As companies emerge from the COVID-19 storm, it will be more important than ever to test the resilience and health of their businesses, as well as to strengthen them in preparation for any future crises.
Sandra Beswick, Director at Fluence Capital , a strategic advisory firm specialising in business turnaround, says regular health checks not only keep the heart of the business ticking, but are critical in helping business owners future-proof their growth and success.
“A health check takes the pulse of the business to find out if it’s on an upward trajectory or experiencing various stages of decline. By highlighting areas of strength, as well as potential weakness, health checks give business leaders the opportunity to address any major issues before they threaten survival.”
Sandra says regular health checks are especially important in today’s business environment, which is characterised by rapid, unpredictable change, especially in the face of the COVID-19 crisis.
She says some key elements businesses should address when attempting to understand the health of their businesses. These include:
- Stress test your company’s financial health
It’s essential to assess how the impact of the crisis may have affected your cash flow. You also need to understand if you have sufficient working capital and access to liquidity, bearing in mind that banks are being far more discerning with loan applications in the current volatile economic environment. - Look to the future
Getting an understanding of future cash flows can be challenging at the best of times, and even more so in these current unprecedented market conditions. However, attempting to forecast your future cash flow will help you to identify potential gaps and plan accordingly. - What are the operational issues?
Understand what the operational and administrative roadblocks are in your business and assess the issues requiring corrective action as soon as possible.
Sandra says business owners obviously have a strong emotional connection to their business, meaning it can often be difficult to take an objective look at the root cause of the issues.
“We’re all guilty of spending our time working in our business rather than on our business. However, when attempting to understand the health of your business, it is important to remain logical and unemotional.”
She says when attempting to identify warning signs and formulating a plan to take the business forward. most business owners don’t know where to begin when it comes to understanding the health of their businesses which is why it’s important to let the experts assist.
Sandra says conducting a regular health check will help you to protect your bottom line, set yourself apart from competitors, and help ensure that you can operate as usual in the face of unforeseen disruption.
Fluence Capital’s Business Health Check is designed to provide you with a comprehensive overview on the state of your business, as well as an action plan on what steps to take to improve it. Get in touch with one of our specialists today to find out more [email protected] or visit www.fluencecapital.co.za.