Time to Conduct a Business Review?
However innovative or market changing your management ideas and strategies are, a business owner should once in a while take a step back and analyse the results! This forms the basic concept of a Business review. It is a common occurrence for business owners and senior managers to become too attached to their ideas and are unable to see the wood from the trees. Sometimes this can be a result of our repetitive nature (the strategy worked in the past so no need to change) or it could be an ego thing as many owner managers are very driven individuals with bucket loads of self-confidence which brings with it a resistance to admit they make mistakes like everyone else. Another common reason we come across is a fear of change. Taking a step into the unknown can be a daunting prospect even when it is obvious that change is needed. Whatever the reasons one thing is certain, repeatedly implement the wrong business strategies will ultimately result in failure. This a where a business review becomes vital!
What is a Business Review?
A Business Review is conducted in conjunction with the senior management of the business in order to provide a clear and independent perspective on the effectiveness and profitability of the various aspects of the company. The objective is to look beyond the day to day flow of business activity to assess how the business should move forward. The process is designed to enable a clear consensus to be established on what needs to be done, based on a thorough analysis of the current position and available options for developing the business.
Why is a Business Review important?
Conducting a formal business review periodically is very important as it gives the business a full and open perspective on what’s really going on in their company. Business owners need to be in a position to assess the results of their strategies and processes. This can only be achieved by conducting a thorough strategic review of the business focusing on issues like financial results, productivity, business processes as well as non-monetary areas like staff morale, absenteeism, barriers to growth, etc. Corrective action can then be made for areas of poor performance. How can improvements be made if they are not first identified? Implementing a formal business review can be one of the most beneficial things a business owner can do and the short term payoff can be multiples of what the process will cost. Knowing what’s actually happening as opposed to thinking you know the reality can be hugely beneficial for the future prospects of the business.
What’s involved in a Business Review?
Essentially a Business Review asks 4 fundamental questions.
Where is the company now?
This stage involves analysing the company’s strengths and weaknesses, how well it addresses the needs of buyers and markets, and how it compares with its competitors. An assessment of operational effectiveness will be done, that looks at people, processes, and organisational responsibilities. The purpose is to establish a solid and agreed starting point for the remainder of the project. This stage often highlights differences of opinion between people within the company and builds consensus about what needs to be done and why.
Where could we get to?
In the second stage the strategic review options are identified. Research and analysis includes the sizing, profiling and segmentation of markets, and considers the options available for development of products and services through options such as organic growth and strategic partnerships.
Where should we get to?
Based on the analysis in the first two stages a selection of the appropriate objectives can be made from the strategic review options that are available. This includes the selection and prioritisation of the initiatives that will be required. Deeper research into the chosen market opportunities is often required in order to complete this stage effectively.
How do we get there?
In the final stage an operational plan is developed based on the value propositions that has been developed during the first three stages. The offering to each market or market segment is defined. The requirements for the development of the company’s people, processes and organisation are defined. Targets are established in this stage along with the definition of the metrics that will be used to evaluate success.
What areas does a Business Review cover?
The Business Review as previously discussed will cover a wide range of areas. These should include, but not limited to:
Financial Performance of the various aspects of the business
The Operations of the business and how tasks get done
The Performance of the People in the business and how they perform their roles
Review of the Sales and Marketing activities of the business
Industry & Competitor bench marking to determine external success
Product/Service reviews on aspects of pricing, service offerings, new opportunities, innovations, etc
The Business Review will not only address current realities but will also focus on the future. The process shouldn’t be anything to fear nor should whatever results emerge from the process. The review should be conducted from a positive, benefit orientated perspective that will result in positive action whatever the key findings of the process.
What are the End Benefits of the Review?
By the end of the review the business owners be in possession of the full picture regarding their company. Specifically management will:
Have an independent assessment of their business by an independent expert
Have recommendations on how to increase the bottom line performance of the company
Be in a position to improve cash flow and management of working capital
Know what products/services are working for the company and where resources should be directed
Be able to increase the sales performance of the business
Know where cost efficiencies can be made within the business
Know where the business can make more money
Have in its possession a written road map (strategic plan) for the future success of the company.
Having accurate information and armed with renewed knowledge and insights, the business owners can then act according based on the findings. This will save a large amount of time and money that would otherwise be wasted if a business continued down the wrong path oblivious to the fact that it is even doing so.
How often should a Business Review be conducted?
An internal review of the business should be conducted regularly (every 3-6 months) depending on the need. An independent external review should be conducted annually in order to be in full possession of all the necessary insights. As part of the review the owners of senior managers should be involved in the process directly while still allowing the external expert to facilitate the process. This will result in the best of both perspectives and gives a formality and discipline to the process.
How can Avid Partners help our Business?
An Avid Partners Business Review can help increase your sales, improve cash flow, generate cost efficiencies and provide you with a written roadmap and strategic plan tailored to your business. Our review is normally carried out at your business premises and can be completed in as little as one day with minimum disruption and cost to your business, while generating both short and long term benefits. Many business owners will know that a business review will greatly benefit their business but never put a formal review mechanism in place. One of the main reasons for this is that it is never the right time! Well now is the right time so get in touch today!
Contact Avid Partners to see how we can assist you with a Business Review.
Email us at advice@avidpartners.ie.
Call us on 01 4286900.
