What Is A Business Assessment, And How Do You Conduct One?
As a business leader, it’s often helpful to understand how your business is doing and where it’s going. There are numerous tools, systems, and frameworks you can use to get a pulse on how things are going. Business assessments are especially easy to conduct and particularly effective to analyze. Getting a professional second opinion is also valuable when you need to identify gaps and vulnerabilities of the strategy and correct the course. Business analysis services are a good choice for companies with a roadmap to growth and prosperity. Data-driven decision-making is always a good idea that inevitably leads to improvements.
What Is A Business Assessment?
Most business owners have a basic vision for their business. Few, however, have a practical plan for growing and achieving the goals outlined in their vision statement. And it’s easy to get so caught up in the daily operations of running a business, that you don’t pause long enough to look at the overall health of your organization.
A business assessment is an objective and unbiased analysis of your business that’s designed to provide a clear picture of where your business is, where it’s going, what factors are impeding growth, and what factors can help you get from where you are to where you want to be.
“It’s important to note that an assessment is not an audit. An audit, in its simplest terms, is a pass or fail result that must be documented and enforced. An audit is built from the outcome of an inspection and demands actions from findings,” PinnacleART explains. “An assessment refers to an evaluation. It is an estimate of what is going on with a certain process and whether there are new risks or benefits to be considered.”
The primary purpose of an assessment is to gauge how well your plant is managing and executing in areas that impact the bottom line and/or influence growth.
How To Conduct A Useful Business Assessment
There’s no uniform method of conducting a business assessment. It looks different in every setting, situation, and organization. Here are a few tips to help you improve the effectiveness of business assessment within your own company:
Find The Right Type Of Assessment
There are dozens of different business assessments you can conduct. (And you can always create your own original analysis or framework.) The key is to identify and implement the right assessment for your needs.
Assessments take on all sorts of angles and focuses. There are financial assessments, marketing assessments, tactical assessments, leadership assessments, management assessments, etc. And then within the generalized categories, you have specific types.
The SWOTT Analysis (Strengths, Weaknesses, Opportunities, Threats, and Trends) is perhaps the most widely used business analysis. The GPCT Analysis (Goals, Plans, Challenges, and Timeline) is also popular.
Analyze The Appropriate Kpis
The secret to conducting useful business assessments that provide actionable insights is to analyze the appropriate key performance indicators (KPIs). The KPIs you find useful for your organization will differ from the next. Take the time to develop a list that helps you examine your operations within the context of your goals.
Make sure you’re being truthful when you conduct assessments. The insights you glean are only as effective as the honesty of the inputs. Making the organization look better by manipulating data or optimizing which data points are used does nothing but hurt your results.
Consider Outsourcing The Assessment
If you’re worried about being honest, or don’t believe you have the right internal resources to conduct a meaningful assessment, outsourcing is always an option. The results tend to be less biased and more empowering.
Optimize And Track Over Time
It’s not enough to conduct a business assessment once every couple of years. It’s something you must integrate into your quarterly processes.
“Building a business assessment practice into your quarterly planning guides you through the growth and development of the essentials needed to grow your business to success that is sustainable and predictable,” consultant Jackie Nagel explains. “A business assessment ensures your business has what it needs to deliver on your goals. It helps you expand and grow your business in a way that is smart and strategic. It provides a solid foundation for making sound decisions.”
Regular assessments also provide the opportunity to optimize your business on the fly. Rather than waiting for an annual assessment, you can make quick changes in real-time, which improves results and gives you a better chance of meeting specific year-end goals.
Business assessments should become a mainstay in your business. They need to be conducted regularly and with purpose. The more strategic you are about using them, the more improvement your organization will experience on a regular basis. What are you waiting for? Get started today.