Most owners are so occupied with running the business that they rarely step back to assess how healthy it is. The ten questions below take about ten minutes. Answer each honestly with a yes or no, then add up your score at the end. The sections cover sales, costs and profit, cash, team and systems, which are the five areas where problems most often go unnoticed.
Sales
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Do you know which products or services make you the most profit? Not the most revenue, the most profit. Your best seller is sometimes your least profitable line once discounts and extra work are counted.
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Is no single customer more than a quarter of your sales? If one customer leaves, could the business survive? Heavy reliance on one or two customers is one of the largest hidden risks in an SME.
Costs and profit
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Do you receive a monthly profit and loss statement within three weeks of month-end? If you only see your real numbers once a year, at tax time, problems have months to grow before you notice them.
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Have you reviewed your prices in the last 12 months? Rent, salaries and materials rise every year. Prices that have not moved mean your margin has quietly shrunk.
Cash
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Could you cover two to three months of fixed costs from cash in the bank? This buffer is what carries you through a slow season, a lost customer or a late payment.
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Do most customers pay within your stated payment terms? Late payers turn your profit into someone else’s cash. If 30-day terms usually mean 60 days in practice, the answer is no.
Team
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Does every staff member have a clear role and know what is expected of them? Without clear roles and targets, people stay busy, but not always on the right work.
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Could the business run for two weeks without you? If every decision passes through you, you are both the business’s main bottleneck and its single point of failure.
Systems
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Are your key processes written down? If only one person knows how something is done, the business is exposed every time that person is away or leaves.
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Do your systems give you the numbers you need without manual spreadsheets? Your accounting, POS and stock systems should answer basic questions quickly. They also need to be ready for e-Invoicing if it applies to you.
Your score
Count your yes answers.
| Score | What it means |
|---|---|
| 8 to 10 | A healthy business. Keep reviewing it every six months. |
| 5 to 7 | Solid, but with gaps that could hurt you in a downturn. Address the weakest area first. |
| 0 to 4 | Several risks at once. It is time for an outside view and a clear plan. |
Where to start
- Do not try to fix every “no” at once. Choose the three answers that concern you most.
- Tackle one a month, starting with cash if question 5 or 6 was a no, because cash problems compound fastest.
- Put a date in the calendar to repeat this check in six months and compare the scores.
- If you scored 4 or below, bring in an outside view before committing to any major spending.
Want an expert view?
Our Business Health Check (RM350) is one two-hour session, onsite or online. We review your sales, costs, cash flow, team and systems, then give you a five-page report with your top five priorities. If you book an advisory programme within 30 days, the full fee is credited. Book your health check