Business Health Check: What to Check First and Why

The calendar is full. The team is flat out. You finish a busy month and the bank balance looks thin. Profit does not match the effort, and nobody can quite say where it went.

A holiday still means the phone rings. A week away is not a week away. Quotes sit with you because only you can price them. Staff ask the same questions they asked last month. You want the business to carry itself, and it still runs through you.

That pattern is common in established businesses that have been trading for years. It rarely means you are doing the work badly. It usually means a few things that made sense when the business was half this size were never looked at again.

A business health check is the relief. Not a lecture in management accounting. A short set of looks at your own records, in a set order, so a vague feeling becomes specific questions.

Pull twelve months of profit and loss, the debtors list, the quote log, and one typical week of messages and calendar entries. Mark each check fine, odd or unknown. Take any unknown to your accountant rather than guessing.

Table of Contents

• The Six Checks to Run, in Order
  • How to mark the page
• Where the Money Leaks Between Quote and Profit
  • Walk the cost lines with a pen
  • Check the price against the date
  • Count the work that died after quoting
• Cash You Have Earned but Have Not Collected
  • What sits behind each band
• Signs the Business Still Runs Through You
  • What to count
• Team Checks Before You Look to Hire
  • Test the work, then the vacancy
• What Another Year of the Same Costs You
  • Project it forward
• Book a Business X-ray to Confirm Your Numbers

The Six Checks to Run, in Order

Start with what you already feel. The diary has no spare hour. The team is working hard. The profit at month end does not look like the effort that went in. You cannot leave for a week without a call. That is not a character flaw. It is a sign the records have not been read in the order that shows where the money and the decisions actually sit.

Run these six checks in this order. Each one uses a record you already have. Each one raises one question. Do not skip ahead to hiring, software or a new price list until you have marked all six.

How to mark the page

Fine means the figure matches the work you can see. Odd means the direction worries you, even if you cannot name the cause yet. Unknown means you cannot find the number or you do not trust it.

Do the profit check before the cost check. Do the quote check before you touch prices. Do the cash check before you tell yourself the business is short of work. Do the decision count last, once you can see which leaks are also waiting on you. That order stops you fixing the wrong thing first.

Where the Money Leaks Between Quote and Profit

Open the profit and loss for the last twelve months. Put each month beside the same month last year and mark where profit slipped while sales held. A strong month can cover a weak quarter. Read the year as a direction, then circle the first month the direction changed.

Walk the cost lines with a pen

Go line by line: wages, subcontractors, materials, software, rent, vehicles. For each one ask a blunt question: did this cost grow because the work grew, or did it stay from a smaller version of the business?

The usual finds are boring. A seat nobody uses. A van that earns less than it costs. A subcontractor rate that rose while your quote stayed still. Each item looks small in isolation. Together they explain why a full diary can still produce a thin month.

Take the list to your accountant for clean classification. The judgement about whether cost outran work comes from your jobs, your payroll and your supplier invoices.

Check the price against the date

Put today's price list beside the list from two or three years ago. If the customer price barely moved while wages, fuel and materials climbed, the leak is already priced in. You need the two lists and the margin on the jobs you sell.

Count the work that died after quoting

Now pull the quote log and match it against jobs won. The gap is priced work you held capacity for and never banked. Value it at your average job size from your own records. Then count how many quotes stalled because a decision, a discount or a final number waited for you. That is owner dependency showing up as lost revenue, beside profit.

A profit and cost calculator (opens in new tab) can lay the trend, the cost lines and the dead quotes on one page. Keeping even part of that gap often beats buying another lead source.

Cash You Have Earned but Have Not Collected

The work finished on a Friday. The invoice went out at the end of the month, once things went quiet. By then the customer's payment run had passed, and a finished job had become an overdue balance. Check your last few jobs for that gap: the last day of work against the date on the invoice.

The profit figure on your report and the cash in your bank are two different numbers. The debtors ageing report shows you the gap between them. Your accounting software, or your accountant, can produce it in minutes: every unpaid invoice, grouped by how long it has been waiting.

What sits behind each band

Break the overdue total into names. Aged money usually sits with a short list of customers, a sign-off nobody chased, or an invoice that was wrong the day it went out. A name tells you who to call. A total just sits there looking worrying.

If the invoice waits for a quiet afternoon, the quiet afternoon never comes. Close that gap before you chase anyone.

Then count the reminders that only go out because you send them. If the answer is all of them, the cash problem is also a dependency problem. The team can see the list. They are waiting for you to be the one who asks for the money. That count goes on your health check next to the profit figure, because a business where only the owner can ask to be paid has a second leak running.

Compare this month's bank balance with the same month last year. If the balance is lower while profit looks steady, the difference is often sitting in what customers owe you. Take the ageing to your accountant for an hour so it gets read properly. Day to day, cash flow management (opens in new tab) comes down to three habits: invoice the day the work finishes, let the reminder go out without you, and refuse to let one quiet customer age into a ninety-day balance.

Signs the Business Still Runs Through You

Take yourself out of the diary for fourteen days. No calls, no approvals, no quick answers by text. Write down what would stop, what would slow, and what would be decided badly.

Then open last week's messages, calls and calendar. Count every decision that reached you. Count the quotes only you could send. Count the work that went to a competitor, or sat waiting, because nobody else could price it or promise a date. That last figure is the one owners skip, and it is often the most expensive.

Sort each item. A written rule could have covered it, or a named second person could have made the call.

What to count

Check the approvals that sit with you: refunds, discounts, pricing, hiring and supplier terms. Note which client relationships only you can hold. Watch for the questions that come back every week. A repeated question means the answer already exists. It has not been written down, or it has not been put where people look.

Expect the number to be higher than your first guess. The decisions you resist handing over are usually the ones that have been yours the longest. Write each one down with a name beside it: yours, or the person who takes it next. Managing a small team (opens in new tab) gets easier once those decisions are named. Telling people to use their initiative, with nothing written down, just moves the queue.

Treat that count the way you treated profit. If it runs high, the business can look healthy in the accounts and still be hard to leave, hard to staff and hard to sell. A buyer pays for a business that runs. They discount one that runs through you. Check the number again in six months and see whether it moved.

Team Checks Before You Look to Hire

Look at rework before you look at headcount. An open role feels like the obvious fix when everyone is flat out. Often the work is already leaking before a new person walks in.

Pull a sample of recent jobs. Count how many came back for a fix, a re-do, a callback or a complaint. Then ask who caught each problem. If you did, the team is not yet carrying quality. Hiring into that pattern gives you another person whose work you will check yourself.

Test the work, then the vacancy

• Written tasks: Check whether quoting, scheduling, checking and closing a job are written down. A process that lives in one person's head is a process the business can lose.
• A live problem: Give a staff member a real customer issue and watch whether they can resolve it inside the limits you set. Do not rescue them in the first five minutes.
• Where hours go: Note time spent waiting for your sign-off, redoing someone else's work, or chasing information from another desk.
• What a new hire would own: Write that down before you advertise. Write what they would not own as well.

Recruiting is already hard for a lot of employers, and a difficult hire can hit delivery, not just the vacancy ad. An open role is not neutral. Every week it stays open, the same work lands on the same people. Count that load as a cost that is already running. If the main tasks are not written down, a new person will not fix the queue. They will join it, and the questions will still come back to you.

Ask your accountant only if a wage or subcontractor line needs classifying. The rest of this check is yours: rework, written steps, and a real problem handed to someone else.

What Another Year of the Same Costs You

The next twelve months already have a price. You can put a number on it from your own records in about an hour.

Open your job log or quote diary for the last six months. Count every job you declined, quoted late or let slip because nobody could take the call, price the work or say yes without you. Write the count down. Then multiply it by the average margin a job of that size earns in your books. Not revenue. Margin, the part left after wages and materials. Double the result to cover the year.

Multiplying the job count by your average margin gives you a six-month cost; doubling that gives you the year. Your result comes from your own records, not someone else's example.

Project it forward

Do the same sum for one working week. Count the decisions, quotes and callbacks that sat waiting for you while you were on a job. Price each one at the margin it held up. That second figure is what your involvement costs on top of the lost work.

Now put both totals beside your profit trend for the last two years. If profit is flat, the gap you just wrote down is what another unchanged year costs. If profit is falling, add the slide on top.

Then compare that total with the cost of fixing the cause: a hire, a price rise, a written process, one less thing that waits for you. In most cases the repair is the cheaper option by a wide margin. That is the comparison worth making before this year rolls into the next.

Book a Business X-ray to Confirm Your Numbers

You now have six numbers from your own records. Pick the one that costs the most. You do not need all six fixed at once.

Most owners already know what should change. The gap is implementation. Someone owns the change, it has a date, and it is written down where the team will see it. An answer that stays in your head does not change next month's profit or next month's inbox.

The Momentum Starter Pack (opens in new tab) is the place to begin, with the checks you have just run still in front of you.

If you want those figures read with you, book a Business X-ray. It is a free diagnostic session with Glenis Gassmann. She goes through your actual numbers: where profit is leaking, and how many decisions, quotes and client calls still route through you. No obligation. It is a conversation about your figures.

Bring twelve months of profit and loss, the debtors ageing report, the quote log and your two-week test notes. Glenis is an Implementation-Driven Business Advisor with 35 years in business and accounting. She works from the records, not from a pep talk.

Stop Knowing. Start Doing.

Glenis Gassmann is an Implementation-Driven Business Advisor on the Gold Coast, working with established business owners across Australia and New Zealand. Author of Why Knowing Isn't Enough, a number one Amazon new release.

Your Success Shift works with established owners on the live business: profit that does not match the effort, cash that has been earned but not collected, and a business that still stops when you step away. If the six checks have shown you where to start, book a call and walk through your own numbers.