI and reduce mistakes after you’ve found these opportunities for growth. A business evaluation can help you to see your business from the outside, and be able to inspect key areas of your business all from one succinct document.

Donald Max is a senior career consultant at a boutique Executive Search Firm.he is enjoy writing about packaging, education, science and technology. And also He is mainly focused on helping Senior Level & C-Level