Business Health Check

Take the Business Health Check Challenge!

In your business:

Yes No
Is there a documented interactive business plan … regularly amended and referred to by management?
Are regular reviews undertaken analysing major cost elements and the relationship to revenue/operational activity?
Are protit and loss projections and cash flow forecasts prepared against which actual performance is monitored?
Does the business monitor and actively manage aged debtors and creditors?
Does the management team meet regularly to review operational issues?
Is the business breakeven point known?
Is cashflow managed actively...does management have the necessary tools to manage cash flow in times of tight credit?
Does management set aside time from the operational side of the business to understand the financial position and what the key financial drivers are? (for example, stock levels, gross profit margin, debtors and creditors)

Has management considered the impact of accident or disability of key personnel on the business?

An answer “No” to any of these questions highlights specific areas of the management systems that may require attention. Five or more “No” responses may indicate that business management practices may be in need of significant overhaul.

On your business:

Yes No
Does the business pay one supplier in priority to another?
Is the business drawing but not issuing cheques?
Does the business increasingly need to pay cash on delivery to secure supply?
Is the business widening its range of suppliers to obtain additional credit?
Is the business running down stock levels below efficient operating levels?
Does the business follow-up late paying customers only when it gets desperate?
Does the business have a high level of debt?
Is there increasing exposure to key customers?
Is the business' overdraft increasing and/or are borrowings increasing to service cash flow requirements?
Are planned capital purchases being delayed
Is "work" being priced to 'get the job' generating cash flow rather than pricing for margin?
Are sales static or declining...but stock levels rising?
Are your relationships weak with key suppliers?
Is the business dependant on a few major customers who are not paying as well as they used to?
Have any applications for finance or funding been rejected?
Is there high staff turnover or is the turnover rate increasing?
Are superannuation, GST, PAYG and other statutory payments falling behind?
Are the owners paying themselves just what is left over?
Is the aging of the business debtors increasing or have bad debts increased?

An answer of “yes” to any of these questions may highlight cash flow management issues. Five or more “Yes” responses may indicate that the business may be showing signs of stress, and it is essential that controls be put in place now.

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This document is intended to provide general information only and should not be relied upon in substitution for professional legal and financial advice. While due care has been taken in preparing this document, no warranty as to the accuracy of the information contained within this document is given. No liability is accepted by any member of the Shoreline Business Group Pty Ltd for any error or omission, or any loss caused to any person relying on the information contained in this document, except where such liability cannot be excluded.