An Overview of the Business Diagnostic Instrument
Our research into the common concerns of small to medium business
owners showed the following:
- Insufficient financial return for capital investment;
- Insufficient financial return for the effort put into the business;
- Administration and paperwork taking precedence over strategic
thinking and business planning;
- Insufficient access to sources of capital to fund growth; and
Inadequate access to advisers to assist business owners.
Similarly, our research into the key indicators of business success
identified seven broad dimensions that need to be assessed to check
the health of any business:
1. Scanning the external environment:
- assess marketplace developments;
- identify and evaluate your competitors;
- assess the service levels of your suppliers and Industry Association;
and
review your strategic alliance arrangements.
2. Understanding your customers:
- review your customers‚ profiles and needs;
- assess whether your products and services meet your customers‚ needs;
and
examine your capacity for innovation in products and services.
3. Evaluating your strategic direction:
- define your intended strategic performance outcomes;
- assess your organisation‚s planning processes; and
evaluate the level of staff commitment to strategic objectives.
4. Assessing your capacity for change and business development:
- assess your business' need and readiness for change;
- evaluate your business' culture;
- assess your decision-making processes; and assess your marketing
strategies.
5. Reviewing your leadership:
review your leadership capabilities;
review the success and promise of your succession plans; and
assess the effectiveness of your leadership and management training programs.
6. Assessing your organisation's systems and infrastructure:
- determine whether you have the right skills and staff numbers for
your business;
- assess the effectiveness of your IT strategies and technological
systems;
- evaluate the effectiveness of your communication systems and practices;
- assess your physical settings and issues of geographic location;
- evaluate the quality of service received from external professional
advisers; and
assess the appropriateness of your insurance and workers‚ compensation
cover.
7. Assessing individual and business performance:
- assess the financial performance of your business;
- determine your business' speciality products and services;
- assess the levels of individual and business competence; and
examine the current motivation, reward and recognition systems.
Profitability of an enterprise is more than an accounting exercise,
but requires equal attention to people management, systems
improvement, marketing and managing change.
The Business Diagnostic process makes it easy to analyse what is
happening in a business and its external business environment. The
objectives of undertaking the Business Diagnostic process are to:
- obtain an overall assessment of business performance;
- obtain an outline of current strengths and key problem areas; and
provide suggestions for building on strengths and tackling the key
problem areas, including action and implementation plans.
Examples of challenges for business operators to emerge from the
Business Diagnostic Process include the need to improve:
- financial control systems to enhance budgetary decision-making and
control;
- workplace health and safety systems to reduce Workcover
premiums;
- business planning mechanisms to provide an overview
of the strategic
direction of the business;
- strategies and tactics for business growth and
development;
- business succession planning to ensure that
the business will remain
in good hands; and
approaches to managing people to obtain the
best from the workforce.
For more information, please contact:
Director, Organisational Consulting
BDO Kendalls
PH: (07) 3237 5999
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