Business Health Check
Written by Adam Ramage l Accounting Team
Just like your physical health, your financial health and the health of your business should not be ignored. We understand that our health can often be pushed to the background. Is it years since you have had an “annual checkup” with your GP? Do you put the reminder cards from your dentist in the bin?
Every business is different, and no one solution is appropriate for all businesses, small or large. But a business health check that is tailored to your business and personal circumstances can ensure you understand where you are healthy, and where you may need some changes to improve your fitness!
Whether in the early stages of your business journey, looking at your exit plan, or somewhere in the middle, an external review with the support from Canny Group ensures you both receive and understand your health card, your vital statistics, and what medicine you may benefit from.
So, let’s have a look at what questions you need to consider!
Are The Business Cash Flows Looking Profitable
- Is your business profitable? As profitable as you would like?
Your business should be a major part of your lifestyle and wealth, both now and in the future.
Profitable businesses provide choices for business owners. Like delegating some of your work, drawing profits for lifestyle benefits, and the ability to invest in income earnings assets inside or outside of the business. Building the profitability of your business, or maintaining the future profits should be in your plan.
What’s Your Financial Plan for Tax?
- Are you minimising the tax you and your business pay?
We are not talking about some “scheme” whispered about in dark corridors. We are talking about legitimately understanding ways you can reduce or defer the tax you pay today. We work with business owners to identify how their profit, tax and cash flow can all work together for better outcomes.
New machinery might reduce your overheads, but can also provide relief from tax at the same time. Planning to sell an asset? Want to hire a new team member? Understanding how that can impact your tax, as well as your operations.
When Was Your Last Internal Audit of Your Assets?
- Are your assets protected and risk minimised?
Not all business structures protect your assets equally.
We can review your current structure, identify risks and opportunities, and provide a clear plan for protecting your assets without impacting your business operations. these risks can also be yourselves. If you own a business with someone else, do you have documented shareholder agreements or partnership agreements that protect your position and the ability of the business to continue if something happened to one of you?
Want to know more about business structures? Check out this article we have previously put together about Getting Your Business Structure Right!
Who Prepares Financial Guidance For Your Exit?
- Do you have a succession plan in place?
The most valuable businesses are those that can be sold without disruption to profits.
Long-held or family businesses may need to work through processes and plans to ensure that the business can be “passed on” either to a new owner or part of your existing team or family. Having a plan to achieve a smooth transition protects your investment and provides peace of mind to those involved. Last minute actions can lead to unwanted consequences, so having a plan adds value to your business.
Want to know more about succession planning? Check out this article we put together about Succession Planning Is Not Just A Collection Of Buzzwords!
What Do Your (Accounting) Systems Look Like?
- Are your business systems in good order including your operational documentation/IP?
One of the ways to add value to your business is to ensure there are systems in place that can allow it to run without you being present.
Think about Mcdonald’s, but you do not have to have more than one worksite for systems to keep your business running as it should. And if you have your “special sauce”, have you got it documented in a way that, if you need or wanted, someone else could use it? Not just some scribbled notes, or a list of contacts. A set of documents that clearly identify how your business runs. Put yourself in a purchaser’s shoes. What would that documented set of procedures be worth?
How Is Your Financial Reporting?
- Does your business have loans or equipment finance and are they optimised?
We have been through record low-interest rates, but with any new purchases or refinancing, ensuring the next finance works for you is more important with a return to “real” interest rates.
We can help you make sure the finance is in the right entity, with the right terms, and can put you in touch with lending professionals, when and if needed.
Wealth Creation
- Are you creating wealth for yourself and your family?
We return to the big picture, and this is not just about profits. I could mean it is about getting assets in the right structure, or profits to the right person. Our health check process takes your family circumstances and goals into account when reviewing and assessing opportunities.
All these questions appear simple, and you may have even asked them of yourself, but by going through a structured Health Check process, the results can be both illuminating and power your business to success. Or, they may focus your efforts on areas that are often ignored. Sometimes business stick with the “status quo” yet with a different lens, alternatives may be more efficient or more effective.
Canny Group, Your Business + The Accountants Geelong Trust
We work with you in each step of our Health Check process, seeking to understand how your business operates, from delivering a product or service through to receiving the income for that product or service. We believe that “prescription without diagnosis is malpractice”, ensuring we take the time to evaluate your business.
Canny Accountants are the accountants Geelong trust when it comes to business – big or small, start-up or well into your practising years. We are your partners when it comes to business advice. Let us help you to ensure your business is running at its best. Get in touch with our team to find out how we can help you reach and achieve your goals.
