Business Viability Assessment

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Copyright – GS Consulting Ltd.
Business Viability Audit – Self-Assessment
Understand your business and make it better!
The following exercise WILL improve your business. An initial investment of 30 minutes of your time
will help to audit your business and give you the confidence that you can fulfil the key fundamentals:
 Are you market viable?
 Are you organisationally viable?
 Are you commercially viable?
What follows is a comprehensive series of questions to get a reality check and help you assess how
well your business is positioned for growth. This is not easy and you must be objective and realistic
to get a true and honest assessment. Inevitably, this is a generic model and all businesses are
different, so only answer those questions that are relevant to your business. Don’t be frightened
about not answering questions, as this about assessing where you are at your stage of growth and
may only be a pointer to where you may need to be in the future.
Blue Questions: Give first impressions ie your ‘gut feel’, approximations are fine. 30 mins max
Green Questions: Where a textual explanation is asked for, keep focussed and try to use 20
words maximum. These questions can be answered later in your own time.
Try to follow this six step process to get full benefit from the exercise:
1. Initially answer the qualifying Red questions. If you answer yes to all of these proceed to
step 2, if not, stop at this point as the exercise is probably not for you.
2. Complete all Blue questions with a yes/no or numeric answer (starting at Market Viability
section). Try to do this within 30 minutes. Remember the longer you take may reflect how
much of a ‘feel’ you have for the business. Not all questions will relate to your business. Just
ignore those questions you don’t believe are relevant.
3. Score and analyse your results based on the guidance at the end of the document. More
importantly look at where you might consider your areas of weakness are, based on your
own assessment.
4. At a later stage, in your own time, answer the Green questions requiring a factual or textual
answer. These complete the picture of your business and start to reflect why you are doing
the things you are.
5. Make a list of actions you can do in the short term (30 to 90 days), that will improve the
identified areas of weakness. Prioritise them in terms of importance and potential positive
impact to the business.
6. Allocate time, resource and responsibility to carry out at least two (but no more than 3)
initial actions. These should be reviewed and replaced with up to three new actions on a 60
to 90 day basis to maintain a momentum of improvement.
Note. The 1 to 4 responses are qualitative, with 1 being a strong, definitive yes and 4 being no
or don’t know, so low answers are good! You might interpret them broadly as:
1 – You’ve got it nailed 2 – Good but can get better
3 – Definite room for improvement 4 – Not addressing this and may need to!

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Qualifying questions:
Do you really know what your current business position is? Y / N
Do you have a real desire or need to improve, grow or change your business? Y / N
Do you have some idea or ambition as to what you want your business to be? Y / N
Do you think external help is required or acceptable to you? Y / N
If your answers to these questions are a quick and automatic yes, then it is worthwhile proceeding to
the main body of the assessment
Qualify your thinking by identifying which of the following reflect your short/medium-term
business goals;
 Identify what is working and what is not working in your business
 Solve already identified business issues
 Improve current profitability
o Improve sales
o Reduce costs
 Grow the business
 Diversify
 Move to export markets
 Position for exit

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Business Overview:
How many years has the company been in business? ________
Market –
Describe your products or services _________
Who, what or where is your target market? _________
Which country is your primary market? _________
Which other countries do you operate in? ________
Resources –
How many employee FTEs (full-time) do you have? ________
How many contract FTEs do you access? ________
How many managers do you have? _________
Business Model –
Are your sales Business to Consumer / Business to Business / Both ?
Product/Service unit value?
< $100 / $100 -$1,000 / $1,000-$20,000 / >$20,000
Sales cycle?
<1 day / 1 day -1 week / 1 week - 2 months / > 2 months
Finances – (provide approximate/ best guess answers)
Reported revenue for last full financial year? _________
Projected revenue for current fy? _________
Expected revenue for the next quarter? _________
Monthly operating cost? __________
Size of current qualified sales pipeline? __________

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1. Market Viability:
Market Positioning:
Are you in the market you want to be in? Y / N
Is your market presence established? 1 2 3 4
What, where or who is your existing market? __________
If not, (or planning to enter a new market in addition to your existing market),
What, where or who is your new target market? __________
Has market entry been researched/validated? Y / N / Don’t know
Is market entry easy? 1 2 3 4
Is market entry affordable? 1 2 3 4
Is the market large enough? 1 2 3 4
Is the market safe/stable? 1 2 3 4
Is the market window long enough? 1 2 3 4
Is your product/service fully ready for market? 1 2 3 4
If not, what R&D/Packaging effort is required? No. of weeks?_______ $?________
What new geographic markets are you planning? ___________
Why? ___________
Is your current (or new) market opportunity or need clear? 1 2 3 4
What is not working in the market? __________
Does your product/service fill such a market gap? Y / N
What do you offer (that others don’t) to fulfil the market need? ___________
Can you articulate a clear value proposition? Y / N
If yes, what is it? ___________

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Can you make a quantifiable, qualitative difference? 1 2 3 4
Can you prove or demonstrate your differential? 1 2 3 4
Are your references credible in your market? 1 2 3 4
Are you visible in your market? 1 2 3 4
Sales:
Do you have a clear sales plan? Y / N
If so, what is it? _________
How many customers do you have? _________
Will your revenue cover your costs over the next 90 days? 1 2 3 4
Do you have a high level of repeat sales or referrals? 1 2 3 4
Do you know what proportion of sales will come from new business? Y / N
How large is your new business pipeline? No. of Prospects? _______ $ Revenue?________
Is your sales pipeline reasonably accurate? 1 2 3 4
Is your sales pipeline well qualified? 1 2 3 4
Roughly what % normally translates into sales? __________
Do you have sufficient sales people? 1 2 3 4
How many sales FTEs do you have? __________
Do they have clear documented sales targets? Y / N
Are the sales staff experienced or well-trained? 1 2 3 4
How many are based (geographically) in your market(s)? __________
Do you sell at the right (decision-maker) level? 1 2 3 4
Does you sell effectively? 1 2 3 4
Is individual sales performance measured? 1 2 3 4
Why do people buy from you? __________
What would be the profit impact of a 2% increase in sales? ___________

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Do you have a sales channel strategy? Y / N
If yes, what is your value proposition to the channel? ___________
Your Channel(s):
Do they have adequate sales resource? 1 2 3 4
Do they have good market networks? 1 2 3 4
Do you have an accreditation process? Y / N
Can you control channel performance? 1 2 3 4
Can you win new clients & partners? Y / Don’t know
Delivery:
Can you get your solution to market? 1 2 3 4
Is your delivery online? Y / N
If not,
Do you have a Delivery/Distribution strategy? Y / N
If yes, are you or your agents/distributors capable? 1 2 3 4
Do you/they allocate appropriate resources? 1 2 3 4
Do you have an accreditation process? Y / N
What is your delivery cycle? days / weeks / months ?
How would your distributors describe your company? _________
Do you have a support strategy in place? Y / N
Do you have a problem logging system? Y / N
Do you have a help desk? Y / N
Do you monitor customer satisfaction? Y / N
Are your customers fully satisfied? 1 2 3 4

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How would your customers describe your company? __________
Do your customers provide referrals? 1 2 3 4
Marketing / Branding:
Do you have a clear marketing strategy? Y / N
How many FTE resources drive your marketing? _________
Do you have a Brand strategy? Y / N
If yes, what is it? __________
Do you have a clear market message? 1 2 3 4
If yes, what is it? _________
Do you have a targeted market image? Y / N
If yes, what is it? _________
Is your website effective? 1 2 3 4
Does it drive measurable transactions? Y / N
Can you measure hits/responses? Y / N
Is your P.R. effective? 1 2 3 4
What media do you use?
a. In home market? __________
b. In offshore markets? _________
What is your target coverage – weekly / monthly / quarterly ?
Does your marketing/branding enhance your market differentiation?
1 2 3 4
Do you have a pricing strategy?Cost plus / Market rate / Premium / Value-based / Other ?
Is your pricing compatible with your market image? 1 2 3 4
Does your pricing work for you? 1 2 3 4
What would be the profit impact of a 2% increase in price? __________
Can you retain your clients & partners? Y / Don’t know

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2. Organisation Viability:
Do you have a long-term vision for the business? 1 2 3 4
Do you have a Strategic Plan in place? 1 2 3 4
Do you have the ability to implement your strategy? 1 2 3 4
Do you have an operational Business Plan? Y / N
If yes, is it for 90 days / 6 months / 1 year / 2 years
Which of the following key Business functions are covered in your Business Plan?
Sales /
market
strategy
Partner /
Channel
strategy
Distribution
/ Support
strategy
Product
strategy
Marketing
/ PR
strategy
People/ HR
strategy
Asset
strategy
Investment
/ funding
strategy
Note that for manufacturing/processing companies other disciplines like warehousing/storage will
be required.
What elements of business experience are covered by your management team?
Entrepreneur Exec Mgmt Finance
Mgmt
Legal/
Contract
Sales/Mktg Technical Distribution H.R.
Are the management team fully capable? 1 2 3 4
Are management accountable for performance? 1 2 3 4
Are management aligned on business values? 1 2 3 4
Do management have a shared view of strategy? 1 2 3 4
How good is communication between management? 1 2 3 4
Is there an established succession plan? Y / N
If yes, what is it? _________________
Do you have a formal Board? Y / N
If yes, which of the capabilities/experience below are covered by the Board?
Entrepreneur Exec Mgmt Finance
Mgmt
Legal/
Contract
Sales/Mktg Technical Distribution H.R.

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Are your Board market credible (high enough profile)? 1 2 3 4
Is the Board right for your size of business? 1 2 3 4
Is the Board clear on its governance responsibilities? 1 2 3 4
Do you have an Advisory Board? Y / N
If yes, what additional specialist skills can they offer? __________
What systems/processes do you have in place?
Financial /
Accounting
Payroll /
H.R.
CRM /
Sales
Website /
Marketing
Business /
Risk
Planning
Asset
Mgmt.
Resource
Planning/
Mgmt.
Debt Mgmt/
Collection
Are your systems and processes effective? 1 2 3 4
If you are a manufacturing/processing company:
Is your production equipment up to date? 1 2 3 4
Is it easy and cheap to maintain? 1 2 3 4
Could you afford replacement/updating? 1 2 3 4
Do you have rigorous quality assurance in place? 1 2 3 4
Do you have capacity to increase output quickly by 10% 20% 50% 100% ?
Do you have a ‘people’ culture? Y / N
If yes, explain what you mean ______________
Do management communicate well with staff? 1 2 3 4
Are management and staff well aligned? 1 2 3 4
Do the staff understand their role/importance? 1 2 3 4
Is the business dependent on key personnel? 1 2 3 4
If yes, are they replaceable? 1 2 3 4
Is the quality of your staff key to success? 1 2 3 4
Do you measure staff performance? 1 2 3 4

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Do you encourage staff input/feedback? 1 2 3 4
Do you encourage ideas/suggestions for improvement? 1 2 3 4
Can you identify the staff/skills you need? 1 2 3 4
Can you hire the staff you need? 1 2 3 4
Can you keep them? 1 2 3 4
Do your management and staff contribute to your market differentiation?
1 2 3 4
Do staff respond/communicate well with customers? 1 2 3 4
(phone/email/text/counter/meeting)
Do staff present your business value/image well? 1 2 3 4
Is a succession plan for the business required? Y / N
If yes, is it clearly known? Y / N
Can you adequately manage and operate your business? Y / Don’t know

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3. Commercial Viability:
Operational Finance:
Do your Accounting services provide all the support you need? Y / N / Don’t know
Is your primary Accounting via an online tool eg MYOB, Xero? Y / N
Are you using some of their add-ons to automate processes? Y / N
Is your current Banking arrangement sufficient for your business needs? Y / N / Don’t know
Do you have firm projected cashflow to cover costs over the next 3 months? Y / N / Don’t know
Do you accurately know your monthly fixed costs? 1 2 3 4
How often do you re-negotiate fixed cost items? On-going Yearly Rarely
What would be the profit impact of a 2% reduction in fixed costs? _________
Do you have a fixed operating budget for the year? Y / N
Are you managing your operating costs well? 1 2 3 4
How often do you re-negotiate supplier terms? On-going Yearly Rarely
Do you have rules to manage operating costs eg travel, mobiles? Y / N
What would be the profit impact of a 2% reduction in variable costs? __________
Are you comfortable with your level of liquidity? 1 2 3 4
Are you satisfied with your level of profitability? 1 2 3 4
Do you have a process for chasing customer payment? Y / N
Will most payments be made by due date? 1 2 3 4
What proportion of payment due is <30 days / 30-60days / 60-90days / > 90 days ?
Have you systemised reminder / collection notices? Y / N
How many staff are dedicated to chase payments? __________
Can you pay your suppliers on time? Y / N
If not, do you have an approved arrangement for late payment? Y / N
Are your PAYE and GST returns up to date? Y / N
Is your overall administration/financial control effective? 1 2 3 4

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Do you measure how well your business is doing? 1 2 3 4
How do you do it? ___________
Do you have differentiable Intellectual Property (IP)? Y / N
If yes, how is it registered / protected? __________
Strategic Finance:
What type of investment have you had to date?
(Friends / Private individuals / Angels / V.Cs / Institutional / Government)
Do you have new sources of funding? Y / N
If yes, are these Government/commercial grants? Y / N
Is there other potential external investment? Y / N
Do you have an investment generation strategy? Y / N
Do you have a prepared investment term sheet? Y / N
Have you researched investment alternatives? 1 2 3 4
Do you have a realistic market valuation? 1 2 3 4
Do you know how much investment you need? 1 2 3 4
Do you have an exit strategy? Y / N
Why and what is it? __________
Why should people invest in you? ___________
Can you sustain your business long term? Y / Don’t know

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Guidance:
The questions above are all ones you may have to be able to answer to have a long term and
growing business. Basically the summation of the answers should address the four key questions:
 Can you win new business (and potentially partners)?
 Can you retain your clients and partners?
 Can you resource and manage your business as it grows?
 Can you sustain and fund your business long term?
Of the Y / N questions, the answers ideally should all be Y. If you answer N, then thought and
actions are required to remedy or justify that. In terms of measurable assessment give Y a value of
2 and N or Don’t Know a value of 4.
There are more than 100 quantifiable questions, and not all will be relevant to all businesses
based on size, maturity, type of business etc. Don’t be frightened of setting aside those that are
not relevant to your business.
In broad terms if your measurable scores ( including Y / N answers) average 2 or less for all the
questions relevant to your business, then you are in good shape and capable of growth.
This measurement is only a guideline. What is really important is identifying areas where you can
improve or may need help. Hopefully this exercise will help you know your business a bit better.
Look at the scoring of individual sections to try to evaluate where you may have room for
improvement. This is particularly important for the areas in Market Viability. If you have scored
more than 2, you really should re-assess your basic business model and perhaps get some external
assistance to review the business with you. Quite simply if your products(s)/service are not market
viable and sellable, it may not matter how strong your organisational or commercial model is!
For small, emerging businesses, don’t despair because you shouldn’t realistically expect to be able
to answer all the questions or give all ‘yes’ answers or low number assessments, as you may not
be mature enough to actually need those business processes and structures just yet. However it
does no harm to think and plan ahead for when you do need them.
Of the questions requiring a written response or require ‘circling’, they are either bits of key
operational information you should have at your fingertips or strategic insights that require
thought and justification. To help your focus and clarity of thinking, keep your written responses
to a maximum of 20 words.
The ‘tabled’ elements in the second section are all required, if not now, they should be planned
for.
What do you do now?
The exercise above gives you a fairly comprehensive overview of where you think your business is
currently positioned (assuming your answers have been as objective as possible). If you are not
fully honest with yourself, there is only one loser in this exercise. Try it with the management
team!

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The value you can generate from this knowledge is based on the actions you take to improve this
current position.
Practical Exercise
After your initial run-through, try to make time to go through the exercise again, focussing
separately on different sections to better understand your areas of strength or potential weakness
(Don’t do it all at once, try it section by section over a period of time). For all those questions
where your response has been a ‘No’, ‘Don’t know’ or a ‘3 to 4’ rating, try to think of one single
action that would give a more positive outcome. Then apply a reality check to those actions. If the
action;
 Can be resourced/funded
 Can be achieved in the next 30 to 90 days
 Can provide an outcome that materially improves business capability or performance,
Then DO IT. Allocate responsibility and timeline for delivery.
In another 2 to 3 months repeat the exercise. It would do no harm to repeat the whole assessment
on a 6 to 12 month cycle to attempt to measure your improvement.
Remember this is YOUR audit assessment. Nobody outside your company can see it without your
permission. It may be that you will need outside advice or help to address problem areas, but that
is your decision and at least you will be better placed to articulate the problem and its scope. This
should help you manage and focus consulting activity.
Good Luck!!!
If you wish to discuss this, contact Gordon at
gas@gordonstevenson.org
021 199 1949

Business Viability Assessment

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