Strategic Audit and Business Effectiveness

'Business processes' is quite an elusive term for startups and business owners without experience. Trying to set it up sometimes leads to a long trial-error path.

Managing a business in the modern world means paying attention to your employees, your image, the processes, and the profitability. And these parts are interconnected – if you have customers, the right strategies, and employees – you are making profits.

Yet, many beginners still confuse revenues with profitability because it's exciting to get some cash flow and have your team in place. While being excited about your business is good, being blunt about your finances, expenses and revenues is a significant problem.

We are often told 'change is always good, ' which applies to our lives and the business, meaning the sound change.

The fact is – the business doesn't have to wait till one of the scenarios below to start changing:

• Consistent losses over three past quarters
• Merger or acquisition
• IPO

But the reality is – that many businesses react to the problem but are not prepared to respond effectively and are not ready to predict and prepare to avoid losses or other crises.

Why is that? There could be many reasons. Some are:

• Optimistic forecast
• Lack of knowledge
• Lack of responsibility
• Following wrong adviceAnd other

Do you know what the biggest problem for management consultants is? The problem is that business owners and managers –are hesitant to get help. Once they are ready, some part of the business is already sinking once they get assistance. After the assessment, they often resist taking a swift hand and acting fast.

Often we hear statement – the first thing management consultant does is recommends layoffs. While this statement is still valid, it is also more of the old day's strategy—today's – not just layoffs where necessary, but also automation and formalizations.

We know it's hard to think about layoffs, but to save the business and keep other employees covered, sometimes it is a must. After all, the primary responsibility of the business owner and management is to support the profitable business by providing as many jobs as necessary. It's not the business owner's responsibility to keep all the employees on a payroll – even those who are no longer relevant due to new automation and change in market and business environments. It might sound not warm-hearted, but such is life.

A strategic audit is an essential exercise that allows business owners to find gaps, define new tools to benefit the business, and identify the next steps.

Let's face it – every business should constantly evolve; stagnation is a recipe for disaster. But frankly, business owners often tend to 'ride the wave' for too long or under the wrong angle, which causes them to stumble or even fail.

Why is it so common? Well, we listed some of the reasons above. But it's called the 'human factor' – hyper confidence, blindness, or simple resistance to change.

For many years management consultants have heard from business owners the statements such as:

• 'this is how I see it.'
• 'I can't do it this way. I don't feel it.'
• 'I've decided I want to try it this way.'
• 'I'll give it another six months
• And many more.

Those statements are the perfect demonstrations of hyper confidence and resistance to change. And while sometimes this nervousness pays off, it does not most of the time. And resistance to change only means that the losses will be much higher than they could have been.

Strategically speaking, a business owner should always track changes and expenses and be on par with the newest developments. Not to mention things like changing, responding to the market, pursuing emerging opportunities, and simply growing. When there's stagnation, the next step is failure. This is because the main objective of any business is not just conducting some business activity but making profits. That is the definition of business, and there's no way around it.

The most common questions about strategic audits are the following:

• Why strategy? Because every business owner's move should be well weighted out.
• Are a strategy and a plan the same? No, a plan is the list of actions based on the strategy.
• Will the management consultant merely snoop around? Well, yes. They are supposed to figure out where the bottlenecks are, where the leaks are, and what the major problems are.
• Should I prepare my team? Not really. You don't want things presented not in the way they work in everyday workflow.
• Where there be any layoffs? It is possible. But every case is unique, and there's no way to say before the audit.

Approaching strategic audit without external expertise might be challenging. Deciding to engage eternal expertise is a challenge of its own.

When should you holler for help? Just answer the questions below.

1. Has your business financial result shown a decline over the past six months?

2. Do you have enough qualified employees, and everyone performs their best, with no gaps and no overhead detected?

3. Are you regularly monitoring and implementing relevant tech innovations and modern business practices?

4. Do you regularly monitor market change to identify the need for business change and new opportunities?

5. Are you satisfied with your business growth?

6. Will/does your business perform well without you spending a long hour monitoring everything?

If you answered 'no' to any of the questions above, it's time to bring in external expertise.

How do you approach the process?

Step 1. Find your advisors, consultants, and sources

Step 2. Analyze what aspects of your business you are most concerned about

Step 3. Call in the help

Step 4. Assess the results and work on change plan execution

Yes, it is that simple. Sometimes it's practically impossible to do it on your own. External expertise can open your eyes to the things you've been missing. Do not hesitate to get help; put your business success as the top priority and work towards it.

While there's no right and wrong, there are examples of businesses and startups that, on the first look, don't make any sense and yet gain quite a success. There's right and wrong in operations. It's unfair to overspend. It is inappropriate not to follow trends and market changes. It's wrong not to pay attention to insufficient business growth or performance. What is right? As mentioned before, any business is profitable in the right direction. Be on the top and aspire for the better. We are here to help, WKGstrategy.com