Conducting a thorough business evaluation allows your business to move in the right direction and reduces risks going forward. Pay attention to the things below to start conducting a business evaluation.
1. Market Performance and Direction in Business
Ask yourself what makes your business work, which market to go next, if you can launch a new product/service and how the business can be improved. Drawing up a marketing plan as part of a business plan will determine in which market you want to sell and target the nature and geographic distribution of your customers. You should assess your customer base and market position as an important part of the process. You can look at important factors such as changes in your market, new services emerging, changing customer needs, or changes in competitive activity.
2. Business Products and Services
A good starting point for conducting a business evaluation is to evaluate what you do in a business i.e. the core activities of the business, the products made, and the services provided. You can ask the questions below to help you.
- How effectively are you matching your product/service to your customer’s needs? If you are not sure about the need, you can do a market analysis.
- Which of your products/services worked and those that didn’t go as planned? Define a product/service that offers a high percentage of sales with a high profit margin
- What’s the problem with a product/service that doesn’t work? Consider pricing, marketing, sales, design, packaging and sales systems to make improvements
- Are the prices for the products/services you charge profitable?
3. Operational Review
At this stage, you should ask the internal factors what is holding your business back, and if there are any obstacles, think about how you can overcome them. Take turns considering various aspects of the business such as place, business methods, technology used, or existing information technology.
- Place, for example whether you have a long-standing commitment to the property you live in, or what are the advantages and disadvantages of your current location.
- Technology and information, for example how is your current management information system and whether this system allows for more flexible performance
4. Financial Review
Businesses often fail due to poor financial management or lack of planning. Therefore developing and implementing a good financial and management system is very important for business. You can update your original business plan to get started. When you want to evaluate your finances, you can consider things such as cash flow, working capital, profit and loss, sales income and others.
5. Employees and Skills
Having employees with the right skills can help you reach your business goals faster. You can carry out training and development planning for employees in your company.